If you’re looking for a word to summarize the 2022 experience for investors, developers, owners and operators in the commercial and multifamily real estate industry, may we suggest: “Uncertainty.”
It was a big part of the discussion as we all entered the year, almost 365 days ago now, and it is an even more dominant topic today as we click our digital calendars over into 2023.
That “uncertainty” also looms large in what has become a tradition at RENX, our annual list of the top CRE stories of the previous year. In fact, we’ve chosen the subject as our Story of the Year …
To note a few considerations resulting from that "uncertainty":
- rapidly rising interest rates;
- increasing predictions of a recession in 2023;
- tightening of money markets, making credit harder to access for buyers and developers;
- a sea change in housing affordability concerns, from the actual price of the real estate to mortgage rates;
- the ongoing return-to-office debate and what hybrid work arrangements will ultimately look like;
- lack of clarity about CRE property values moving forward, and fewer comparables, making transaction prices more difficult to nail down;
- insert your own other ripple effects here . . .
Topping our list of 2022 stories . . .
The industry 2022 seeking insight and guidance into these crucial questions. Hence our “top story” harkens back to the advice and counsel provided throughout the year.
CRE-focused economic updates provided by experts such as CIBC's Benjamin Tal and fellow economists were followed more closely than ever before.
The economy, lingering effects of the pandemic, and a long high cycle for CRE led to other fallout as well. So, our 2022 list looks different from past years – more issues, though there are still major transactions and less M&A activity.
As always, the fun in creating these lists, and in reading them, is to debate the relative merits.
So grab a coffee, an eggnog or other holiday libation, and peruse the list. We've placed the Top 10 in order of relevance (as we see it), and added 10 additional major events grouped loosely by sector, geography and other factors.
The Top 10 appear here. For the full RENX Top-20 list, click to access our newsletter.
And to all of you, from all of us: Best wishes for Joyous and Happy Holidays.
Interest rates and economic uncertainty dominated headlines in 2022, stifling transaction and development activity and creating big demand for insights from economists such as Benjamin Tal and others. The three articles linked here offer snapshots from different parts of 2022.
The federal government accelerated plans to reduce its office footprint and is compiling a list of properties for redevelopment / divestment. One positive for building owners with federal tenants: workers will be expected back in their offices two to three days per week.
Dream Industrial REIT (DIR-UN-T) and Singapore-based investment manager GIC formed a joint venture to acquire Summit Industrial Income REIT (SMU-UN-T) – valuing the trust at approximately $5.9 billion. The deal now has Summit unitholder and court approvals.
Amancio Ortega, the billionaire behind the Zara clothing chain, acquired Toronto’s Royal Bank Plaza skyscraper from Oxford Properties and CPP Investments for about $1.2 billion.
Allied Properties REIT (AP-UN-T) agreed to acquire six office properties comprising about 1.2 million square feet from Choice Properties REIT (CHP-UN-T) for $794 million. Three of the buildings are in Toronto, one is in Montreal, two are in Vancouver.
One of Canada’s most iconic apartment and mixed-use communities, the Cherryhill Village in London, Ont., was sold in a record-setting $571-million transaction. Ottawa-based Minto, KingSett Capital and a private partner sold the community to Toronto’s Park Property Management.
Crestpoint Real Estate Investments Ltd., acquired the largest fulfillment centre ever completed in Canada, the multi-level 2.8-million-square-foot Amazon facility in the south end of Ottawa.
“It’s a little surreal, I’d have to say, but it’s good,” is how Primaris REIT CEO Alex Avery described his feelings after the trust was spun off by H&R REIT (HR-UN-T) as an independent, publicly traded entity entering 2022.
A company controlled by billionaire financier Stephen Smith reached a deal in November to acquire alternative mortgage lender Home Capital Group Inc. (HCG-T) for $44 per share in cash, for a purchase price of nearly $1.7 billion.
Blackstone Real Estate (BX-N) continued to expand into Canada, including this $400-million, six-building GTA industrial portfolio, comprising 1.5M square feet. The global giant also opened a Canadian office and acquired two Montreal office buildings for $230 million.