Goodman Commercial

Today was anything but a routine court approval.

What began as a regular day in court for the approval of a $4.6M offer turned into a rare, two-round sealed bid process in front of the judge – something seldom seen in court proceedings.

With six additional bidders stepping forward, the courtroom briefly resembled a live trading floor rather than a typical hearing.

Megan Johal of Goodman Commercial Inc., the queen of court-ordered sales (pictured holding court — pun intended — outside chambers), managed a fast-moving and highly competitive process with precision and composure.

Through a strategic marketing campaign and targeted outreach, we were able to create real competitive tension, ultimately driving the final approved sale price to $6.0M – a $1.4M (30%) increase in value for our client, Desjardins.

This strong result underscores the critical role of a well-executed sales and marketing process in court-ordered transactions.

Property details: https://lnkd.in/gJizbSsR

If you are navigating receivership or foreclosure scenarios, feel free to reach out.

Mark Goodman, principal at real estate agency Goodman Commercial, said the empty condos program is a waste of taxpayers’ money that nobody asked for and that won’t do much to create housing affordability.

“Any time a government gets involved and they start playing with the levers, more often than not, they screw things up, and our government has really screwed things up,” said Goodman.

“One could argue that they, in theory, could be buying these units below replacement costs. Okay, so that’s a positive thing, but everything is selling below replacement costs right now.”

Goodman pointed to the provincial NDP government’s rental protection fund, which was supposed to buy up threatened affordable rentals to preserve supply, that he said didn’t do much to make housing more attainable.

He said he would rather see the province and Ottawa remove the General Sales Tax from homes — in a B.C. version of a recent agreement between Ottawa and Ontario that saves Ontario residents up to $130,000 on homes valued as high as $1.5 million.

“We are not criticizing developers. They didn’t ask for this,” said Goodman. “When there’s this much friction to get anything done, and we demonize and vilify housing providers and developers and landlords, crushing their business — because that’s essentially what we’ve done — we’ve nuked the industry.”

𝗕𝗿𝗶𝘁𝗶𝘀𝗵 𝗖𝗼𝗹𝘂𝗺𝗯𝗶𝗮𝗻𝘀 𝗮𝗿𝗲 𝗼𝘂𝘁𝗿𝗮𝗴𝗲𝗱 𝗮𝗯𝗼𝘂𝘁 𝗮 𝗽𝗿𝗼𝗴𝗿𝗮𝗺 𝘁𝗵𝗮𝘁 𝗶𝘀 𝘀𝗼 𝗳𝗮𝗿 𝗹𝗶𝘁𝘁𝗹𝗲 𝗺𝗼𝗿𝗲 𝘁𝗵𝗮𝗻 𝗮 𝗵𝗲𝗮𝗱𝗹𝗶𝗻𝗲

The pitchforks are out in British Columbia over an attention-grabbing announcement that seems to have caught everyone by surprise. Taking a break from watching the World Cup, Prime Minister Mark Carney and Premier David Eby took to the podium to announce they are teaming up to convert 2,200 newly built but unsold condo units into affordable housing.

The program, quickly branded as a bailout, has done the impossible task of uniting the left and the right in this increasingly divided province. It also managed to overshadow significant moves many have been calling for – namely a 50% reduction in DCCs, along with new funding for transit and hospitals.

Even worse: when it was announced, no one in government seemed to know what this bold intervention might actually be. Rather, our leaders led with a headline-grabbing promise, apparently without defining the program first.

𝗧𝗵𝗲 𝗯𝗮𝗶𝗹𝗼𝘂𝘁 𝘁𝗵𝗮𝘁 (𝗺𝗮𝘆𝗯𝗲) 𝘄𝗮𝘀𝗻’𝘁
Despite the definitive headlines and widespread condemnation from social media pundits, the official announcement only committed to leveraging “innovative financing tools to convert more than 2,200 vacant condo units in priority growth areas into affordable homes.”

Carney spoke of using “the right financing mechanisms” to make the homes more affordable, while simultaneously taking a large block of unsold inventory off the market. “It is a way to clear off on the books this overhang.”

Postmedia quoted a BC Housing Ministry spokesperson saying “discussions are underway between the province, the federal government, and stakeholders on how we can best leverage innovative funding mechanisms to create a pathway to home ownership for people facing barriers today.”

Financing. Funding. Pathway to home ownership. When it comes to the condos actually changing hands, no one knows who will be buying, where, at what price, or the timeline involved. The talk of a bailout was premature; even now, whether the program will be implemented in a way that moves any inventory at all remains unclear.

