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Commercial properties going for unreal prices, but do buyers know the limits they face?

February 2nd, 2016 · 6 Comments

Just a side note: I will be so happy when I get to write fewer stories about the city’s kooky real-estate market. But, now, in the meantime …

Lots of chattering these days about the high prices that key pieces of Vancouver commercial real-estate are going for: Royal Centre, $400-million to a German investor. Bayshore, $300-million to Concord Pacific. The Denny’s restaurant site on Broadway, $500 a buildable square foot.

All of that is mysterious enough. On top of that, various reporters have latched on to another puzzling phenomenon, which is a couple of local companies that appear to have businesses going “crowd funding” real-estate purchases. Solicitations for investors for the Molson’s brewery site and a Nelson Street site have been dug up in recent weeks, with various promises in the solicitations, which appeared to be linked to a company called Sun Commercial, about what kind of redevelopment is possible on the sites. (Sam Cooper at The Province was the first to spot this.)

The B.C. Securities Commission got involved to find out whether this was a violation of any rules on raising money from investors. In the meantime, councillors and planners are mystified and not sure whether these buyers will know, when they arrive at city hall, that rezoning is going to be complicated or downright impossible. My story, detailing some of the saga of what’s been going on, is here. (Don’t be put off by the inaccurate headline.)

I should point out that, at the moment, no one seems to know whether anyone did actually invest anything. All we know is these weird solicitations appeared on various social media locations.

One set of companies that got caught up in the reporting and securities commission review, Luxmore Realty and Canada Luxmore Crowdfunding, has been trying to set the record straight, at least about what its company is doing. Luxmore, which hasn’t been pitching any big Vancouver properties to my knowledge, doesn’t raise money directly or “crowd fund” in the Canadian sense of the word.

Instead, as Luxmore rep Jason Liu said, what it means in his operation is explaining to people what kinds of investments are out there (real estate and otherwise) and then encouraging them, if they’re interested, to find other interested investors and form legal partnerships so they can invest as a group.

Whatever is going on, Vancouver’s market continues to get weirder … and not in the fun, Austin sense.

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