December 23, 2024 Update
  
Season's Greetings
We wish you a Merry Christmas and a Happy New Year. As we celebrate this festive season, may peace on earth and goodwill toward all guide us forward (Luke 2:14).
Funding Update
We are pleased to announce that we have successfully reached our funding goal for the Phase 1 capital raise. As a result, the offering of Class B Units is now closed.
For those interested in utilizing your TFSA or RRSP contributions, we are excited to share that Phase 2—featuring Class C Units—will open on January 30, 2025, earlier than anticipated.
Please communicate your interest directly to Parvis at transactions@parvisinvest.com and Western Pacific Trust at self-administered@westernpacifictrust.com.
Reminder: The deadline for RRSP contributions is March 3, 2025. The annual contribution limit is set by the Canadian government. Please check your CRA account for individuals at https://www.canada.ca/en/revenue-agency/services/e-services/digital-services-individuals/account-individuals.html
Building Update
Upstairs Unit: The previous tenant vacated on September 30, 2024. The space has been successfully leased to a local dealership under a two-year term at a higher rate.
Downstairs Unit: The current tenant is vacating on January 31, 2025 and we are already working on a lease with a union electrical contractor who are interested in leasing as of February 1, 2025, also under a two-year term.
Both tenants are on triple-net lease terms ensuring that property holding costs are fully covered. Lease income continues to offset financing costs. Additionally, the roof is undergoing repairs as it is at the end of its service life.
Project Progress Update
The City of Coquitlam has acknowledged challenges with TOA zoning designations imposed by the Provincial Government. A block-by-block review commenced this fall with draft amendments expected by early spring 2025.
Our property at 576 Lougheed was originally designated as a high-density TOS area. However, during the TOA zone setup, an error excluded it from the designated circle despite its proximity to other high-rise developments. Following discussions led by Olga Karan, Councillor Djonlic acknowledged the oversight, and the City is working to rectify this issue.
Rezoning and Development Application
Since our last meeting, we have retained all required consultants and completed all necessary reports for the rezoning and development application. Olga is meeting with City staff before the year end to review responses to a pre-application letter.
Timeline: Rezoning and development permit applications typically take 8–12 months. We aim to submit our application in early January 2025.
Geotechnical/Hydrological Study: GeoPacific returned to the site this month to conduct a fourth drilling study to confirm the secant wall dimensions.
Daycare Facility
In late November, Olga met with the Fraser Health daycare licensing officer to review our blueprint for the proposed 9,049 sq. ft. indoor and 3,550 sq. ft. outdoor daycare facility. The design accommodates:
A YMCA-operated non-profit daycare for infants (35 children)
A for-profit daycare for infants, toddlers, and before-and-after school programs (51 children)
Together, these facilities will provide care for 86 children. We are collaborating with YMCA’s Raegan Stewart to secure an operator for the non-profit portion. The YMCA will lease a portion of the space at a below-market rate while the for-profit daycare space will be sold.
It is now mandatory to provide daycare space in high-density rental towers in the City of Coquitlam.
Land Acquisition
Discussions with the City to purchase partial Edgar Road and the adjacent parcel (formerly known as 590 Lougheed) are progressing. Upon transfer of the title from the Ministry of Transportation (MOT) to the City of Coquitlam, zoning was changed from industrial to a road dedication. This zoning discrepancy devalued the land which works in our favor.
On November 19, the Pooni Group facilitated a comprehensive discussion with City staff regarding the partial acquisition of Edgar Road and the property formerly known as 590 Lougheed Hwy. During the meeting, Olga highlighted the strategic importance of this acquisition considering the planned future closure of Edgar Road, as outlined in the pre-application letter (paragraph 1.7). She emphasized that, given the closure, the proposed acquisition would not adversely affect traffic flow.
The acquisition of this portion of Edgar Road will significantly improve access to the building, enhance safety, and align with existing municipal plans, including the proposed cul-de-sac at the north end of Loring Street. Olga further underscored that this purchase is crucial for ensuring safe and efficient access to the daycare facility, while also preserving access to the garages of the two adjacent single-family properties.
Market Outlook
The 2024 Housing Market Outlook forecasts declining vacancy rates, expected to fall below 0.9%, driving rental prices upward.
Rental Prices in Coquitlam (October 2024)
1-bedroom: $2,500–$2,800/month
2-bedroom: $3,600–$3,800/month
3-bedroom: $4,000–$4,300/month
Although vacancy rates in the Vancouver primary rental market increased slightly from 1.3% to 1.4%, rental rates are expected to rise further as purpose-built rental construction lags behind demand.
Capital Allocation Recap
Class B Units: Funds were allocated for land acquisition and soft costs including consultant, legal, and other professional fees.
Class C Units: Proceeds will cover rezoning and development application fees, Community Amenity Contribution (CAC), additional consultant and professional fees.
Looking Ahead
We look forward to hosting an investor mix-and-mingle in February 2025 of the New Year. Stay tuned for details!
Until then, we wish you and your loved ones a joyful holiday season and safe travels.
Gratefully,
July Ono, CAPM, BA LDRS
OCMI Capital Management Inc.
#210 – 15272 Croydon Drive, Surrey, BC V3Z 0Z5
604.830.2438 | july@ocmi.ca
Olga Karan, CPA, CGA, BFin
OCMI Capital Management Inc.
#210 – 15272 Croydon Drive, Surrey, BC V3Z 0Z5
604.330.2172 | olga@ocmi.ca
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