Every major urban centre has its fringe but how should that inform your real estate goals? Who better to explain than a leading development company who un-fringes the fringe! Anyway, enough about fringe. This week, Chard Development’s President & CEO, Byron Chard, sits down with Matt & Adam to talk up-and-coming areas in Vancouver and Victoria and – better yet – how to spot them and take advantage! Take almost 30 years of developing, a dash of unparalleled expertise in the Vancouver and Victoria markets, and you are left with a riveting, info-packed Q&A that will have you reaching for your wallet. It might even have you wanting to live on the fringe… but not like Matt did in his Westfalia and puka shells in 2001. Level up!
Vancouver Real Estate News, Market Updates, Insider Tips, Stats, & Analysis
Tell us about yourself and Chard Development.
Chard Development was started 27 years ago by my father, David. His former development company was letting him go due to bankruptcy and he was having to tell vendors payments were coming, even though they weren’t. So my dad started Chard so he could be his own boss and because he never wanted to lie to vendors again. We always pay our bills on time and it’s a reputation we have.
We build on the fringe because the fringe becomes the core. We started on Spadina Street in Toronto which was on the fringe, but then became the core, and we did the same with Main Street in Vancouver.
My dad believed Baby Boomers were coming to Victoria well before they did. We’re now doing our 10th residential project in Victoria and we have 10 active projects, have finished 1400 homes and have 1000 homes in our pipelines with 60% of those being rental.
What was it like growing up in a real estate family? What brought you in?
My father never forced real estate on me or my two sisters. My two sisters are not involved in the business. I was an accountant but didn’t know where I wanted to go in the business world. I was working in Dallas during the 2008 recession and was put on an account to evaluate real estate assets. Seeing the risk of real estate taught me a lot about the industry and gave me the bug.
I did learn entrepreneurship from my father growing up – the perseverance, the hours and the passion. My dad fell into real estate because he was curious. And it was pure drive after that to understand the complexities of the real estate development industry.
What draws people to real estate is people: It’s a people business. We’re building homes – communities for people. Real estate is tangible. After 5-7 years of a project, you get to walk it. You know where every screw is and why that wall is there. That’s such a rewarding experience. Being able to hand homeowners their keys is an awesome experience. They now have an attachment to the industry.
Real estate creates a story. That human interaction drives so much. We build homes and we create jobs; that’s the core of what we do.
Chard is unique because you’re very active in Vancouver and Victoria, as well. What are the similarities and differences between those markets?
They are very different places to work. You have to break it down by neighborhood and product type. But the big difference is the culture. The island culture is very different from Vancouver culture. After working in Toronto for a few years, Vancouver is a breath from Toronto, but Victoria is a breath from Vancouver.
Victoria is a small town; everyone knows everyone. Vancouver is a bigger city. There are more players here, so how do you stand out? We have 20-30% repeat buyers in every building, which I’m very proud of. And one of the reasons for that is our quality control. When we did our Yates building in Victoria, homeowners found less than 2 deficiencies per unit. We put so much passion into that handover.
On working with trades:
You treat people the way you want to be treated. We have to act with integrity. We resolve any issues face to face. It’s more about the relationship and the people than the contract.
What attracted Chard to Victoria?
Victoria has become more competitive in the last five years. It’s on the map, and we’re seeing that with migration trends. It’s mostly domestic migration. People enjoy the nice weather, less rain and walkable environment. The demographics in Victoria are very interesting and that’s what keeps us building on the island.
The Baby Boomer trend is picking up but so is the tech industry. The three big industries on the island are government, tech and tourism. We’re seeing more young individuals in tech moving to Victoria and renting. A lot of investors are renting out one bedroom units for just under $2000 that they bought in the $400,000 range.
The island has a very strong and stable economy, especially with the government there.
How are the Victoria and Vancouver market related?
Would you rather purchase at the same price in Surrey or Victoria? Coquitlam or Victoria? What are the rental rates? How does Victoria compare? Where do you see more future growth?
I believe in urban environments. Covid has shaken urban cores but I believe humans like interaction. They like to have access to amenities and an urban lifestyle. As single family and townhome prices continue to escalate, condos are going to come back. It’s not a bad deal to live in a downtown condo.
Where are you more excited about, Victoria or Vancouver?
That’s like asking who is my favourite child! Each has their own pros and cons. We are launching a project in Victoria right now and will be launching an affordable one in a few months. Those projects are on the fringe of downtown. I’m excited because of that location. There’s a lot of outdoor spaces: large patios, terraces, etc. I’m excited about the product we’re building. I think we’re well positioned for what we do. We build on the fringe of downtown and I feel strongly about those markets. That’s where people want to be.
