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Olympic real estate

Conventional wisdom suggests that being named an Olympics host city is a guaranteed economic stimulant, but most real estate professionals know that the reality is far more complicated. From the rousing success generated by Sydney to Athens, where the citys Olympics Village literally wound up under water, real estate success is anything but a sure thing, no matter what city the Games end up in. Below, a sampling of past events and real estate forecasts for London and the 2014 Olympics in Sochi.
Sydney: 2000 Summer OlymPicS To accommodate visiting athletes and officials, Sydneys municipal government constructed 700 apartments and 900 permanent townhouses on 222 acres in Newington Village, a small suburb just five miles outside the city proper. Unfortunately, such an initiative was not large enough to appease the visitors, who were faced with sleeping in garages, dining rooms and living rooms during the games, not to mention other makeshift rooms that were later dismantled following the event. Today, some 5,000 residents dwell in 930 apartments and 1,100 houses. AThenS, 2004 Summer OlymPicS Against all odds and preliminary audits by Olympics officials, Athens was named host city in 2004, even after losing its bid in 1996 on the events 100th anniversary. All told, the officials guessed correctly: Just four years after the games, 21 out of 22 venues had shuttered, with many casualties of graffiti artists. Meanwhile, some 2,292 apartments built near the foot of Mount Parnes have been ghettoized, with about 10,000 residents complaining that the communitys isolation from the rest of Athens has kept promised senior centers, theaters and libraries from becoming a reality, according to a 2008 report. VAncOuVer: 2010 WinTer OlymPicS Once known as Southeast False Creek, the area in Downtown Vancouver was the last remaining site in the city to be developed and had been the focus of real estate owners since the 1970s. That all changed after Vancouver was named host city of the 2010 Winter Olympics and ground zero for the construction of 18 buildingsenough space to hold 2,730 athletes and officials. Now called Millennium Water, the former Olympic Village now houses 120 marketrate rental apartments, an additional 250 affordable rental apartments and 730 market-rate condominiums, many commanding as much as $950 per square foot. By 2020, meanwhile, the reinvigorated neighborhood is expected to house 16,000 people in more than 5,000 units. lOndOn: 2012 Summer OlymPicS International visitors, estimated at 5.3 million people, are expected to spend $110 million, or about 18 percent more in London than if the Olympics were not being held. The Bank of England expects output to be around 0.2 percent higher in the third quarter than it otherwise would have been. Where London differs from previous hosts is that legacy plans are more advanced by the start of the games. IOC president Jacques Rogge said London raised the bar when it comes to delivering on real estate development. SOchi, 2014 WinTer OlymPicS With a population of just 329,481 residents, the Russian city is among the smallest chosen to host the Winter Olympics and as such will require a dramatic development plan to accommodate the 300,000 visitors expected to participate. Under a current proposal, the number of hotel rooms will increase by 35,000 by game time, while the citys underdeveloped office sector has already spurred the development of several new buildings, including Chaika Plaza.

Sources: various newspaper reports, Cushman & Wakefield Ryan Pierse, Oli Scarff, Jeff Vinnick, Paul Gilham, Mikhail Mordasov/AFP; Getty Images

18|July 31, 2012|The Commercial Observer