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EPISODE DESCRIPTION
Episode 97: Matt and Taylor are joined by Mark Goodman. Mark is the Principal Broker at Goodman Commercial Inc. from Vancouver, BC, who also hosts the "Goodman Report Podcast", and is one of the most influential real estate leaders in the province. With over $4 billion in sales of apartment buildings, investment properties, and development sites across more than 600 transactions, Mark has built a distinguished career and is one of Canada’s leading commercial real estate brokers.
Goodman Commercial Inc. was started by David Goodman, Mark's father, who sold his first property in 1972. For over 50 years, the powerhouse Goodman name has been synonymous with expertise on multi-family apartment sales and development sites, and today is one of Metro Vancouver’s top commercial real-estate firms. With over $7 billion in team sales volume and over 2000 transactions, Mark's forward-thinking strategies have kept his firm ahead of the industry curve, continually leveraging new methods and technologies to broaden reach while maintaining a personal touch.
In addition to his brokerage expertise, Mark also co-authors and publishes The Goodman Report, Metro Vancouver's number 1 multi-family investment resource. Across Canada, thousands of owners, investors, real-estate analysts, and media sources rely on the Goodman Report for insights and market data on the rental apartment building and development site scene. This publication has helped cement Mark's reputation as an authority on apartment building sales in British Columbia and throughout Canada.
Mark is here to discuss: → The start & evolution of the Goodman Report, breaking down the 2024 Goodman Report, and the impact of capital gains and affordable housing on the year. → Trends for 2025 including the mindset on the market, cap rates and prices per unit, and how the provincial initiative "rental protection fund" will negatively affect the market. → The potential introduction of a Canadian 1031 exchange capital gains-deferral program, why we're in a perfect storm for huge multi-family losses, and why expense ratios are a flawed system.
Goodman Report Website: www.goodmanreport.com
Goodman Report Instagram: @goodmanreport
Goodman Report YouTube: @goodmanreport
"Goodman Report Podcast": @GoodmanReport
Goodman Commercial LinkedIn: @GoodmanCommercialInc.
Mark Goodman's LinkedIn: @MarkGoodman
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Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Welcome back to the Colonial RealEstate Podcast.
(00:01):
I'm your mortgage broker host,Taylor Atkinson.
And I'm your real estate agenthost, Matt Glenn.
What's happening, Taylor?Well, I got out and voted this
week.
Yeah, you really voted.
I'm not.
I'm going day of.
You're waiting until, yeah.
Yeah.
Yeah, so we're recording this, buton the 24th of April.
And what, voting's 28th?Like, are we going to know the
results that night?I think we'll know the results, or
(00:22):
at least have an idea.
We thought the same thing in the
provincial election, election, andit took like another five days.
That's true.
Yeah.
So when we listen to this,everyone might be scratching their
heads still, but I think we'llknow an answer.
I actually think the provincialelection had, it seemed like a
more technology advanced votingsystem.
This one, like I got there, Ididn't know if I was coloring in
(00:42):
the circle, putting an X, a checkmark.
I was trying to read instruction.
I asked the lady, she's like, oh
yeah, no, just the check mark.
So someone manually has to go
through and read all these.
It just seems like such a crazy
system, but.
That's crazy.
Yeah.
If you're confused, mark.
you're confused, that means thatlike 50 % of the population is
confused, dude.
I feel like there should be a
better system that removes thehuman error, you know, like a
(01:04):
digital system.
Well, if you have a digital
system, Well, if you have adigital system, isn't it hackable?
Don't they like the human error?Yeah.
Okay.
At least then you can get a
recount.
Like, I don't know.
I don't know what the best thingto do is, but there are
instructions, obviously.
Yeah.
As we're sitting right now, as oftoday, and who knows really what
the polls mean.
I don't know how they really come
up with this stuff.
Yeah, nobody ever asked me.
Do you know how the polls work?So right now, liberals are at 42 %
(01:26):
and conservatives are at 38%.
But I think it's trending
slightly.
Liberals are coming down slightly
and conservatives are coming up.
So it's going to be like split.
Yeah.
Pierre was way ahead and then
Trump got in and has been pissingoff Canadians.
So then Carney came way back andwas ahead and now they're kind of
evening out, I think.
So yeah, we'll see.
Yeah.
(01:47):
It's interesting for me
personally.
for me personally.
I feel like I'm in an echo chamberbecause yeah, I see things one
way.
Well, in the real estate industry,
I think we are in an echo chamberfor sure.
Well, in the real estate industry,I think we are in an echo chamber
for sure.
Yeah.
One thing I got to say is I likethat we have like a 35 day
election.
Like man, I would not want to be
dealing with this for 18 months.
I like that.
It's just like get your pointacross and get people out.
You know, that's actually like agood positive spin because on the
(02:08):
final question of the debate, spinbecause on the final question of
the debate, when they asked them,you know, what do you like about
this election?And they were like, you know, I
wish I could have gone out.
And they all said the same
response.
I wish I could have met more
people and I wish the election waslonger.
And I was kind of like, yeah, Iguess they haven't really had like
a fair chance, but really.
Goddamn politicians, go out and
meet people when there's not anelection.
Yeah.
Have a town hall for Christ's
sake, if you're so worried aboutthat.
Yeah.
Right.
And also, I feel like we've beentalking about an election for like
(02:30):
a year now.
It's been inevitable.
Yeah.
Honestly, it's nice that it's not
in everyone's life forever.
So like, it's kind of just, here
we go.
Then we just live with the
consequences next week.
Well, exciting times.
We'll see.
Yeah.
Well, on this show, we had anawesome guest, Mark Goodman.
He has the Goodman Report.
He's based out of Lower Mainland,
based out of Vancouver.
He's been in commercial real
estate, I think mostly multifamilyfor the last 20 years.
(02:51):
And, you know, his dad.
was an agent prior to him.
Really cool origin story.
Like his dad basically did a
mailing list, you know, likemaking envelopes, door knocking,
personally handing them out.
And Mark's evolved it.
to where it is now, where it's asemi -annually, annually, you
know, project and then doesmonthly mail outs as well and
stuff like that.
So really good resource, has his
own podcast, puts out coolLinkedIn stuff.
(03:12):
So we wanted to speak to somebodythat sees the industry down there
because, you know, we're hearing alot from like Vancouver and
Toronto of like the trends ofcertain asset classes.
So yeah, he was a great resourceto talk to.
We'll And he is very stoked on thepossibility of a Canadian 1031
exchange.
So that's kind of interesting to
hear.
of interesting to hear.
I mean, it just seems like a no-brainer.
(03:34):
So if anyone doesn't know what the1031 exchange is in the States,
basically, it allows you to defercapital gains if you reinvest it
into the economy.
So you sell a property or
potentially a business, there'scapital gains.
As long as you reinvest that backin, it's great for the Canadian
economy.
It's great for that business or
investor.
It gets things moving.
When you sell these properties,you don't have massive tax bills.
gets things moving.
When you sell these properties,
(03:55):
you don't have massive tax bills.
You just buy another property.
Things move.
I haven't honestly read up a lot
on why we wouldn't want thisbesides less government revenue, I
guess.
But it just seems like a positive
to me.
Yeah.
But I think the government revenuewill be there at some point,
right?When you do stop deferring those
at some transaction.
But if the economy is doing better
and GDP is growing, thegovernment's going to be making
more money.
So it's more of a long -term plan,
right?But honestly, I hope that one goes
(04:15):
through.
And the GST on homes.
Let's cut that too.
Let's get some homes moving here.
Yeah, there's been some greatpromises over the last month.
So we'll see who holds up theirend of the bargain here.
Probably nobody.
nobody.
Yeah, here you go.
The election's over.
Here's the hose.
This is a great episode.
It's a lot of fun to talk to.
Obviously, you can tell he
podcasts himself because he's onit.
(04:37):
Yeah.
This episode, like every episode,
is sponsored by Century 21Assurance Realty.
We got our fingers in all thepies.
around the province.
We're a great brokerage to work
with.
Kind of like a cooperative
environment.
Obviously, when you're a real
estate agent, you're your ownperson, you're in your own
(04:57):
business, but we have added acooperative spin to it and it's
worked out well for our agents.
So if you're an agent looking for
a new brokerage or to changethings up, give us a call.
Or if you're a buyer or sellerlooking for an agent, call one of
our seller agents up or just callme.
Enjoy the show.
is a Okay, welcome to the Colonial
Real Estate Podcast.
Mark Goodman, how are you doing?
(05:17):
I'm great.
How are you guys?
Great.
Well, we like to start our show
just so our listener can get toknow you a little bit.
What's your perfect Friday looklike?
The perfect Friday.
That's a great question.
Showing up to work with a subjectremoval, with a bank draft for a
deal that's gone firm, firm dayFriday, and perhaps a closing as
well.
That would be a great Friday,
coupled with perhaps a nice non-stressful lunch, walking distance
(05:37):
from my office.
And then maybe a massage during
lunch if I can carve out sometime.
That would be good.
And then heading home and relaxing
and maybe a little socializingthat evening, I think would be
great.
I think you nailed it, Mark.
Honestly, that sounds like a greatFriday.
Let me know when you have one ofthose.
Yeah.
It's been a while.
Normally, it's just grueling,intense whack -a -mole, you know,
(05:59):
solving problems all day and thenwolfing down lunch in 10 minutes
and dealing with difficult people.
Yeah, our listener can't see, but
you've got a map of Vancouver onthe background there.
Where is your office?We are located in Vancouver in the
South Granville neighborhood.
So we're on 10th and Granville.
It's really the center of thecity, and we're five minutes away
from downtown Vancouver, just overthe bridge.
(06:20):
We have perfect access to the westside of Vancouver, east side of
Vancouver, over to Richmond.
So we're very central.
That is a nice location.
location.
That's actually a stellarlocation.
Yeah.
I've followed a lot of your posts
on LinkedIn and Goodman reportthat you put out and you've just
finished, you know, your kind offinal Goodman report for the year,
(06:40):
I guess.
Yeah.
I would love to focus on thatbecause Vancouver is such a good
indicator for kind of the rest ofthe province, really, with trends.
Can you break down kind of commontrends, any changes over the last
12 months, good or bad?Sure.
And just kind of give us theinsight.
