Property Biz Canada

Canadian commercial real estate: An investor’s best-kept secret?


At a time when it appears politics is just another reality TV show, it seems too many people are willing to resort to hyperbole and make extravagant promises in bids to boost their egos.

Image: ReDev Properties CEO Richard Crenian says local libraries are on the rebound, and that might be an opportunity for some shopping centre / retail landlords.

ReDev Properties CEO Richard Crenian says Canadian commercial real estate is a solid investment.

Few industries are immune from individuals who promise but don’t deliver, and that is true in all aspects of investing. With so much clutter in the marketplace, it can be difficult to distinguish fact from fad.

For decades, commercial real estate has been considered an alternative asset, and has maintained a low profile relative to other asset classes. But a track record of solid positive results is changing that perspective.

Maybe now is a good time to look at why it is such a great investment option, particularly in Canada.

Traditionally, the North American market has been dominated by the United States but the ongoing political and social upheaval are leading some to look to Canada as a safer option. It even earned this country the epithet: the Switzerland of North America. 

Here’s why the praise is justified.

Why smart investors are looking to Canada:

1. Stable Political Climate

We’ve always had tiffs between federal and provincial politicians, but the “Canadian way” is to find a compromise and maintain stability.  Investors prefer a steady and secure economic model. Canada is now emerging as a safe haven relative to the uncertainty in the United States and much of Europe.

2. Strong Economic Conditions

With a slightly undervalued dollar, foreign investors are likely to accrue an exchange benefit which offers them an advantage over some other countries. And while interest rates are expected to rise over the coming years, as they’ve been at all-time lows and the Bank of Canada has indicated the increases will be gradual, there appears little chance of a jolt to the system.

3. Multi-Cultural Country

Canada has been built on its diversity. Everybody is from somewhere else and they have a story to tell. This makes it much easier for foreign investors to feel comfortable and be able to familiarize themselves with the economic and social conditions that drive the country.

There are some dark clouds to keep an eye on, the most obvious is NAFTA. The United States has been hell-bent on ripping up a deal that, for most observers, has served the signatories well for more than 20 years.  While parties have supported the need for some parts of the agreement to be updated, this does not appear to be sufficient for the White House.

Positive outlook for commercial real estate

As we look toward the second half of 2018 and beyond, most analysts offer a very positive outlook for commercial real estate in Canada, particularly in sites that offer potential for future development and densification – areas at the core of ReDev Properties’ business philosophy.

Commercial real estate offers investors, including high-net worth individuals, attractive risk-adjusted returns as opposed to the volatility of equities markets and the extremely low gains from bank deposits.

Therefore, commercial real estate can be seen as a middle way which offers attractive risk and return options along with cash-flow to a portfolio.

The key to success will be maintaining the high standards throughout the industry which have led us to this enviable position.

As I’ve written before, having the expertise to understand the needs of each community and engage its residents is neither glamorous nor headline-making but this approach, both Swiss and Canadian, is usually very effective.

About ReDev Properties Ltd.

ReDev is a leading real estate investment management firm founded by Richard Crenian in 2001 with an exceptional track record of successfully owning, developing, and managing real estate across Canada. 

We focus solely on commercial real estate, which enables us to deliver competitive investment performance, while ensuring the alignment of interests with our partners.

To learn more about Richard please visit redevgroup.com

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Richard Crenian

About the Author ()

Richard Crenian is the founder and President of ReDev Properties. Since its founding in 2001, Richard and ReDev Properties have grown the asset management company using a long-term approach to manage over 25 commercial properties, primarily located in Western Canada. To learn more about Richard please visit www.richardcrenian.ca.

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