Canada must prepare for CRE slowdown: Avison Young

Canada must prepare for CRE slowdown: Avison Young

Canada’s commercial real estate market is coming off an unprecedented year, but despite continuing favourable conditions it is late in the cycle and a slowdown is inevitable. Avison Young‘s 2018 North America and Europe Commercial Real Estate Forecast says the Canadian sector has been experiencing healthy property market fundamentals across all regions and asset classes – supported by a stable economy which is the envy of G7 countries.

Property Biz Canada – Property Biz Canada – Property Biz Canada – Property Biz Canada

Bombardier’s Toronto aerospace facility for sale

Bombardier is shopping around its sprawling aircraft manufacturing site in Toronto’s high-priced real-estate market. The transportation company said it put its 152-hectare Downsview Airport location north of the city’s downtown up for sale a couple of weeks ago as part of its financial turnaround plan. Spokesman Olivier Marcil said the unique land with a runway is larger than the company needs.

CBC – Globe and Mail – Toronto Star

Summit Industrial Income REIT buys into data centres

Summit Industrial Income REIT (SMU-UN-T) ended a very busy 2017 by entering a joint venture partnership with Urbacon to develop, own and operate digital data centres across Canada.  Toronto-based Urbacon previously developed industrial properties for joint ventures with an earlier incarnation of Summit, and that history makes for a solid fit.

Property Biz Canada – Property Biz Canada

Canadian Tire taking over Sears’ ‘fabulous’ Calgary property

CT Real Estate Investment Trust (CRT-UN-T) CEO Ken Silver said the purchase and leaseback of a Sears Canada distribution centre in Calgary in 2016 allowed it to acquire a piece of “fabulous real estate”. Now, it is putting that investment to good use.

Property Biz Canada – Property Biz Canada – Property Biz Canada – Property Biz Canada

Final Sears Canada stores shuttered for good

All remaining Sears Canada stores closed their doors for good on Sunday, including 17 in Ontario. The department store chain had been in business in Canada since 1953, but struggled in recent years to adapt to the internet age and a changing retail environment.

CBC – Toronto Star – CBC – CBC

Linamar to create 1,500 jobs at new innovation, research centre

Linamar Corp., Canada’s second-largest auto-parts maker, will create 1,500 jobs and open a new innovation and research centre in an investment backed by about $100-million in funding from the federal and Ontario governments. The creation by Linamar (LNR-T) of 1,500 jobs over the next 10 years will be announced Monday in Guelph, Ont., where Linamar is based and already operates a research and development centre and factories throughout the city. 

Globe and Mail (Subscription required) – Winnipeg Free Press

Co-working trend spreads to south Edmonton

Libraries, coffee shops or home offices — small business owners often work in unconventional settings. While they seem like a glamorous part of the entrepreneurial lifestyle, those public workspaces have their limitations. Many entrepreneurs have turned to co-working offices as an alternative place to do business. A Beaumont, Alta., couple has found success by jumping onto this trend.

CBC

BMO demolition could pave way for Edmonton’s tallest tower

A stone frame and hollow belly are what is left of the former Bank of Montreal building in downtown Edmonton.  Plans for the site are far from finalized but Regency Developments has a vision of what will replace the old building. The company is planning a mixed-use tower with commercial space on the main level, and a hotel and residential condominiums on top.

CBC

Halifax developer still pushing for 25-storey tower

The developer of a proposed 25-storey tower across from the Halifax Common is asking any and all supporters to speak up ahead of an upcoming public meeting into the controversial project. APL Properties, operated by Armco Capital, wants to build the mixed-use development — called the Willow Tree Tower — at the corner of Quinpool Road and Robie Street.

CBC – HalifaxToday – Halifax ChronicleHerald

Wal-Mart opens new front in e-commerce battle

Wal-Mart Canada Corp. (WMT-N) has launched two hubs for distribution of fresh food and other e-commerce orders, an initiative that could be its answer to Amazon.com Inc.’s push into selling groceries online. Wal-Mart’s new storefronts, which accommodate pickup and home deliveries of online orders and eventually could be used as physical stores, bring the retailer into densely populated city districts, a departure from its customary suburban haunts. 

