Videos as Recommendations – What do you think?

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News – The Reality of Toronto’s Office Market – January 2012

In reality, the opportunity to buy a AAA asset in Toronto can come up only once a decade and there are REITS out that will stretch for the deal.

Article – Scotia Plaza is up for sale.  They are hoping to achieve $1 billion and now that the teachers have the cash to spend after selling the Leafs it may happen?
Article – Dundee REIT just closed on Whiterock for $580 million
Article – This was right on the heals of their purchase for Slate Properties at $832 million

Landmark Office Building purchase:
1) Commerce Court, Toronto (2000), $618-million
Sold by CIBC to British Columbia Investment Management Corp.

2) Royal Bank Plaza, Toronto (1999), $485-million
Sold by Royal Bank to Oxford Properties and OMERS Realty Corp.

3) Bankers Hall Complex, Calgary (2000), $437-million
Sold by TrizecHahn Corporation and Calgary Financial Tower Ltd. to Gentra Canada Investments

4) Brookfield Place – TD Canada Trust Tower, Toronto (2008), $429-million (half-stake)
Sold by Brookfield Properties to OMERS Realty

5) Gulf Canada Square, Calgary (2007), $382-million
Sold by O&Y, Brookfield, CGS to Great West Life and London Life

By the numbers:
Downtown – 4.6% vacancy rate (overall) – but most tenant’s are looking for B class space in the Financial Core which sits at 3.3%

Our numbers show the opportunities for “deals” in B class office buildings are in the Yonge and Eglinton (6% vacancy) and Yonge and St. Clair markets (7.4%).  Contrary to expectations, Yonge and Sheppard is actually one of the strongest performing markets at a vacancy rate of 1.3%!

Other thoughts:
·         Since 2000, the GTA office market has averaged 2.3 million square feet of absorption annually.  This year’s absorption hit over 4.1 million square feet, higher than the 2010 annual absorption of nearly 3.4 million square feet.

·         The Downtown office market hit a 10-year high showing positive absorption of 2.1 million square feet.  In the last 10 years, absorption has repeatedly been under 2 million square feet, with the last high being in 2000, when over 3.2 million square feet was absorbed throughout the year.

·         Availability rates in the Downtown office market have continued to decline, reaching 8.0 percent at the end of the quarter. The last time the availability rate was this low was in the fourth quarter of 2008, when it was 7.5 percent.

#CRE Public vs Private data debate – CBRE vs CoStar

First, my thoughts:
Until we have a more distinct line between what is public and private data, the debate and heated exchanges will continue. Example, I see no reason why I can’t post pictures of office space and buildings on my website with the brokers / listing agents name prominently displayed as the person to call for additional info. The brokerages and agents however, for some reason, don’t want this information “out there on the net” and threaten to call TREB / RECO to file complaints. My rebuttal to this is, maybe I should call your Landlord and let them know you are not doing your best / fiduciary duty to get the listing information out to as many people as possible. Usually that’s not taken very well but I don’t get it?!

Where’s your line as it relates public or private information / transaction data / marketing material? Can I post pictures of a building I have taken or the vacant space I have toured to save my clients time or is this private? I believe transaction data to be private but pictures of lobby’s, individual spaces and what is sent out publicly via brokers and tenant’s flyers to be public.

The original article that got it all stirred up:
CoStar CEO Andrew Florance is peeved. He heard that a CBRE executive sent a memo to agents asking them not to provide lease data to CoStar. In a Washington Post story, Florance said that CBRE should be examined “…by the federal government for anti-competitive practices…” Just like the CoStar/LoopNet merger is being “examined” for possible anti-trust violations.

I suppose some smaller brokers might cheer Florance on for taking CRE behemoth CBRE to task. After all, big national brokerages and industry consolidation puts the smaller ones at a distinct disadvantage.

This concerns CoStar, too. Florance claims CRE “…is the most concentrated industry that exists”. And that the “concentration” of brokerages leads to hoarding data that keeps owners and tenants from using “alternative” brokers.

But Florance isn’t championing the smaller broker at all: “One thing that could happen is that owners lose the ability to represent themselves because they lack the necessary information.” Where would owners get the information to represent themselves? From CoStar, of course.

Let’s get one thing straight before we continue. The data in question is lease data. Publicly traded companies have to provide some lease transaction details in financial reports but private companies do not. CoStar is whining about uncooperative brokers interfering with CoStar’s “right” to get this data.