Can you tell us more about the projects in Victoria?
The Yates on Yates, which we finished at the end of 2020, is in the heart of downtown. It’s in the core. We have another project three blocks east of that on Cook Street. You can walk to parks, school and outdoor amenities.
Where is Victoria heading?
One of the issues in Victoria is lack of supply that’s coming. There’s an inclusionary housing policy that means larger buildings will need to have a number of units at affordable housing rates. I support the philosophy behind that policy but the execution has put a stranglehold on supply. There’s a lack of new condos approved to come to market.
For us on Cook and Yates, we’re in the middle of high rise and low rise. We’re in the transition out of downtown and into the single family neighbourhood.
It’s a challenging municipal environment. Construction costs are higher on the island. But there’s a lot of similarities between Victoria and Vancouver when it comes to supply, population growth, etc. I truly believe in Victoria.
Where are you excited about in Vancouver?
Mount Pleasant has been a big neighbourhood for us for many years. It’s no longer on the fringe and has matured a lot over the last five years.
The City of Vancouver is challenging to work in. But I still strongly believe in it and the different neighbourhoods. We’ve invested in the Marpole neighbourhood and I think it has a long way to go to mature and work on its liveability. We’re partnering with the YMCA to offer low-income rentals. I enjoy working in unique financial structures to deliver a diversity of housing. Anyone can do a high-end condo. But to be able to offer low-income housing and to work with not-for-profits is rewarding and a lot of fun.
Marpole is on the fringe; it’s a suburb within the city. We like to look at a community and ask what they need. We’ve heard that in Marpole, they’re losing a lot of daycares and medical offices. How can we respond and design buildings the community needs? We want to design spaces with community-serving retail or thoughtful commercial spaces. How can retail be an amenity for residential?
Where would you buy if you were looking for a single investment in BC?
You have to look at the long term. When you buy a pre-sale, you need to look at long term trends. Where is the strong economy? What does supply look like? Some skytrain stations have a lot of supply coming in. How will those areas respond when the supply comes to market? You have to balance the maturity of the area with the supply coming in.
What is the economy that supports the rental market? That’s why I love Victoria. We’ve seen historically low vacancy rates, steady rental rates and strong domestic migration. I’m biased, but I think the island is an extremely strong investment opportunity.
I like the areas around the downtown core of Victoria; I love fringe. You can walk downtown but still have the views and outdoor opportunities.
What are your thoughts on the market for the rest of 2021? And in the next 3-5 years?
For the condo market, I’m quite bullish and optimistic for both Victoria and Vancouver. Amazon will bring a lot of individuals into Vancouver who need rental housing. They want a turnkey condo downtown. The increase in single family home prices will drive the demand back to condos.
We’re also seeing that the Vancouver and Victoria real estate markets are strong on their own. Immigration has not been driving our markets like we think it has been. In the history of Chard, we’ve only sold four units to people who are not Canadian citizens. That’s because of who we attract and intentionally market to. Supply is continuing to be squeezed and there’s not enough for the amount of immigration we’re expecting.
The rental industry will be interesting to watch. A lot of rentals are being proposed and approved but how many get built? It’s very different to get equity for a rental than for a condo.
There are no easy sites anymore because land is a constraint. Who can navigate the city process and the construction process? It’s fun but it’s a challenge.
How does Chard analyze risk?
I have a fantastic team who execute to the highest standards. We try to mitigate risks as much as we can.
For example, in Victoria for Yates on Yates, we sold it in 2017 when we were unsure where the market would go. It was shifting in Vancouver but we didn’t know where it would go in Victoria. So we put into place a homeowner equity program. Purchasers only need a 15% deposit but we offered them a 7% return if they increased to a 20% deposit. That mitigated our closing risk and gave us comfort knowing the owner would be there. It also gave a return to our homeowner and didn’t cost us that much.
That was a strategic way for us to mitigate risk on our closing and protect our homeowners so we could deliver what we promised.
Are there other markets in BC you’re excited about?
We’ve poked into a lot of cities but one thing I know is we do what we do really well. We know the cities we work in really well and we’re not looking to move away from them. We are exploring other municipalities in metro Vancouver but we’re not going into townhomes or single family. It’s not who we are. We want to focus on executing and delivering, like we have for the last 27 years, not stretching ourselves too thin.
Find out more: https://charddevelopment.com/