Well, now that you've asked, Ihappen to have hot off the press
(07:02):
our year -end report 2024, whichis packed full of stats and
commentary.
themes for 2024 and many of which
are carried over to 2025.
So I'm going to read some of the
highlights just because I can'tremember them all.
There's been a lot.
That is a comprehensive book.
How many pages is that report?You're right.
It is.
It's 20 pages.
Wow.
Full of stats and anybody can
(07:22):
download it online, goodmanreport.com.
We put out two a year, the mid-year report and the year end are
big seminal reports.
And in between, we publish a lot
of articles.
The hard copy mail out goes out
twice a year.
Fantastic.
Yeah, it started in 1983.
And when I joined the business in
(07:42):
2002, we took it online.
So we have quite a large
following.
So the themes.
2024, I characterized with a fewbullet points.
Inflation finally under control.
But interest rates went up, and
then they went down, and then theywent up.
So it's been that kind of rollercoaster.
Capital gains last year, thatlooming deadline, and everybody
freaked out.
I think it was June or July.
I can't remember.
June, yeah.
It was insane for us.
(08:03):
We had five deals close within a
week of the deadline, $90 million.
Some of our clients, in theory,
would have saved a million bucksjust by making sure they didn't
get captured by that increase inthe inclusionary rate to, I think
it was 66 .7 % instead of 50.
Yeah.
So, and now, as you know, bothPolyev and Carney have suggested
they'll do away with the capitalgains tax, which I think is a
(08:26):
great idea.
Capital gains increase.
Increase.
Yes, yes.
Yeah.
If we could get rid of the entire
tax, that would be good too.
Yeah.
Residential Tenancy Act changes.
There were more changes to the
act, which further eroded propertyrights in British Columbia.
Big theme.
Astronomical development cost
charges, also known as DCCs, wereapproved for 2025.
(08:49):
That's been a real problem,particularly in this environment
where we have still very highconstruction costs, soft costs,
long entitlement periods.
So that really was the death knell
for the development land industry,which continues today.
Another theme, court -orderedsales receiverships continue to
grow.
Big news last year.
It continues this year.
Court ordered sale.
Our client is Deloitte and we aregoing to be marketing a condo site
(09:09):
in Burnaby that is underreceivership.
Some of the other themes, new landuse policies in flux.
So we have TOA.
transit -oriented area development
policies.
So there was a deadline that was
imposed in 2024 by the province tomandate that all the
municipalities within BC complywith their new rules, which is
(09:30):
essentially doing away withrestrictions or having a minimum
height and a minimum densityaround transit nodes.
to build.
And it basically is the province
understanding clearly that thecities aren't building fast
enough.
They're not building high enough.
They're not building enough andtrying to relieve some of the
pressure because we have a housingaffordability problem.
(09:54):
That caused a lot of confusionbecause not all municipalities
complied with the deadline.
and also the devil's in the
details.
So, for example, the province came
in and said, you know, you have tohave a minimum height and a
minimum density, and there'scertain tiers of density depending
on how close you are to a transitstation.
(10:17):
So they could mandate that, butthe city controls the minutiae,
like what are the frontagerequirements?
Is there inclusionary zoning,below market zoning?
Is there a pace of change?They may restrict how many
developments could go through peryear.
Are there a maximum amount oftowers per block, which we have
seen in the Broadway plan?So Vancouver did OK because
(10:40):
Vancouver was able to replicateand really mirror the work that
they did for the Broadway plan anduse that program for the TOA,
transit oriented area policies.
But other cities haven't.
really been able to comply or haveeverything flushed out.
So there's clarity.
So that's still causing a lot of
confusion today.
When a developer wants to look at
a piece of land, they still don'thave clarity on how they could go
(11:02):
about realizing redevelopment.
Are there some cities that are
like standing out worse to dealwith?
Yeah.
Until recently, Burnaby was real
tough.
Okay.
Basically said they didn't want todeal with it.
So it's always changing in flux,but yeah, that's been a challenge.
Yeah.
Okay.
So what we have in Vancouver formost developments now is 20 % has
to be below market or affordablerental.
(11:24):
what we have in Vancouver for mostdevelopments now is 20 % has to be
below market or affordable rental.
And a lot of cases, unless you're
in the highest density area, whichtypically is around six and a half
FSR or 20 stories, even then it'shard to pencil out because that 20
% below market is a drag on thepro forma and the rents have to be
(11:47):
20 % below market.
or at the same rents that the
tenants were paying before theymoved out, whichever is lower.
The tenants have the right ofreturn to come back at the same
rent, but you don't know how manytenants are going to come back
after two or three years of goingthrough the development process.
So there's a lot of unknowns.
There's a lot of risk.
(12:08):
The other notable factor in 2024that has continued into 2025 is
softening rental rates.
It's been really significant.
I can't remember the last time.
that we've had such a pronounced
change in rental rates,particularly in the higher rent
areas or where rents were pushedpretty high.
And so that's causing a lot ofhavoc in the market because in
addition to high constructioncosts and long entitlement times
and all the risk and uncertainty,which comes along with being a
developer, now you have to rejigyour performance because, you
(12:28):
know, some developers were bankingon $6 plus per square foot in
rents.
And that has really come off.
So many opine that it's becausethere's more supply in the market.
Perhaps that's one factor.
I think it's more to do with just
a really tough economy and peoplelosing their jobs.
And fatigue has really set it inthe market.
Like not everybody can affordthese crazy rents.
So there's been a pronouncedadjustment there.
(12:49):
And I would say now going into2025, the most interesting or
exciting thing that we've heardfrom our politicians is the idea
that we... may have rollover,which would allow investors who
sell investment properties toreinvest their money and not have
to pay capital gains tax, which werefer to as the 1031 exchange in
Canada.
(13:09):
So that would be really
interesting.
And I think for anybody in the
transactional -based business,whether you're a mortgage broker,
a realtor, or otherwise, I thinkwe would see a lot more liquidity
and velocity in the market.
I think we'd have to hire another
couple brokers just to keep up.
That would be a good problem.
Can we just talk about thebenefits of that program?
(13:29):
just talk about the benefits ofthat program?
So yeah, as the listener knows, Imean, this has been going on in
the States.
first entry, 1031 exchange.
You sell, you can defer your gainsessentially as long as you
reinvest into real estate, whichis just a fantastic idea in Canada
because if we want more supply andthis allows movements of property,
(13:49):
it can be a second house as well,like a vacation cabin, something
that you're going to pay gains on.
You can roll that over into
something else.
Is this going to be the next
catalyst to actually put some moreunits on the market?
It would be huge.
would be huge.
(14:10):
Yeah, there are so many scenarios.
I read an article, I think, I
don't know if it was in businessin Vancouver, where they have a
case study of a business ownerthat owns an industrial site
somewhere in the Fraser Valley.
They want to sell the property
because they want to expand theirbusiness.
But if they sell the property,they're going to get hit with a
massive capital gains and the costbenefit doesn't work out to sell
the property.
Yet they're struggling because
they need to expand theirbusiness.
At the same token.
(14:32):
That land, the highest and best
use is actually rentaldevelopment.
And so if they sold their propertyto a developer, now we would have
much needed rental housing built.
So win -win for everybody.
Win -win for the community.
Win -win for the renters.
More supply.
Win -win for this business owner
that they can go on and expandtheir business and hire more
people.
Yet.
The government's got their handout.
(14:54):
It doesn't make sense.
So you've basically frozen the
market.
That's just one example.
But I think to have a healthy,balanced market, we can't penalize
people for continually riskingtheir capital and trying to make a
profit.
And if you keep taxing people to
oblivion, we're going to lose theentrepreneurial spirit here in
British Columbia and Canada, andpeople are going to take risks and
move their money elsewhere.
You know, it's funny as I just
(15:15):
dealt with this, my own businesswhere he had a land assembly where
there was four houses for sale.
Yeah.
And then the fifth one, the cornerone was kind of like the money
property to the whole thing was arental property.
So the four owners, all owneroccupied want to live there.
And then the rental property onthe corner, I approached them and
said, do you want to sell like sothat we can build an apartment
(15:38):
block?And they said, no, because if I
sell, I'm going to get killed oncapital gains.
That's right.
So they just didn't sell.
So the corner was still there.
The other four sells.
And now they're building like 16townhomes when it would have been
like 72 unit.
That's right.
Building all because of the oneperson.
And she's right.
She would have effectively not
made any money because of that.
(16:01):
Makes more sense for her to just
keep the property as like a duplexrental of two units there.
And it's not always on the bigscale too, right?
Like a lot of people think thislegislation comes down and it's
going to just support developers.
But even if somebody has a small
condo that they've been rentingout for years and years and years,
you know, they're better off justto refi and defer those gains and
(16:22):
keep it as a rental.
But what if a first time home
buyer wants to buy an affordablecondo?
Well, if they, you know, removethis capital gain or do a
rollover.
That allows somebody to buy that
as a home, an owner -occupiedhome.
So yeah, huge opportunity withthis.
this.
What's the argument against this?
Because when I look at it, it'sjust positives across the board.
Why would they not do this?I couldn't think of a real reason.
The government is used toextracting their pound of flesh.
(16:43):
government is used to extractingtheir pound of flesh.
And our whole system and Canadiangovernment is based on a very
onerous tax ethos.
Things are changing now because
now we realize that we have tocompete and we have to attract
capital and we have to bring backinvestors.
And I think foreign investmentwould be very healthy for the
economy.
And Trump's putting on the
pressure.
Maybe he's doing us a favor in the
long term that we can't be relianton the United States and that we
(17:04):
have to grow up and look.
at alternatives and create a more
healthy, balanced economy.
Because if we don't, we're in
serious trouble.
Yeah.
And the beauty of this program is,you know, if you're reallocating
that capital back into Canada,like that's the key point.
Because right now there arepeople, you know, selling assets
and going elsewhere.
Like the States or Mexico or
wherever you want to go.
wherever you want to go.
Like, do you know how many BCdevelopers have pens down?
(17:26):
They're done with Vancouver.
They're moving to Calgary.
Like if that's not a sign of thetimes, I don't know what is, but
they don't want to have anythingto do with taking risks here.
And just to build anything heretakes years.
In Calgary, you can get somethingdone in a year, you know, go
through the entitlement processand make some money and provide
housing.
