A Discussion with Bob Rennie (Part 1): East Van, Downtown, Surrey
Bob Rennie. Photo: Jeff Vinnick/Getty Images
Vancity Buzz had the rare pleasure of sitting down with real-estate king Bob Rennie last month, during the Millennium Water Olympic Village Grand Opening. Today we break out Part 1 of 2.
We discussed everything from his roots in East Vancouver, to the downtown condo market, and even a little bit of suburb love with Surrey. His insights are interesting to say the least. We’ve kept the discussion authentic.
Manny: Alright so I have all the questions on here ‘cause I’m being green right (on my BlackBerry)…
Bob: That’s good you know what I’m going to grab the iPad and stop carrying stuff around. I just got back yesterday (from California), I was gonna buy one yesterday when I was in the Apple store but I said no I’ll wait, they come out the next month or so.
Karm: Early June I think.
Bob: Yea I’ll just wait.
Manny: So, about yourself Bob, how was it growing up in East Van? You know we’re also from East Van as well.
Bob: If you get out we wear it as a badge of courage.
Bob: But you know I’m a lot older so East Van was a bit different than it is today and when you look at the DTES what we see on the streets that’s not just poor people. It’s not people looking to find a job or a bowl of soup. There’s a lot of people down there that have severe mental challenges. So that side of it wasn’t there. But, I kept all my kids in public school and my daughter in grade 10 she switched to private school because she wanted to move to America. But I like diversity. I think that’s why Woodwards and projects like this work for me because I understand. I think that the Eastside always understands the Westside, I don’t think the Westside always understands the Eastside. It’s sort of like we know all about America but I don’t think America knows a lot about us. Which is why they go into trouble in Iraq because they don’t try to understand.
Karm: They try to bully their way.
Bob: Yea they just try to insist that their way is right but it’s not.
Manny: I’ve heard of Westside parents actually say, do not cross Cambie Street to their kids haha.
Bob: I joke that on the Westside equals Cambie and then the province of Alberta, right, there is nothing inbetween. There’s no other word for it than ignorance. I think that growing up on the Eastside gave me a really good platform to come into real estate. I came in when I was 19.
Manny: What high school did you go to?
Bob: Vantech. And you guys went to?
Manny and Karm: John Oliver.
Bob: Okay. Worse.
Karm: Yup haha. It’s gotten better though.
Manny: They’ve actually really cleaned it up (see link).
Bob: I think Eastside schools that, you know, you look at families more that are more in survival mode, and it’s a privilege to get ahead and it’s a privilege to be educated. Whereas sometimes it’s such an expectation from privileged families.
Manny: Have you seen the East Van sign? The cross? Welcome to East Van.
Bob: If it wasn’t permanent I’d buy it. It is so good.
Manny: Was University ever an option for you? I mean I know at 19 you started in real estate right away.
Bob: You know I was married at 20, and the thing was that always said I’d come in and earn money for a couple years and then go back. But I think I found my niche, I just was so addicted to real estate that I just never did. I never stopped. I didn’t stop to travel for a two years either, I just stayed with it. I think for a long time I was really intimidated by people with an education. I just felt inferior and that may be as an Eastside remnant.
Karm: You definitely have that inferiority complex.
Bob: You went to?
Manny: I went to SFU, actually I had to go to school you know parents and everything right the pressure. Yea you know it’s an Indian thing.
Bob: Also you’re younger, and my parents weren’t aware I wasn’t going to university.
Manny: So you started off in real estate and I read a little bit about you so you’re basically responsible for the 33 x 120 lots that we have in East Van right now, the smaller lots? Haha
Bob: What I did is… I have this thing in life where you survive on your similarities but you’re only known for your differences. So I had to find a niche that nobody else was doing. So I found every 66 ft lot and I used to know it by heart sort of from Victoria drive to Rupert and from Kingsway to the water. I’d send letters and Christmas cards three, four times a year to homeowners. I would never call them because I didn’t want rejection. And then I would sell their house to a builder sell the two new houses and then the people who bought the new houses I’d sell their houses.
