A property broker in Vancouver says its new program to arrange bulk condo sales will give frustrated developers an escape hatch, while providing long-term upside to buyers willing to hold the units before eventually selling for a profit. 

Mark Goodman, principal with Goodman Commercial, said there are roughly 4,000 unsold condos in the Vancouver market. 

"We've introduced this new marketing service (to broker bulk condo sales), and it really is to help developers clear standing inventory amid slow pre-sale absorption, and... challenging market conditions throughout Metro Vancouver," Goodman told RENX in an interview. 

To begin with, Goodman is marketing the bulk sale of 30 new condo units at a six-storey wood-frame building in Surrey City Centre. 

Goodman told RENX he was also anticipating a meeting with another developer with 25 units to sell at a project in Coquitlam. 

"Gut-wrenching cycle" in condo sector

"We've gone through a gut-wrenching cycle where prices have dropped off sharply in the condo market and transaction volume is at historic lows," Goodman said. "We haven't seen a market like this in decades. So, it's a tough spot for developers."

He said the program targets vacant units in new or soon-to-complete condo buildings in the Metro Vancouver region. He said the benefit to sellers is to clear their backlog of unsold units en masse, while the benefit to buyers is to buy condos on a volume discount. They can rent the units, hold them, and earn a profit if they sell them in stronger market conditions. 

It remains to be seen when those improved conditions will arrive, but Goodman says the pipeline of condo developments is already nearly closed off, meaning the region could see a shortage of new condos by 2028 or 2029.

"There's no more product coming on stream and as a result, we're going to see a lot of stress put back on the market," Goodman said.

He said the bulk discount on the units could start at around 10 per cent. 

Bulk condo buyers have appetite in the GTA 

This is also happening in Toronto. Private investment firm High Art Capital recently launched its GTA Rental and Affordable Housing Initiative, a fund expected to have $1.3 billion to acquire blocks of new, unsold condominiums across the region for conversion into long-term rental housing.

The plan aims to deliver 2,200 rental units in the near term, including approximately 550 affordable rentals. The model is the first of its kind at this scale in the GTA, the company told RENX in a recent interview. 

In Vancouver, Goodman says this era is reminiscent of 2009 when developers were trying to unload condos amid economic and financial turbulence. "For some, this is bringing back memories." 

He said interest in bulk purchases seems to be high. He's hearing from realtors, private investors and institutional companies. "I would say since we started… we've now had 50 groups reach out by email or phone." 

Mainstreet Equity weighs bulk condo opportunity

Bob Dhillon, president and CEO of Mainstreet Equity Corp, is among the investors interested in bulk condo purchases in Western Canada. 

Based in Calgary, the company focuses on buying and renting mid-market residential buildings that typically have fewer than 100 units.

He told RENX in an interview the company is in the early stage of assessing the value and opportunity in picking up distressed condos in bulk. Mainstreet holds about 20,000 rental apartments in its portfolio. 

The firm want units priced below the replacement cost and offering a clear sales upside when conditions improve. "We have to get paid to wait and see an opportunistic exit," Dhillon said. 

Mainstreet would put any bulk condos purchased into its rental inventory, Dhillon said, noting there are many market factors that remain to be fulfilled to initiate a potential condo recovery in Canada. 

"We don't know the direction of immigration policies, international students, international workers," he said, adding that Canada is at an economic crossroads and real estate and housing will be part of the path forward.