How do the best and brightest pivot and maintain a competitive edge in Vancouver’s ever-changing market? Sunny Hahm, Director of Marketing & Strategy at Beedie, joins Adam & Matt to discuss some of Beedie’s biggest successes in the down market and the secret to maintaining a competitive edge through careful analysis and bold choices. Sunny also looks forward to 2020 and – spoiler alert! – much of the the doom and gloom that clouded last year’s holiday season is gone. He shares his predictions for 2020, whether prices go up or down, and which areas are sure bets for buyers. Ladies and gentleman, it’s Hahmer time!
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Episode Summary
Please tell us about yourself.
My background is Korean and I immigrated here when I was three years old. I grew up in Maple Ridge and went to school at UBC, studying commerce. I fell in love with the city and Vancouver became home. Outside of the real estate world, I spend a lot of time on the water. I’m an ex dragon boat athlete. Vancouver actually has the largest dragon boat community in North America. Since the 1986 Vancouver Expo it’s been a huge sport locally.
Before we get to real estate, you also recently produced a movie.
Yes, I co-produced a documentary with a group of talented people. We spent three years in North Korea tracking the life and culture of ice hockey players. We wanted to get under the layers of politics and see the human side of life in North Korea. Ice hockey is a small sport in North Korea but gave us a huge perspective and access to elite players.
I’ve been to North Korea almost six times now. The biggest learning was really that they aren’t that different. The way they tie their skates, step onto the ice and score a goal is no different than a Canadian hockey player. I thought there would be a lot of conversations around why they are motivated to play, since they won’t be joining the NHL or playing in the Olympics. But they do have a choice in whether they want to play. Their passion and determination to win is the same as a lot of Canadian athletes. The human spirit to do better every single day is global.
One of our co-producers has a cultural exchange company and has been to North Korea over 60 times. So through him, we were able to get into the country easier.
You’re a guy who wears many hats. Let’s get back to your main gig at Beedie.
We formally go by Beedie. We have Beedie Industrial, Beedie Living, Beedie Construction and Beedie Capital Division. The Beedie family has also launched a fund to help students with promise to access secondary education under Beedie Luminaries. I’m most focused on Beedie Living.
Why real estate?
Why not? My background was in marketing and international business. While studying in Singapore, it opened my eyes to place making and the major structures that were going up. When I got back, I spoke with one of my mentors who recognized my background in marketing and interest in real estate. He pointed me towards real estate firms that had project marketing opportunities. Since then, every day real estate is a topic of conversation whether at the office or at the dinner table. Real estate is in every facet of our lives and I love being a part of that conversation.
Do you see a lot of connections between what is happening in Singapore and Asia and what could happen in Vancouver? Is that what inspired you?
Definitely. Coming back to Vancouver, I began to appreciate what the city has to offer – the oceans, mountains, etc. There’s a lot of opportunity for us to learn from cities around the globe. We’re doing a good job but we could do better – particularly in areas of public transit demand, and density where it makes sense. During my six months in Singapore, the Marina Bay Sands went from the second level to the top level of construction.
What is a day in the life of the Director of Marketing and Strategy at Beedie?
I don’t know if there is a typical day or schedule, which is one of the reasons why I love my job. The day to day changes every single day. Some days I’m working with the interior designers, some days the architects. But most of my efforts and value-add would be around how we best position our product so it meets consumer demands and design. My job is to strategize how we best position our story to convey the best message to the investors or end users.
Where do you draw the inspiration when you’re designing?
To take it a step back, when I travel to other cities in North America, I always find it fascinating to see how sophisticated our development industry is in Vancouver. So we rely on that sophistication, the savvy of our consumers, our sales and marketing consultants, Urban Analytics, and other data points to get that consumer information. We do have our own internal resources but we rely on external data as well to augment that information. Our job is to interpret all of that to design something that works for the marketplace.
For example, there’s one consultant called Plan X whose job it is to squeeze out every inch of efficiency within our buildings. They do an audit of our buildings and find things, like 2-3 extra parking spots, to increase efficiency. You wouldn’t find consultants like this in other markets.
What’s most exciting about being in the industry?
It’s not only such a large part of Vancouver but it’s also such a large contributor to the community. The reason I get up for work is because I know the project I’m working on now will launch in two years, be completed in five years, and every time I drive by that building I will know that I contributed to the community I live in.
Every time I travel out of the city and come back, there’s an appreciation for this city. You can ski and hop on a surfboard all in the same day. Nowhere else offers that. We should all be very proud and excited for the city we live in.
On real estate in your personal life
Everyone is tracking the market. Everyone has an opinion. Personally and professionally it’s always been a topic I’ve been interested in so I track the market very closely.
Presales VS resales. Would you buy a pre-sale right now?
The short answer is yes. There are smart buys out there right now. Relative to 2016-2017 when everyone was flocking into presales, the market has changed dramatically. Resale is more active right now; we haven’t seen that same growth or buoyancy in presales. But it’s not dead! It’s not as hot as 2016-2017 but we don’t want it to be that hot.
We launched a product in June 2019 in Burnaby Heights, Storia. Average size is 1100 square feet with end-users in mind. We sold 80% of our homes in two and a half weeks. So if you design the right product for the right end-user, there are the right opportunities. That project has appreciated in prices, which isn’t common in the presale world.
But there are signs of life in the right areas. Fraser Valley hasn’t really slowed. It’s all about finding what makes sense for you as an investor or end-user.
