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Olympic Village starts its price reductions

Blog by Adam Knight | February 17th, 2011

Check out the new Olympic Village pricing announced by Bob Rennie today. Most of the condos with large reductions are the larger more expensive units which are being reduced up to 50% and the other studios as little as 5% discounts. Overall 30% discounts are applied to the units at  the Olympic Village. Take a look at the article from the Vancouver Sun for more details. If you are interested in purchasing a condo at the Village, Contact Adam Knight 604.916.9940 for more details!

Condo marketer Bob Rennie announces new pricing structure for Olympic Village


VANCOUVER - Condo marketer Bob Rennie took the wraps off a new pricing structure for the troubled Olympic Village this morning that is intended to set a cautious roadmap for recouping much of the $740 million Vancouver taxpayers have put into the troubled development.

The discounts range from as much as 50 per cent on the most expensive units with good views to as little as five per cent on some of the cheapest and smallest studios. On balance, the average discount is about 30 per cent.

But before the public can be convinced those reductions are enough to move sales, Rennie will have to satisfy real estate agents, some of whom are angry at being excluded from a market test he conducted last week in which he sold 31 units. Rennie will hold a briefing session this afternoon for more than 1,000 real estate agents who will be given detailed information about the new prices.

Rennie provided to The Vancouver Sun a selective list of six units he says illustrates the range of units being put on sale as of Friday.

At the very top is a three-bedroom, 2,500-square-foot 10th-floor condo in the Kayak complex at the east end of the village that once was listed at $4.8 million. He said cutting the price by 38 per cent to just under $3 million is a reflection of how much the market has changed since the last sale in May.

At the other end of the spectrum is a 566-square-foot sixth-floor studio in the Bridge buildings on the other side of the village which he once listed at $530,900 but which now is selling for $420,000.

Rennie did not provide the full list of units for sale or comparisons between new and old prices. But a backgrounder shows the cheapest unit under the new structure is a studio in the Bridge complex at $349,500 - which once was offered for over $400,000, while a luxury 3,400-square-foot three-bedroom unit in the same complex is $4.1 million.

Whether those reductions will be enough to spur sales won't be known for several days. Rennie has promised the receiver he will sell 60 units in 60 days. He's already reached that goal by half in a test sale his agents conducted over the last week.

The new pricing structure is being applied on 230 units in a group of five buildings situated at opposite ends of the village' middle row. Selling those and filling up the buildings along the back row with renters is a strategy the court-appointed receiver Ernst & Young believes will help stabilize the village and remove a ghost-town feel.

But it's also a calculated risk with taxpayers' money: the 230 units now going up for sale represent only about $200 million of market value. That means the rest of the more than $500 million owed to the city will have to come from 244 units, many of them the highest-priced ones that will take time to sell.

When the city pressured Millennium Developments to put the project into voluntary receivership in November, Mayor Gregor Robertson said he wasn't sure taxpayers would get all of their money back. Real estate experts have suggested taxpayers could lose as much as $150 million because of the boondoggle, caused high construction costs, initially high prices, the recession and a lack of consumer confidence in the project.

Not for sale in this latest attempt to right the tilting Olympic Village are the 60 luxury units in the two waterfront Canada House buildings.

The sale also represents a radical departure from the way the last public marketing was conducted in May.

Faced with a city deadline to pay a $200 million installment on its loan, Millennium Development put all of its stock on the market; Rennie believes the resulting flood of choices discouraged many buyers.

"If we made a mistake, there were different pressures on May 15. The developer's goal was to pay down the loan and they brought out all of the inventory," he said.

"When the consumer arrived, they had a pricing issue."

Now, shackled by the image of a ghost town that continues to erode consumer confidence, the city and the receiver crafted a plan to rent out upwards of 127 condos on the back row of the village. Coupled with sales in the two Kayak and Bridge complexes and a high occupancy rate in 252 units of city-owned affordable housing, the receiver believes 70 per cent of the village will be occupied by the summer.

The biggest price reductions are for more expensive units that have been harder to sell. There is a lot of demand for smaller, cheaper units and so the reductions for them are consequently smaller.

Rennie said there's been "no sign" of interest from bulk buyers of more than a couple of units, and the receiver is also not accepting further discounts off the new prices. Multiple bids will be accepted, but Rennie said that concept is "a bipolar opposite" to what has so far happened in the village and he's not banking on bidding wars to break out.

Of the 31 test sales from last week, 12 were for units costing more than $900,000 and another 11 were for units priced between $600,000 and $900,000. The remaining eight were for units less than $600,000.

Rennie said those offers still need to be accepted by the receiver, and it's possible not all will be completed. But he said the fact that more than a third of the people were willing to spend upwards of $1 million bodes well for city taxpayers, who are owed more than $700 million on the project.

Still, the sales irritated a number of real estate agents who called The Vancouver Sun to complain, saying Rennie didn't need to do a test market because he already understands the market forces at play. Instead, they claimed the sale was a way of Rennie letting preferred buyers in before the general public. None of them wanted to provide comments on the record so it is difficult to verify their claims.

Rennie dismissed the claims, saying neither he nor his agents get commissions on the sales. He said he negotiated a substantial fee with the receiver, Ernst & Young, because the receiver wanted to make sure as many sales as possible were completed through outside brokers.

He said it would have been irresponsible for him to proceed with a third sale without verifying the validity of his new prices.

Ernst & Young has broken down pricing on the 230 units in the Bridge and Kayak buildings this way: 59 will be less than $500,000; 61 will be between $500,000 and $750,000; 51 will be between $751,000 and $1 million; and 59 will be more than $1 million.

Ernst & Young said, of the remaining 244 units to be sold, 127 along the back row of the complex will be rented out temporarily to help fill out the village population. The rest, representing the most valuable, will be sold at a later time.