If there was a common theme across the commercial and multifamily real estate industry in 2023, it can be summed up in two words: economic uncertainty. The theme is prominent in RENX's annual list of the year's top stories.
We have again compiled what we feel were the top-20 stories of the year . . . the top 10 are listed here and there's a link to our annual Top-20 newsletter which contains summaries and links to each of the articles.
A couple of major trends really stood out. First, the uncertainty certainly created investment opportunities for some, but many investors were reluctant to dive in too deeply.
While there has not been as much distress selling as some expected, there were still some blockbuster deals and a rush of transactions in the waning weeks of the year.
Was that due to buyers and sellers finally closing the ask-bid gap which had blocked so many potential deals? Or perhaps because there's a feeling the Bank of Canada has ended its dramatic cycle of interest rate hikes?
We'll learn more in early 2024 on that front.
Big changes in the C-suites
2023 was also a year of significant turnover at the top of several of Canada's largest real estate developers, owners and investors. Allied's Michael Emory gave up his CEO role in favour of Cecilia Williams. KingSett's Jon Love is stepping into a larger board role, opening up the CEO's chair for Rub Kumer.
Glenn Way has taken the president's chair at GWLRA, Christine Bergeron is now CEO and president at Concert, Mark Holly is CEO at Crombie . . . we could barely keep up with the CEO changes in 2023 (and apologies to the other significant new CEOs and presidents not mentioned here).
We saw surges in alternative investment sectors, including hotels and resorts bouncing back in a big way from the COVID years, data centres, pharma/life sciences/health care, even self-storage saw significant transaction and development activity.
The industrial sector has slowed – slightly – after several years of explosive growth, but remains strong. Retail continues to outpace the low expectations of naysayers and with Canada's rapid population growth, purpose-built rental will remain a robust sector for any developer who can make their pro formas work.
Phew. What a year.
So, without further ado, we offer our Top-20 CRE Stories of 2023. Some stand alone, others represent a trend or sector (i.e. the KingSett CEO article is representative of that aforementioned whirlwind in the C-suites).
Agree, disagree, debate these at will over a toddy or an egg nog during the holiday season.
Then strap yourself in for 2024 . . .
Merry Christmas, and Happy Holidays to all.
RENX's Top-10 stories of 2023:
1) Interest rates are coming down ... soon: Benjamin Tal: In his final major industry address of 2023, at the Toronto Real Estate Forum, Tal held the attention of every executive in the room. His message was one of cautions optimism for 2024 . . . and lower interest rates.
2) Kumer to succeed Love as CEO at KingSett Capital: One of the biggest, and one of the last major CEO successions announced in 2023. This article is No. 2 because of the magnitude of this change, and the magnitude of the many other president and CEO changes during the year.
3) Mach, Sarees buy 922,000-sq.-ft. Toronto Atria office complex: It was not a banner year for office trades, but this was one of the largest and most significant. It also marked a trend, at least for Mach, which spent the year expanding its portfolio with office and other assets across the country.
4) Ford consortium to build $1.2B battery materials facility in Quebec: One of the biggest announcement in a booming sector. EV production and its supply chain expansion is leading to millions of square feet of industrial development and leasing across Canada.
5) Allied to sell $1.35B data centre portfolio to KDDI: One of the largest dollar-value property transactions of 2023 and also highly significant because the assets at 151 Front St. W., 905 King St. W. and 250 Front St. W. are a critical hub for Canada's internet operability.
6) Oxford sells 75% interest in GTA industrial parks to TPG for $1B: A late-December transaction which will result in TPG becoming majority owner of the Brampton Business Park and Vaughan Business Park. The transaction values the sites – a combined 5.1 million square feet – at about $1.3 billion.
7) Primaris REIT wants more after two large 2023 shopping centre acquisitions: Enclosed shopping centre specialist Primaris made two of the largest retail acquisitions of the year, buying the Halifax Shopping Centre and Annex for $370 million, and the Conestoga Mall in Waterloo for $220 million. CEO Alex Avery explained why.
8) W.P. Carey pays $468M US to acquire Apotex's GTA properties: The deal includes a Greater Toronto Area portfolio of four pharmaceutical R&D and manufacturing campuses, comprising 11 buildings.
9) Ontario Teachers' to split Cadillac Fairview into two entities, CEO Sullivan to retire: The largest restructuring of the year in Canada's real estate sector, which includes moving Teachers' real estate portfolio to in-house management. Concurrent with this, longtime president and CEO John Sullivan announced his retirement.
10) Slate Office REIT unveils major Portfolio Alignment Plan: Slate is not the only Canadian real estate company to feel the effects of higher interest rates, lower office valuations and ongoing uncertainty. Its move in November proposes the sale of 40% of its $1.8B in assets, moves to conserve cash and a higher debt ceiling.
Want to see the full Top-20 list? Here's a link to our Year-End Newsletter.