Beedie has always geared towards the end-user in mind. We prioritize liveable suites over micro-suites. We understand the market is going through a reset and the end-user is the priority. We have a project in Coquitlam that is also heavily geared towards end-users. We believe we are where we need to be right now. The more experienced developers in our city recognize this and build with that end-user in mind.
On choosing the right developer for your presale.
The biggest focus if you’re buying a presale should be who you’re buying from. Do your homework. It’s a longer process to get the keys in hand so you need to do that research. Get pre-qualified and figure out your finances down the road. Who are you buying from? What’s their history and relationship with construction, contractors, trades, etc.? Selling is one thing but delivering is another. Construction efforts, home completion and customer service will need to be priorities for developers looking to last in this market.
There’s the short term value – are you getting $10,000 or $20,000 off right now? And then there’s the long term value – what is the value down the road? What will resale look like?
On the importance of developer reputation.
Developer reputation is a decision factor at the consumer level and also at the partnership level. Brand and the focus around our brand is something we’re valuing more than ever before. It’s not just throwing ads out there but contributing to the community. For example, the Beedie School of Business and the Beedie Luminaries program. When I say brand, it’s about how a company acts as a social citizen.
Can you talk about the decision process to make homes bigger, double down on integrated appliances and other decisions on Storia and similar projects? How do those calls get made?
My boss would say out of 10 decisions you make, seven will be right and three will be wrong. There’s no exact science so all we can do is utilize our partners’ and consultants’ information, as well as our own information, to make the best decision.
With Storia, we had two critical decisions that would impact the cost and change the game. One was the decision to go a half-parkade deeper to offer a second parking stall to the penthouse apartment owners. That additional parkade level cost X so we usually ask if that will be returned. But we believed that we would lose purchasers if we didn’t offer two parking spots.
Our second critical decision was around air conditioning units. Half of our competitors in the area don’t offer air conditioning. But in this day and age, end-users are concerned about heat levels in the summer. So we decided to add air conditioning. We needed to know our numbers on the construction side and check in with our trades to make smart decisions.
Do you have an area in Vancouver you’re excited about?
I truly do believe in the Coquitlam sub-market. Coquitlam has seen tremendous growth – not as much as Burnaby but that is why there’s still potential there. Burnaby has skyrocketed in house prices. But just further east is Coquitlam where you have easy access to skytrain stations, giant park spaces, community centers, etc. The Heights on Austin is in that area – exactly where Burquitlam was a few years ago. It’s a very friendly area to raise a family and close enough to main transit nodes. It’s a residential area for people to enjoy.
The second area I’m excited about is Squamish. The median age of migration patterns there shows primarily young people moving in. It’s an easy drive from Metro Vancouver – about the same as Langley. And I would pick Squamish over Langley all day long.
And one other area I like is Port Moody. It’s been a sleepy community for many years but it’s trending up. The skytrain is out there and it has all the best craft breweries in Metro Vancouver.
When a market has a down turn, you see the most important factors rising to the top. Communities are out-performing areas where a community feel doesn’t exist.
Absolutely! Even from an investor standpoint, you need to think about how you will get a competitive lease rate. So you need to think as a tenant. What is a renter looking for? What would they pay a bit extra for?
It’s interesting to see where trends are moving for younger families. It used to be the westside with great schools was most popular but pricing makes that area more limited. So it’s affordability but also socially and personally where people want to hang out.
We see gaps closing. People moved east for affordability but now it’s also about great neighbourhoods. So the gap between Kits and Grandview is closing. The gap between Metrotown and Brentwood is closing. You also want to be where your people are. So if all of your friends are packing up and moving to Langley, that might be where you go too.
We’re seeing more young families, first time buyers and end-users in the market. So that’s where our focus is right now.
On retail trends.
We are watching the retail market but we don’t have a dedicated analyzing team. But we are the largest developers and providers for industrial developments. So as they see shifts with their retail clients, we can interpret that information and relate it to the residential side. As I travel outside of and around Vancouver, I always look at what kind of restaurants or bars are moving into the neighbourhood. Brewery Road in Port Moody is a classic example. No one was talking about Port Moody 10 years ago. Now they go to visit the breweries, and then Port Moody Park, the great schools, etc. So we’re not studying retail trends specifically but we are learning from them.
For example, with Station Square, we identified key retail tenants ahead of time that would add value to the neighbourhood. Cactus Club and Earls are there. This provides a benefit to the residents above and the whole Metrotown community. Beedie tries to strategically curate the best retail tenants for the location.
Do you have a favourite investment you’ve ever made?
The best investment for myself, and what I tell everyone to do, is travel. You don’t have something tangible but everytime I come back home, I learn something.
What advice do you have for millennials who want to get into the industry?
My first piece of advice is to be patient. Everyone is very intelligent these days and sometimes that comes with impatience and entitlement. So stay patient. I strongly believe in striving for mastery.
What does 2020 look like?
On the resale side, activity has been strong and prices are growing so I think we’ll see a strong market with more activity. For presales, supply has been decreasing in recent years. As supply diminishes, there won’t be as many incentives available and the market should be getting healthier.
5 Wire:
Favourite Neighbourhood: Fairview Slopes
Favourite Bar or Restaurant: Anh and Chi
Book you would recommend everyone read: The Alchemist by Paulo Coelho
Advice you would give your 18-year-old self: Listen more
Something you have purchased for under $1,000 that has changed your life: My wedding ring (married last month!)
Find out more about Beedie.
Sunny’s Instagram: @itshahmmertime