Three Harbour Green marketing firm responds to our post questioning "Sold Out" status

Meet George Wong.

Mr. Wong works for Magnum Projects.  From his profile:

A recognized leader in the marketing and sales of condominium projects, George Wong is renowned for his ability to create effective and efficient sales and marketing programs that speak directly to an identified target audience, resulting in high-velocity absorption and an increased return on marketing investment.

You may recognize his picture from last month's CBC-TV story exposing the MAC Marketing employees who posed as fake Asian buyers for the media during Chinese New Year.  

In that story, Mr Wong had this exchange with the CBC:

CBC Reporter Kirk Williams: Some say irrevocable damage has been done to the Real Estate Marketing Industry. That future claims of sold out success stories will be viewed with skepticism, at best.

George Wong: I hope that is an isolated incident. Unfortunately it does give the Industry a bit of a black eye.

Perhaps it is that skepticism which lead to our post two days ago about Three Harbour Green titled "What does "Sold Out" mean? Is it another way the public is being manipulated in the world of real estate sales?"

Our post questioned the validity of a real estate ad in the Vancouver Sun in which Three Harbour Green announced that the Penthouse in their building is available for $22,300,000. 

Our concern? The part of their ad that told potential buyers that: "all tower and townhome suites are SOLD OUT"

Our skepticism was generated by current tax reports which show 34 of the total 81 suites at Three Harbour Green registered to the address of the developer, ASPAC Developments Ltd.  The validity of these tax reports was reinforced by this November 26th, 2012 article in the Vancouver Sun which advised that approximately 30% of the 81 suites at Three Harbour Green remained unsold.

Given that this project started construction in 2008, and that the Lower Mainland has been beset by stunningly weak real estate sales the past three months, we wondered if it was realistic to believe that all the tower and townhome suites at Three Harbour Green have in fact sold out... particularly since it had taken approximately 5 years to sell just 60-70% of the development.

As it turns out the above mentioned Magnum Projects is the marketing and sales firm for Three Harbour Green.

Yesterday we were contacted by Mr. Wong, who wished to address the questions we had raised.  Here is what he had to say:

Dear Village Whisperer,

Your recent blog post titled “What does "Sold Out" mean? Is it another way the public is being manipulated in the world of real estate sales?” has been brought to our attention, and we wanted to provide you with the most updated information in regards to Three Harbour Green.

As the marketing and sales firm for this project, we would like to confirm that all of the homes at Three Harbour Green have been sold, with the exception of the penthouse, as the Vancouver Sun ad states.

“Sold” means a firm and binding contract with received deposit.

The majority of the Three Harbour Green homes have already closed. The remaining units are in the process of closing, which means we've received firm contracts and deposits. Units which are sold, but not yet closed, have not yet registered with the Land Title Office, which is why the tax records posted reflect the current owner, Aspac Development.

We would hope you can make an addition to your story that includes our statement and clarifies the issues. Please feel free to contact me if you have any questions.

Kind regards,

George Wong, Magnum Projects

So there you have it.

While the real estate market has been weak for the rest of the Lower Mainland, Magnum Projects has been able to defy the trend.  Since the Vancouver Sun reported on November 26th, 2012 that more than 30% of the units at Three Harbour Green were unsold, Magnum states unequivocally that the development is now officially sold out (excepting the penthouse, of course).

We thank Mr. Wong, and Magnum Projects, for taking the time to address the issue for us.

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What does "Sold Out" mean? Is it another way the public is being manipulated in the world of real estate sales?

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UPDATE: The marketing firm for Three Harbour Green has responded to today's post.  You can see their response here.

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The investment world calls it the pump and dump.

It's a stock selling tactic that involves artificially inflating the price of an owned stock through false and misleading positive statements in order to sell the cheaply purchased stock at a higher price. Once the hype kicks in, the stock is "dumped".

Critics of the real estate industry have often wondered aloud about the term 'Sold Out' when it's applied to condo developments.

Is it sometimes used as a 'pump and dump' tactic?

What does "Sold Out" really mean?

Ask the average Joe/Josephine potential buyer on the street what they think when they read that a 100 unit development is "Sold Out", and she probably believes it means all the units in a development have been sold to like-minded purchasers.

Once "Sold Out",  the cachet of the property increases with implied high demand.  

But what if that property isn't really "Sold-Out"? 

What if a theoretical developer, in the face of lagging sales, holds on to over 40% of the units in a development in order to create scarcity in the marketplace?

Sure... all of the units made available for sale have been sold. But if the public knew a developer was holding on to almost half the units in his building for sale at a later date, would keeping that information from them constitute... deception?  

Ponder that while we add another dimension.

What if the aforementioned theoretical developer then begins selling his withheld units, one at at time. and as part of the marketing of those units he advertises that all other units in the development are 'Sold Out'?

Would potential buyers pay more than they would have if they had known almost half the units in a development were still held by the developer waiting to be sold?

Last Saturday the following advertisement appeared on page B4 of the Vancouver Sun.

Three Harbour Green has announced that the Penthouse in their building is available for $22,300,000.

Three Harbour Green is a Coal Harbour neighborhood development with 81 suites on 32 levels.

In this advertisement potential buyers are told - in blue hilight - "Regrets all tower and townhome suites are SOLD OUT"

But is that really the case?