Yeah, I'm sure this is a lot in
your report as well.
(17:49):
It's like the uncertainty that
we've had over the last couple ofyears is killing transactions and
killing opportunity.
And this is a great program.
But to summarize it over what it'sjust about a year now, capital
gains inclusion announcement cameout.
It was supposed to be implementedin June, then maybe delayed and
it's going to happen.
It's not going to happen.
And now we're talking about wipingit out.
(18:10):
altogether.
Larger transactions take a long
time.
So if somebody put pen to paper,
you could crystallize those gainsprevious.
You could reassign that asset in adifferent corp and pay those
gains, which was just essentiallya money grab from the government.
But then it didn't happen.
And then you still have that
transaction that's going to playout to sell.
(18:31):
What if you sell before thisprogram doesn't get...
It's wild how much money is lefton the table here.
Absolutely.
Yeah.
Well, kind of to stay on topicwith your report, where are we
headed in 2025?What are the trends looking like?
And can we talk about, I mean,everything like what are cap rates
in Vancouver?How many transactions have been
happening?Vacancy?
Just, yeah.
Where are we going with
everything?Well, I'll start with like the
notable trends in 2024 and how Ithink it's going to play out 2025.
So 2024 finally was a recoveryyear.
(18:53):
sort of, when compared to theprevious two years.
So we've had two consecutiveyears, 2022 and 2023, saw declines
in transactions in dollar volumein the Metro Vancouver multifamily
market.
And in 2024, we bounced back.
We had an increase in transactionsof 33%.
So we had 97 sales throughoutMetro Vancouver.
compared to 73 transactions.
So that's significant.
But dollar volume was major.
There was a major change.
(19:13):
We went up 71 % from the previousyear.
So 2024 saw $1 .78 billion intotal volume.
compared to just $1 billion a yearearlier.
So we've had a 33 % change intransactions, but a monumental
change in dollar volume.
And that's because we had a few
major transactions.
We had three deals over $100
million, which is really big forour city.
(19:34):
And so major pension funds andinstitutions came in and bought
some newer product in Vancouver.
So that really inflated the dollar
volume.
I would say some other noteworthy
trends in terms of buyer profile.
For years, it's been very
consistent.
Generally speaking, 10 % of all
the transactions in MetroVancouver were by pension funds
and REITs, generally.
Most of them out of Toronto, some
(19:56):
out of Alberta.
But for the most part, our
market's been about 85 % privateinvestors, mom and pop, anything
from a 10 -suite apartmentbuilding right up to a $50
million, $60 million deal.
About 85 % were private and high
net worth individuals.
The other 10 % institutions and
5%, give or take, were nonprofitor government entities.
And that has changed significantlywhere government and nonprofit
(20:19):
represented 19 % of all thetransactions last year.
And that's due in part to aprovincial initiative called the
Rental Protection Fund, wherethey've allocated half a billion
dollars to nonprofits in ways ofgrants and subsidies for them to
buy.
this older rental housing that we
(20:39):
see today throughout MetroVancouver.
You know, I've been critical ofthe program.
They're not creating any newrental housing.
They're really just shifting thebuilding from one ownership group
to another.
And if you're one of the lucky few
that it's part of a nonprofit,you'll get your rent subsidized or
(21:00):
frozen in time.
But it's not really adding supply
to the market.
But in any event, I think it was
very politically expedient for ourpremier and province to roll out
this program.
If anything, one could argue that
it causes more scarcity and moredemand because you've literally
removed affordable housing out ofthe public sphere for regular
people into the nonprofit sphere.
(21:21):
I don't think it's a very elegant
and efficient way of... helpingaffordable housing or creating
affordable housing.
It's kind of a blunt tool where
you buy a building and the tenantlucks out.
You know, a lot of these tenantsdidn't need to be saved.
Many of them make a decent incomeand they just happen to be living
(21:44):
in that building that waspurchased by a nonprofit.
And, you know, they'll stay therefor years.
So in any event, that I thinkreally contributed to the dollar
volume and the transactions in2024.
Institutional groups, pensionfunds and REITs dropped a little
bit.
They represented 7 % of the
transactions and privateindividuals represented about 74%.
(22:06):
So there was a change there.
In terms of value, if we look at
Metro Vancouver across the board,so that includes the city itself,
neighborhoods like Kitsilano.
Fairview, Marple, the West End of
Vancouver, and then, of course,the suburbs, Burnaby, North Van,
Coquitlam, you name it.
The price per unit was flat.
(22:28):
So in 2024, the average price perunit was $462 ,000, and the
previous year was $459 ,000.
So there was a 1 % increase across
the board in price per unit.
It's not the best way to look at
value because there's differentpockets and nuances to different
areas.
And many of the properties,
apartment buildings that wereacquired were for redevelopment.
And so in many cases, developerspaid a lot more for the land and
(22:48):
that really pushed up the priceper unit.
So the devil's in the details.
In Vancouver, there was a 17 %
increase in average price perunit.
So we were at 570 ,000 a unit.
versus 486 the previous year.
Again, there's some sales wherethe sites were purchased by
developers that pushed the priceper unit to over a million dollars
(23:11):
per unit.
But it just gives you a general
sense of where the market.
I do not see any pronounced change
in value over the next while.
I just think things have
stabilized.
Interest rates have come down.
The one trend that I think isgoing to be very noteworthy is the
amount of listings on the market.
For the last three years, what
I've heard from investors orpeople considering selling is
we're just going to wait.
Anytime there's uncertainty, push
(23:32):
the pause button.
We're going to wait.
We're going to wait for the marketto get better.
We're going to wait.
When interest rates go down,
prices are going to go up.
And what I try to communicate to
people is that interest rates areonly one variable that dictate
market value.
It is not the Hail Mary indicator
(23:57):
of how values are going tomanifest based on interest rates.
What happened was people waitedthree years.
Interest rates finally came downabout 100 basis points.
I mean, you would know better thanme.
And what happened was there's fourtimes as much product on the
market.
(24:18):
So, you know, at Marpole, there is
a dozen listings hanging in themarket for, you know, between 320
and 380 a door.
Nothing's been selling.
It's been like that for a year.
I came up with a few listings at
$300 ,000 a door.
It was crickets.
We just sold one building for $260,000 a door.
(24:38):
And we made the market.
And that kind of screwed things up
for everybody else.
This is supply and demand.
The market doesn't lie.
We just tied up another building
around $260 a door.
Well, three years ago, they were
selling close to $400 a door.
So there's been about a 25 % to 30
(25:00):
% drop.
per unit in Vancouver properties.
We're seeing less of a pronounceddrop in newer purpose -built
buildings or properties that had ahigher yield.
So it's a much more sensitive timetoday for cap rates.
You're going in cap rate is veryimportant.
Gone are the days where a buyer isgoing to feel comfortable putting
down 70 % and having a 30 % loanto value, which by the way, I've
done some of those deals at a twoand a half cap.
(25:24):
Before 2019, cap rates were lessimportant.
They were temporary becauseentrepreneurs, people would go in,
they'd rehabilitate these oldinefficient buildings.
They would give notice, rehab thebuilding, and double the rents,
also known as rent evictions.
That game is over.
And so you could be stuck with abuilding and just wait for natural
attrition, natural turnover, andthen you would go ahead and update
the units.
So cap rates are much more
(25:45):
important today than they've everbeen.
The lending environment isdifferent.
Everything takes longer.
They scrutinize the numbers more,
less flexibility.
We're still doing deals, but I
would say that the cap rates thatwe're seeing are generally in the
very high 3 % to low 4 cap raterange.
Of course, there's nuances forevery deal, but generally we're in
(26:05):
the high threes to low fours.
We just closed on a building in
Mount Pleasant, a really nice old1960s building.
It sold at a 3 .2 cap.
which is lower than we typically
see.
However, the price per unit was
330 ,000 when, generally speaking,the market in that area was
trading around 350 to 370.
So in return for a lower price per
(26:25):
unit, the buyer accepted a loweryield.
But over time, two or threeturnovers, you're going to get
those rents up 50 to 75%.
That cap rate will change very
quickly.
So it's not all about cap rate.
But I would say it's much moreimportant today than it's ever
been.
That does seem a bit higher than I
(26:47):
thought it would be in Vancouver.
Do you feel it's going to keep
going up?I think things have plateaued
right now.
I think five -year money CMHC
insured, you're probably around 3.5, 3 .6.
It's quite volatile.
It's changing all the time.
So you're going to need somethingclose to that in order for it to
make sense.
I don't think cap rates are going
to drop or increase.
(27:08):
I think things are going to be
stable right now.
And we finally have data points.
Until recently, We had appraiserscalling us all the time, like, how
do you value a property when thelast trade in this neighborhood
was eight months ago?And that's ancient history.
The way we were pricing propertiesis we look at what was currently
(27:29):
hanging on the market, which was alot.
And then you got to undercut theprice.
And finally, we started gettingsome sales and data points.
You know, I'd say we're in a muchhealthier environment.
It's more balanced now, but it'scertainly it's not a seller's
market anymore, whichtraditionally what Vancouver real
estate used to be.
Buyers have a lot more choice and
(27:50):
options right now, and they'remuch more careful.
You raised a good point there.
raised a good point there.
I think historically, we've alwayslooked at real estate and said,
yeah, there's a value add with therent evictions.
pre what was that 2022 i guesssomething like that they changed
it i think before 2019 thelegislation was such that allowed
you to evict tenants for thepurpose of renovation yeah so you
(28:14):
know now you nailed it you're liketransitory you have a renter move
out you know just by attrition andyou can increase rent but you know
something you said a few minutesago which we've seen in the
okanagan as well rents have beendecreasing so our think before
2019 the legislation was such thatallowed you to evict tenants for
the purpose of renovation so youknow now you nailed it you're like
(28:36):
transitory you have a renter moveout you know just by attrition and
you can increase rent but you knowsomething you said a few minutes
ago which we've seen in theokanagan as well rents have been
decreasing so our those units thatare on the market, are they still
so undervalued that even if thattenant moves out, there will be a
rental increase?Yeah, for sure.
Like we had a client, this is abad news story and it's not
(28:59):
typical, but it would be on theextreme range of like, you know,
bad investment decision or badtiming.