Manny: No cold calling eh?
Bob: I did a little bit at the beginning. But… Direct mail. If I sold a home in Burnaby I would send out 10 000 direct mailers. Constantly.
Manny: So in East Van now where do you see some densification occurring? We see a lot on the Westside.
Bob: I think you should really watch from Gore to Clark Drive. That corridor is going to change. If I owned this city, I would take from Clark Drive to Commercial and whether it’s Hastings or Franklin up to First Avenue and I would look at building a new city with density there. Maybe they’ll get creative and put more residential from CN and on the flats down there. And I think as you see Emily Carr University is going to move to…
Karm: The False Creek flats area right, is that what they’re saying?
Bob: Emily Carr is going to move to Finning tractor site on Great Northern Way. So as that happens you’re gonna see a complete shift.
Karm: It’ll be a shift.
Bob: So I think they’ll make densification there. ‘Cause if you look at the numbers for downtown… When is your blog going up?
Manny and Karm: Sometime next week. (Lie, it took us a month)
Bob: I’m releasing the numbers on Thursday. You’ll see for 2007 we delivered in downtown completions for condominiums 3298. That drops to about 2200 completions for ’08. You’ve gotta remember those are 99% sold. For ’09 that dropped below 2000 to 1900. And for 2010 we dropped down to below 1000 completions. 2011 I think it’s 700. By the time we get to 2013 it’s less than 500 completions. And I can’t build a tower downtown and deliver it before 2013. So there’s no supply coming up. None. So where are we gonna vent that to? I think the Olympic Village and SEFC will win by that. The reason that happened is all the developers ran to the sidelines in ’08 when we had the economic downturn. So if they hadn’t run to the sidelines we may have had oversupply after the Olympics but any potential oversupply was all cured in the downturn in the economy. So the low supply is great for developers, it’s great for maintaining prices, but it’s just brutal on affordability.
Manny: I was going to delve into that. So why are the developers still on the sidelines? Are they starting to get back into action now?
Bob: They’re coming off the sidelines now. Financing’s tough. The pressure’s on buyers. Whether it’s high or down payments, and higher deposits and less affordability.
Karm: You’re looking at a potential home owner soon.
Bob: So where do you go?
Karm: Well you know right now me and my wife are trying to just scrounge, save, trying to get about 20% down. We’re looking downtown ‘cause I work downtown. Coal Harbour maybe Yaletown, somewhere there.
Bob: So I’m just bringing on the Eldorado Hotel on Kingsway and Nanaimo.
Karm: So that’s going through now? Because I remember it used to be called The Hills.
Bob: It was The Hills but I had that developer sell it to Wall Financial and the presentation centre wasn’t ready so we just threw the model in my office in Chinatown. *Ryan it’s going really well… this is Ryan he’s my boss*
(Side conversation about Millennium Water lineups. We joke it’s like the downtown nightclubs.)
Bob: We gave our building in Chinatown to the World Olympians during the Olympics so it was the home of all the previous Olympics athletes. And Ryan ran it so he did such a great job of getting them to work with us.
Manny: We were going to ask about Surrey. I mean they’re full of lots of expectations. Do you see the future living in Surrey like how they proclaim?
Bob: I do. It’s the centre. But it has to watch how it develops because you know high-rises are an urban concept.
Karm: That’s what I was saying.
Bob: And when you see some of these developments that have come on. They’ve been modeled around inflation. Actually… I haven’t done my Surrey notes yet. I have all the stats for the inventory coming.
Manny: Where do you get all these stats from?
Bob: Urban Futures, I do them with them on population and immigration. And Sandra Cawley of Burgess Austin tracks every development.
Manny: How can I get a hold of these numbers? Because I’m all into supply and demand because I’m a joint major with Economics.
