A member of the Facebook Group posted some comments regarding Klein Group. I asked Klein about the questions raised and received his response. This post includes the comments and Klein's response. While it is quite long and detailed, I hope it is helpful.
Mr. Dalessandro,
I felt the need to respond to your post; I hope the detail of my response will give you some of the references that you can review for yourself. Please do not take my comments as disparaging as this is my profession for the last 20 years and representing 136 families at Anchor Point is something I do not take lightly. In the last 2 years our office has financed over $100M in cash transactions from overseas and over $450M in land sales. I speak from direct experience. Remember, my job is two fold: to make good on our proposal to Anchor Point Owners, and to represent and protect my current clients.
There are many incorrect statements in your post. It is important that owners receive information from the sources of expertise directly.
Your post says, "If I remember correctly they said they had about 20% assembled at the meeting on the 9th. I assume that would have been about 95 at that time given there is 477 total. That means that between MYU and Klein over 50% have signed listing agreements now. If you add the Sotheby's contracts in to the mix then even more. A couple of months of hard work on the realtors part and we should know if we can go to market by spring hopefully. MYU seems to have some momentum now. They have booked a booth at some big investor expo overseas during December to get Anchor Point some exposure as well. Now It's up to the vendors to direct their agents what to do, i.e. Instruct them to cooperate. Ed Wilson shot down all the claims/excuses Klein and Scouten had for not cooperating re: Errors & Omissions insurance etc."
a. Please do not mix the number of units represented by the various brokerages into a single offering - it absolutely is not. Make no mistake - what is occurring now, is a split of owners interests and owners equity with a long time delay. I think this is precisely what some owners were hoping for, however, the result may be a Bill 40 with ongoing legal costs 2 years down the road.
b. To further clarify, Sotheby's "units" are under a Contract of Purchase and Sale and have been already "purchased" by their buyer. They are "off" the market and already acquired. Not for sale.
c. Mr. Wilson is not an expert in commercial real estate brokerage, nor the land market, nor the real estate brokerage insurances required to protect clients when land values are in the $100s of millions. Mr. Wilson does not pay the insurance premiums and special insurance premiums required for these large transactions as a real estate brokerage. We do. I would encourage you to ask the brokerage that represents you for a copy of their insurance policy and a written confirmation of their coverage for their services, including this thing they are calling "co-operation".
d. Our Exclusive Listing Contract covers the issue of participating in "co-operation" when it is an insured activity. I would refer you to 17. B. (d):
Further to Clause 7B, the Seller authorizes the Designated Agent of the Listing Brokerage, in his/her sole and complete discretion to determine with which potential Buyers, Other Brokerages and Agents he/she will engage, share information or cooperate with as it pertains to the sale or marketing of the property. The Listing Brokerage and Designated Agent are not required to consult with or obtain confirmation of the Seller’s instruction before exercising this discretion. The Seller acknowledges that the Listing Brokerage has explained the potential ramifications of a reduced exposure as it can negatively affect the final selling price. The Listing Brokerage, in its sole and complete discretion, may also utilize confidentiality agreements to register potential Buyers.
When landmark real estate transactions are undertaken, single representation with a brokerage is a normal occurrence. (That is exactly what each major firm presented to AP owners: Avison Young, Cushman Wakefield, Royal LePage Commercial, Colliers, CBRE) None of their proposals spoke about co-operation nor a co-listing.
High value sellers, like in the case of AP, wish to ensure their information is kept confidential and that their information is only released to highly qualified, end purchasers, not speculators. Examples of such transactions include the recent sale of the Bentall Portfolio for over $1B in 2017, the Canada Post Building, Surrey Central, Hudson Bay Company Building coming potentially in 2018, Molson Brewery to Concord Pacific in 2016 etc.
d. As per Mr. Wilson's claim that "co-operation" is an ethical requirement of real estate agents and in the best interests of our clients. This is completely unfounded and untrue.
What he may be referring to is the MLS® system. As past President of the Real Estate Board of Greater Vancouver (2012), I have an intimate knowledge of the Rules of Co-operation, Professional Standards and the Standards of Business Practice. An Exclusive Listing Contract is completely separate from the MLS® Rules. The MLS® systems sell homes and homogeneous property types where co-operation drives price for properties where many purchasers can participate. Most residential real estate agents speak this language and sell homes all the time using it.
In commercial real estate, where the values exceed the tens of millions, where the protection of information and access is required to only the most qualified, it is different. We have tenants to protect, confidentiality provisions to keep, etc. Remember, Anchor Point is a $350M to $400M sales with a $1.19B final development value (approximately). This is a very serious sale and should be treated with caution and a LOT of background preparation.
e. Please find the public link to the Canadian Real Estate Association REALTOR® Code: http://www.crea.ca/wp-content/…/2016/03/The-REALTOR-Code.pdf
Please review the table of contents and materials for yourself. There is no mention of anything associated with co-operation - why? Because it simply isn't one - it has never been in over 40 years.
f. For a complete understanding of why co-operation/co-brokerage, in the form being considered, our brokerage will absolutely not participate in, please see our Klein Group Video Presentation on the subject:
g. I would strongly encourage you, before determining that a matter like insurance is "shot down" - that you get the answers from your brokerage. I would encourage you to phone Mr. Chris Johnston, Head Insurance Adjuster at Errors and Omissions Insurance for Realtors in BC and ask him anything about co-brokerage or co-operation for yourself in a large strata. Let him know I sent you. I reconfirmed my facts on November 10, 2017. Mr. Wilson is not providing you with any insurance coverage for his information, unless you are his client? Are you? How do you know? If something goes wrong - who is covering you? and how much? Be very aware of the facts rather than rhetoric.
"It's time for Klein to grow up and accept he isn't getting the whole complex and the 20 +million commission and do what is best for his clients."
h. While I appreciate your concern for our company's revenues, our company's best interests are served by actually selling our current clients' units (136 units valued at over $100M) for the 9 months we currently spent. Spending more time to deal with the AP internal issues and politics doesn't help our company's revenue. We are much better served to spend our time with other land sales and assemblies in the Lower Mainland that need our services - there are a lot of them. We will continue to announce them publicly as they come available. However, staying the course, and trying to make good on our initial proposal to all AP owners is actually the best option for all owners at Anchor Point (and our clients). Maximum value is achieved when 80+% is taken to market as a single, complete offering. Nothing less.
Notice too, that we provide facts, dates and references. Owners should insist that all professionals do the same. Are you working with the brokerage that is setting the bar or copying it?
Eugen Klein
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