Expo 86 is often pointed to as a defining moment in the history of Vancouver real estate and both the market and Imani Development have come a long way since then. CEO and President of Imani Development, Payam Imani, sits down with Adam & Matt to discuss his 30-year journey through Vancouver’s real estate market, starting in the 1980s, building single family homes on the westside, all the way to building today’s signature towers that will define Vancouver’s skyline of tomorrow. What cautionary tales should today’s aspiring real estate moguls heed? Where would Payam Imani buy right now? And where is the market heading after so many recent policy shifts? Experience speaks volumes!
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Tell us a little bit about yourself
I’ve been in Vancouver and involved in construction and real estate for 30 years. I first started in spec homes in the Vancouver area but Imani is best known for building multifamily and larger projects in Vancouver and Burnaby.
How did you get your start in real estate?
I worked with my father building single family homes and continued in real estate from there. I started working on the westside with single family homes in Kerrisdale and Dunbar and moved out from there. I have my roots in Vancouver and now I’m venturing into Burnaby.
You’ve been involved in Vancouver real estate from just after Expo 86 to the present and you’ve seen incredible growth here. Were you expecting Vancouver to have these amazing real estate runs over the last 30 years?
Anyone who has lived here for a long time does so because they enjoy our fantastic environment. Our city is livable and so enjoyable. Real estate follows that by virtue of demand so it’s not hard to see why the Vancouver market would do well. Having been involved in real estate since my younger years, it feels natural to me. I’m very confident in Vancouver and I’m comfortable with the market here.
Why real estate?
I love it. Real estate is so multi-faceted – from the creative design to the transactional processes. It’s something you can touch and feel when it comes to construction. It’s very gratifying to drive past a building you worked on 10-15 years ago.
For example, with Akimbo, our project in Brentwood, I’m very excited about it. The architectural design of this project will change the skyline in Brentwood.
We’re currently in a market slowdown. Is this a worrisome time or an opportunity for buyers?
Over the past 12-14 years, our standards and expectations have been skewed based on the real estate run Greater Vancouver has had. Back in the 90’s, developments used to strive for 40-50% presale before starting construction. The idea of projects selling out before construction is a new idea that we’ve seen in the last decade. So, developers who started their careers within this timeframe have flawed expectations.
It’s not a poor market in Vancouver today; it’s just slower. But there’s still demand. Buyers can take advantage of this by taking their time and buying what suits them best.
Overall, we’re okay. We have had a healthy market over the last few decades, besides a few hiccups here and there.
Do you see Vancouver as a healthy market?
In general, Vancouver real estate is healthy. We’ve seen unaffordability build up in the last decade and that’s not created by any one element in the market. Likewise, it’s not fixed by any one solutions. Lots of people, policies and economic factors will all have to come together to solve it.
But the longer affordability was ignored, the larger the problem got and the harder it is to fix. Politicians did intervene but, in my opinion, too late. All levels of government began rolling out their own policies that overlap with each other, which left us with some unintended consequences. We had the stress test, foreign buyer tax, empty home tax and rising interest rates all happening in a fairly short period of time.
Policies are good. Each policy had good intentions and, on their own, might have made sense. Everything should be done in moderation with careful study and careful implementation. When things are done in haste and without consulting the right people, you end up with the effects we’re seeing right now. The effects are much more profound on single family homes and not as much on the condo or presale market because the demand is still there. Buyers don’t know where the market or interest rates or policies will be in two years.
If you hold onto a property long enough, history shows it will be successful. So, if you elongate the period you’re holding your property, that should remove some risks. But it depends what your goals are as a buyer. Maybe this is not a flippers’ market.
Let’s look at Akimbo, for example. Architectural buildings can sell for 20-50% more than similar buildings. But we’re holding back on that pricepoint with Akimbo so it’s more affordable. Buyers now have the opportunity to take advantage of this.
Is now a good time to look at single family home?
I think so! I recently bought one myself. This slow down we’re seeing won’t be permanent. It’s only a matter of time before people start buying again.
The gap between homes on the east and west side has narrowed considerably and that’s due to population based moving. The high prices we saw in 2015/2016 pushed younger purchasers east, hurting single family homes on the westside.
What are the challenges facing the development community today?
Cost is the big challenge – from the construction side as well as the municipal fees. In fact, municipal fees are outpacing the construction cost rise year over year. We see finished product prices stabilizing while building costs are rising.
For example, in 2006 I did a project with a development cost charge of $4/sq ft and now it’s $14/sq ft.
Talent pool and availability of labour is another challenge. This means costs rise and developers have quality concerns with their product.
Timing is another challenge with the permitting process and development process. It used to be a 4-5 year development cycle and now it’s 5-7 years. Unfortunately, this all affects the final price of the product.
Akimbo is your first project in Burnaby. Was the ease of development in Burnaby a factor in moving east? Or are you just excited about Brentwood?
I’m not sure if Burnaby is easier to develop in than Vancouver. All municipalities have their challenges. Burnaby is an attractive area to develop. I’m very excited about Brentwood. We saw the growth and positive aspects of the neighbourhood; we saw the potential.
What do you look for in a good real estate investment?
Quality and location, location, location. A quality location and a quality product will always maintain its advantage. When you invest in real estate, you need to understand the market, the area you invest in, the potentials of the opportunity and how that all aligns with your goals. You need to study carefully before investing.
What wisdom can you share from your career? What mistakes and areas should we watch out for?
You want to make sure you’re not overreaching when it comes to the investment magnitude and ensure the timing works for each individual investor. In the last 3-5 years, we’ve seen a lot of transactions, flipping and assignments – which I don’t consider true investments. A typical investment is not a quick in and out. You need to be aware of that and know that you may not be able to liquidate and get money out as quickly as you had hoped. Real estate is a long-term game.
Any areas outside of Brentwood that you are excited about in Greater Vancouver?
We like to keep our eye on all areas. New West is exciting. We’re not there but lots of developers are and their council is developer-friendly. The tri-cities has been active. And Surrey and Langley have been good areas for developers.
Are you still excited about the west side?
First, I will say that the east side has been developing well over the last 5-10 years. There is lots going on there on Main, Commercial and Grandview/Woodland. They’re becoming dynamic neighbourhoods. So I’m not sure if the younger demographic would move back to the west side of Vancouver unless they had personal ties to family or the neighbourhood. There’s a lot going for eastside residents and that’s incentive to stay.
What does the rest of 2019 hold?
I think it will be a slow and steady year. It’s a time for people to catch their breath and regain their confidence in the market. I don’t think anything is fundamentally wrong with our market so we just need time for people to find their footing again.
What are you 3-5 year predictions?
Sometime in 2020, probably early 2020, people will start up activity again and the market will heat up. I hope the progression from there is more moderate than what we’ve seen in the recent past.
Do you have any parting advice for people looking at your career who aspire to it and for people who are just starting out?
Slow and steady. And there is nothing better than first-hand experience. Yes, it’s a longer learning curve but it’s much more solid and will give you something you can rely on. First-hand experience is way better than advice from a friend or consultant.
Favourite neighbourhood: Mt. Pleasant
Favourite restaurant or bar: Le Crocodile
First place you take someone from out of town: Queen Elizabeth Park
Westside mansion or downtown penthouse: Downtown penthouse
Something you have purchased for under $500 that has had a significant impact on your life: Gift for my wife
Find out more at http://www.imanidevelopment.ca/