This has nothing to do with what is right. It’s about competition for data and clients – those owners and tenants CoStar would have bypass the agent. If CoStar can’t get this data, they have less to offer. And without comprehensive data, their reporting will always be suspect. Poor CoStar…

The problem for CoStar is that is that there is no reason for agents to give CoStar lease data of private companies especially when the agent has confidentiality agreements. Even without a written agreement, the permission for transmission and publication of that data is rightly at the discretion of the tenant or owner – not the agent.

I don’t want to hear how agents should provide this information for the good of the industry. How is it good for the industry to pass along private client information? Is the handful of lease comps you might get worth betraying a confidence?

And don’t get me started about the value of someone else’s lease information. Reliance on lease comps is over-hyped in most markets. Even if you could standardize the transaction details, all a comp represents is a unique set of conditions in a single moment of time that cannot easily be generalized to any other deal. You get all you need to know about where prices are going by looking at asking lease rate trends.

Regardless, CoStar wants the data. And it takes a lot of gall to complain when your competition won’t give it up. That’s right. Any brokerage that collects its own data is CoStar’s competition. History shows what CoStar likes to do with it’s competition.

If CoStar really wants to be the premier provider of CRE data, their researchers should get off their lazy butts and call the people who really own the data – the owners and tenants – instead of harassing agents. What? Too difficult? Can’t get anyone to return your call? Welcome to the world of commercial real estate… Maybe handing out a “Power Owner” award will help.

Hey you!  Agent?!  What are your thoughts?

Avison Young releases 2012 commercial real estate forecast

Avison Young – full report

CANADA
Office

Leasing activity was strong across Canada’s office markets in 2011, with vacancy rates decreasing and rental rates trending upward in most markets nationwide. Canada’s overall office vacancy rate has declined steadily from 9.2% at the depths of the recession in 2009, to 8.3% in 2010, to 7.6% in the closing months of 2011 – solidifying the recovery.

Six of the 12 Canadian markets surveyed experienced a decrease in vacancy rates of varying degrees in 2011. Surprising many market observers, Calgary posted the most impressive improvement over 2010 with vacancy plummeting 340 bps to 7.2% as 2011 drew to a close. From West to East, vacancy rates also fell in Vancouver (-80 bps to 7.6%), Lethbridge (-50 bps to 9.4%), Mississauga/GTA West (-40 bps to 11.6%), Toronto (-70 bps to 7.9%) and Montreal (-60 bps to 8.6%). From West to East, those markets that witnessed a rise in office vacancy included Edmonton (+90 bps to 10%), Winnipeg (+40 bps to 6.9%), Ottawa (+40 bps to 5.6%) and Quebec City (+20 bps to 4.7%). Regina remained unchanged at 1% – the tightest office market in the country once again.

Looking ahead, the national office vacancy rate is forecast to decline an additional 60 bps to end 2012 in the 7% range. While vacancy rates are expected to hold steady in Montreal (8.6%) and Ottawa (5.6%), rates are expected to trend lower in Vancouver (-120 bps to 6.4%), Calgary (-200 bps to 5.2%), Edmonton (-140 bps to 8.6%), Lethbridge (-20 bps to 9.2%), Mississauga/GTA West (-100 bps to 10.6%) and Toronto (-70 bps to 7.2%). Conversely, due to some much needed supply, Regina will see its vacancy rate climb 320 bps to 4.1% by the end of 2012. Other markets that are expected to see an uptick in vacancy include: Winnipeg (+10 bps to 7%), Quebec City (+60 bps to 5.3%) and Halifax (+130 to 10.3%).

Waterfront Toronto releases 2015 Pan Am Games plans

Written by Derek Flack

In a press release issued earlier today, Waterfront Toronto released some of its plans for the Athletes’ Village at the 2015 Pan Am Games, including renderings of what the site is supposed to look like when it’s all said and done. To be built on the West Don Lands — the area nestled between the Port Lands, Corktown and the southern terminus of the Don Valley Parkway — the project will provide temporary housing for 10,000 participants in the Games before eventually taking shape as mixed-used community.

Included in the renderings below is a peek at some of the amenities that will become part of what some day might become a neighbourhood. There will be a massive, 82,000 square-foot YMCA (which will be used as a training facility throughout the Games), a George Brown student residence, 787 units of what’s termed market housing (5 per cent of which will be reserved for affordable ownership), and 253 units of affordable rental housing.

Full article via BlogTO

Queen Street Market still awaits renewal as the Grove

The beautiful but mostly empty Queen West Market, across from the MuchMusic building will soon be transformed into a healthy food court, but not as soon as originally planned. The Grove, as it will be called, was initially scheduled to open by the end of 2011. But delays in design and planning have set the grand opening back until April of this year, says Lisa Borden, a founding partner of establishment.

