Citified is the most comprehensive resource for researching a new-build home or commercial space in metro Victoria and southern Vancouver Island.
Victoria Change City
Institutional investment in Victoria's rental housing market Q&A with Alex Messina of Nicola Wealth

Alex Messina of Vancouver-based Nicola Wealth Real Estate speaks to Victoria's draw among institutional rental housing providers, and the region's economic resiliency in June's Ten on the 10th.

Institutional investment in Victoria's rental housing market Q&A with Alex Messina of Nicola Wealth
Ten on the 10th
Citified's Ten on the 10th is a monthly question-and-answer segment connecting our readers with the insight and knowledge of Victoria's top real-estate and business professionals.
June's Ten on the 10th features Alex Messina, Director of Acquisitions, Real-Estate, for Nicola Wealth Real Estate.
Asking the questions is Ross Marshall, Senior Vice President of the Victoria offices of commercial real-estate brokerage CBRE. As a leader in facilitating large-scale commercial real-estate transactions throughout the Capital Region – which include apartment complexes, industrial retail and office properties, and land/development opportunities – Ross and his team are at the forefront of market-leading real-estate transactions on Vancouver Island.
Would you like to be featured as part of a future Ten on the 10th Q&A? We'd love to hear from you.

Let’s start with an introduction of Nicola Wealth, and tell us what attracted your firm to investment and development opportunities in Greater Victoria?

