Goodman Commercial sold off all 30 units in this condo to an investor last year in a bulk sale.Goodman Comercial
Last year, commercial broker Mark Goodman sold off an older 30-unit condominium on Vancouver’s Commercial Drive to an investor.
“A developer owned it for many years, sold the commercial ground level years earlier, and instead of selling off each unit individually, we sold all 30 units to one bulk investor,” said Mr. Goodman, owner of Goodman Commercial. “It’s already filled with renters. And the investor I sold them to is going to be piecing them off individually when the market recovers.”
He has similar deals under way, including an 18-unit building in the Joyce area, which had been built, but the developer held back some units and rented them out. Another proposal, in a Surrey, B.C., condo building with 100 units, is on hold until the developer closes on 70 of the units. Developers and marketers have been calling.
“The first one we launched is for a developer in Surrey Centre. I can’t say who it is at this point, because there was so much interest it spooked them.”
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A bulk sale at discount prices in a partially sold building is sensitive, he said, because other investors in the building have paid more, and a bulk sale could lower their appraised values, impacting their financing. Buyers might even walk away from deposits.
“Where we come in is, we can package up standing inventory of unsold product, and our value proposition is that these developers, their absorption rate is one to two sales a month. But if you’ve got 30 units, that could be a two-year timeline. That’s expensive, and they could reallocate capital to another project. So, partner with me, and I could potentially sell 30 units in a month. Boom. In return, they drop the price 10 or 15 per cent below posted retail rates, which is way below what it was a few years ago.”
With an estimated 3,650 condos in the province remaining empty by the end of 2026, according to Rennie Intelligence, B.C. real estate pundits are expecting increased interest in bulk purchases at discounted prices, with the investors selling once the market recovers. The Ontario government has partnered with High Art Capital, a private investment firm, to buy up unsold condos and rent them out. Mr. Goodman could see something similar happening in B.C.
“We are solving a problem; clearing out inventory and saving the developer in the end a bunch of time and aggravation, and the investor now is renting out these units,” said Mr. Goodman. “Well, that’s a good thing, because units are in a rental pool for a time.”
In B.C., corporate buyers, who’ve formed a corporation, usually for tax planning and liability purposes, tend to be smaller players who favour condos over houses. They include developers, real estate investment companies and families owning multiple properties. Mr. Goodman said some developer-investors build and temporarily hold units and then sell them off.
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Corporations own 23,190 condos in Vancouver’s census metropolitan area – a higher number than the Toronto census metropolitan area’s 21,465 corporate-owned condos. Corporate-owned condos include private businesses and for-profit government pension funds, according to 2023 data provided by the Canadian Housing Statistics Program.
Around 8 per cent of Vancouver condos are corporate-owned, and the number increases to 11 per cent for units built between 2016 and 2023.
Corporate interest in Ontario real estate favours detached houses, with 85,175 houses, or 2.1 per cent of all houses, in that province under corporate ownership. In B.C., corporations own 29,320 houses, or 2.8 per cent.
Simon Fraser University associate professor Andy Yan, who is a fellow of the Canadian Institute of Planners, analyzed the data and said not to underestimate the power of numbers that look relatively small. He noted that when foreign buying began to impact Metro Vancouver’s housing markets, those percentages were also small and yet impactful. Overall market trends, for example, are based on a tiny percentage of property transactions.
“The data offers a baseline for measuring patterns and trends in residential real estate ownership,” he said. “With private equity and institutional investors purchasing homes in the United States, it would be curious to see if and how this trend would come to Canada.
“It also begs the question: Why didn’t the NDP government close the loophole that allows corporations to dodge the property transfer tax when the property is transferred?”
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It’s routine for development and real estate companies to hold property in a shell company, and then sell shares instead of transferring title, so the tax isn’t triggered. Ontario long ago closed that loophole, but B.C. hasn’t. B.C. investors who buy buildings from developers save millions of dollars in taxes. Also, with lack of transparency, it’s a system that could invite bad actors, some say.
Lawyer Ron Usher represented the Society of Notaries Public of B.C. at the Cullen Commission inquiry into money laundering seven years ago, and he’s long advocated for greater transparency around corporate ownership. Mr. Usher said the province created the Land Owner Transparency Act (LOTA) so owners couldn’t hide behind numbered companies, resulting in potential fraud, money laundering or tax evasion. Thousands of pre-existing companies were required to register beneficial ownership. Mr. Usher has pushed the province for numbers on enforcement so far, but he was told in an e-mail that if compliance information were made public, it could discourage compliance.
“That is laughable and absurd,” he said. “As far as I can see, even though they claim otherwise, there is not a single charge laid against anybody for not complying with LOTA.”
The financialization of housing, however, is nothing new, he added.
“Some have argued, of course, these things created lots of rentals. And for a while there, there wasn’t much purpose-built rental being built. The whole condo boom was purpose-built rental, but we didn’t call it that. So this is what people mean when they say ‘financialization’; where real estate turns into a desirable asset class, and people have been pushing that for years.
“Rich people have always made an effort to diversify their assets. In other words, you don’t want to be 100 per cent in the stock market.”
Mr. Goodman said there are relatively few major institutional investors in B.C. And the upside to corporate ownership is that real estate is usually a reliable investment for average Canadians. Major players also tend to make better landlords, he said.
“I’ve always argued that I think it’s very healthy,” he said. “I think we want to have big corporations buying housing, those could be pension funds, and that money is for pensioners, Canadians. And that’s a good thing, they are investing in housing.”