Fantastic brick and beam lease. Click the link below to download the flyer. If you are calling the agent directly refer to officesearchtoronto.com to get the real deal! The 1,560 sf works out to about $3,400 per month.
Please note the attached office space is not listed with OfficeSearchToronto.com but call us first at 416-992-9869 or E-mail Me for floor plans and additional information. If you want to sort out only the available office space listings on this blog, click the link “Available Office Space Toronto” in the Categories section on the bottom right.
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The current contrast between failing US banks and their stronger Canadian cousinsprovides the ideal viewing gallery to see what ingredients lead to strong banking systems and which lead to weaker ones. In 2008, 25 U.S. banks failed. So far this year another 13 have gone under. The last bank failure in 2008 was Sanderson State Bank, a tiny bank with just one branch in Sanderson, Texas, population 851. With only $37 million in assets, the local real estate market’s collapse probably played no small part in the failure. Scroll through the Federal Deposit Insurance Corporation’s (FDIC) website of failed banks and most resemble Sanderson: institutions with a few branches, no more than a hundred million in assets, and usually based in California, Texas, Georgia, or Florida.
But it’s not only the small banks dropping. A few large ones have failed including IndyMac – with 33 branches – and Washington Mutual with over 2,000 branches. And though Countrywide and Wachovia were bought by Bank of America (BAC) and Wells Fargo (WFC) respectively, both were on the path to failure. In 2006, its last good year, WaMu reported assets of US$350 billion. This made it bigger than Bank of Montreal (BMO), Canada’s fifth largest, which had only US $319 billion that year.
Like Sanderson, these large U.S. banks had a regional flavour to them. Though styling itself a nationwide bank, WaMu’s 2006 annual report shows that some 49% of its loan portfolio were in California. According to Bloomberg, some 43% of Countrywide’s loans were in that same state, and the majority of both Wachovia and IndyMac’s loans were sourced from there. This regionalism is a relic of strict laws like the Banking Act of 1933 that once prevented inter-state banking and the growth of national branch banking.
Look at the balance sheets of these failed banks and something else pops out: they focused on one class of asset, residential real estate mortgages. Some 65% of Countrywide’s assets were related to homes and around 74% of WaMu’s assets were related to the same.
Canada’s banks are a different beast. While the U.S. banking system is made up of thousands of banks serving certain communities, states, or regions, Canada’s banking system is made up five large chartered banks with branches in every province.In decreasing order of size by market capitalization, these are the Royal Bank (RY), TD Bank (TD), Bank of Nova Scotia (BNS), CIBC (CM), and Bank of Montreal.
Don’t look for mom and pop banks like Sanderson up North. Banking law in Canada never limited the geographical expansion of banks, so Canadian banks tend to have regionally well-diversified deposit bases and loan portfolios. If Alberta goes bust, Ontario can be counted on to hold things up for the typical Canadian bank, and vice versa. Not so the case in the U.S., where a collapse in one state means a handful of collapsed banks.
Second, the average Canadian chartered bank holds only 25% of its assets as residential mortgage loans, the remaining 75% spread between government debt, credit cards,personal lines of credit, business loans, and corporate bonds. That means that if one asset class plummets, or an industry flounders, odds are another will hold up.
That being said, the inevitable fall in Canadian real estate prices will hurt the banks’ balance sheets. So far real estate prices in most cities have paused, not fallen. But when they do, bank stock prices will fall even more.But there are no undiversified WaMu’s in Canada that depend almost entirely on the fate of the real estate market.
That doesn’t mean that Canada has a spotless banking history. For its last significant bank failure, one need only look back to 1985 when the 10th and 11th largest banks by assets – the Canadian Commercial Bank (CCB) and its smaller cousin the Northland Bank – went broke. Both banks exhibited some of the same features as today’s Sanderson State Bank. Founded in 1975, CCBand Northland took a regional approach to banking, focusing on the provinces of B.C., Alberta, and Saskatchewan for business. As oil prices exploded in the 1970s till 1981, both concentrated ever increasingly on oil & gas loans and real estate lending. Assets grew 20-70% a year, far outdistancing the larger chartered banks.
The collapse of oil prices in late 1981 and their continued deterioration dramatically hurt the loan quality of the banks’ oil loans. Often secured by oil in the ground or drilling rigs, this collateral fell to a fraction of its value during the bust. At the same time the Alberta economy – largely dependent on energy prices – entered a recession, with job losses and collapsing real estate prices causing all sorts of delinquencies and loan defaults.