A anonymous reader of this blog sent us what appear to be current tax reports (dated February 26th, 2013) for properties at Three Harbour Green (277 Thurlow Street).

This is a screen shot of an alleged tax report for Unit # 3101.  It's the report for the Penthouse suite - supposedly the only unit left available for sale:

As of February 26th, 2013 it says the unit is registered to 1830-1055 Hastings Street, the address of the developer of Three Harbour Green: ASPAC Developments Ltd.

That would make sense since Three Harbour Green is advertising the property for sale.

There's just one problem.  Similar reports appear to be on file as of February 26th, 2013 for Unit's #102, 103, 104, 301, 302, 502, 602, 701, 702, 703, 801, 902, 1001, 1003, 1102, 1203, 1301, 1303, 1401, 1403, 1701, 1702, 1801, 1901, 1903, 2003, 2103, 2301, 2402, 2403, 2701, 2801, and 2901.

These alleged tax reports appear to indicate that the above listed 34 suites (of the total 81 suites at Three Harbour Green) continue to be registered to the address of the developer, ASPAC Developments Ltd.

Here is one of those tax reports, allegedly for Unit #102:

For Unit #302:

For Unit #701:

And Unit #2301:

They all appear to be registered to 1830-1055 Hastings Street - the address of the developer of Three Harbour Green: ASPAC Developments Ltd.

How can this be if "all tower and townhome suites are SOLD OUT"?

I guess it's possible that these tax reports we've anonymously received are fake.

Or, perhaps, Chinese New Year (CNY) did produced a wave of sales and all 33 remaining units (everything except the Penthouse) were sold; the February 26th tax reports merely waiting to be updated with the new registered owners.

But didn't we cover the whole disappointing CNY sales season after the MAC Marketing fiasco?

So here's our question.

Does Three Harbour Green and ASPAC Developments Ltd still own all of these suites?

If these tax reports are genuine (and CNY didn't produce a wave of sales that swept away all the inventory at Three Harbour Green), is advertising the development as "Sold Out" with "regrets all tower and townhome suites are SOLD OUT" misleading? 

Surely there are some kind of standards in the real estate industry for this sort of thing?

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More speculator panic? - Updated

In our last post we related that CIBC economist Ben Tal had come out with some very bearish comments about Real Estate.

He had said his bias leans towards...

"an expectation of more significant price declines. This is basically a stagnating housing market, not a housing market that is going to be on fire. This is a housing market that you'll see activity moderating and prices actually going down. In Vancouver, prices are already falling from sky high levels a year ago, especially in the once bustling condominium market."

So you have to wonder if there is any signs of concern amongst speculators.

Last week we profiled speculators who had bought a west side home to renovate and flip... but were desperately seeking to bail mid-renovation.

But what of those condo speckers, the ones who signed up for pre-sales.  As some of them see their completion dates near (and the balance beyond their 10-15% downpayment looms), are any of them affected by the plunge in sales and explosion in listings we have seen so far this year?

Let us turn to craigslist.

Here we have a CL posting from someone who is trying to dump a pre-sale assignment for a townhouse at 277 Thurlow Street in the very upscale Coal Harbour of downtown Vancouver by Stanley Park. (click image below to enlarge)

Due for completion at the end of this month, it seems he is most certainly feeling the heat of those 'falling prices' Benny Tal was referring to.

The craigslist headline screams:

"Panic Sale - Reduced to Cost"

Offered is a luxury townhouse at the new Three Harbour Green development. With a closing date of March 31st, 2012 fast approaching, the burden of moving a 2,303 sq ft, 2 Bedroom + Den (with private roof top Patio and 2 full, 1 half bathrooms) seems to be weighing on our dear specker.

Asking price (which is advertised at being at cost): $3,500,000.

Promoted as 1 of only 2 townhouses available in the development, it seems our eager specker is in worse shape than you might have noticed at first glance.

Not only did he snap up this unit in the presale, but the CL notes he also has the 2nd townhouse for sale as well (listing for $3,000,000).

Yikes!

The contact person is in the CL ad goes by the first name of Alok (contact number 604-664-9915).

A search of that phone number comes back as belonging to Alok Kansai, a manager of the Vancouver (Surrey) branch of the countertop, flooring and cladding company Hari Stones Limited.

So it seems our speculator works in the R/E construction industry.

Clearly, as he services the real estate bubble, he couldn't help but try to grab himself a piece of the speculator pie.

But with the market turning, and with only 15% down for the assignment, one can only wonder at the mounting stress as he grapples with coming up with the remaining 85% of the $6.5 million due on these two townhouses.

Interestingly the CL advises that the GST is included in the advertised price on "these units only".

How many other units is this supplier is dabbling in, I wonder?

How will he be affected by the changes to the Canadian 'liar loans' to the self employed as banks no longer accept undocumented statements as to their 'income'?

Even if he can managed to pull off following through on the $6.5 million in new mortgages these two town homes require, what happens when he has to complete on the other units he has acquired in pre-sales?

More importantly... if Tal's predictions of "more, significant price declines" come to fruition how ugly are things going to get for him and other speculators in similar positions?

Me-thinks the 'panic' is only just starting to set in. I suspect we will be seeing a lot more of these 'panic sales' in the months ahead.

(ht to SunBlaster in Vancouver Condo Info comments section)

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