Bob: So you should… When Jessica comes back… Jessica! You’re allowed to be honest. Are there any seats left at the UDI? You guys wanna come on Thursday?
Manny and Karm: Sure!
Bob: What I did is I invited too many people but then a lot of people are already going with other people. So she told me last night some weren’t coming so I didn’t wanna put you on the spot, invite you and then there’s no seats. Because it’s sold out. It’ll be an interesting one for the way I think your guys’ brain works.
(We rubbed shoulders with the Aquilini’s and other huge developers. Great lunch! Thanks Bob. See our post-wrap on UDI)
Manny: I mean definitely. I mean people need to move in Vancouver right. It’s all about supply and demand at the end of the day right?
Bob: Exactly. And when you look at the aging population the numbers are really frightening the way that’s coming out or the way I’m interpreting it. And I mean Surrey, when we did Yaletown we wanted Soho we wanted Chelsea and we got stuck with Yaletown. We got our version of their version. And then you see some developers and councilors and I don’t want to knock the mayor. But they say that Surrey is going to be the new Yaletown.
Karm: When I hear that it makes me cringe.
Bob: There is no Cioppino’s at $300 for lunch. You know there’s not that demographic. There isn’t a seawall 3 blocks away.
Manny: I mean their selling point is a view of downtown Vancouver.
Bob: I think if they taketh away from the inflationary model and just to put in some of the right product that’s not hyped and find their own differences rather than trying to become. I mean we didn’t get what we wanted, we got Yaletown. So they’re gonna get their version of our version of the New York version.
Manny: They’ll progress.
Bob: Ground-oriented townhouses all day long. But high-rises are an urban concept. So they have to have the infrastructure. They have to figure out what that demographic wants out there. Your rents aren’t high enough for the investor to go crazy buying new. Whereas you buy downtown your rents might not be a great retirement, but we’re making so little of it you see capital appreciation. Which is why you’re buying downtown and not at the Eldorado.
Bob: But somebody else is buying the Eldorado ‘cause they can not get into downtown and they’ll do fine.
Karm: Oh yea.
Bob: I have most of the units under three hundred thousand.
Karm: Not bad. And the transportation down Kingsway, you take the buses, not bad.
Bob: It’s a half a cup of coffee from downtown.
Karm: Yea that’s the way you can look at it. I like the convenience of downtown and I’m always downtown on my days off so me and my wife are just like why are we not just gonna live there then.
Bob: I moved my mother downtown…
Karm: Did you?
Bob: …1999. Everybody in the family got mad and said that it’s wrong and she’s got no life there, but kept her alive. Where do you live?
Manny: I live in South Van.
Karm: We both live in South Van.
Manny: Fraser 49th. Fraser’s actually seeing a lot of action. A lot of gentrification.
Bob: Absolutely. That ethnicity gets diluted. Look at Commercial Drive it was Little Italy, it was only Little Italy. And now that disappeared and moved up into Burnaby Heights. Chinatown got hijacked by Richmond. It’s very hard, as prices go up, it’s really hard to hang on to your core.
Karm: Like the Punjabi Markets, Little India, whatever you wanna call it.
Manny: It’s dying.
Karm: It’s dead. Now we saw there’s a Bean Around The World coming in on 49th and Main.
Bob: There goes the neighbourhood.
Karm: And we’re like this is the beginning of the end probably for Little India.
Bob: It is. And the trouble is that Little India, the Indian community is not all just there now.
Karm: They’re gone, to Surrey.
Bob: Everybody moves to surround themselves in the South when they’re insecure, and then as they start to figure out it’s not bad out there…
Karm: There’s no need to just stay there. You can go anywhere. I mean I never shop there.
Bob: And then people don’t want to be you know, whether it’s the Asians, Italians, the Jews, everybody doesn’t want to be ghettoized they all move out.
Tomorrow we discuss the impact of the Olympics, DTES, Chinatown, sustainable development and the Olympic Village. You really don’t want to miss this.