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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   October 01, 2019 229 0 0 0 0 0
The latest project announced by Devimco Immobilier, the Fonds immobilier de solidarité FTQ, and Fiera Real Estate is shaping up to be Montreal’s largest mixed-used residential complex so far. Late last week, the $700-million-plus Maestria development has broken ground on the site of the former Spectrum de Montréal. The project, which will be comprised of two towers 57 and 61 storeys high, will be offering a total of nearly 1,750 residential units ranging from 300 to 2,200 square feet. Designed by with architectural firm Lemay, Maestria will also be furnished with an abundance of green spaces intended to promote urban biodiversity, as well as a public plaza accessible to all residents. An aerial walkway connecting the two buildings will be located at the 26th and 27th floors, which is expected to be the highest ever in a residential project in Quebec. The towers are planned to incorporate office units, along with restaurants, entertainment venues, and neighbourhood shops and services. Hunger for the spaces has been intense, with 75% of the first tower’s units having been sold just a few months after the project’s announcement in November 2018.Sales for the second tower have
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   September 30, 2019 218 0 0 0 0 0
Private buyers remain the most active contingent in BC’s commercial market, according to the Mid-Year 2019 Investment Review (British Columbia) report by Avison Young. This sector accounted for 82.5% of the deals completed during the first half of 2019.A total of 85 commercial deals closed in the province during the first six months of the year, with a total value of more than $2.74 billion. Private buyers’ share of overall value shrunk to a record-low 29%, however.This was significantly below the 60.6% ratio seen in 2018. “Prior to 2017, the last time private buyers were responsible for less than 50% of overall dollar volume was in 2012 when they accounted for 72% of total purchases, but just 38% of the $2.35B invested that year,” Avison Young stated. Institutional investors reigned supreme.While these were involved in just 8% of completed deals, the cohort’s impact was undeniable as they accounted for 66% of dollar volume during that period, with more than $1.8 billion. Much of this stemmed from the sheer size of the properties involved. “Of the seven institutional acquisitions in the first half of 2019, four involved significant downtown and suburban
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   September 30, 2019 214 0 0 0 0 0
The pace of growth of Montreal’s residential property values has swelled by more than double since 2017, according to figures released earlier this month by the municipal government. Greater Montreal home values increased by an average of 13.7% from 2017, considerably larger than the 5.9% registered during the previous municipal roll roughly two years ago. During this period, single-family detached homes saw a 20% increase in value, ending up at an average of $600,000.Meanwhile, condo values grew by 8.7%, up to an average of $365,000. “The market has just completely exploded over the past few years since 2017,” residential broker Rebecca Sohmer told CTV News. Condos have been especially noteworthy, with demand dramatically intensifying and median prices increasing twice as fast as the rate seen in single detached housing. A late August report by Royal LePage stated that from January to July of this year, the median price of the Greater Montreal area’s condos spiked up by 10.3% annually, up to $286 per square foot (psf).To compare, single-detached homes saw 5.2% growth during the same time frame. In the City of Montreal, the condo median price grew by 7.9% year-over-year
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   September 30, 2019 283 0 0 0 0 0
Proximity to universities is an often overlooked fundamental that enhances property values, but there’s another reason student housing should be a staple of every portfolio. “There’s massive media coverage of the student housing crisis and research shows it isn’t getting any better.There’s colossal demand for student housing,” said Jennifer Hunt, vice president of research at the Real Estate Investment Network.“Millennials make up the largest demographic in Canada, superseding baby boomers, but at the crux of the demand [during 2011-2012 and 2015-2016] is domestic student enrollment, which increased 2%, and international students, which rose 52%.” REIN’s inaugural University Effect:A Report for Rental Housing Providers determined that a house’s price will increase 1% for every kilometer closer to a university it is because of high demand for student housing within 400 metres of the institution.Given the dearth of student housing provided by the university—most of what is available goes to first-year students—there exists a monumental opportunity for investment. But investors first have to know where to look.REIN has established what it calls a long-term formula to decipher which areas produce the highest ROIs.For example, universities increase GDP and employment also grows 4.6%. Understanding where
