Sellers are optimistic, but can former Olympic Village find enough buyers?

Millennium Water’s high environmental standards, waterfront location justify cost, marketer says

By Derrick Penner, Vancouver Sun

Millennium Water, the former Olympic Village, was open to the public on the weekend and the response has left the sellers ecstatic with 40 units already sold. They had felt selling 60 units by the end of June would be outstanding.

Photograph by: Jenelle Schneider, PNG

As of Tuesday, buyers had stepped forward to claim 40 of the 474 remaining apartments in Vancouver’s Millennium Water, at prices ranging from the $600,000s to $4.7 million.

The sellers are ecstatic, saying the pace of sales is far beyond their expectations. But some industry watchers are asking whether that pace will continue.

How many buyers are out there, they ask, for deluxe homes on blue-chip waterfront real estate, which come at premium prices due to the high environmental standards of their construction?

“The concern is about how much it costs,” Vancouver realtor Will Wertheim said in an interview. “If money is no object for some people, sure, [buying makes sense]. But you’ve got several hundred units to move, and do you have that many people for whom money is no object?”

Wertheim was among about 1,000 realtors who toured the development Sunday, the day after about 15,000 people lined up to view suites in the project, which has had heavy backing from the city.

When construction costs ballooned and the developer’s initial financier ran into difficulties, the city had to make an emergency guarantee for a $750-million construction loan for the project, which served as the main athletes’ village for the 2010 Olympics.

Tracie McTavish, president of Rennie Marketing Systems, the firm selling the project for developer Millennium Development Corp., argued that prices in the project are competitive with similar new construction.

“I’ve got [units] priced at $550 a square foot to $1,550 a square foot and everywhere in between,” McTavish said in an interview. The maxim that “the closer to the water, the more expensive, the bigger the view the bigger the price,” applies to the project, he said.

At the high end, McTavish said prices are comparable to the more posh enclaves of Coal Harbour, and at the lower end, they are similar to what people can expect to pay in other developments on the south side of False Creek, such as the Exchange building. At that building, which Rennie is also selling, pre-sale prices have averaged $725 a square foot.

McTavish added that units in another south False Creek project, the Maynards Block, are priced in the low to high $600s per square foot.

“It’s absolutely competitively priced in the market relative to everyone else that’s out there,” McTavish said, especially considering its environmentally friendly construction.

The new neighbourhood has earned a Platinum-level standing in the Leadership in Energy and Environmental Design criteria.

Micheal Ferreira, a principal with the consulting firm Urban Analytics, said those environmental attributes — in-unit radiant heating, grey water separation and recycling in toilets, rainwater collection for on-site irrigation — do justify a premium.

“By its very nature, I think a good chunk of that higher pricing is a direct result of that LEED Platinum rating,” Ferreira said, adding that factor makes it difficult to compare it with other projects.

Wertheim agreed that Millennium Water’s unique attributes make comparisons difficult. But he said it remains to be seen how big the market is, especially for its smaller units at the lower end of its price range — in the $600,000s.

Wertheim estimated the premiums on units are 20 to 60 per cent compared with other available inventory.

He noted that Multiple-Listing-Service data for Coal Harbour shows the highest price obtained in Coal Harbour over the last 60 days was $2,245 per square foot on a $3-million apartment. Buyers in that range, he said, might be attracted to Millennium Water’s unique neighbourhood.

At the lower range, however, “if you want to get just another condo, there’s lots of those out there.”

While the city’s loan guarantees to Millennium give it a considerable interest in recovering as much as it can from the sale, McTavish said the sellers are not in a hurry and have embarked on a two-year campaign.

He noted that 474 finished units represents a considerable amount of inventory to dump on the market all at once, so sales will be staggered.

“We thought if we sold 60 units by the end of June, we’d be doing cartwheels,” McTavish said. “To have done in excess of 40 in the last three, four days when we really weren’t in selling mode, we’re really happy.”

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