Vancouver developer Wesgroup Properties LP is delaying some projects and laying off an unspecified number of its employees, the company’s president and CEO said on social media Thursday.
“Due to the unprecedented and compounding challenges facing the real estate industry, including prolonged economic uncertainty, the rising cost of delivering housing and a deeply stalled condo market, we … were faced with the extremely difficult decision to reduce the size of our team,” Beau Jarvis wrote in a public LinkedIn post on June 19.
Jarvis said economic realities “left us no choice,” calling the move a “last resort” that followed attempts to reduce costs in other ways.
“Housing projects across the country are being cancelled or delayed because they are no longer viable. Moreover, we are delivering housing at a cost that people cannot afford to purchase. I will say it again – This is a COST-OF-DELIVERY CRISIS,” Jarvis wrote.
In a Thursday statement, Wesgroup confirmed it is delaying "a number of upcoming projects" and reducing the size of its team "for long-term sustainability," but declined to provide details about the number of layoffs, the departments affected or the company's size.
The company has 201-500 employees according to its LinkedIn page, though its website contains a reference to 185 employees. It has been involved in large developments like River District in Vancouver, Inlet District in Port Moody and Brewery District in New Westminster.
The news comes weeks after Vancouver real estate marketing firm Rennie & Associates Realty Ltd. due to geopolitics, artificial intelligence and other industry upheavals.
The condo market has slowed to a “grinding halt,” according to a November report from PricewaterhouseCoopers LLP and Urban Land Institute.
“In markets like Toronto and Vancouver, a significant market slowdown is underway as it becomes too costly for many developers to proceed with condo developments,” .
“Developers are also facing challenges on the revenue side as investors, who make up a large portion of new condo buyers in many markets, pull back.”
Update: In a further statement Friday, Wesgroup said the size of its team was reduced by 12 per cent this week, and that the company remains "in a fiscally sound position."