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   September 27, 2019 221 0 0 0 0 0
Proving to be especially resilient against the negative impacts of the global trade turmoil, British Columbia’s commercial real estate continued to pull in significant investment volumes during the first half of 2019. According to the new Mid-Year 2019 Investment Review (British Columbia) report by Avison Young, total transaction numbers during that period (85 commercial deals) were the third largest ever in the market, behind only the historic levels seen last year (102 deals) and in 2017 (109 deals). Total dollar value exceeded $2.74 billion, with office and industrial assets drawing in the largest investments.These properties are expected to continue attracting substantial volumes for the foreseeable future. The office sector accounted for 70% of the first-half total at more than $1.9 billion.This was spread across 21 sales, including the major Bentall Centre transaction valued at $1.05 billion. “Investor appetite for office properties in Metro Vancouver, particularly in the core, will remain robust through 2019 with quality assets attracting multiple bids and achieving premium pricing,” Avison Young stated. Industrial properties represented 40% of the total sales number with 39 deals closed.With a total value of more than $391 million, the property type continues
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   September 27, 2019 231 0 0 0 0 0
Scheduled to close by the end of this month, a multi-million-dollar transaction is attesting to the strong demand for Toronto’s retail spaces. Earlier this week, Choice Properties Real Estate Investment Trust announced that it has cemented an agreement to sell a 30-property portfolio to a third-party buyer. “We are pleased to execute on this opportunity to recycle capital,” Choice Properties president and CEO Rael Diamond said  “Along with the recent issuance of equity, this transaction further strengthens our balance sheet by reducing leverage and providing additional capacity to fund our significant development program.” Valued at approximately $426 million, the portfolio is comprised of three distribution centres and 27 stand-alone retail properties. With e-commerce coming to the fore as one of the city’s most vibrant industries, a growing expectation for same-day delivery among consumers is driving the demand for Toronto’s retail assets. According to the latest Emerging Trends in Real Estate study published by PwC Canada and the Urban Land Institute, spaces for pre-delivery storage are among the most important properties.Cold storage for food is a particularly valuable resource, taking into account the increasing influence of online shopping. Co-working arrangements
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   September 27, 2019 243 0 0 0 0 0
Today’s offices are virtually unrecognizable from what they were even a decade ago. On behalf of GWL Realty Advisors, Leger Marketing conducted a survey of 573 office tenants in three Vancouver offices it manages and determined their most desired amenities had to do with health and wellness. “In buildings where we didn’t have fitness, that was a key feature they wanted, and if the buildings didn’t already have a sit-down restaurant or café, those were also amenities people of all ages—but definitely the younger generations—asked for more of and saw as more important,” said Wendy Waters, VP of research services and strategy at GWLRA. “The younger people working in our buildings wanted landlords to provide activities.Yoga was one, but also health and wellness presentations, and even guest speakers.That was a little surprising how many people in our buildings would like us to offer these additional group experiences.” Bicycling is a popular mode of urban transportation and 18% of Vancouver office workers primarily cycle or walk to work.Thirty percent of respondents who don’t cycle say they would if provided “end-of-trip” facilities, which are designed as a place to lock up their bikes, shower and change.
