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The Olympic village in Vancouver on Friday October 9, 2009. (Darryl Dyck/ The Canadian Press/Darryl Dyck/ The Canadian Press)
The Olympic village in Vancouver on Friday October 9, 2009. (Darryl Dyck/ The Canadian Press/Darryl Dyck/ The Canadian Press)

Real estate

Steep discounts likely part of Olympic village strategy, marketer says Add to ...

Filling the Olympic village with residents will take a complex strategy that could include offering heavy initial discounts for some units, says the village's marketer.

"We want to populate the village," said Bob Rennie, as he negotiates with receiver Ernst & Young on the overall plan for the village since private developers Peter and Shahram Malek agreed to receivership for the troubled $1-billion project. "We've removed the financial cloud. Now we have to remove the ghost-town cloud."

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Although there were statements from Councillor Geoff Meggs earlier this week that there would be discounts of 20 per cent on some units, Mr. Rennie said everything is still being considered by the receiver, who makes the final decision.

But he did say it's likely there will be steep discounts on a select number of the 480 condos - likely under 100 units - when a new sales program is launched in February.

"It will be priced so that you come in to the village and say 'This is the best deal out there.' "

That doesn't necessarily mean the cheapest in town, but the cheapest for the value and the location. If those sales go quickly, the receiver will likely start raising prices.

"We're going to sell building by building, but we're establishing the right mix to bring on," Mr. Rennie said.

Another part of the strategy: renting out a large number of condos so that there aren't so many units to sell at once.

Mr. Rennie has consistently said that the village has been challenging to sell because it's already built, while Vancouver is a "presale town."

In presales, people put down a small amount of money and can decide over the next two years whether to sell at a profit before the building is even finished, let a relative move in, rent it out or move in themselves.

That's why the Wall condo project, across the street from the village, sold more than 400 units in less than a month this fall.

With a project like the village, people have to get a mortgage to cover the entire amount of the unit in fairly short order. That makes selling the village more like selling single-family homes. With such a large number of expensive properties, it's like trying to sell a third of all the single-family homes in Kerrisdale.

The Olympic village started out four years ago as a potential crown jewel for the city. Vancouver invested millions of dollars in community services, bridges, parks and seawall walks around the site, after selling the property to Millennium Development Corporation for $193-million.

But the project ran into a series of difficulties. The Maleks had trouble obtaining financing and were forced to rely on an American hedge fund. That hedge fund ran into trouble itself and, when the Maleks' construction costs started to go over budget, the fund cut off its monthly payments in September, 2008.

The city, which had provided a guarantee for the loan, first stepped in with short-term financing and then, after Vision Vancouver swept to office, took over the entire loan.

But sales of the condo's many high-priced, luxury units stalled after the Olympics.

The city and Millennium applied jointly to put the project in receivership earlier this month.

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