Nicola Wealth Real Estate is the in-house real-estate division of Nicola Wealth, a premier Canadian financial planning firm. Our team acquires and manages properties for Nicola Wealth’s real-estate portfolios, offering high-net-worth clients an opportunity to invest in real-estate with an experienced and hands-on management team. Our portfolio spans a wide range of asset classes in major markets across Canada and the United States, and also includes strong secondary markets such as Victoria.  
The James project in James Bay is the first of its kind for Nicola Wealth and also your first acquisition in the Victoria Marketplace. Can you tell us about the opportunity you saw here and how that came about? 
We identified this opportunity in 2015 at a time when we were looking to develop modern multi-family rental apartments in various markets and coincidentally, were also looking to enter the Victoria market. The building was being operated as Harbour Towers Hotel and the hotel rooms were particularly well-suited to be converted to more conventional apartments. With the strength of the Victoria rental market combined with the iconic James Bay location, we were confident that this property would be successful as a rental apartment building where residents would benefit from the walkability of the neighbourhood and the panoramic views from upper floors in the building. Our strategy was to acquire the hotel and continue operating it while we secured the approvals to complete the conversion.  Now that the building has been completely re-imagined as “The James,” we are very pleased with the results and we intend to hold this property long-term.
Victoria has seen significant activity among large investment firms, REITs and pension funds looking to invest in the local rental market. What is driving the relatively sudden attention from these organizations?
Most institutional investors take a national approach to their real-estate strategy in Canada. With a lot of attention focused on Toronto and Vancouver, you have to broaden your scope. In the US there are many major markets to choose from, but in Canada, the list of major markets to invest in is significantly shorter, especially for those taking a wait-and-see approach on Alberta. As a result, Victoria presents a very compelling opportunity for those that understand the fundamentals. It is the second largest market in BC with a growing population and employment base. The rental market is also resilient with a very low vacancy rate and until relatively recently, very limited new supply. The housing market in Victoria is relatively affordable compared to Vancouver, so the City has benefited from those looking to relocate and retain the same West Coast lifestyle in a more affordable setting. Compared to markets like Vancouver and Toronto, there is a relative value opportunity with a great growth story. Unfortunately, the secret is out.
In addition to the James, how are you looking to expand your multi-family rental portfolio in the Victoria marketplace?
Our strategy is to develop first-class rental apartment projects that we will retain long-term.  We have a handful of projects across Greater Victoria, all at various stages of development.  We are particularly excited about our project at the southwest corner of McKenzie Avenue and Shelbourne Street in the University Heights neighbourhood of Saanich.  We are in the process of re-submitting our re-zoning and development permit application to construct 385 rental units atop 19,000 square feet of retail. Our hope is to begin construction in the Spring of 2022. The project will be highly amenitized with a lounge, gym, coworking spaces, and two large roof terraces.   
Victoria's apartment rental rates for market-leading inventory are currently in the range of $3.00 to $3.25 per square foot. Where do you see rates going over the near-term?
It’s difficult to predict where rental rates will go in the near-term. The pandemic initially slowed the market but as conditions eventually return to normal and migration patterns resume, we expect that population growth and a low vacancy rate will continue to support rental rate growth. There is always noise in the market, but we take a longer-term view to real-estate investing and are confident that in the long run, we will continue to see strong growth in Victoria. 
Thousands of units of rental housing have been built in Victoria in recent years, and yet the vacancy rate remains at near-zero percent. What will it take in terms of supply to see a 3-5% uptick in the vacancy rate? Is it even possible, outside of macro-economic impacts on the local market?
From our perspective, new supply is certainly the biggest variable affecting to the vacancy rate. For many years, there was virtually no new rental apartment development in Victoria, but similar to other markets in Canada, the city has recently experienced a renaissance of rental apartment construction. This will benefit a market where the rental housing stock is older and does not have the same features and amenities that new product offers. Renters actually benefit by having more availability of this type of product to chose from. The biggest constraint on new supply is a lengthy municipal approval process which results in longer timelines for delivery of new housing and also higher costs for developers. I think it will be healthy to see a gradual increase in the vacancy rate and suspect that it will be more pronounced in older stock as a result of more choice for renters with new product hitting the market. This is why we’re focused on developing instead of acquiring existing buildings because we feel our portfolio will be better positioned for the future. As more supply hits the market, location will also be very important. Again, as renters will have more choice, buildings in inferior locations will likely be more impacted. 
You recently completed your first office investment in Victoria with your purchase of the Dogwood Building at 1019 Wharf Street. What attracted you to this asset class?
We pursue most asset classes including office but have always been very cautious when approaching office investments because of the significant capital that can be spent on tenant improvements to re-lease space as tenants turn over. For this reason, we typically pursue “creative office” space that has lighter tenant improvements so the space can be more easily repurposed as tenancies change. This type of property, which often has exposed ceilings and other features such as concrete or brick, is becoming more sought after, particularly amongst technology-based tenants. The Dogwood Building is one of our favourite creative office buildings in our portfolio. It was originally constructed in 1906 and was completely renovated ten years ago to combine its heritage features with a modern office environment. Overall, we like the Victoria office market for its stability as it benefits from being home to the Provincial Government, but it is also becoming a centre for innovation and technology.   
Victoria’s industrial market remains very constrained. However, you recently acquired your first industrial property here. What opportunities do you see in the industrial market?
The industrial asset class is one of our favourites. However, it has been challenging to find investment opportunities of scale in Victoria given the smaller market size. Victoria shares similar features to Vancouver in that its supply of industrial land is geographically constrained. It is difficult to find large tracts of industrial land for development and the existing inventory of industrial buildings is smaller with fragmented ownership that is dominated by owner-users and private investors. This makes it very challenging to find scale or assemble a portfolio. But, for all those reasons, we think the industrial market will continue to remain strong.
We recently acquired the Bay Bridge Complex at 945 Alston Street, which is comprised of approximately 29,973 square feet on 1.13 acres of land in Vic West.  We liked this opportunity because we could acquire a multi-tenant cash-flowing property with an irreplaceable infill location that can be redeveloped in the long-term. There will continue to be strong demand from tenants for this type of property as a result of the low vacancy rate in the industrial market and the property’s proximity to downtown. Another strategy we are bullish on is strata industrial development where businesses have an opportunity to acquire a strata unit instead of leasing space. We are participating in this strategy with PC Urban in the development of IntraUrban Colwood on the former Galaxy Motors site at 1764 Island Highway. The project is currently pre-selling and has received very strong interest. 
Nicola Wealth Real Estate has a very diverse approach to investing in commercial real-estate. You’ve touched on a number of different asset classes already, but are there other strategies that really excite you?
One of our early acquisitions was a portfolio of four self-storage properties operating as Advanced Storage Centres. We continue to own and operate this brand, which has since grown to six locations in the Lower Mainland. Our plan is to continue to expand and our vision is to have locations in Greater Victoria and on thr mid-Island. As population centres grow, demand for self-storage increases so it makes sense for us to focus on a market like Victoria. We were yet again reminded of the resiliency of self-storage during the pandemic where we saw our occupancy remain very strong. 
What’s next for the real-estate market from your perspective as we emerge from the pandemic?
There is so much capital, both institutional and private, looking for a home. Early into the pandemic commercial real-estate transaction volumes slowed down but as soon as transacting became logistically possible, activity resumed. Although there were concerns about whether or not tenants would continue to pay rent, by and large, the impacts were not nearly as drastic as expected and real-estate continued to prove its resiliency. The landscape to acquire commercial real-estate is now as competitive as ever, and we expect this to continue into the foreseeable future. This will force us and others to continue to be creative when looking at acquisition opportunities of both income-producing properties and development sites. C

Receive Citified's timely real-estate news straight to your inbox. Sign up for our newsletter, and connect with us on Facebook:


© Copyright 2021 by All rights reserved.