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   September 25, 2019 247 0 0 0 0 0
A noticeable lack of significant portfolios for sale, as well as a dearth of top-tier office complexes and rental apartments, has led to a marked decline in foreign commercial property investment so far this year. Data from Altus Group Ltd.showed that the total volume of January-June commercial transactions across Canada plummeted by 70%, from the $5 billion during the same period in 2018 to just $1.5 billion this year. Moreover, while price growth and levels have intensified as a result of this scarcity, many investors have instead chosen to wait and see on the sidelines, Altus vice president of data operations Raymond Wong told BNN Bloomberg. The latest Emerging Trends in Real Estate study published by PwC Canada and the Urban Land Institute found that development timelines – in commercial and residential alike – are among the sector’s most pressing concerns. Industry players cited approval processes along with construction, material, and land costs as the top issues in 2020. Fortunately, the next few months will likely see some pending major deals close, Altus stated.Among this are Oxford Properties Group’s sale of the Fairmont hotels portfolio to a Singaporean wealth fund, as
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   September 25, 2019 247 0 0 0 0 0
Interest rates are expected to rise—when has become anyone’s guess—and if they do, amortizations must as well. “If you look at the reduction from 40 to 35 years, it coincided with a reduction of interest rates by almost a full percentage point in a short span of time with no visible indication of those rates rising again anytime soon,” said Dustan Woodhouse[1], president of Mortgage Architects[2].“Each subsequent amortization cut—from 40 years to 35, 35 to 30, 30 to 25—mathematically was roughly the equivalent of a 1% interest rate hike and it offset the lower rates.In other words, reducing amortization by 15 years was the equivalent of a 3% interest rate difference.So interest rates fell about 3% from historical averages but the shorter amortizations put the payment in line with a higher interest rate over a longer amortization. “Naturally, as interest rates move up, you want to undo the changes, but the problem is math is hard, and at some point they forgot in government that the reason they reduced amortization all the way down to 25 was to address the amount of mortgage people were qualifying for.” In 2007, when the
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   September 23, 2019 278 0 0 0 0 0
The Kitchener-Waterloo region will see intensified demand in the coming season, according to a new study by Zoocasa. The phenomenon will be especially apparent in the lower price brackets.Affordable options are the region’s strongest attractions, with many buyers fleeing the inflamed costs of the Toronto market. Average prices in the detached home segment stood at $615,568 last month, markedly below the $619,307 seen in the City of Toronto. Zoocasa’s analysis noted that Kitchener-Waterloo has become “a popular real estate destination for both locals and buyers on the move, whose buying power is supported by its strong education- and health-based jobs market.” Moreover, the region remains a sellers’ market.Overall home sales in the region slowed down by 9.1% year-over-year in August. “Sales-to-new-listings activity remains steep, creating an increasingly competitive marketplace for prospective buyers, setting the stage for an active fall market.” In Kitchener, 14 out of 19 of its neighbourhoods assessed by Zoocasa lean towards being sellers’ markets, with sales-to-new-listings ratios (SNLR) of 61% or more.Of these locales, Grand River North had the highest ratio at 120%, up 57% annually.This represented a 20% increase in sales and a 37.5% decline in new listings,
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   September 23, 2019 269 0 0 0 0 0
Late last week, Greybrook Realty Partners and Marlin Spring announced the acquisition of a Montreal portfolio comprised of seven apartment buildings with a total of 324 rental units. Said properties are situated close to restaurants, shops, hospitals, grocery stores, two metro stations, the Université de Montréal, and hospitals like the Jewish General Hospital. Greybrook Realty and Marlin Spring stated that they will also be in charge of renovating suites and improving the common areas across all the buildings. “The close of this acquisition brings the total number of units within our value-add portfolio to 774.With asking rents currently below comparable products in the area, we believe an opportunity exists to improve both the product offering and revenue through execution of a value-add program,” Greybrook Realty executive director Jared Berlin said. “With the success of our existing Montreal portfolio, supported by the City of Montreal’s strong rental market fundamentals, we believe these assets are a natural fit in our growing Quebec Multi-family Portfolio” Marlin Spring CFO Elliot Kazarnovsky added. In recent years, strong population growth – especially immigration – has spurred sustained growth in Montreal’s rental housing market. Figures from IPA’s Midyear
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   September 23, 2019 249 0 0 0 0 0
