May 30, 2007

Affordable luxury offered for starter market

Jean Sorensen

correspondent

SURREY

The starter market in housing is often neglected by developers and doesn’t offer the luxury that first-time buyers usually feel they want. But, developer and contractor Tien Sher Group has come forward with the Quattro project in North Surrey (see rendering opposite page), an 1,100 unit residential and commercial development which offered bachelor apartments for as little as $119,000 with luxury features that surprise buyers. The units were so popular that they drew in 6,500 on-line registrants compared to the usual 1,500-1,800 registrants for a suburban development.

Bill Morrison, a partner in Pilot House Real Estate Inc., which is handling the marketing and sales for the company says this market niche which appeals to the lower side of middle income earners is like a old forgotten gold mine, where known residual ore still exists. “We know it’s there, but we don’t know how to get it out economically,” he says. The challenge is fitting luxury into a starter package and delivering it at a reasonable price.

Morrison said Tien Sher did a market estimate of what price the first time buyer might be willing to pay. “We ball-parked figures of about $150,000 to $200,000 for a one bedroom and $190,000 to $220,000 for a one bedroom plus den and $230,000 to $270,000 for a two bedroom,” he says. An average price for units in the complex was $230,000, he says. (Bachelors started at $119,000).

Taking price into account, an architect was found who could design not just affordable spaces but space with that extra bonus, even though it was not large. (Apartments range from 416 to 1,248 square feet). Tien Sher was fortunate to find Patrick Cotter Architects Inc. in Richmond. “Patrick Cotter was selected because he understood this market, the geographies of the area and demographics we were trying to reach,” he says. The result was some “stunning” floor plans. The bachelor units are only 416 square feet and it’s a tight plan, but, unlike the standard bachelor, the Quattro units offer a den. “It’s a high-demand product,” he says, adding that one couple from the Fraser Valley arrived at 3 a.m. in the morning to stand in line for a bachelor unit in Phase I of the pre-sale of 140 units.

Other design features include placing a bathroom between two bedrooms to achieve greater utilization of space and that bathroom. “By reducing the need for a second bathroom, you can reduce the price. It’s also a perfect design for a young couple,” he says, adding that Cotter’s designs are known for efficient floor designs that do not involve hallways.

Morrison says Tien Sher’s president Charan Sethie has a vision of creating “affordable luxury” in the design of the homes. The kitchens include granite counter tops, Whirlpool stainless steel appliances, and the units offer high nine-foot ceilings. Much of Tien Sher’s ability to build affordable units in North Surrey is attributed to a cooperative spirit from the city of Surrey, says Morrison. Mayor Diane Watts has been instrumental in reducing development services charges by 60% for developers willing to invest in the North Surrey area, he says. Quattro will be a $500 million development with eight residential buildings plus commercial and retail outlets spread over 10 acres. It is the largest project that North Surrey has undertaken. Tien Sher’s in-house construction division is handling construction.

The project is currently in the second phase of pre-sale. The first phase, which offered 140 units, sold out in 3.5 hours, while the second phase (to go to market in late March) will offer 116 units. Construction should begin on site in 60 days with individuals moving into their new units in 20 months.

Morrison says being able to access reasonably priced land, having good design, and having concessions by the city have all been instrumental in bringing luxury units to the starter market.

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