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Among the commercial sales that have raised eyebrows is the Molson brewery site in Kitsilano, assessed at $43.7-million. But it has sold for $190-million, said a source.Rafal Gerszak/The Globe and Mail

Recent deals on some key Vancouver properties at astronomical prices have politicians, planners, and the B.C. Securities Commission concerned about the level of speculation, misrepresentation or plain ignorance emerging.

City officials see signs that Vancouver's hot housing market is enticing buyers to pay inflated prices without getting complete information on how demanding the rezoning process is.

And they've also become alarmed recently at news that a new type of venture – real-estate crowdfunding – is being marketed without giving investors a picture of all the costs, hurdles and perhaps outright rejection that a development rezoning may encounter.

For its part, the B.C. Securities Commission is investigating the activities of two local companies that appear to be crowdfunding real-estate deals.

Councillor Raymond Louie said it's disturbing if the properties are being marketed to potential investors with promises about what the development potential is for the sites, but without warnings about the risks involved.

As well, he said, buyers – whether they're crowdfunding or not – are going to find themselves in trouble if they pay a high price without realizing that rezoning may be impossible, or that there will be stiff city demands for developer contributions to community benefits that weren't factored into the developer's equation.

"If they've overpaid, the city doesn't take that into account. And it's the fiduciary responsibility of these agents to explain the environment. If they misrepresent, I'd say they're liable," Mr. Louie said.

The city, already in convulsions over startling increases in the prices of single-family homes in the last few years, has seen key commercial properties change hands recently at previously unheard-of rates.

A German multibillionaire has bought the Royal Centre bank tower and mall at Georgia and Burrard streets for $400-million, according to media reports last week. The Westin Bayshore hotel and convention centre, which has very limited development possibilities on its land, sold to Concord Pacific for $300-million in September.

Sites on Broadway in central Vancouver are selling for increasingly high prices, with the Denny's restaurant at Broadway and Hemlock Street said to be changing hands at a new record-high price of between $450 and $500 per buildable square foot.

At least, with some of those properties, the city was able to issue warnings in advance about the development limitations.

However, several other properties have also changed hands recently at prices so high, they could only be justified if a major redevelopment were allowed.

Among the commercial sales that have raised eyebrows is the Molson brewery site in Kitsilano, assessed at $43.7-million. But a source confirmed to The Globe and Mail it has sold for $190-million.

Two small apartment buildings on Nelson Street in the West End, assessed at about $16-million and owned by companies directed by developers Bruno and Peter Wall, sold last fall for about $60-million, say sources with knowledge of the transaction.

And an apartment building on Broughton Street, also owned by companies directed by the Walls, assessed at $75-million, has also sold for $170-million, say sources. None of those deals has officially closed yet, so no records are available.

But in the case of the Molson brewery, the site is zoned for industrial use only.

Still, a real-estate company called Sun Commercial, affiliated with Sun Crowdfunding, appeared to be advertising it recently on a Chinese-language website to potential investors as a "high return, zero risk" property with development potential for "330,000 square feet of great sea view apartments."

Sun Commercial issued a statement last week saying the information about the Molson brewery property was placed without its knowledge and the company is not crowdfunding.

"An individual (June Tang) published advertisements on "" (a Chinese-language website) in Suncom's name purporting to solicit investors, but she did this without Suncom's knowledge or approval, and certainly not at Suncom's direction (she listed her own phone number and e-mail address, not Suncom's)," said the statement that Sun Commercial sent out to media via e-mail from its lawyer, James Carpick.

The Nelson Street apartment buildings appeared on the Facebook site of a former local realtor last October, with a Suncom logo. The former realtor, Julia Lau, who says on her business card she is a vice-president of Sun Commercial, was looking for investors in a development she claimed could result in a 58-storey tower on the site.

But the post didn't mention that a rezoning is not a certainty, or that the developer will be expected to ensure that a quarter of the units are for social housing, a requirement under the city's new West End plan.

The October posting is now gone from Ms. Lau's Facebook page, though a screen grab of it was captured and posted by a Vancouver Province reporter. The posting was also quoted in October in an online condo blog, A Google search of Julia Lau's name and the Nelson address turns up a cached page linked to Sun Commercial Realestate.