Globe and Mail (Subscription required) – Toronto Star

Queen’s Park will be Canada’s largest legal pot dealer

By this time next year, Queen’s Park will be the biggest marijuana dealer in Canada — and perhaps the largest legal seller in the world. (Unlike most jurisdictions where marijuana is legal — such as California and Colorado, where private-sector outlets are allowed to sell cannabis — Canada’s most powerful provincial government will enjoy total control over retail sales.)

Toronto Star

Amazon seeking up to one million square feet in Boston

Amazon (AMZN-Q) is on the hunt for as much as one million square feet of office space in Boston, adding a new level of intrigue as it whittles down the list of the cities competing for its second headquarters. The Seattle company is negotiating with a Seaport developer to lease an entire office building, and possibly two, to continue its expansion in the city, according to sources. 

Boston Globe – Associated Press – Business Insider

Manhattan office market dominated by large deals in 2017

According to CBRE, 2017 was a year of large deals for Manhattan’s office market for securing space larger than 100,000 square feet, including 11 transactions of greater than 250,000 square feet. CBRE reports in all, 33 new office leases or expansions accounted for 8.2 million square feet of leasing activity last year, making up 29% of the 2017’s total leasing activity.

World Property Journal

Invesque acquires transitional care facility in Nebraska

Invesque, Inc. (HLP-U-T) announced it has acquired a newly constructed, state-of-the-art post-acute transitional care facility  located in Lincoln, Neb., from Mainstreet Property Group, LLC. The 72-bed facility was purchased for US$21.6 million, and subject to a long-term triple net lease. The acquisition expands the Company’s existing relationship with Hillcrest Healthcare System in Nebraska.  

Canada Newswire – Property Biz Canada – Property Biz Canada

Chicago office tower sells for $107 million

A Denver-based real estate investment firm paid $107 million for a 38-storey tower in the Loop, betting on continued healthy demand for office space downtown. A venture of private-equity firm Ascentris bought the Helmut Jahn-designed building at 120 N. LaSalle St. last month from a venture of Newark, N.J.-based Prudential Financial, according to Cook County property records.

Crain’s Chicago Business – Chicago Tribune

Market Trends and Research

L.A. office asking rents continue to rise

Los Angeles’ office leasing market slowed down at the end of last year, thanks to sky-high rents and yet another uptick in vacancy. Average asking rents increased to $3.29 per square foot, up 9.3 per cent from the same period last year and 3.5 percent from the third quarter, according to a Q4 report from Cushman and Wakefield, representing the largest year-over-year increase since 2008.

The Real Deal

Real Estate Companies

Winnipeg’s Royal Albert Arms Hotel has a new owner

Winnipeggers might soon be able to relive the glory days of the Royal Albert Arms Hotel. The historic 104-year-old hotel, considered a linchpin for redeveloping Albert Street, has a new owner, Neil Soorsma, after it was purchased at a mortgage auction in November for $1.35 million. Soorsma says plans for a restaurant to open on the main floor are underway.

Winnipeg Free Press

Aphria buys Broken Coast Cannabis for $230 million

Licensed marijuana producer Aphria Inc. (APH-T) has signed a deal to buy Broken Coast Cannabis Inc., a cannabis producer on Vancouver Island, in a transaction it valued at $230 million in cash and stock. Broken Coast operates an indoor cannabis production facility on Vancouver Island that it is expanding. As part of the transaction, Aphria has approved a further expansion project. 

Financial Post – Ottawa Citizen – Windsor Star – Edmonton Journal

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Real Estate Investment Trusts

The REIT way: Focus on fundamentals, ignore the scoreboard

The big news in 2017 for REIT investors is how shares in the high-dividend paying stocks underperformed compared to the broad stock market. According to NAREIT, “during 2017 the REIT industry had generated total returns of 9.27% according to the FTSE Nareit All U.S. REITs Index. That’s actually slightly better than their long-term average: from the beginning of 1972, when the All U.S. REITs Index was created.