We had a client come in whopurchased a building in the West
End in 2017, which was really avery strong, it was peak, you
know, interest rates were low, youknow, prices were escalating very
quickly.
And they bought this building at a
very low cap rate at the time.
You know, I figure it was around a
(29:19):
2 % cap rate.
And I've sold a ton of these
properties at 2%.
They didn't start the renovation
program right away.
And half the building had rents at
$600 to $700 a month.
You know, one bedroom today, you
could be around $2 ,500, right?They had these units rented for
600, 700, you know, about half thebuilding.
And then they spent a million anda half dollars renovating the
(29:39):
building, not the suites, but thecommon areas, the exterior, the
roof, the windows, which doesn'tincrease your rent.
Then they had holding costs andtheir mortgage just matured.
So it went up, you know, quitesignificantly.
So they're in a negative cash flowsituation right now and they're
bleeding.
And, you know, what do you do?
It's been professionally managed.
I looked at the rent rule.
And even in the last two years,the property has been rented out
(30:01):
at $2 .30 a square foot when itshould be around $3 .50 or more.
So their manager has been doingthem a disservice as well over the
last two years.
So it's really a bad luck
situation.
So they're into it for about $15
.5 million all in.
You know, renovation costs,
holding costs, brokerage fees, andso forth.
They're into it for about $15 .5million.
Well, their property is worth.
probably around $385 ,000 a unit,
which is in the higher three caprange.
And it pencils out to about $8million.
So we're talking about a $7 .5million loss since 2017.
A lot of investors think, well,we're only seeing that craziness
in the land market.
you know, we are having these
massive swings downwards.
Well, it's happening in some cases
in the multifamily market as well.
You know, it's a perfect storm.
(30:22):
Your mortgage matures, yourinterest rates tripled, you're
softening rents, you're notgetting the turnover that you
thought.
This is not an easy game.
You have to manage the manager andyou're running a business.
And so unfortunately, there's afew people getting stuck right
now.
Do you have the stats for what you
guys are using for expense ratiosright now?
Because I imagine that's increasedlike substantially.
We don't use expense ratios.
don't use expense ratios.
(30:43):
I find it a flawed system.
I don't think it's a very elegant
way to look at expenses andcompare apples to apples.
And I'll tell you why.
When I started in the business in
2002 or 2003, expense ratios weremore common.
And they were about 33 % prettyconsistently.
The market was stagnant.
It was flat.
One bedroom units were $750 amonth.
(31:03):
Price per unit in the west sidewas $80 ,000 a door and cap rates
were 6%.
That was for about a year when I
started.
And what happened was rents just
started increasing exponentially.
And so your expense ratios
logically dropped.
Expenses didn't increase at the
same rate.
And then we had this renaissance
of new purpose -built buildingswhere now you weren't being stuck
(31:24):
with legacy tenants, you wererenting at market.
And market is not the CMHCaverage.
That's a snapshot of rents frozenin time.
Market was like way higher.
And so expense ratios started
dropping to about 16%, 17 % on newbuilds because the rents were
quite high.
Or you can have an underperforming
building where the rents arereally low.
And so your expense ratio is goingto be over 50%.
(31:44):
So what we use is price per unit.
Price per unit is a much better
way of looking at buildings.
And I would say like for an older
building, you know, 56 year oldbuilding.
You're going to range anywherefrom $55 to $6 ,500 a unit right
now.
And maybe a little higher for
newer purpose -built buildings.
It depends, you know, if there's
(32:06):
underground parking and anelevator and, you know, the type
of staff you have managing theproperty.
But we rarely look at expenseratios.
How many clients are you seeinghigh level that are using MLI
Select compared to just, you know,conventional financing?
I would say my gut right now isabout... probably 70 % are going
for CMHC insured money.
Wow.
It's a much better interest rateand longer amortization periods
(32:31):
and it tends to work.
However, for buildings that are
underperforming significantly,buyers are not going through CMHC.
They're getting conventional loanand they're trying to add value,
turn over the building.
In some cases, our clients will
offer money to tenants to moveout.
So the soft approach.
So it's a win -win for the tenant,
win -win for the landlord.
And then when they get their rent
(32:51):
roll, it starts looking better.
They'll go through the CMHC
process.
So that's what we're seeing.
I've noticed that the timelinesfor getting CMHC insured financing
right now are quite long, a littlelonger.
We don't like to have buildingsunder contract for more than 30
days.
We try to keep it under 30 days,
which is really not enough time toget the rubber stamp from CMHC.
(33:14):
Basically, we're seeing a lot ofbridge loans right now where
mortgage brokers are.
assisting our clients with
conventional financing.
They'll close with a CMHC approved
lender, and then they'll roll itinto CMHC a few months later.
So there's an additional cost toit, but it seems to be the route
that buyers are going today sothat we're not stuck waiting for
(33:37):
six months under contract.
That's interesting.
I mean, we're seeing a lot of...
Purpose built rentals in Kelowna
as well.
We did an episode recently.
We have about 5 ,000 units comingon the market over the next few
years.
And, you know, it's about a 3 %
add to our current inventory.
And I believe most of those would
be MLI Select as well.
(33:58):
Yeah.
You know, it's a great program,but is it kind of holding up that
side of the industry right now?Like artificially, if things
aren't penciling at these caprates, it works.
But I guess if we were to compare.
MLI Select compared to the
rollover, the 1031 exchange.
What would you prefer if you had
to pick one?Yeah.
Oh, Oh, rollover all day long.
Yeah, absolutely.
(34:18):
I mean, look, CMHC is in vogueright now.
It wasn't always in vogue, butthey've got some decent programs
and it makes sense.
But, you know, if they're not
around anymore, there'll beanother mortgage product that will
fill the market quite quickly.
Yeah.
I do want to ask one more questionbefore we kind of wrap up here.
I know we've got to be cautious oftime, but how did the Goodman
(34:38):
Report start?That's a great question.
Let's start with my father back in1980.
Before that, he was a residentialrealtor for 10 years at a national
company called NRS Block Brothers.
It was the big company in Canada,
and he was doing residentialsales.
I was just a kid.
(34:59):
He became the number one realtor
in all of Canada.
He won an award, and he was
working a lot.
Back then, there was no cell
phones.
There was no pager.
There was no email.
There was no internet.
How the hell did you do a deal?It was couriers and rotary phones.
That's crazy.
That reminds me of that meme.
It's like, what did people dobefore Google Maps?
(35:19):
It's like, they use maps.
Yeah, I don't even know how to use
a map now.
So, you know, back then they were
doing deals with... carbon papercontracts on the hood of a car and
you were sending couriers fordocuments.
There was no fact.
There was nothing.
And the MLS was literally a book.
a It was a book.
So, you know, that was 10 years.
(35:40):
He would smoke a cigar in his
office.
He had.
20 typist secretaries, and it wasa different time.
smoke And after that, he wantedhis weekends back.
He wanted something a little bitmore cerebral.
He started doing business with themogul Nelson Scalbania.
He sold a few buildings to him.
Many of your audience may not know
who he is, but he was the mostprominent.
flipper real estate cowboy in thehistory of the world.
(36:02):
Google Nelson Scalabinia.
He was amazing.
Sold Wayne Gretzky to the Oilers.
But he was buying and selling.
He was doing about 600transactions a year on a napkin.
He couldn't keep track of hisdeals, making $20 million a week
on flips.
In any event, That propelled him
to move more into commercial realestate.
He decided that there was a vacuumof information in the apartment
market.
Nobody had information.
So he decided to start theapartment building newsletter,
(36:22):
which got rebranded to the GoodmanReport.
And as a kid, it was truly afamily business.
So he would write the newsletteron a pad of paper, send it to
someone to type up.
They would go to a printing press
and then the whole family wouldget around the dining room table
and we would have to stuff theenvelope.
You know, how old was I in 1982?Well, I was about five years old.
(36:45):
We were stuffing envelopes,folding them, licking stamps.
And my father would write a noteto every owner, handwritten.
And there's about 2 ,300 apartmentowners.
So you can imagine it took a longtime.
But, you know, we had mygrandparents come over.
The cleaning lady came in.
My brother, we were folding.
And before you knew it, he was thenumber one guy in the apartment
business.
And that continued for many years.
I started back in 2002, joined thebusiness, and the rest is history.
(37:09):
My father retired six years ago,but we took it online.
And I said, you know, Dad, weshould really have a website.
And he goes, what do I need awebsite for?
Everybody knows who I am.
I'm like, you should also get a
computer on your desk.
He goes, what do I need a
computer?I got my secretary to do the
faxes.
But when we started gathering
emails, I remember our first emailblast.
(37:29):
Like right now we have... youknow, 150 ,000 followers through
our email distribution list and onLinkedIn and Facebook and Twitter
and Instagram.
But back then I said, you know,
we're going to take the GoodmanReport online and we should get
emails.
I remember getting a thousand
emails through calling owners,mailing them, asking for their
email.
They would say, what's an email?
And I was like, well, you can getone on AOL if you remember those
(37:52):
days.
And I would walk them through to
subscribe.
So I did that for a few years.
And I remember I got a thousandemails and now I had to send them.
And there was no bulk emailprograms back then.
It was old school.
But you couldn't send out 1 ,000
emails through Shaw or Telus,whatever we use, the ISP, because
they thought you were a spammer.
(38:12):
So I had to go meet with the IT
person at Shaw and ask them towhitelist our ISP for 24 hours so
I could send out 1 ,000 emails,which, by the way, was huge.
So our first listing, sending outby email.
23 years ago, it was a building inChilliwack.
And I didn't even know where thehell Chilliwack was.
I just remember it was a reallylong drive.
(38:34):
And my father said, we don'ttypically do stuff in Chilliwack.
It's too long of a drive, but it'sa nice building.
And my dad wasn't veryenthusiastic.
But we took a picture.
I wrote a description.
The IT department was on standby.
They whitelisted our IP.
And I sent out 1 ,000 emails forthis Chilliwack listing.
And the phone blew up.
It rang off the hook.
We got multiple offers.
And, you know, my father had been
(38:55):
in the business for 25, 26 years,came running down the hall.
And he goes, this is fuckingincredible.
I've never seen anything like thisbefore.
This email thing is amazing.
This internet is amazing.
This is a good idea.
This is the future.
And the rest is history.
is history.
