Featured in: Financial Post
VANCOUVER — The real estate team at Unique Properties don’t see themselves as kingmakers, but if your home really is your castle, it’s no wonder the occasional client sees them that way.
A buyer contacted them about an island the firm had for sale — just one kind of the properties that the group at Colliers International sells and part of a distinct collection of valuable real estate that falls somewhere between the residential market and the commercial industry, but not specifically served by many brokerages.
“We had a 5,000-acre island for sale in Fiji. I got a call from a fellow saying he wanted to create his own kingdom and rename the island,” said Mark Lester, the leader of the Unique group, from his company’s offices overlooking the ocean and mountains in the downtown of British Columbia’s largest city.
Unfortunately, that buyer didn’t materialize, but that doesn’t mean the island is still up for grabs — Unique sold it shortly thereafter to an undisclosed high-profile client.
Unique is a sub-brand under Colliers International, a publicly traded company with more than 16,000 employees in 66 countries. That connection with Colliers has helped Unique in what is often an international quest to buy and sell real estate to the world’s rich and famous.
“What we have found is there is unique capital out there looking for unique real estate. Our job is connecting them,” Lester said. “The way I often describe it is we handle unique real estate that requires commercial expertise that other people don’t know what to do with. That’s a pretty broad definition, so it’s a lot of asset classes.”
That wide swath of properties has included private islands, golf courses, marinas, ranches, ski resorts, forestry land and institutional properties. It doesn’t have to be property outside of urban areas, but it usually is.
Alan Johnson, vice-president of Unique Properties, said many of the properties are in iconic locations. “They’re iconic in Canada, and an icon in B.C.,” he said. “That plays into the position of the asset in the marketplace.”
In the almost 20 years that Lester and Johnson have been working together, the team has done about $700 million in deals, but the most memorable — and the most difficult to price — might have been the Douglas Lake Ranch, a 164,000-acre property in B.C.’s Nicola Valley.
The property was Canada’s most famed cattle range and had been owned from the 1950s by the Woodward family before being sold to Bernie Ebbers, then-CEO of World Com, in 1998.
After Ebbers got into legal issues that eventually landed him in jail, the firm sold the property on behalf of the debtors’ representative to Stan Kroenke for $90.3 million. Kroenke is the owner of Kroenke Sports Enterprises, which counts the National Basketball Association’s Denver Nuggets and National Hockey League’s Colorado Avalanche among its holdings.
Some deals are smaller, such as the $1.475 million a buyer paid for Julia Island, a seven-acre piece of land southwest of Galiano Island, which is one of Southern Gulf Islands between Vancouver Island and the Lower Mainland.
“It has a dock and a little cottage. It’s off the grid. No electricity and rain water collection,” said Lester, indicating that a wealthy Vancouver resident purchased the private island. “You could build a sizable house on it, if you wanted to.”
One of Unique’s biggest challenges is trying to value a property since there is not the same liquidity in, say, islands as your average Canadian home. Adjusting expectations of sellers to market realities is part of the job.
Johnson, who has worked with Lester since 1997, said a lot of the value depends on the asset itself, but they do look for direct comparisons in the market.
“If it’s a private island, we’ll look at recent sales. It’s surprisingly simple, but it’s also complex because we have 20 years of property that we have looked at,” said Johnson, adding that pricing income-producing properties focus more on the profit that will be produced by them.
The firm’s fees tend to be higher than those who sell more standard real estate, but it also tends to do fewer transactions in a given year because it is such a specialized field. The properties they sell also tend to be more expensive to market, both because there is a smaller field of buyers and because the real estate is more challenging to get to and to show.
Lester and Johnson left Colliers in 2011 and took the group to Sotheby’s International. “That wasn’t the right place for us,” said Lester, referring to Sotheby’s. “The brand is great, but in terms of what we do and the nature of out business it wasn’t the right place.”
The firm moved to Jones Lange Lasalle at the end of 2013, but late last year decided to return to Colliers where Lester had spent 20 years before he left. Johnson had been almost there 15 years.
The third member of the team is Andrea Thieven, who was brought in when they moved away from Colliers five years ago to provide administrative support as a client project specialist. She stayed with the team when they returned to Colliers and now heads up the administrative operations and marketing.
The contact list of the firm is a who’s who list of the wealthy and famous, including billionaire sports franchise owners and actors such as Mel Gibson.
“We have a good contact list, but in many cases we are looking for the proverbial needle in a haystack for a purchaser,” Lester said. “You sell a development site in the city and you know who the top 20 prospects are. With the assets we deal with, you have to match that need (for a buyer) with interest and it tends to be a global search.”
You go around the country and you’ll find residential realtors who might specialize in waterfront or islands and things like that, but these guys play at a different level.
Technology — including satellite imagery and modern mapping techniques — has made their lives a lot easier.
“We used to be on the road a lot more before Google Earth,” Johnson said, with a laugh. “(Now) I can do 90 per cent of the due diligence beforehand.”
Of course, they still have to visit the site and the group spends a lot of time on float planes, helicopters and boats — and sometimes, Lester said, “we end up going by Ski-Doo.” The journey can often be arduous, but worth it in the end.
“Several years ago, we sold an island in Fiji, called Mago Island. We were representing a Japanese company in the sale of the property. We had to fly to the main island, then get on a smaller plane to another island nearby and then get on a small boat to go 20 miles to this island,” Lester said. “I got there and I was totally soaked, me and five Japanese guys in the middle of the Pacific Ocean on this totally isolated island.”
The trip was worth the effort as the 5,400-acre island ended up selling in 2005. The buyer? Mel Gibson, who was brought into the deal by another agent.
Kirk Kuester, an executive managing director of Colliers International with responsibilities for British Columbia, said there aren’t many companies doing what Unique Properties does in a large commercial context.
“It’s pretty distinctive, in terms of our industry,” he said. “You go around the country and you’ll find residential realtors who might specialize in waterfront or islands and things like that, but these guys play at a different level.”
The plan is to roll the brand out across the country, but Unique has already created working relationships in other parts of the country.
“It’s based in Vancouver, but it’s a business we are active in nationally,” Kuester said. “It’s more active in (the) West, but we have projects in the East and we think it’s quite scalable from a North American perspective, and even broader.”