By 1985 the CCB was insolvent; the value of its assets worth less than its liabilities and equity. Realizing this, the Mulroney government – anxious to garner western approval – launched a bailout of the bank, and along with the Alberta and BC governments, the Canadian Deposit Insurance Corporation (CDIC), and the big 5 banks injected some $255 million in new capital into the CCB.
The bailout failed. The majority of the CCB’s deposits were not retail deposits, but wholesale deposits. Banks like the Royal or Toronto Dominion depend on retail deposits – individuals and businesses that hold chequing and savings accounts at a bank branch. These deposits are stable since clients are often slow to switch, customer service instills loyalty, and each account is protected by the CDIC up to a certain dollar level.
Wholesale deposits, on the other hand,are usually short term (say 30 days) and in amounts often exceeding CDIC insured levels. There is no necessity to set up branches to solicit funds – instead money can be wired in or out at the click of a button. Professional traders scan hundreds of competing banks for the best rate in which to place wholesale funds. Good service doesn’t keep deposits. Only the best rates attract funds, and this can change quickly.
After the bailout, CCB wholesale depositors – smelling fishy assets – began cashing in by the millions. Canada’s central bank, the Bank of Canada, stepped in to stem the run, providing the CCB with replacement funds. Northland, also dependent on wholesale funds, was caught up in July by a wave of deposit redemptions too. By September 1985 the BoC had lent some $1.3 billionto the CCB and another $500 million to Northland. Realizing that the wholesale depositors run on the banks could not be stopped, authorities allowed CCB and Northland to fail. At the time of their demise the two banks reported $3 and $1.5 billion in assets respectively, about 0.75% of all Canadian bank assets.
The failure of Northland and CCB led to a number of small bank takeovers by larger stalwarts. National Bank ate a weakened Mercantile Bank and HSBC (HBC) bought the Bank of British Columbia. In 1988, the only western focused banks to survive – the Alberta Bank and Western & Pacific – merged to form Canadian Western Bank.
The case of the Canadian Western Bank -Canada’s eighth largest – gives cause for concern because it is reliving the same conditions that killed its Alberta-based competitors over 20 years ago, as well as those down south like Sanderson. With 36 branches, most of them in Alberta and BC, the western-focused CWB was Canada’s fastest growing chartered bank during the boom years of 2000-2008, almost tripling its lending. Peaking in late 2007, shares traded at $32, giving the entire bank a value of $2 billion.
Oil prices have collapsed in 2008, just as they did from 1981 to 1985. The real estate boom that has dominated the western landscape – fuelled in part by high oil prices – is showing signs of reversing. Depending on who you talk to, prices in Calgary and Edmonton are off anywhere from minimal to ten percent. It’s an easy call to say they’ll have more to fall.
With 55% of its loans in Alberta (numbers from `07 annual report), CWB isn’t in the sweet spot it once was. About 10% of its total loans are tied up in Alberta residential real estate, and another 10% qualified as oil & gas production and service loans. With around 50% of its loans made to commercial, construction, and equipment financing businesses based in Alberta, it might seem that oil and housing exposure is minimal. But in Alberta, who can say how many of these business loans depend on the oil industry’s fate; probably a lot.
While the Royal Bank and the other big players will suffer in Alberta, at least they are well diversified. CWB has all of its eggs in once basket. Already we see its impaired loans rising. Once lower as a percentage of all loans than the others, CWB’s impairment rate has grown faster in 2007 and 2008 than the other large players (see fig 1).
Lucky for it, the CWB learnt from the 1985 bank crisis. Unlike Northland and CCB, it has built up a solid base of retail deposits. Wholesale funds account for a tiny 2% of all deposits. If the situation deteriorates, a bank run won’t happen. Nor do we think the bank is insolvent. But it does seem that the CWB is in a tighter spot than its bigger relatives, and the longer oil prices stay below $45 the tighter that spot will get.
TORONTO — The Ontario Municipal Employees Retirement System endured an $8-billion net loss on its investments in 2008, but its chief executive stressed Monday that “the main issue here is that our fund is strong.”
The loss represents a 15.3 per cent negative rate of return, which OMERS said places it in the top quartile of large pension funds.
“The financial crisis that devastated world markets in 2008 happens once in a lifetime,” OMERS president Michael Nobrega commented.
“OMERS did not escape the downturn, though we believe we fared relatively well as a result of the performance of our fixed income, real estate and infrastructure assets and our decision not to invest in certain high-risk financial products.”