That was awesome.
Well, I mean, huge takeaway there
is there's a massive amount ofwork ethic in your blood.
(39:18):
So I appreciate that.
We have fun every day.
was awesome.
have fun every day.
That's great.
Yeah.
Yeah.
I hope this was fun.
It was good for us.
And yeah, I really appreciate you
coming on.
Keep the report coming.
And yeah, I appreciate all theinformation you're providing to
us.
Great.
Well, it was a pleasure to meetyou guys and be on your show.
(39:38):
I go to Kelowna once a year.
It's a beautiful place.
Time slows down.
It's hot.
It's beautiful.
I love the Lake Country.
And I'll come visit you guys thenext time I'm up there.
Sounds great.
great.
For your audience and listeners,if you're interested, you can
subscribe to goodmanreport com online.
We send you news, views, listings.
And I also have a podcast, the
Goodman Report podcast.
So we've had a few people on and
(40:00):
you can listen to that on all yourfavorite platforms.
So thank you guys.
That sounds great.
Thanks, Mark.
Appreciate it.
Welcome back to the Colonial RealEstate Podcast.
(00:01):
I'm your mortgage broker host,Taylor Atkinson.
And I'm your real estate agenthost, Matt Glenn.
What's happening, Taylor?Well, I got out and voted this
week.
Yeah, you really voted.
I'm not.
I'm going day of.
You're waiting until, yeah.
Yeah.
Yeah, so we're recording this, buton the 24th of April.
And what, voting's 28th?Like, are we going to know the
results that night?I think we'll know the results, or
(00:22):
at least have an idea.
We thought the same thing in the
provincial election, election, andit took like another five days.
That's true.
Yeah.
So when we listen to this,everyone might be scratching their
heads still, but I think we'llknow an answer.
I actually think the provincialelection had, it seemed like a
more technology advanced votingsystem.
This one, like I got there, Ididn't know if I was coloring in
(00:42):
the circle, putting an X, a checkmark.
I was trying to read instruction.
I asked the lady, she's like, oh
yeah, no, just the check mark.
So someone manually has to go
through and read all these.
It just seems like such a crazy
system, but.
That's crazy.
Yeah.
If you're confused, mark.
you're confused, that means thatlike 50 % of the population is
confused, dude.
I feel like there should be a
better system that removes thehuman error, you know, like a
(01:04):
digital system.
Well, if you have a digital
system, Well, if you have adigital system, isn't it hackable?
Don't they like the human error?Yeah.
Okay.
At least then you can get a
recount.
Like, I don't know.
I don't know what the best thingto do is, but there are
instructions, obviously.
Yeah.
As we're sitting right now, as oftoday, and who knows really what
the polls mean.
I don't know how they really come
up with this stuff.
Yeah, nobody ever asked me.
Do you know how the polls work?So right now, liberals are at 42 %
(01:26):
and conservatives are at 38%.
But I think it's trending
slightly.
Liberals are coming down slightly
and conservatives are coming up.
So it's going to be like split.
Yeah.
Pierre was way ahead and then
Trump got in and has been pissingoff Canadians.
So then Carney came way back andwas ahead and now they're kind of
evening out, I think.
So yeah, we'll see.
Yeah.
(01:47):
It's interesting for me
personally.
for me personally.
I feel like I'm in an echo chamberbecause yeah, I see things one
way.
Well, in the real estate industry,
I think we are in an echo chamberfor sure.
Well, in the real estate industry,I think we are in an echo chamber
for sure.
Yeah.
One thing I got to say is I likethat we have like a 35 day
election.
Like man, I would not want to be
dealing with this for 18 months.
I like that.
It's just like get your pointacross and get people out.
You know, that's actually like agood positive spin because on the
(02:08):
final question of the debate, spinbecause on the final question of
the debate, when they asked them,you know, what do you like about
this election?And they were like, you know, I
wish I could have gone out.
And they all said the same
response.
I wish I could have met more
people and I wish the election waslonger.
And I was kind of like, yeah, Iguess they haven't really had like
a fair chance, but really.
Goddamn politicians, go out and
meet people when there's not anelection.
Yeah.
Have a town hall for Christ's
sake, if you're so worried aboutthat.
Yeah.
Right.
And also, I feel like we've beentalking about an election for like
(02:30):
a year now.
It's been inevitable.
Yeah.
Honestly, it's nice that it's not
in everyone's life forever.
So like, it's kind of just, here
we go.
Then we just live with the
consequences next week.
Well, exciting times.
We'll see.
Yeah.
Well, on this show, we had anawesome guest, Mark Goodman.
He has the Goodman Report.
He's based out of Lower Mainland,
based out of Vancouver.
He's been in commercial real
estate, I think mostly multifamilyfor the last 20 years.
(02:51):
And, you know, his dad.
was an agent prior to him.
Really cool origin story.
Like his dad basically did a
mailing list, you know, likemaking envelopes, door knocking,
personally handing them out.
And Mark's evolved it.
to where it is now, where it's asemi -annually, annually, you
know, project and then doesmonthly mail outs as well and
stuff like that.
So really good resource, has his
own podcast, puts out coolLinkedIn stuff.
(03:12):
So we wanted to speak to somebodythat sees the industry down there
because, you know, we're hearing alot from like Vancouver and
Toronto of like the trends ofcertain asset classes.
So yeah, he was a great resourceto talk to.
We'll And he is very stoked on thepossibility of a Canadian 1031
exchange.
So that's kind of interesting to
hear.
of interesting to hear.
I mean, it just seems like a no-brainer.
(03:34):
So if anyone doesn't know what the1031 exchange is in the States,
basically, it allows you to defercapital gains if you reinvest it
into the economy.
So you sell a property or
potentially a business, there'scapital gains.
As long as you reinvest that backin, it's great for the Canadian
economy.
It's great for that business or
investor.
It gets things moving.
When you sell these properties,you don't have massive tax bills.
gets things moving.
When you sell these properties,
(03:55):
you don't have massive tax bills.
You just buy another property.
Things move.
I haven't honestly read up a lot
on why we wouldn't want thisbesides less government revenue, I
guess.
But it just seems like a positive
to me.
Yeah.
But I think the government revenuewill be there at some point,
right?When you do stop deferring those
at some transaction.
But if the economy is doing better
and GDP is growing, thegovernment's going to be making
more money.
So it's more of a long -term plan,
right?But honestly, I hope that one goes
(04:15):
through.
And the GST on homes.
Let's cut that too.
Let's get some homes moving here.
Yeah, there's been some greatpromises over the last month.
So we'll see who holds up theirend of the bargain here.
Probably nobody.
nobody.
Yeah, here you go.
The election's over.
Here's the hose.
This is a great episode.
It's a lot of fun to talk to.
Obviously, you can tell he
podcasts himself because he's onit.
(04:37):
Yeah.
This episode, like every episode,
is sponsored by Century 21Assurance Realty.
We got our fingers in all thepies.
around the province.
We're a great brokerage to work
with.
Kind of like a cooperative
environment.
Obviously, when you're a real
estate agent, you're your ownperson, you're in your own
(04:57):
business, but we have added acooperative spin to it and it's
worked out well for our agents.
So if you're an agent looking for
a new brokerage or to changethings up, give us a call.
Or if you're a buyer or sellerlooking for an agent, call one of
our seller agents up or just callme.
Enjoy the show.
is a Okay, welcome to the Colonial
Real Estate Podcast.
Mark Goodman, how are you doing?
(05:17):
I'm great.
How are you guys?
Great.
Well, we like to start our show
just so our listener can get toknow you a little bit.
What's your perfect Friday looklike?
The perfect Friday.
That's a great question.
Showing up to work with a subjectremoval, with a bank draft for a
deal that's gone firm, firm dayFriday, and perhaps a closing as
well.
That would be a great Friday,
coupled with perhaps a nice non-stressful lunch, walking distance
(05:37):
from my office.
And then maybe a massage during
lunch if I can carve out sometime.
That would be good.
And then heading home and relaxing
and maybe a little socializingthat evening, I think would be
great.
I think you nailed it, Mark.
Honestly, that sounds like a greatFriday.
Let me know when you have one ofthose.
Yeah.
It's been a while.
Normally, it's just grueling,intense whack -a -mole, you know,
(05:59):
solving problems all day and thenwolfing down lunch in 10 minutes
and dealing with difficult people.
Yeah, our listener can't see, but
you've got a map of Vancouver onthe background there.
Where is your office?We are located in Vancouver in the
South Granville neighborhood.
So we're on 10th and Granville.
It's really the center of thecity, and we're five minutes away
from downtown Vancouver, just overthe bridge.
(06:20):
We have perfect access to the westside of Vancouver, east side of
Vancouver, over to Richmond.
So we're very central.
That is a nice location.
location.
That's actually a stellarlocation.
Yeah.
I've followed a lot of your posts
on LinkedIn and Goodman reportthat you put out and you've just
finished, you know, your kind offinal Goodman report for the year,
(06:40):
I guess.
Yeah.
I would love to focus on thatbecause Vancouver is such a good
indicator for kind of the rest ofthe province, really, with trends.
Can you break down kind of commontrends, any changes over the last
12 months, good or bad?Sure.
And just kind of give us theinsight.
Well, now that you've asked, Ihappen to have hot off the press
(07:02):
our year -end report 2024, whichis packed full of stats and
commentary.
themes for 2024 and many of which
are carried over to 2025.
So I'm going to read some of the
highlights just because I can'tremember them all.
There's been a lot.
That is a comprehensive book.
How many pages is that report?You're right.
It is.
It's 20 pages.
Wow.
Full of stats and anybody can
(07:22):
download it online, goodmanreport.com.
We put out two a year, the mid-year report and the year end are
big seminal reports.
And in between, we publish a lot
of articles.
The hard copy mail out goes out
twice a year.
Fantastic.
Yeah, it started in 1983.
And when I joined the business in
(07:42):
2002, we took it online.
So we have quite a large
following.
So the themes.
2024, I characterized with a fewbullet points.
Inflation finally under control.
But interest rates went up, and
then they went down, and then theywent up.
So it's been that kind of rollercoaster.
Capital gains last year, thatlooming deadline, and everybody
freaked out.
I think it was June or July.
I can't remember.
June, yeah.
It was insane for us.