 Article resources

  • Would you like to be featured as part of a future Ten on the 10th Q&A? We'd love to hear from you
  • View CBRE Victoria's website here
  • View Nicola Wealth Real Estate's website here
  • 2018
    • October, 2018: Reed Kipp of Devon Properties talks about Victoria's rental housing industry
    • November, 2018: Business Development Bank of Canada's Chris Boissevain talks about interest rates
    • December, 2018: Aryze Development's Luke Mari and Ryan Goodman talk about real-estate development
  • 2019
    • February, 2019: Phung Horwood's My Phung talks about real-estate appraisals
    • March, 2019: Luke Mills of Megson Fitzpatrick Insurance talks about the insurance industry
    • April, 2019: Greg Damant of Cascadia Architects talks about architecture in Victoria
    • May, 2019: Real-estate development with Robert Fung of The Salient Group
    • June, 2019: Rental housing industry Q&A with David Hutniak of LandlordBC
    • July 2019: Harris Green redevelopment Q&A with Mark Chemij of Starlight Investments
    • August 2019: Land remediation Q&A with Harm Gross of NEXT Environmental
    • September 2019: Business banking Q&A with Raj Wirk of Coast Capital Savings
    • October, 2019: Real-estate development Q&A with Mike Miller of Abstract Developments
    • November, 2019: Real-estate development Q&A with Byron Chard of Chard Development
    • December, 2019: Interest rate and commercial mortgage brokerage Q&A with Dave Ganong of Canada ICI Capital
  • 2020
    • January, 2020: Real-estate development costs Q&A with Doug Foord of Invictus Commercial Investment Corp.
    • February, 2020: Private lending and the mortgage industry Q&A with Len Shorkey of Shorkey Mortgage Corp.
    • March, 2020: Strata insurance premiums Q&A with Luke Mills of Megson FitzPatrick Insurance
    • April, 2020: Rental housing and COVID-19 Q&A with David Hutniak of LandlordBC
    • June, 2020: COVID-19's impact on Victoria's real-estate Q&A with Jordan Milne of GMC Projects
    • July, 2020: Multi-unit residential and commercial building fire safety services Q&A with Tim Lindsay of the Vancouver Island Fire Protection Association
    • August, 2020: Royal Beach Q&A with Georgia Desjardins of Seacliff Properties, developer of the 134-acre Colwood project
    • September, 2020: Victoria real-estate development Q&A with Sam Ganong of Curate Developments
    • October, 2020: Real-estate development Q&A with developer Dan Cox of Cox Developments
    • November, 2020: CRD affordable housing and CRD parks services Q&A with Stephen Henderson of the CRD
    • December, 2020: Real-estate values, wine and housing market Q&A with Johnathon Sipos of Cielo Properties
  • 2021
    • January, 2021: Mass timber construction, the Mayfair District and junior hockey Q&A with Edward Geric of Mike Geric Construction
    • February, 2021: Excavating industry, sewage treatment pipe and COVID economy Q&A with Trevor Mann of Don Mann Excavating
    • March, 2021: Victoria industrial sector investment opportunities Q&A with Brent Sawchyn of PC Urban Properties
    • April, 2021: Northern Junk, Capital Iron lands and Victoria real-estate development Q&A with Jon Stovell of Reliance Properties
    • May, 2021: Victoria housing delivery and affordability Q&A with Adam Cooper of Abstract Developments
  • Looking for a new-build home or commercial space in Victoria? Use Citified to research new-build condosrentals and commercial spaces
  • Follow Citified on  Twitter
  • Connect with Citified on  Facebook:
You may be interested in:

Victoria housing delivery and affordability Q&A with Adam Cooper of Abstract Developments

Victoria housing delivery and affordability Q&A with Adam Cooper of Abstract Developments


Projects with relevant tags

Crosstown, phase 1

584 Burnside Road East, Victoria
rentals, commercial, officesunder construction

Terra Alta Apartments, building A

665 Redington Avenue, Langford