Success of pricey units in West End welcomed by Reliance

The owner of a new, purpose-built rental building in Vancouver’s West End with expensive rents said he’s been surprised to lease out about a third of its 108 units.

The economic downturn and unemployment in the retail and hospitality sectors have been very visible, but “a lot more people are still working (and) aren’t in those industries,” said Jon Stovell, president and chief executive officer of Reliance Properties, which owns the 22-storey building at 1188 Bidwell St.

Of the 35 tenants Reliance has signed up since it started the process last November, about 25 per cent told the company that they were coming from outof-province or the country to start new jobs in Vancouver, Stovell said.

They include Debasish Dutta. He and his spouse moved to Vancouver in mid-March from Boise, Idaho, just before travel restrictions. Dutta has been working remotely from Vancouver for a U.S.based company that is “into AI and machine learning,” while his spouse, who also has a data science background, started a job with a local firm.

The backdrop is one where rent charges have softened and vacancies have been rising in the last months in the Vancouver area. Some short-term rental listings have been turned into longer-term stock with the slowdown in business and leisure travel. Empty home and speculation taxes had already been nudging up the number of units available for long-term rent too. Lastly, Reliance’s building sits in a two-block area around Davie Street in the West End where several other new, purpose-built rental buildings will be opening up hundreds of more units in the coming years.

Despite all these other trends and factors, Michael Ferreira, managing principal of Urban Analytics, which tracks data for developers, said Bidwell’s strong start shows the tightness in specific parts of the market.

The expensive rents at Bidwell — which range between $2,190 and $4,700 per month, not including the penthouse, according to Reliance — make for a limited renter pool.

“The fact they’ve been able to lease that many units and in a relatively short period of time, even amidst (the pandemic shutdown), I think it’s fairly impressive and shows the demand,” Ferreira said.

He added that “given the limits on being able to increase rents on an annual basis,” developers with rental buildings coming on to the market are sacrificing the higher-paying consumers they can entice.

“There’s a misconception these buildings are just cash cows for whoever builds them. It’s a huge financial commitment to build them because (the developer) isn’t selling the units” and recouping costs more quickly, Ferreira said.