(08:03):
We had five deals close within a
week of the deadline, $90 million.
Some of our clients, in theory,
would have saved a million bucksjust by making sure they didn't
get captured by that increase inthe inclusionary rate to, I think
it was 66 .7 % instead of 50.
Yeah.
So, and now, as you know, bothPolyev and Carney have suggested
they'll do away with the capitalgains tax, which I think is a
(08:26):
great idea.
Capital gains increase.
Increase.
Yes, yes.
Yeah.
If we could get rid of the entire
tax, that would be good too.
Yeah.
Residential Tenancy Act changes.
There were more changes to the
act, which further eroded propertyrights in British Columbia.
Big theme.
Astronomical development cost
charges, also known as DCCs, wereapproved for 2025.
(08:49):
That's been a real problem,particularly in this environment
where we have still very highconstruction costs, soft costs,
long entitlement periods.
So that really was the death knell
for the development land industry,which continues today.
Another theme, court -orderedsales receiverships continue to
grow.
Big news last year.
It continues this year.
Court ordered sale.
Our client is Deloitte and we aregoing to be marketing a condo site
(09:09):
in Burnaby that is underreceivership.
Some of the other themes, new landuse policies in flux.
So we have TOA.
transit -oriented area development
policies.
So there was a deadline that was
imposed in 2024 by the province tomandate that all the
municipalities within BC complywith their new rules, which is
(09:30):
essentially doing away withrestrictions or having a minimum
height and a minimum densityaround transit nodes.
to build.
And it basically is the province
understanding clearly that thecities aren't building fast
enough.
They're not building high enough.
They're not building enough andtrying to relieve some of the
pressure because we have a housingaffordability problem.
(09:54):
That caused a lot of confusionbecause not all municipalities
complied with the deadline.
and also the devil's in the
details.
So, for example, the province came
in and said, you know, you have tohave a minimum height and a
minimum density, and there'scertain tiers of density depending
on how close you are to a transitstation.
(10:17):
So they could mandate that, butthe city controls the minutiae,
like what are the frontagerequirements?
Is there inclusionary zoning,below market zoning?
Is there a pace of change?They may restrict how many
developments could go through peryear.
Are there a maximum amount oftowers per block, which we have
seen in the Broadway plan?So Vancouver did OK because
(10:40):
Vancouver was able to replicateand really mirror the work that
they did for the Broadway plan anduse that program for the TOA,
transit oriented area policies.
But other cities haven't.
really been able to comply or haveeverything flushed out.
So there's clarity.
So that's still causing a lot of
confusion today.
When a developer wants to look at
a piece of land, they still don'thave clarity on how they could go
(11:02):
about realizing redevelopment.
Are there some cities that are
like standing out worse to dealwith?
Yeah.
Until recently, Burnaby was real
tough.
Okay.
Basically said they didn't want todeal with it.
So it's always changing in flux,but yeah, that's been a challenge.
Yeah.
Okay.
So what we have in Vancouver formost developments now is 20 % has
to be below market or affordablerental.
(11:24):
what we have in Vancouver for mostdevelopments now is 20 % has to be
below market or affordable rental.
And a lot of cases, unless you're
in the highest density area, whichtypically is around six and a half
FSR or 20 stories, even then it'shard to pencil out because that 20
% below market is a drag on thepro forma and the rents have to be
(11:47):
20 % below market.
or at the same rents that the
tenants were paying before theymoved out, whichever is lower.
The tenants have the right ofreturn to come back at the same
rent, but you don't know how manytenants are going to come back
after two or three years of goingthrough the development process.
So there's a lot of unknowns.
There's a lot of risk.
(12:08):
The other notable factor in 2024that has continued into 2025 is
softening rental rates.
It's been really significant.
I can't remember the last time.
that we've had such a pronounced
change in rental rates,particularly in the higher rent
areas or where rents were pushedpretty high.
And so that's causing a lot ofhavoc in the market because in
addition to high constructioncosts and long entitlement times
and all the risk and uncertainty,which comes along with being a
developer, now you have to rejigyour performance because, you
(12:28):
know, some developers were bankingon $6 plus per square foot in
rents.
And that has really come off.
So many opine that it's becausethere's more supply in the market.
Perhaps that's one factor.
I think it's more to do with just
a really tough economy and peoplelosing their jobs.
And fatigue has really set it inthe market.
Like not everybody can affordthese crazy rents.
So there's been a pronouncedadjustment there.
(12:49):
And I would say now going into2025, the most interesting or
exciting thing that we've heardfrom our politicians is the idea
that we... may have rollover,which would allow investors who
sell investment properties toreinvest their money and not have
to pay capital gains tax, which werefer to as the 1031 exchange in
Canada.
(13:09):
So that would be really
interesting.
And I think for anybody in the
transactional -based business,whether you're a mortgage broker,
a realtor, or otherwise, I thinkwe would see a lot more liquidity
and velocity in the market.
I think we'd have to hire another
couple brokers just to keep up.
That would be a good problem.
Can we just talk about thebenefits of that program?
(13:29):
just talk about the benefits ofthat program?
So yeah, as the listener knows, Imean, this has been going on in
the States.
first entry, 1031 exchange.
You sell, you can defer your gainsessentially as long as you
reinvest into real estate, whichis just a fantastic idea in Canada
because if we want more supply andthis allows movements of property,
(13:49):
it can be a second house as well,like a vacation cabin, something
that you're going to pay gains on.
You can roll that over into
something else.
Is this going to be the next
catalyst to actually put some moreunits on the market?
It would be huge.
would be huge.
(14:10):
Yeah, there are so many scenarios.
I read an article, I think, I
don't know if it was in businessin Vancouver, where they have a
case study of a business ownerthat owns an industrial site
somewhere in the Fraser Valley.
They want to sell the property
because they want to expand theirbusiness.
But if they sell the property,they're going to get hit with a
massive capital gains and the costbenefit doesn't work out to sell
the property.
Yet they're struggling because
they need to expand theirbusiness.
At the same token.
(14:32):
That land, the highest and best
use is actually rentaldevelopment.
And so if they sold their propertyto a developer, now we would have
much needed rental housing built.
So win -win for everybody.
Win -win for the community.
Win -win for the renters.
More supply.
Win -win for this business owner
that they can go on and expandtheir business and hire more
people.
Yet.
The government's got their handout.
(14:54):
It doesn't make sense.
So you've basically frozen the
market.
That's just one example.
But I think to have a healthy,balanced market, we can't penalize
people for continually riskingtheir capital and trying to make a
profit.
And if you keep taxing people to
oblivion, we're going to lose theentrepreneurial spirit here in
British Columbia and Canada, andpeople are going to take risks and
move their money elsewhere.
You know, it's funny as I just
(15:15):
dealt with this, my own businesswhere he had a land assembly where
there was four houses for sale.
Yeah.
And then the fifth one, the cornerone was kind of like the money
property to the whole thing was arental property.
So the four owners, all owneroccupied want to live there.
And then the rental property onthe corner, I approached them and
said, do you want to sell like sothat we can build an apartment
(15:38):
block?And they said, no, because if I
sell, I'm going to get killed oncapital gains.
That's right.
So they just didn't sell.
So the corner was still there.
The other four sells.
And now they're building like 16townhomes when it would have been
like 72 unit.
That's right.
Building all because of the oneperson.
And she's right.
She would have effectively not
made any money because of that.
(16:01):
Makes more sense for her to just
keep the property as like a duplexrental of two units there.
And it's not always on the bigscale too, right?
Like a lot of people think thislegislation comes down and it's
going to just support developers.
But even if somebody has a small
condo that they've been rentingout for years and years and years,
you know, they're better off justto refi and defer those gains and
(16:22):
keep it as a rental.
But what if a first time home
buyer wants to buy an affordablecondo?
Well, if they, you know, removethis capital gain or do a
rollover.
That allows somebody to buy that
as a home, an owner -occupiedhome.
So yeah, huge opportunity withthis.
this.
What's the argument against this?
Because when I look at it, it'sjust positives across the board.
Why would they not do this?I couldn't think of a real reason.
The government is used toextracting their pound of flesh.
(16:43):
government is used to extractingtheir pound of flesh.
And our whole system and Canadiangovernment is based on a very
onerous tax ethos.
Things are changing now because
now we realize that we have tocompete and we have to attract
capital and we have to bring backinvestors.
And I think foreign investmentwould be very healthy for the
economy.
And Trump's putting on the
pressure.
Maybe he's doing us a favor in the
long term that we can't be relianton the United States and that we
(17:04):
have to grow up and look.
at alternatives and create a more
healthy, balanced economy.
Because if we don't, we're in
serious trouble.
Yeah.
And the beauty of this program is,you know, if you're reallocating
that capital back into Canada,like that's the key point.
Because right now there arepeople, you know, selling assets
and going elsewhere.
Like the States or Mexico or
wherever you want to go.
wherever you want to go.
Like, do you know how many BCdevelopers have pens down?
(17:26):
They're done with Vancouver.
They're moving to Calgary.
Like if that's not a sign of thetimes, I don't know what is, but
they don't want to have anythingto do with taking risks here.
And just to build anything heretakes years.
In Calgary, you can get somethingdone in a year, you know, go
through the entitlement processand make some money and provide
housing.
Yeah, I'm sure this is a lot in
your report as well.
(17:49):
It's like the uncertainty that
we've had over the last couple ofyears is killing transactions and
killing opportunity.
And this is a great program.
But to summarize it over what it'sjust about a year now, capital
gains inclusion announcement cameout.
It was supposed to be implementedin June, then maybe delayed and
it's going to happen.
It's not going to happen.
And now we're talking about wipingit out.
(18:10):
altogether.
Larger transactions take a long
time.
So if somebody put pen to paper,
you could crystallize those gainsprevious.
You could reassign that asset in adifferent corp and pay those
gains, which was just essentiallya money grab from the government.
But then it didn't happen.
And then you still have that
transaction that's going to playout to sell.
(18:31):
What if you sell before thisprogram doesn't get...
It's wild how much money is lefton the table here.
Absolutely.
Yeah.
Well, kind of to stay on topicwith your report, where are we
headed in 2025?What are the trends looking like?
And can we talk about, I mean,everything like what are cap rates
in Vancouver?How many transactions have been
happening?Vacancy?
