It’s good to be a real estate lawyer in B.C.

It’s good to be a real estate lawyer in B.C.: [National Edition]
Czarnecka, Marzena. National Post [Don Mills, Ont] 13 June 2007: FP15.

Abstract:

“Two years ago, we had about six to 10 buyers for every reasonable deal. Well, I don’t think there is a definition of reasonable anymore,” says Patrick Julian, a real estate lawyer with Vancouver’s Koffman Kalef. “Prices for condos in Coal Harbour have hit $1,800 a square foot. Campbell Heights, an industrial park we thought we would be selling over a 10-to-12 year time line, we’re out of it already, and the major industrial developers we sold it to, they are reselling the parcels at $800,000 an acre.”

“The Olympics have had some effect, but they have not been the most significant factor driving the boom,” he said. “Having the Olympics here in 2010 has contributed to a kind of feel-good attitude in the city. It’s not just Vancouver and Whistler that are benefiting. The Okanagan and Vancouver Island, for example, are booming, too. There are lots of things happening in terms of acquisitions, sales, and development that are unrelated to the Olympics.”

“If the Olympics weren’t coming in 2010, we wouldn’t see this work,” says Mr. [Keith Burrell] of the Canada Line and the city’s other infrastructure projects. Not to mention the boom in Richmond and Squamish — the mid-point between Vancouver and Whistler on the Olympic-motivated Sea-to-Sky Highway. Take the Richmond, B.C.-based speed skating oval and the surrounding 60 acres of land that will become a residential neighbourhood after the Games. “That’s another fantastic project that would not have come about if not for Olympics,” says Mr. Julian.

Full text:

Larry Sandrin’s wife must hate the Canada Line. The huge rapid transit project, which will connect Richmond, the Vancouver airport, and downtown Vancouver just in time for the 2010 Olympic Winter Games, had Mr. Sandrin, a Bull Housser Tupper real estate partner, scheduling his wedding anniversary around meetings and negotiations with the likes of Keith Burrell, a real estate partner with the Vancouver office of McCarthy Tetrault.

Now, Mr. Burrell is a nice man (and a great real estate lawyer), but if a woman had to be stood up by her husband on her wedding anniversary, surely, she’d prefer if it was for someone a little prettier?

Fortunately, Mr. Sandrin says, spouses of the Vancouver real estate bar have long ago resigned themselves to playing second fiddle to projects like the Canada Line, the Convention Centre, the Olympic Village, and the lands around the Olympic Village, which were snapped up by developers eyeing post-2010 development opportunities. Then there are the residential developments around the University of British Columbia and Simon Fraser University, not to mention a myriad of other infrastructure and real estate projects currently turning Greater Vancouver into a construction zone.

“There are a lot of large developments on the go right now because the market is demanding them,” says Mr. Sandrin. “The level of activity hasn’t abated in a few years.”

An understatement if there ever was one. Vancouver’s real estate market was on fire before the city grabbed the 2010 Olympics. What’s happened since then, well, “boom” doesn’t do it justice.

“Two years ago, we had about six to 10 buyers for every reasonable deal. Well, I don’t think there is a definition of reasonable anymore,” says Patrick Julian, a real estate lawyer with Vancouver’s Koffman Kalef. “Prices for condos in Coal Harbour have hit $1,800 a square foot. Campbell Heights, an industrial park we thought we would be selling over a 10-to-12 year time line, we’re out of it already, and the major industrial developers we sold it to, they are reselling the parcels at $800,000 an acre.”

The prices are unheard of and investors and purchasers continue to drive them up. [The one anomaly in all this is Whistler, where houses that were selling for $15-million last year are selling for $12-million or so now.]

“It’s a little more desperate,” says Mr. Julian. “If interest rates stay the way they are, I don’t see anything that will cause the market to level off or fall.”

LACK OF PRODUCT

“There is no question that there is more money around than ever and probably less opportunity. The market is crawling with investors rich in cash, but not really finding anything that fits into their portfolio,” says Mr. Julian.