This contrasts with some other public pension plans, notably the Caisse de depot et placement du Quebec, which releases its results later this week but is reported to have dropped $38 billion in 2008.
A loss this size, amid misadventures in asset-backed commercial paper and currency hedges, would be a 26 per cent negative return to $120 billion for the Quebec-based pension plan.
At OMERS, the 2008 loss left $43.5 billion in assets, following investment income of $3.9 billion or 8.7 per cent in 2007.
The fund calculates a five-year average rate of return of 6.9 per cent, which it said exceeds its funding requirement.
Its year-end surplus on a going-concern basis shrank to $3 billion from $6.2 billion, and chief financial officer Patrick Crowley said the solvency ratio sagged to 90 per cent – meaning that if OMERS were wound up today, its assets would cover only nine-tenths of the benefits it has promised.
Crowley said it’s up to the OMERS board to decide how this deficiency will be covered and whether additional contributions will be required.
OMERS, responsible for pensions for 390,000 current and former employees of local governments in Ontario, said it had gains in 2008 of 11.5 per cent in infrastructure investments and six per cent in real estate. But its holdings in private equity fell 13.7 per cent and investments in public markets slid 19.5 per cent as global stock markets fell 30 per cent or more.
Crowley said OMERS has reduced its investments in bonds and stocks to 60 per cent of its portfolio from 82 per cent in 2003, “and although we have experienced losses in 2008, they were lessened by the shift toward private market assets.”
OMERS emphasized that it “avoided significant exposure to certain high-risk investments such as subprime mortgages, collateralized debt obligations and over-leveraged assets.”
CEO Nobrega credited this to “a rigorous credit process” in all divisions of the 1,800-employee fund, whose operations include Oxford Properties and Borealis Infrastructure.
He added that the economic crunch is putting extreme pressure on small pension plans and he expects consolidation to pick up speed, with OMERS taking over management of more pensions at universities, transit systems and other public enterprises.
At OMERS, “whatever happens this year, it will not affect the long-term viability of this pension fund,” Nobrega said.
“Our members can remain confident their pensions are secure.”
Hate to break it to you, but that clairvoyant you’ve been paying daily to read you fortune cookies while blindfolded actually isn’t some sort of medium. Tough to swallow, we know. That said, researchers at Canada’s largest children’s rehabilitation hospital are getting closer to equipping entrepreneurial individuals with the tools they need to read minds. By measuring the intensity of near-infrared light absorbed in brain tissue, scientists were able to decode a person’s preference for one of two drinks with 80 percent accuracy, all without a single minute of training on the human’s behalf. This research gives promise to finding out true feelings of those who can’t speak or move due to physical limitations, though there’s no word on how close it is to becoming viable outside of a lab. As an aside, we hear Professor X is pretty perturbed.
There is at least one good thing to be said for 2009 according to Jock Finlayson.
There is only another 10 months left for the industry to ride out the bumpy road, said the executive vice-president of the Business Council of British Columbia
On the brighter side, however, Finlayson predicted that 2010 could see a pretty good snap-back.
Non-residential construction has continued to hold up better than residential construction.
“There has been a big drop in residential permits and that is not likely to turn around quickly,” he said.
“Non-residential permits and the non-residential construction business has been a huge source of growth for the B.C. economy,” he said, “but it is certainly weaker than we were experiencing over 2005 to 2008.”
Finlayson said the economy has so far not seen price gains receding in the non-residential sector.
However, he expects to see that change. The fundamental outlook, he said, is weakening and he expects to see some downward pressure on prices in Vancouver, Calgary and other western Canadian cities.
“The market has changed. You are probably going to have to adjust your prices,” Finlayson told a group of contractors attending the recent BC construction show.
On the optimistic side, Finlayson pointed out that the provincial government’s Major Projects Inventory is still in healthy shape.
The inventory tracks projects either under construction or being actively planned that are worth at least $20 million on the Lower Mainland or $15 million in the rest of the province.
“The latest report from the ministry of economic development shows about $100 billion worth of proposed major projects,” he said.
“A little over $60 billion are currently underway.”
Both numbers are appreciably higher than they were a year ago and higher still, to where they were two years ago. Both figures, he said, indicate that although things are slowing, the construction industry will continue to make a big contribution towards keeping B.C.’s economic head above water for the next couple of years.
However, he maintained a full recovery will depend on the primary industries, which still fuel the provincial economy. These include forestry, mining, hydro power, coal, oil and natural gas.
