The proposed re-development project at Christie Point has got me to thinking.
Would the project be in the cards if rent controls in British Columbia did not play a roll in the rental market industry? It would appear that the property was sold to a deep pocket developer in 2014. The vision for the property appears to remain as rental and not to be sold off in bite sized pieces. I wonder why the previous owner decided to sell?
One of the possible reasons is that due to rent controls the financial incentive to keep and maintain the buildings doesn't exist. While there is a clause to assist landlords should an unexpected cost arise, for the most part the maintenance costs need to be absorbed within the 2.5-3.5% annual increases allowed by the BC government.
In my opinion, when something upsets the natural supply and demand cycle of business, there is a manageable unbalance in the short term that will ultimately affect the long term viability. Christie Point is no exception.
It is not unreasonable to assume that in today's market, this property is underutilized. It is not unreasonable to assume that the current owner will not be able to continue to rent to the existing tenants at the current rents, given that they most likely paid top dollar for such a property and given that the government restricts rental increases no matter what the income and expense ledger states.
It is also not unreasonable to have feelings for those who are caught up in an artificial cat and mouse game that ultimately will catch someone in some sort of financial trap.
I found this paper online worth a read. http://www.walterblo...sh_columbia.pdf