Forbes

Retirees: Here’s how to invest in REITs as interest rates rise

Canadian REITs are steady, but it also means landlords are going to have a harder time hiking rents, especially if regulators decided to implement rent control measures in the future. Corrado Russo of Timbercreek Asset Management Inc. favours U.S. REITs as REITs typically perform well in a rising interest rate environment assuming they’re not subject to unfavourable traits as are many Canadian REITs.

Motley Fool

What’s wrong with U.S. REITs?

One sector has noticeably missed out on the recent record run in U.S. stock prices. REITs underperformed in 2017, realizing total returns of just 5.1 per cent for the year, according to Morgan Stanley (MS-N), with REITs largely missing out on the stock market rally in the second half of the year and consistently lagging the broader market.

CoStar Group

Legal Corner

Mi’kmaq, P.E.I. property rights dispute heads to court

A long-simmering property rights dispute between Mi’kmaq people on Prince Edward Island and the provincial government that has landmark potential will be aired in a P.E.I. court this week. The Mi’kmaq Confederacy of PEI, which represents Abegweit and Lennox Island First Nations, the two Mi’kmaq bands on P.E.I., has applied for judicial review of the province’s sale of a 325-acre golf course and resort property known as Mill River to a private buyer.

Globe and Mail

Retail

Fashion retailer Aubainerie expands to Ottawa

One of Quebec’s largest clothing chains has chosen Ottawa for its first Ontario store and says it plans to hire up to 50 employees ahead of its March opening. Aubainerie, which has been working in recent years to shed its image as a discount fashion store, says it’s spending $2 million to bring its AUB44 concept to Place d’Orléans.

Ottawa Business Journal

Restaurants and Eateries

Canada’s meal-box service a $150M industry

Ready-to-cook boxes are sizzling in popularity within Canada’s food industry, but despite being a $150-million market, profitability appears to be on the slow-cooker. Chefs Plate, one of more than a dozen such companies in Toronto’s crowded market, surpassed $50 million in revenue last year. But although it had raised the possibility of going public this year, it’s still waiting to be profitable. It’s not alone.

CBC – Montreal Gazette

KFC Canada accepts Bitcoin for a bucket of chicken

A professed failure to understand Bitcoin has not deterred KFC Canada from accepting the cryptocurrency as payment for a bucket of fried chicken. A limited-time marketing promotion for a “Bitcoin Bucket” was launched Thursday afternoon by the quick-serve restaurant chain — so limited, in fact, that it appeared to sell out of the ten-piece chicken buckets entirely between 10 a.m. and 11 a.m. ET on Friday.

Financial Post – CBC

New Development

Beedie Living has big plans for Coquitlam

In the centre of Austin Heights, one of Coquitlam’s oldest neighbourhoods, excavators are at work tearing up the ground on the old Safeway site to make way for a massive redevelopment. The 91,500-square-foot property is owned by Beedie Living, the company that built the first highrise in the district after city council approved the Austin Heights Neighbourhood Plan in 2011, aimed at adding 5,000 more residents over the next 20 years.

Tri-City News

Surrey residents oppose development at golf course

A group of Surrey residents who live near the Coyote Creek golf course say a proposed multi-family development will ruin the character of their neighbourhood, jamming up nearby roads and schools and destroying wildlife habitat. “This development is not wanted in our community,” said Orval Baskerville, co-chair of the Coyote Creek Action Committee and vice-president of the Sequoia Ridge at Coyote Creek strata.

Vancouver Sun

International

Shorenstein buys U.S. Bank Tower skyscraper in Sacramento

Shorenstein Properties has acquired the U.S. Bank Tower office building in Sacramento, Calif., for $161 million US, according to sources. The property was sold by joint venture partners David S Taylor Interests and Britannia Pacific Enterprises. San Francisco-based Shorenstein declined to comment. The 366,000-square-foot building is the only office asset that Shorenstein owns in Sacramento, according to its website.

IPE Real Assets

Other

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