Finlayson pointed out there is not much that B.C. can do to stimulate those industries, as they depend on economic recovery in major markets – primarily the U.S. and Asia.
“If you’re in construction or engineering, just be glad you are not in forestry,” he told the executives attending the breakfast. “It could be worse.”
He foresees a weaker construction industry over the next two years as B.C. plunges headlong into recession in 2009.
Non-residential construction will soften, but it will hold up better than residential construction.
He added that the push by the provincial and federal governments to accelerate infrastructure projects will be steps in the right direction. He also shared where he believes the industry is in the cycle.
“We are closer to the bottom than to the beginning of the downtown turn,” he said.
Glass now covers the Bay Adelaide Centre office tower at 333 Bay Street in Toronto, Ont. Construction manager EllisDon Corp. began the 52-storey tower in summer 2006 for owner Brookfield Properties Corp. and completion is expected in summer 2009. There will also be four levels of underground parking and below-grade retail space. The office tower was designed by WZMH Architects. Consultants are: Halcrow Yolles (structural); The Mitchell Partnership (mechanical); and Mulvey & Banani International Inc. (electrical). Subtrades include: Active Excavating & Contracting; Deep Foundations Contractors Inc. (shoring/caissons); Harris Rebar; Structform International Ltd./Hardrock Forming Co. (joint venture formwork); Walters Inc. (structural steel); CBM (concrete supply); Oakdale Drywall; Three Bell Painter; Clifford (heritage); Limen Masonry/Clifford Masonry; Maple Terrazzo Marble & Tile (ceramic/stone); Modern Niagara Toronto Inc. (mechanical); Guild Electric; Vipond Fire Protection; Donalco Inc. (sprayed fireproofing); Phoenix Firestopping; Sota Glazing (windows); Lorvin Steel; Continental Cabinets; City Wide Door & Hardware; Gage Metal; Stonhard; Tagg Industries; InKan Ltd.; Tractel Ltd.; Johnson Controls; Elite Industries; ThyssenKrupp Elevator Ltd.; and Dean-Chandler Roofing.
I have been helping a lot start up companies these days. It seems like there many of them are building the business they have always dreamed of if they find themselves out of work.
Here are a few suggestions if you are looking for small commercial office space in Toronto:
1) Although they can be expensive, sometimes the best solution is a business center. They offer great flexibility and a short term (even month to month – most landlords require a 3 year lease). They can also provide for easy expansion. SOS Realty – Business center solutions across Toronto For a full list of business centers in Toronto call us – 416-992-9869.
2) If you are serious about starting a new business and are able to commit to a 3 year term, give yourself at least 3 or 4 months to find the right solution and recognize that start up costs are usually underestimated. Everything from furniture to computer systems can really add up. If you need some help we offer great referrals on used furniture, office insurance and IT/Phone companies that can come in and have you up and running quickly.
3) Another solution you may like to investigate would be a shared space scenario. Here is a link to a few out there. If you have too much space and are looking to rent offices with another company to help on rental costs E-mail Me!. We can also talk about some free advertising on this site?!
4) Don’t expect most agents to work hard for you if you require less than 1,000 square feet, it’s just a reality. Unfortunately most agents do not work for start ups as there is not much money in it. That’s one of the many things that sets me apart. I consider commercial real estate a relationship business. I’m not out for the quick deal but for the long haul. Treat me how you would like to be treated and we will get along great. I want to be there now so when you need the bigger space in the future I’m the first one you call! Its always great to have a trusting relationship with an agent, particularly when the quick project / short term requirements pop up!
How about buying this for your office instead of hiring a cleaning staff?
The Roomba Professional 610—the most powerful Roomba EVER—is made for large areas like offices, businesses, and big homes. It comes with two interchangeable bins, extra brushes and filters, and two virtual walls.
Some pretty cool encryption technology from Engadget.com
We don’t know anybody who seriously relies on biometrics — except, of course, those of you who rushed out late last year to pick up your very own BioMirage Coffer — but if this is your bag, take note: Sony has just announced Mofiria, their new high speed, compact biometric solution for mobile devices.
The case of the Canadian Western Bank -Canada’s eighth largest – gives cause for concern because it is reliving the same conditions that killed its Alberta-based competitors over 20 years ago, as well as those down south like Sanderson. With 36 branches, most of them in Alberta and BC, the western-focused CWB was Canada’s fastest growing chartered bank during the boom years of 2000-2008, almost tripling its lending. Peaking in late 2007, shares traded at $32, giving the entire bank a value of $2 billion.
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