Just, yeah.
Where are we going with
everything?Well, I'll start with like the
notable trends in 2024 and how Ithink it's going to play out 2025.
So 2024 finally was a recoveryyear.
(18:53):
sort of, when compared to theprevious two years.
So we've had two consecutiveyears, 2022 and 2023, saw declines
in transactions in dollar volumein the Metro Vancouver multifamily
market.
And in 2024, we bounced back.
We had an increase in transactionsof 33%.
So we had 97 sales throughoutMetro Vancouver.
compared to 73 transactions.
So that's significant.
But dollar volume was major.
There was a major change.
(19:13):
We went up 71 % from the previousyear.
So 2024 saw $1 .78 billion intotal volume.
compared to just $1 billion a yearearlier.
So we've had a 33 % change intransactions, but a monumental
change in dollar volume.
And that's because we had a few
major transactions.
We had three deals over $100
million, which is really big forour city.
(19:34):
And so major pension funds andinstitutions came in and bought
some newer product in Vancouver.
So that really inflated the dollar
volume.
I would say some other noteworthy
trends in terms of buyer profile.
For years, it's been very
consistent.
Generally speaking, 10 % of all
the transactions in MetroVancouver were by pension funds
and REITs, generally.
Most of them out of Toronto, some
(19:56):
out of Alberta.
But for the most part, our
market's been about 85 % privateinvestors, mom and pop, anything
from a 10 -suite apartmentbuilding right up to a $50
million, $60 million deal.
About 85 % were private and high
net worth individuals.
The other 10 % institutions and
5%, give or take, were nonprofitor government entities.
And that has changed significantlywhere government and nonprofit
(20:19):
represented 19 % of all thetransactions last year.
And that's due in part to aprovincial initiative called the
Rental Protection Fund, wherethey've allocated half a billion
dollars to nonprofits in ways ofgrants and subsidies for them to
buy.
this older rental housing that we
(20:39):
see today throughout MetroVancouver.
You know, I've been critical ofthe program.
They're not creating any newrental housing.
They're really just shifting thebuilding from one ownership group
to another.
And if you're one of the lucky few
that it's part of a nonprofit,you'll get your rent subsidized or
(21:00):
frozen in time.
But it's not really adding supply
to the market.
But in any event, I think it was
very politically expedient for ourpremier and province to roll out
this program.
If anything, one could argue that
it causes more scarcity and moredemand because you've literally
removed affordable housing out ofthe public sphere for regular
people into the nonprofit sphere.
(21:21):
I don't think it's a very elegant
and efficient way of... helpingaffordable housing or creating
affordable housing.
It's kind of a blunt tool where
you buy a building and the tenantlucks out.
You know, a lot of these tenantsdidn't need to be saved.
Many of them make a decent incomeand they just happen to be living
(21:44):
in that building that waspurchased by a nonprofit.
And, you know, they'll stay therefor years.
So in any event, that I thinkreally contributed to the dollar
volume and the transactions in2024.
Institutional groups, pensionfunds and REITs dropped a little
bit.
They represented 7 % of the
transactions and privateindividuals represented about 74%.
(22:06):
So there was a change there.
In terms of value, if we look at
Metro Vancouver across the board,so that includes the city itself,
neighborhoods like Kitsilano.
Fairview, Marple, the West End of
Vancouver, and then, of course,the suburbs, Burnaby, North Van,
Coquitlam, you name it.
The price per unit was flat.
(22:28):
So in 2024, the average price perunit was $462 ,000, and the
previous year was $459 ,000.
So there was a 1 % increase across
the board in price per unit.
It's not the best way to look at
value because there's differentpockets and nuances to different
areas.
And many of the properties,
apartment buildings that wereacquired were for redevelopment.
And so in many cases, developerspaid a lot more for the land and
(22:48):
that really pushed up the priceper unit.
So the devil's in the details.
In Vancouver, there was a 17 %
increase in average price perunit.
So we were at 570 ,000 a unit.
versus 486 the previous year.
Again, there's some sales wherethe sites were purchased by
developers that pushed the priceper unit to over a million dollars
(23:11):
per unit.
But it just gives you a general
sense of where the market.
I do not see any pronounced change
in value over the next while.
I just think things have
stabilized.
Interest rates have come down.
The one trend that I think isgoing to be very noteworthy is the
amount of listings on the market.
For the last three years, what
I've heard from investors orpeople considering selling is
we're just going to wait.
Anytime there's uncertainty, push
(23:32):
the pause button.
We're going to wait.
We're going to wait for the marketto get better.
We're going to wait.
When interest rates go down,
prices are going to go up.
And what I try to communicate to
people is that interest rates areonly one variable that dictate
market value.
It is not the Hail Mary indicator
(23:57):
of how values are going tomanifest based on interest rates.
What happened was people waitedthree years.
Interest rates finally came downabout 100 basis points.
I mean, you would know better thanme.
And what happened was there's fourtimes as much product on the
market.
(24:18):
So, you know, at Marpole, there is
a dozen listings hanging in themarket for, you know, between 320
and 380 a door.
Nothing's been selling.
It's been like that for a year.
I came up with a few listings at
$300 ,000 a door.
It was crickets.
We just sold one building for $260,000 a door.
(24:38):
And we made the market.
And that kind of screwed things up
for everybody else.
This is supply and demand.
The market doesn't lie.
We just tied up another building
around $260 a door.
Well, three years ago, they were
selling close to $400 a door.
So there's been about a 25 % to 30
(25:00):
% drop.
per unit in Vancouver properties.
We're seeing less of a pronounceddrop in newer purpose -built
buildings or properties that had ahigher yield.
So it's a much more sensitive timetoday for cap rates.
You're going in cap rate is veryimportant.
Gone are the days where a buyer isgoing to feel comfortable putting
down 70 % and having a 30 % loanto value, which by the way, I've
done some of those deals at a twoand a half cap.
(25:24):
Before 2019, cap rates were lessimportant.
They were temporary becauseentrepreneurs, people would go in,
they'd rehabilitate these oldinefficient buildings.
They would give notice, rehab thebuilding, and double the rents,
also known as rent evictions.
That game is over.
And so you could be stuck with abuilding and just wait for natural
attrition, natural turnover, andthen you would go ahead and update
the units.
So cap rates are much more
(25:45):
important today than they've everbeen.
The lending environment isdifferent.
Everything takes longer.
They scrutinize the numbers more,
less flexibility.
We're still doing deals, but I
would say that the cap rates thatwe're seeing are generally in the
very high 3 % to low 4 cap raterange.
Of course, there's nuances forevery deal, but generally we're in
(26:05):
the high threes to low fours.
We just closed on a building in
Mount Pleasant, a really nice old1960s building.
It sold at a 3 .2 cap.
which is lower than we typically
see.
However, the price per unit was
330 ,000 when, generally speaking,the market in that area was
trading around 350 to 370.
So in return for a lower price per
(26:25):
unit, the buyer accepted a loweryield.
But over time, two or threeturnovers, you're going to get
those rents up 50 to 75%.
That cap rate will change very
quickly.
So it's not all about cap rate.
But I would say it's much moreimportant today than it's ever
been.
That does seem a bit higher than I
(26:47):
thought it would be in Vancouver.
Do you feel it's going to keep
going up?I think things have plateaued
right now.
I think five -year money CMHC
insured, you're probably around 3.5, 3 .6.
It's quite volatile.
It's changing all the time.
So you're going to need somethingclose to that in order for it to
make sense.
I don't think cap rates are going
to drop or increase.
(27:08):
I think things are going to be
stable right now.
And we finally have data points.
Until recently, We had appraiserscalling us all the time, like, how
do you value a property when thelast trade in this neighborhood
was eight months ago?And that's ancient history.
The way we were pricing propertiesis we look at what was currently
(27:29):
hanging on the market, which was alot.
And then you got to undercut theprice.
And finally, we started gettingsome sales and data points.
You know, I'd say we're in a muchhealthier environment.
It's more balanced now, but it'scertainly it's not a seller's
market anymore, whichtraditionally what Vancouver real
estate used to be.
Buyers have a lot more choice and
(27:50):
options right now, and they'remuch more careful.
You raised a good point there.
raised a good point there.
I think historically, we've alwayslooked at real estate and said,
yeah, there's a value add with therent evictions.
pre what was that 2022 i guesssomething like that they changed
it i think before 2019 thelegislation was such that allowed
you to evict tenants for thepurpose of renovation yeah so you
(28:14):
know now you nailed it you're liketransitory you have a renter move
out you know just by attrition andyou can increase rent but you know
something you said a few minutesago which we've seen in the
okanagan as well rents have beendecreasing so our think before
2019 the legislation was such thatallowed you to evict tenants for
the purpose of renovation so youknow now you nailed it you're like
(28:36):
transitory you have a renter moveout you know just by attrition and
you can increase rent but you knowsomething you said a few minutes
ago which we've seen in theokanagan as well rents have been
decreasing so our those units thatare on the market, are they still
so undervalued that even if thattenant moves out, there will be a
rental increase?Yeah, for sure.
Like we had a client, this is abad news story and it's not
(28:59):
typical, but it would be on theextreme range of like, you know,
bad investment decision or badtiming.
We had a client come in whopurchased a building in the West
End in 2017, which was really avery strong, it was peak, you
know, interest rates were low, youknow, prices were escalating very
quickly.
And they bought this building at a
very low cap rate at the time.
You know, I figure it was around a
(29:19):
2 % cap rate.
And I've sold a ton of these
properties at 2%.
They didn't start the renovation
program right away.
And half the building had rents at
$600 to $700 a month.
You know, one bedroom today, you
could be around $2 ,500, right?They had these units rented for
600, 700, you know, about half thebuilding.
And then they spent a million anda half dollars renovating the
(29:39):
building, not the suites, but thecommon areas, the exterior, the
roof, the windows, which doesn'tincrease your rent.
Then they had holding costs andtheir mortgage just matured.
So it went up, you know, quitesignificantly.
So they're in a negative cash flowsituation right now and they're
bleeding.
And, you know, what do you do?
It's been professionally managed.
I looked at the rent rule.
And even in the last two years,the property has been rented out
(30:01):
at $2 .30 a square foot when itshould be around $3 .50 or more.