So, in the tradition of Vancouver real estate entrepreneurs and movers and shakers, they’re innovating. “We’re seeing many of these entrepreneurial players who can’t buy the product they want getting into mezzanine lending and getting their cash out there like that,” explains Mr. Julian.

The reluctance of owners to sell is testimony to the strength of the market and the widely held belief that it will hold.

“I have a client who bought a couple of shopping centres a few years ago, and today, they are easily worth almost twice what he had paid for them,” says Mr. Burrell. “I asked him, ‘Are you a seller?'”

The client’s response? “‘Absolutely not. The investments are too good, the land is too good, and if I sell them, I can’t replace them. There is nothing to do with the money if I do sell them.’

“When you have these conditions, you enter a time period where you have lots of potential buyers but no more sellers, and the market can stagnate for a while,” says Mr. Burrell. “So on the transaction side of the real estate business, we may have a bit of a slowdown just because of lack of product.”

One area where things have slowed down is office towers, which nobody is selling these days. “The office buildings in downtown Vancouver are owned by four or five owners,” says Mr. Burrell. Most are in the arms of pension funds. “None of them is going to sell anything. That sort of work — the trading of $150-million office towers — it’s not going to happen frequently.”

Never mind that, everything else is booming. Olympics or no Olympics.

“The Olympics is a bit of a side play,” says Mr. Sandrin. “Many of these projects would be happening anyway.”

David Mydske, a real estate partner with the Vancouver office of Borden Ladner Gervais, agrees.

“The Olympics have had some effect, but they have not been the most significant factor driving the boom,” he said. “Having the Olympics here in 2010 has contributed to a kind of feel-good attitude in the city. It’s not just Vancouver and Whistler that are benefiting. The Okanagan and Vancouver Island, for example, are booming, too. There are lots of things happening in terms of acquisitions, sales, and development that are unrelated to the Olympics.”

However, let’s face it. The Canada Line has been on the table for years, but neither the money nor the political will to get it off (or under) ground surfaced until the Olympics beckoned.

“If the Olympics weren’t coming in 2010, we wouldn’t see this work,” says Mr. Burrell of the Canada Line and the city’s other infrastructure projects. Not to mention the boom in Richmond and Squamish — the mid-point between Vancouver and Whistler on the Olympic-motivated Sea-to-Sky Highway. Take the Richmond, B.C.-based speed skating oval and the surrounding 60 acres of land that will become a residential neighbourhood after the Games. “That’s another fantastic project that would not have come about if not for Olympics,” says Mr. Julian.

What it all adds up to — for lawyers — is record billable hours. “I look at my time sheets and without a doubt the last two years have been the busiest of my career,” says Mr. Julian. The sentiment is echoed across Vancouver.

“Real estate lawyers are in great demand, and it’s very hard to staff,” added Mr. Mydske, and not just the law firms. The City of Vancouver and the City of Richmond’s in-house legal departments are feeling the strain too, competing with private law firms and each other for elusive talent. (The City of Richmond has raided the City of Vancouver’s legal department, as three former City of Vancouver lawyers are now working for the City of Richmond).

In-house and out, everyone is looking for that hot property, a “three-year associate with real estate experience.” Associates are taking advantage of their desirability.

“There has been a fair bit of mobility because the associates are in great demand and moving from time to time,” says Mr. Mydske.

Support staff are almost as badly needed as real estate lawyers.

“There is a premium on everybody right now,” agrees Mr. Sandrin. “We need good people in the real estate area, and none of us have enough of them.”

In the meantime, those in the eye of the storm are making it through on caffeine. That’s why there’s a Starbucks or two on every Vancouver corner. That and adrenaline, and that’s how it will be for years to come.

“Adrenalin is kind of an addictive drug,” says Mr. Sandrin. “The pace we are keeping, it is tiring but it is quite exhilarating, and honestly, I don’t see an end to it. There is no end in sight.”

Illustration

Black & White Photo: Lyle Stafford For National Post / Larry Sandrin of Bull Housser Tupper says “the level of activity hasn’t abated in a few years.” ;

Word count: 1272

(Copyright National Post 2007)