Teams of analysts are employed to peel back the layers of the onion in order to paint a clearer picture of present value, market dynamics, and exit strategy on investment assets, from value add to core plus. And while analyzing the yield of a property forms the basis of investment strategy, I would argue that an equally important consideration is the “price per pound”.
Read MoreWe’ve all heard how over the past couple of years there has been a newfound focus for companies to actively strategize and implement the relocation of their manufacturing activities away from overseas (and politically diverse) countries to more optimal locations, being those with comparable political, economic, timezone and trade policies. For North American companies, the logical case lies to the south in Mexico - and the growth is exponential there - but in this article I’d like to pose the thought experiment of analyzing Alberta, in particular, to capture some of this excessive market demand.
Read MoreWhile the transitions through business cycles can affect consumer confidence and create uncertainty in the financial markets, it’s important to realize we are still a long way off from 20% interest rates, and remain, at present, in historical low territory. Having said this, it’s obvious that a 3.25% increase in the BOC benchmark rate over just a 6-month period will have some tangible consequences. I am going to outline the facts behind affordability in the commercial real estate sphere compared to 12 months ago, and outline how this is affecting our owner/user clients (those who would occupy their own building) and our investor clients (who are looking for tenanted assets with a return on their money). Spoiler alert… property values are (gradually) eroding.
Read MoreSale leaseback transactions are nothing new, but they are a worthwhile tool for all building owner-operators to understand, particularly as the capital markets tighten. Aside from financing, all other costs of doing business have concurrently increased, from labour to transportation, construction to inventory. These all affect the financial health of a business and can jeopardize the financial ratios that the banks must see maintained in order to avoid disruptions. One tool not often considered by building owners is the sale leaseback transaction which can have immediate positive outcomes for their financial statements, and perhaps even allow for further growth and expansion if implemented properly.
Read MoreI’ve discussed at length the migration of industrial occupiers and capital investment into the Alberta market over the past 18 months due to the convergence of peak levels of demand, affordable development land, available warehouse space and unsustainable pricing in other major Canadian markets. As an industrial real estate broker, I get asked frequently if I’m seeing any slowdown in the industrial market due to increasing interest rates, inflation and lingering supply chain struggles. I’ll outline here why these local and global issues are having a much diluted effect on Alberta.
Read MoreWorking in the commercial real estate industry, you get a perspective of how large and multi-faceted this industry is, with hundreds of different jobs, roles, motivations, and ultimately types of assets that are managed, maintained, invested in, leased, and developed. For many outside of the industry, commercial real estate can seem like a "linear concept”, but it is far from that.
Read MoreAir cargo represents the transportation of goods by… you guessed it, air. Many are unaware that nearly every passenger flight is carrying some freight along with the passengers and their baggage. In fact, about half of all air freight was transported in passenger planes. During the past two years however, passenger flight volumes drastically decreased, while simultaneously cargo volumes drastically increased, to a point where cargo contributed to 49% of all airline total revenue in 2020. The Edmonton International Airport has played a major role in the growth of air cargo logistics in the region, and has been a key contributor and leader in the Port Alberta logistics and manufacturing hub.
Read MoreIt truly wasn’t long ago, maybe 12 months or less, that Edmonton and Calgary were flush, perhaps too flush, with Class A speculative distribution space. In the matter of not years, but months, the inventory in both major cities has been absorbed by household names who have entered the Alberta market in quick succession. Regardless of submarket - north, south, east, west or periphery - the pickings are now unbelievably slim for large distribution tenants looking to take advantage of the low cost environment in our province and move into warehouse space within the calendar year.
Read MoreBrick and mortar and e-commerce are like two circles of a Venn diagram, overlapping in their central goals of engagement, but forming separate concepts and strategies for a retailer. Conversely, Experiential Retail, Retail as a Service, and Micro Retail are more representative of building blocks, growing on top of each other to create a fully formed experience for the target retail customer. Read more about how these concepts are overlapping to create new opportunities in the retail asset class.
Read MoreIt wasn’t so long ago that the Edmonton sub-markets of Nisku and Leduc were hailed as the oil and gas heartbeat of the Region. These industrial parks established themselves as the incubators for oil and gas manufacturers, service providers, fabricators, transporters, and many others, aiding in growing our Province’s resource production to all time highs. Edmonton is the capital of the North, but Nisku and Leduc are among the workhorses that allowed the real North to be developed.
Read MoreWhat does a City do when tasked with redeveloping a cost prohibitive, aging emblem that encompasses millions of Edmontonian memories? By the way, this is all located on 160 acres of centralized, transit accessible mixed-use land.
Read MoreI was pleasantly surprised to hear that Alberta, along with Ontario, Saskatchewan and New Brunswick, have all signed on to help further develop nuclear reactor technology in Canada. The goal of this program is to support the advancement and deployment of nuclear energy through small modular reactors (SMRs), a fresh, new technology that greatly differs from standard nuclear reactors, both in size, flexibility and overall safety.
Read MoreResearch shows that on average, people pay more attention to negative news than to positive news (named “negativity bias”). This is a huge reason why the astonishingly higher proportion of news articles and media in today’s day and age leans toward negative, clickbait titles, rather than neutral, or heaven forbid, positive headers. So to start your week, here’s a compilation of five positive, no, GREAT stories that have come out of Edmonton and broader Alberta this past quarter.
Read MoreIf you’ve ever been interested in commercial real estate, and particularly investing in real estate, there are some simple calculations that you should be aware of and understand in order to determine the winners and losers for your portfolio. As you practice these calculations more often, you will be able to quickly pre-qualify potential opportunities to determine if they are viable for your pursuit, or for your existing assets, if they remain performers and worth holding.
Read MoreOver the past few years, investors have taken an increased notice in the temperature controlled real estate sector, expanding both their build-to-suit developments, as well as those speculative in nature. The ever-growing demand for fresh food on a global scale, in addition to the storage requirements for temperature-sensitive pharmaceuticals, has created a uniquely desirable asset class, showcasing currently its added benefit of being relatively recession proof.
Read MoreIt’s easy to get bogged down in the negative news surrounding delayed pipelines, figurative and literal roadblocks, and absentee governance, but behind the veil, there are some outstanding developments, projects and innovations that are taking place all across Alberta.
Read MoreData is growing at an almost incomprehensible rate. There are 2.5 quintillion bytes of data created each day at our current pace, but with the growth of the Internet of Things (IoT), robotics, 5G and AI, that pace is accelerating. By understanding the requirements and initiatives surrounding tech based real estate, Alberta could be in an advantageous position to diversify industry and encourage the absorption of current vacancy in the form of data centres.
Read MoreThe catchphrase of the moment is proving to hold its weight as we analyze commercial real estate trends leading into the new year. Canada’s Multifamily market is the strongest it’s ever been with rental rates nearing 10-year highs, apartments near 100% occupancy, and volatility remaining low. On the industrial front, demand for fulfillment space continues to reign supreme to satisfy the multiplying growth metrics in e-commerce.
Read MoreFounded by a collaborative group of local businesses and non-profit organizations, they came together with the common goal of fostering competitive tax and policy programs within the City of Edmonton to ensure all businesses and citizens can successfully grow and flourish.
Read MoreWhile activity has stayed fairly constant with regard to tenant/purchaser requirements and listings, the deal flow has been slow as most companies continue to have a low risk tolerance in Alberta. Add to this the much anticipated Federal election expected in October of this year, and there has been a mentality of hurry up and wait…until there is a change up federally that is.
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