𝗦𝗼𝗺𝗲 𝗰𝗹𝗮𝗿𝗶𝘁𝘆 (𝘀𝗼𝗿𝘁 𝗼𝗳)
A full week later, Carney and Eby finally stepped in to clarify: this will be a rent-to-own scheme, with the government of BC (with minor funding from Canada) acquiring distressed condos and getting them into the hands of buyers who don’t have the savings for a down payment and would otherwise be shut out of the market. Both went to great lengths to distance the program from the bailout label, suggesting that by buying at scale they will be able to secure units below replacement cost.

On that point, they may not be wrong. Major investors have already identified the same opportunity and have been scouting for blocks of unsold units. At today’s pricing, with discounts for buying in bulk, it would cost the government more to build these units than acquire them from a developer eager to move on and put their capital to work elsewhere. Curiously though, the developers – the supposed sellers of these condo units – say they were not consulted about the program, and some have gone on the record to say this is not help they asked for or wanted. They would have preferred more effective solutions to clear the housing logjam – such as expanded GST relief for new home buyers.

That offer was apparently on the table from the feds, who wanted to give BC the same deal Ontario got months earlier. Eby declined: BC already exempts first-time buyers from GST. In his mind, a young family moving up the property ladder as needs change is buying “a second home” – language typically referring to vacation homes – and is not deserving of GST relief. Par for the course from a premier who has never let policy get in the way of ideology.

Here’s the deeper issue: a government acquisition program lives or dies on its terms. If executed well, it might successfully move inventory, house people, and clear an overhang that is creating havoc not just for developers and their lenders who are on the hook for unsold units, but also for anyone who owns a condo. If the intervenor bungles – buying at the wrong price, moving too slowly, or launching a program too poorly designed to deliver – they don’t just fail to solve the problem, they make it worse. Developers who might otherwise have cut prices and sold low instead sit on their inventory waiting for the government offer.

𝗪𝗲’𝘃𝗲 𝘀𝗲𝗲𝗻 𝘁𝗵𝗶𝘀 𝗺𝗼𝘃𝗶𝗲 𝗯𝗲𝗳𝗼𝗿𝗲 𝗶𝗻 𝗕𝗖
We saw just such a failed intervention a few years ago with the BC Rental Protection Fund. The Fund was designed to give non-profits capital to purchase existing apartment buildings and to operate them as below-market housing. During its peak, when funding was available and splashy announcements were being made, we heard from countless sellers who wanted to sell their building to these cashed-up non-profit buyers. A cursory analysis of some of the transactions shows why. During a falling market, the government-backed buyers were paying top dollar – or more – for dated buildings with low rents that investors in a normal market would discount, not overpay for.

But not all buildings fit their criteria, and many of the non-profit buyers moved extremely slowly or offered terms that made no business sense. And soon enough, as with any government program of this type, the cash ran out. Many apartment owners who passed up good offers from the private market while attempting to catch this wave of funding were left on the sidelines, watching as the value of their building plunged.

Similarly, now, the mere suggestion of government parachuting in to buy up units is bound to give some developers sitting on unsold inventory the temptation to hold prices, to wait for better terms, to avoid the market reckoning that would otherwise clear inventory.

Markets clear, one way or another. The question for any developer holding unsold inventory today is a simple one: how long are you willing to wait to find out if Ottawa and Victoria have designed something worth holding out for?

To some, “innovative financing” may sound better than another price cut. It may also turn out to be another innovative way to generate headlines for a program that delivers far less than advertised.

The bailout may be coming. But it hasn’t arrived yet, and the terms, when they do, may surprise everyone who spent the last week arguing about how generous they were.

The Great Bailout Nobody Can Define - Goodman Commercial Inc. British Columbians are outraged about a program that is so far little more than a headline

En route to Victoria with Megan Johal to meet with clients to check out a major multifamily portfolio.

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We've just listed the best-priced apartment building in Vancouver.

21 suites. Super well maintained and updated. Features a penthouse.

Asking $5 million.
4% cap rate.
$238,000 per unit.

Amazing suite mix heavily weighted to 2s (13-one beds; 8 two-beds).

Option to by the shares and save PTT.

The Coachman – 8741 Montcalm Street, Vancouver - Goodman Commercial Inc. The Coachman is an exceptionally well-maintained and updated 21-suite, three-storey (plus penthouse) apartment building, centrally located in the heart of Vancouver’s Marpole neighbourhood.