So their manager has been doingthem a disservice as well over the
last two years.
So it's really a bad luck
situation.
So they're into it for about $15
.5 million all in.
You know, renovation costs,
holding costs, brokerage fees, andso forth.
They're into it for about $15 .5million.
Well, their property is worth.
probably around $385 ,000 a unit,
which is in the higher three caprange.
And it pencils out to about $8million.
So we're talking about a $7 .5million loss since 2017.
A lot of investors think, well,we're only seeing that craziness
in the land market.
you know, we are having these
massive swings downwards.
Well, it's happening in some cases
in the multifamily market as well.
You know, it's a perfect storm.
(30:22):
Your mortgage matures, yourinterest rates tripled, you're
softening rents, you're notgetting the turnover that you
thought.
This is not an easy game.
You have to manage the manager andyou're running a business.
And so unfortunately, there's afew people getting stuck right
now.
Do you have the stats for what you
guys are using for expense ratiosright now?
Because I imagine that's increasedlike substantially.
We don't use expense ratios.
don't use expense ratios.
(30:43):
I find it a flawed system.
I don't think it's a very elegant
way to look at expenses andcompare apples to apples.
And I'll tell you why.
When I started in the business in
2002 or 2003, expense ratios weremore common.
And they were about 33 % prettyconsistently.
The market was stagnant.
It was flat.
One bedroom units were $750 amonth.
(31:03):
Price per unit in the west sidewas $80 ,000 a door and cap rates
were 6%.
That was for about a year when I
started.
And what happened was rents just
started increasing exponentially.
And so your expense ratios
logically dropped.
Expenses didn't increase at the
same rate.
And then we had this renaissance
of new purpose -built buildingswhere now you weren't being stuck
(31:24):
with legacy tenants, you wererenting at market.
And market is not the CMHCaverage.
That's a snapshot of rents frozenin time.
Market was like way higher.
And so expense ratios started
dropping to about 16%, 17 % on newbuilds because the rents were
quite high.
Or you can have an underperforming
building where the rents arereally low.
And so your expense ratio is goingto be over 50%.
(31:44):
So what we use is price per unit.
Price per unit is a much better
way of looking at buildings.
And I would say like for an older
building, you know, 56 year oldbuilding.
You're going to range anywherefrom $55 to $6 ,500 a unit right
now.
And maybe a little higher for
newer purpose -built buildings.
It depends, you know, if there's
(32:06):
underground parking and anelevator and, you know, the type
of staff you have managing theproperty.
But we rarely look at expenseratios.
How many clients are you seeinghigh level that are using MLI
Select compared to just, you know,conventional financing?
I would say my gut right now isabout... probably 70 % are going
for CMHC insured money.
Wow.
It's a much better interest rateand longer amortization periods
(32:31):
and it tends to work.
However, for buildings that are
underperforming significantly,buyers are not going through CMHC.
They're getting conventional loanand they're trying to add value,
turn over the building.
In some cases, our clients will
offer money to tenants to moveout.
So the soft approach.
So it's a win -win for the tenant,
win -win for the landlord.
And then when they get their rent
(32:51):
roll, it starts looking better.
They'll go through the CMHC
process.
So that's what we're seeing.
I've noticed that the timelinesfor getting CMHC insured financing
right now are quite long, a littlelonger.
We don't like to have buildingsunder contract for more than 30
days.
We try to keep it under 30 days,
which is really not enough time toget the rubber stamp from CMHC.
(33:14):
Basically, we're seeing a lot ofbridge loans right now where
mortgage brokers are.
assisting our clients with
conventional financing.
They'll close with a CMHC approved
lender, and then they'll roll itinto CMHC a few months later.
So there's an additional cost toit, but it seems to be the route
that buyers are going today sothat we're not stuck waiting for
(33:37):
six months under contract.
That's interesting.
I mean, we're seeing a lot of...
Purpose built rentals in Kelowna
as well.
We did an episode recently.
We have about 5 ,000 units comingon the market over the next few
years.
And, you know, it's about a 3 %
add to our current inventory.
And I believe most of those would
be MLI Select as well.
(33:58):
Yeah.
You know, it's a great program,but is it kind of holding up that
side of the industry right now?Like artificially, if things
aren't penciling at these caprates, it works.
But I guess if we were to compare.
MLI Select compared to the
rollover, the 1031 exchange.
What would you prefer if you had
to pick one?Yeah.
Oh, Oh, rollover all day long.
Yeah, absolutely.
(34:18):
I mean, look, CMHC is in vogueright now.
It wasn't always in vogue, butthey've got some decent programs
and it makes sense.
But, you know, if they're not
around anymore, there'll beanother mortgage product that will
fill the market quite quickly.
Yeah.
I do want to ask one more questionbefore we kind of wrap up here.
I know we've got to be cautious oftime, but how did the Goodman
(34:38):
Report start?That's a great question.
Let's start with my father back in1980.
Before that, he was a residentialrealtor for 10 years at a national
company called NRS Block Brothers.
It was the big company in Canada,
and he was doing residentialsales.
I was just a kid.
(34:59):
He became the number one realtor
in all of Canada.
He won an award, and he was
working a lot.
Back then, there was no cell
phones.
There was no pager.
There was no email.
There was no internet.
How the hell did you do a deal?It was couriers and rotary phones.
That's crazy.
That reminds me of that meme.
It's like, what did people dobefore Google Maps?
(35:19):
It's like, they use maps.
Yeah, I don't even know how to use
a map now.
So, you know, back then they were
doing deals with... carbon papercontracts on the hood of a car and
you were sending couriers fordocuments.
There was no fact.
There was nothing.
And the MLS was literally a book.
a It was a book.
So, you know, that was 10 years.
(35:40):
He would smoke a cigar in his
office.
He had.
20 typist secretaries, and it wasa different time.
smoke And after that, he wantedhis weekends back.
He wanted something a little bitmore cerebral.
He started doing business with themogul Nelson Scalbania.
He sold a few buildings to him.
Many of your audience may not know
who he is, but he was the mostprominent.
flipper real estate cowboy in thehistory of the world.
(36:02):
Google Nelson Scalabinia.
He was amazing.
Sold Wayne Gretzky to the Oilers.
But he was buying and selling.
He was doing about 600transactions a year on a napkin.
He couldn't keep track of hisdeals, making $20 million a week
on flips.
In any event, That propelled him
to move more into commercial realestate.
He decided that there was a vacuumof information in the apartment
market.
Nobody had information.
So he decided to start theapartment building newsletter,
(36:22):
which got rebranded to the GoodmanReport.
And as a kid, it was truly afamily business.
So he would write the newsletteron a pad of paper, send it to
someone to type up.
They would go to a printing press
and then the whole family wouldget around the dining room table
and we would have to stuff theenvelope.
You know, how old was I in 1982?Well, I was about five years old.
(36:45):
We were stuffing envelopes,folding them, licking stamps.
And my father would write a noteto every owner, handwritten.
And there's about 2 ,300 apartmentowners.
So you can imagine it took a longtime.
But, you know, we had mygrandparents come over.
The cleaning lady came in.
My brother, we were folding.
And before you knew it, he was thenumber one guy in the apartment
business.
And that continued for many years.
I started back in 2002, joined thebusiness, and the rest is history.
(37:09):
My father retired six years ago,but we took it online.
And I said, you know, Dad, weshould really have a website.
And he goes, what do I need awebsite for?
Everybody knows who I am.
I'm like, you should also get a
computer on your desk.
He goes, what do I need a
computer?I got my secretary to do the
faxes.
But when we started gathering
emails, I remember our first emailblast.
(37:29):
Like right now we have... youknow, 150 ,000 followers through
our email distribution list and onLinkedIn and Facebook and Twitter
and Instagram.
But back then I said, you know,
we're going to take the GoodmanReport online and we should get
emails.
I remember getting a thousand
emails through calling owners,mailing them, asking for their
email.
They would say, what's an email?
And I was like, well, you can getone on AOL if you remember those
(37:52):
days.
And I would walk them through to
subscribe.
So I did that for a few years.
And I remember I got a thousandemails and now I had to send them.
And there was no bulk emailprograms back then.
It was old school.
But you couldn't send out 1 ,000
emails through Shaw or Telus,whatever we use, the ISP, because
they thought you were a spammer.
(38:12):
So I had to go meet with the IT
person at Shaw and ask them towhitelist our ISP for 24 hours so
I could send out 1 ,000 emails,which, by the way, was huge.
So our first listing, sending outby email.
23 years ago, it was a building inChilliwack.
And I didn't even know where thehell Chilliwack was.
I just remember it was a reallylong drive.
(38:34):
And my father said, we don'ttypically do stuff in Chilliwack.
It's too long of a drive, but it'sa nice building.
And my dad wasn't veryenthusiastic.
But we took a picture.
I wrote a description.
The IT department was on standby.
They whitelisted our IP.
And I sent out 1 ,000 emails forthis Chilliwack listing.
And the phone blew up.
It rang off the hook.
We got multiple offers.
And, you know, my father had been
(38:55):
in the business for 25, 26 years,came running down the hall.
And he goes, this is fuckingincredible.
I've never seen anything like thisbefore.
This email thing is amazing.
This internet is amazing.
This is a good idea.
This is the future.
And the rest is history.
is history.
That was awesome.
Well, I mean, huge takeaway there
is there's a massive amount ofwork ethic in your blood.
(39:18):
So I appreciate that.
We have fun every day.
was awesome.
have fun every day.
That's great.
Yeah.
Yeah.
I hope this was fun.
It was good for us.
And yeah, I really appreciate you
coming on.
Keep the report coming.
And yeah, I appreciate all theinformation you're providing to
us.
Great.
Well, it was a pleasure to meetyou guys and be on your show.
(39:38):
I go to Kelowna once a year.
It's a beautiful place.
Time slows down.
It's hot.
It's beautiful.
I love the Lake Country.
And I'll come visit you guys thenext time I'm up there.
Sounds great.
great.
For your audience and listeners,if you're interested, you can
subscribe to goodmanreport com online.
We send you news, views, listings.
And I also have a podcast, the
Goodman Report podcast.
So we've had a few people on and
(40:00):
you can listen to that on all yourfavorite platforms.
So thank you guys.
That sounds great.
Thanks, Mark.
Appreciate it.
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