The average new single-family detached home in the Greater Toronto Area costs $222,000—in taxes. According to a report prepared by Altus Group on behalf of the Building Industry and Land Development Association (BILD), government fees, charges and taxes on GTA condos also run six figures, averaging about $124,000. Examining Ottawa, Calgary, Montreal and Vancouver, as well as San Francisco, Miami, Boston, Chicago, Houston and New York in the U.S., it was determined that Toronto has the dubious honour of having North America’s highest home taxes. Per typical single-family home unit, the taxes, government fees and charges in the GTA are three times higher than the average in the aforementioned U.S.cities, and nearly double what they are in the four Canadian cities.The same levies are 1.5 times those in the American cities and approaching 30% higher than the Canadian cities. “The facts demonstrate that government fees, taxes and charges play a significant role in eroding housing affordability in the GTA.These costs are unsustainable and BILD calls on all governments to bring certainty and transparency for new homebuyers,” said David Wilkes, BILD’s president and CEO. “The Building Industry and Land Development Association supports the concept
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   September 20, 2019 698 0 0 0 0 0
Industrial The industrial sector is forecasted to be strong next year with warehousing and fulfillment driving development.According to Q2-2019 statistics compiled by CBRE, the national vacancy rate for industrial space was 3.1%, however, in Vancouver that number is even lower with only 2.1% of spaces available, and they’re nearly all accounted for in Toronto where the vacancy rate is 1.5%. The result is escalating rents because supply simply cannot keep apace demand.PwC cites an interviewee who pegged industrial real estate to be the strongest bet going forward, especially in Toronto, Vancouver, Ottawa and Montreal.Calgary has also shown promise, not to mention a reversal of fortune for the sector.But a scarcity of land upon which to develop industrial properties is concerning.Halifax is also slated to build more industrial space because the sector has witnessed many large portfolio transactions of late. Office Canadian office is a very healthy area of the country’s overall real estate market.Survey respondents rated downtown properties fifth in terms of development prospects next year, and as the country’s economy continues growing—especially its tech sector—optimism is high in the office sector. In spite of considerable office space construction, a substantial amount of units are
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   September 20, 2019 229 0 0 0 0 0
Over the last few years, Vancouver’s downtown area has seen much intensified demand for commercial assets among retail companies. This is especially apparent among luxury retailers, CoStar Group Canada senior market analyst (Vancouver) Jamil Jamani said in the company’s latest analysis of the market. A large part of this is that the region has often served as a proving ground for these major brands prior to their North American expansions. “Robson Street is facing increased interest, as well as Alberni Street,” Jamani told the Vancouver Sun in an interview.“You’re starting to see luxury retailers scatter not only in malls, but around downtown Vancouver.” The region’s economic growth, which is likely to outpace the national level this year, is also impelling the trend. Retail has been one of the Vancouver commercial property market’s strongest performers, with net absorption from July 2018 to July 2019 at 2.1 million square feet, CoStar stated. By the end of that period, vacancy in the Lower Mainland’s retail market also dropped to a record low of 1.3%. “That is extremely low,” CoStar senior market analyst (Vancouver) Jamil Jamani said.“If you look at any of the major malls
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   September 20, 2019 226 0 0 0 0 0
Work has begun on a 247-acre master-planned community in Midland, Hanson Development Group announced. Construction of The Seasons on Little Lake will take into account the natural features of the site, along with around 13 kilometres of planned recreational trails.This is because one of the project’s aims is to establish a community that will thrive amid a carefully preserved green setting. “The Seasons on Little Lake represents an incredible opportunity for the town of Midland,” mayor Stewart Strathearn said.“We’re confident [the new residents] will come to love the amazing natural beauty of this region the way all Midlanders do.” Aside from easy access to Little Lake, the development will also offer much opportunity for activities like canoeing, kayaking, and paddle boarding. The project is expected to accommodate around 3,500 new residents, with units starting from $399,999. As of press time, the project has already sold 93% of properties in the first two phases of the development.A significant proportion of the buyers are from the GTA and the Simcoe region. “To our valued purchasers, we’re thrilled to start building your dream home and move you one step closer to living in this beautiful
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