White Spot site sale rings in at $245M, set for residential development

The White Spot site on West Georgia was sold for $245 millionin a deal that ranks among the highest prices paid for residential real estate in Vancouver.

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The siteand adjacent parking lots are zoned forjust under 400,000 square feet of residential space. The White Spot sitewas purchased by Carnival International Holdings Ltd., which trades on the Stock Exchange of Hong Kong.

"We haven't really seen a piece of land that large be sold in downtown Vancouver," said Tsur Somerville, an associate professor at the University of British Columbia's Sauder School of Business.

Priced out of reach

Somerville saiddevelopers will pay over $600 per buildable square foot, which will place the finished units out of reach for many averageincome earners in Vancouver.

"If you're paying that price for land with all the other costs, there's no way you're selling anything for less than $1,200 $1,500 a square foot," he told On The Coast guest host Michelle Eliot.

But in housing models he has studied, Somerville said that there's a trickle down effect when high end units like this are built.

"Building those high end units is what generates the money that (the city) uses for subsidizing other types of housing.

"Part of the problem is it's not like it happens instantly," he said, adding there's no guarantee that those funds will be put toward subsidies.

Foreign ownership

Numbers released on Tuesday by Statistics Canada showed that about 20 per cent of condos built in the last two years in Vancouver, Richmond and Coquitlam are owned by non-residents.

It's a trend that Somerville expects to see continue with this latestdevelopment and doesn't predict that the foreign buyers and vacancy taxes will affect sales.

"If you said non-residents couldn't buy, I doubt that would even completely solve the problem because they're not a big enough share of the overall demand across the whole Lower Mainland."

With files from the CBC'sOn The Coast.