However, the company told The Globe and Mail the Facebook post is "not in any way related to Sun Commercial." In a statement read by a Sun Commercial employee, the company said Ms. Lau "has never been an owner or employee of Sun Commercial." The company has declined to answer questions about whether it is the buyer of the Molson site or Nelson Street site, and why Ms. Lau has been identified with the company in the past.

Ms. Lau did not respond to a call made to her company, Julia Lau Personal Real Estate Corp. Neither did a lawyer who has acted on her behalf in the past.

The Broughton Street building was purchased jointly by Asia Standard International Group Ltd. from Hong Kong and Landa Global Properties, say sources familiar with the transaction. The principals in Landa are two young men from Vancouver, Kevin Cheung and Scott Wang, whose fathers are property developers in China. That property is not being advertised as an investment possibility. That site will also fall under the West End plan.

Both of the Walls' properties were acquired two years ago, about a year before the city approved its West End plan, which opened the door to higher densities on those sites and others.

The B.C. Securities Commission is now conducting a review of Sun Commercial Realestate, which is affiliated with Sun Crowdfunding Holdings. The two companies have some of the same directors.

Crowdfunding for investment money is something that B.C., as well as other provinces, has allowed since last May, as a way of providing a less onerous mechanism to raise money for small startups and early-stage companies. However, companies or individuals can't raise more than $500,000 in any one year, with no more than $1,500 per investor.

Companies or individuals asking for investors under that program don't have to issue a formal prospectus or audited financial statements, the way larger securities firms do. As well, the commission exempts companies from those formal requirements if they are soliciting investments from friends and family, for example, or if the investments are being solicited from accredited, wealthy investors.

But any company headquartered in B.C. or with some other link to the province still has to file a statement with the commission saying how much it has raised and under what categories.

Neither Sun Commercial nor Sun Crowdfunding has filed a statement like that, commission spokesman Richard Gilhooley has said.

The commission has also named a second company in its review of crowdfunding: Canada Luxmore.

Luxmore Realty director Jason Liu, a registered realtor, met with The Globe and Mail on Friday to explain that "crowdfunding" for local Chinese investors he works with doesn't mean Kickstarter-style crowdfunding.

Mr. Liu, who hasn't bought any big Vancouver properties or tried to market them through public calls for investors, says he spent an hour at the commission on Thursday explaining the way his business works.

He doesn't collect anyone's investment money, he said. Instead, he runs seminars at a restaurant he owns in Richmond, where he talks to people about the kinds of ventures they could put their money into – ranging from tech startups to commercial property – and then urges them to form partnerships with like-minded investors to participate in bigger deals.

"I know all the immigrant investors and they don't know which way to invest. They don't know what to do. I need to find a way to help the people."

Mr. Liu said, unlike non-realtors, he has to be very careful how he describes real-estate investments, because he could lose his licence if he misrepresents its potential returns or futures.

He legally changed the name of his Canada Luxmore Crowdfunding company three days ago, he said, because he has realized it was being misinterpreted. It is now Caus Capital.

But Vancouver councillors and planners are concerned that buyers paying inflated prices will have some unpleasant surprises.

Some buyers along the Cambie Street corridor ran into similar problems a few years ago, as there was a stampede by both locals and offshore investors to acquire land along the Canada Line.

At least one offshore buyer complained that the realtor had not told him that the city would take 75 per cent of the increased value of the land during the rezoning process, a standard that is well known by locals.

Kevin McNaney, the city's assistant director of planning for the downtown area, said none of the buyers of the current set of high-priced sites had contacted the city.

"If anyone purchases a major site, we recommend they come and talk to us to understand our strong focus on urban design and amenities. We hope investors do their due diligence," said Mr. McNaney. The city has been adamant that the Molson site will remain light industrial.

Mr. McNaney said the developers of the other two sites will both need to provide significant benefits to the city in the form of housing and other amenities for the entire West End.

When the city hears about a major piece of land for sale, it puts out an "issues note" to let potential buyers know what they're getting into. The city did that when the downtown Canada Post site was put up for sale, as well as the Westin Bayshore.

But, said Mr. McNaney, sometimes the planning department doesn't hear about sales until deals are done.

He confirmed that the site being advertised as "1065 Nelson" hasn't been rezoned.

Currently, there are two low-rise apartment buildings at 1075 Nelson and 1059 Nelson, for which the Walls had started the rezoning process.

Last July, they held a pre-application open house to show off a 60-storey "pixellated skyscraper" called Nelson on the Park. But the application never went ahead.