Fortune 500 company taps hot Vancouver property market
JLL buys Metro firm with focus on apartments
By Kelly Sinoski, Vancouver Sun
Fortune 500 company JLL has acquired a Vancouver real estate firm that specializes in commercial apartment buildings, underlying a growing desire among global investors, including in the U.S. and Europe, to tap into the region’s hot property market.
JLL CEO Brett Miller said the acquisition of Bill Goold Realty will allow the company to benefit from the already strong local buying pool in Vancouver as well as grow its Canadian operations by attracting more “regional, national and international capital into British Columbia’s commercial real estate market.” Although Asian buyers have long invested in Metro Vancouver’s real estate, he said his company is seeing a growing thirst among American investors for Vancouver properties because of the shrinking Canadian dollar, and among Europeans in slow-growth economies. France, Germany and Switzerland, and potentially Spain, are likely pools to draw from, Miller said, as investors seek safer bets in which to park their money for the long term.
German multibillionaire Klaus-Michael Kuehne, for instance, is said to be close to a deal to buy Royal Centre, one of Vancouver’s largest office towers.
“This is a particularly interesting sector for all investors at this point,” Miller said. “Of all the realty classes, apartment buildings tend to be the most stable. No matter what happens in the economy, people need a place to live and they pay the rents. Investment in apartments represents a safe haven. Typically most (investors) are looking for a long-term hold, stable income, and are not in the development of real estate.”
Miller said he welcomes the opportunity to work with Bill Goold Realty, which completed more than 30 transactions valued at $335 million in 2015 – the highest ever for the group.
Goold, whose firm includes six brokers, will lead JLL’s multifamily investment sales in Vancouver, while Ray Townsend will head its day-to-day operations.
The partnership, Miller said, will allow JLL to tap into a “dynamic growing city with a strong economic base and diversified economy,” while Goold can expand his reach across the world.
Thomas Davidoff, an assistant professor at the University of B.C.’s Sauder School of Business, said the move underscores the global interest in Vancouver’s real estate market.
“There’s clearly global interest in Vancouver. I think people are aware we’re on the map,” Davidoff said. “It suggests that perhaps it’s not just China interested in Vancouver – it’s going to be a global market. The rising values put it on the radar screen of large firms, and that looks like what’s going on here.”
Metro Vancouver is attractive for foreign investment, particularly Vancouver, Burnaby, North Vancouver and New Westminster, Goold said. This is partly because the region is landlocked with little room to grow, meaning little chance of an oversupply of apartments, while SkyTrain stations offer lucrative possibilities as cities build their town centres around them.
Goold said he expects the demand for apartment buildings will continue to grow, especially as residential prices explode and people seek to live closer to transit so they can avoid buying cars. Local buyers, he said, are taking advantage of low interest rates to get into the market.
The partnership with JLL culminates a new chapter for Goold, a Port Alberni native who was on welfare and working odd jobs when, at 29 years old, someone suggested he try real estate.
He sold a few houses to put food on the table, but found his niche in commercial properties – partly, he said, because he found apartment owners so humbling. Many were Europeans who came here after the war, he said, including one woman who operated an office in a basement with a dirt floor. He remembers one of his first sales: an elderly German couple who scrimped and saved to operate their apartment building wanted to sell it so they could retire and travel. But when the deal went through, the husband had died.
“They’re just hard-working, regular people,” he said. “I loved to service them.”
Goold, a commercial Realtor for ReMax who also owns an apartment building, said he feels he has “outgrown” his business. The acquisition will allow him to tap into a list of potential foreign investors compiled by JLL people throughout the globe who match assets to people’s interests.
“I think that will open up places all over the world,” he said. “It’s just a way I can learn more about investors who want to come to Vancouver.”