The historic market space will be filled with a variety of food alternatives in a neighbourhood that is currently mainly populated by either sit-down restaurants or junky fast food like Pizza Pizza and Subway. “I want a group of ten coworkers to be able to walk in to The Grove and realize they never have to fight about where to eat lunch again because it has something for everyone,” says Borden.

Full article

Avison Young Commercial Real Estate Newsletter – Fall / Winter 2011

The Greater Toronto Area (GTA) I will benefit tremendously from hosting the 2015 Pan/Parapan American (Pan Am) Games. The event will bring more than 10,000 members of the international athletic community and 250000 tourists to the city for the duration of the Games, while generating more than 15,000 Jobs. Events will be held across and beyond the GTA, in an area ranging from Niagara Falls to Barrie, resulting in more than 25 regional infrastructure, construction and renovation projects. In Toronto, development has begun in earnest.  In the former industrial area known as the West Don Lands, the future site of the Athletes Village. By integrating the Athletes Village into the existing plan for the district, revitalization will begin in the West Don Lands wars ahead of schedule.

The West Don Lands area is just east of downtown, on the west bank of the Don River along the shore of Lake Ontario. First developed as a residential area in the 1830s, the district was soon overtaken by Industry, which predominated until many companies closed or relocated to the suburbs, beginning in the 1970s.The land was expropriated by the province in 1987, with a plan to rehabilitate the area with the construction of a community called Ataratiri, but redevelopment was abandoned in 1992 due to the high cost of addressing site remediation issues. Since the n, the West Don Lands have sat vacant.

Over the past decade, a new vision for these old industrial lands has been created. The plan calls for nearly 6,030 residential u nits, employment and commercial space,23 acres of parks and green space, schools, and integration with existing public-transit routes. Simply overcoming environmental hurdles, including a century worth of soil contamination and the site’s location on the flood plain of the Don River, has been an enormous achievement.

The integration of the 2015 Pan Am Games Athletes Village has shifted the West Don Lands redevelopment into high gear, bringing forward the previously-announced completion date of 2019 by four years. The Athletes Village portion of the development— consisting of varying high-rise and low-rise structures on pedestrian-friendly streets —will comprise more than half of the total construction planned for the West Don Lands, and will be converted after the Games into housing and commercial space, forming a major part of the originally envisioned mixed-use neighbourhood.

At the end of September, it was announced that a consortium of builders and architects known as Dundee Kilmer Development Ltd. has been selected to design, build and finance construction of the Athletes Village.

Driven by the preparations for the Games, the West Don Lands area will come full circle, once again becoming a bustling residential and commercial neighbourhood on the doorstep of downtown.

Market Conditions in Canada – a CBRE perspective October 2011

I was unable to embed the audio on my site but here’s a link to the presentation.

John O’Bryan, Vice Chairman of CBRE Limited and Asieh Mansour, Head of Americas Research, discuss market conditions in Canada in light of recent weakening economic growth and market volatility in hte U.S. and the Eurozone.  The stability of Canada’s economy and commercial real estate sectors relative to other regions, and how it could benefit investors and occupiers.

VIDEO – Commercial Real Estate Market – 2012 Predictions by Sherry Cooper

Sherry S. Cooper is a Canadian-American economist. She is currently Chief Economist of BMO Capital Markets, with responsibilities for economic forecasting and risk assessment. She comments regularly in the press on financial issues. Here are her thoughts on the real estate market in North America.

Toronto’s iconic Flatiron Building is up for sale!

Original Article

The triangular five-storey red-brick building, with a trompe l’oeil mural on the side, went on the market Tuesday, with formal bids due on Oct. 27 to Brookfield Financial Real Estate Group, which is overseeing the sale.

“It’s the ideal time,” said Eve Lewis, president and CEO of Woodcliffe Landmark Properties, noting that for the first time in almost a century, no ongoing leases mean a single owner or tenant could occupy the entire office space, close to 20,000 square feet.

Only the bar Flatiron & Firkin remains with a lease until the end of 2015.

Sitting at an unusual corner where Front, Wellington and Church Sts. meet, the building has often been photographed with Toronto’s bank towers in the background.

Lewis recently took over the helm of Woodcliffe after her husband Paul Oberman, a heritage developer, died in a small plane crash in March in Maine. He was flying with another man in a four-seater plane when they ran into an ice storm.

Lewis is also president of MarketVision, a condo marketing firm.

Oberman specialized in developing heritage properties including renovating the old North Toronto train station, which now houses the Summerhill LCBO. He painstakingly worked on the Flatiron building, also known as the Gooderham building, which dates back to 1892.

“I think it has always had an incredible appeal because of its iconic nature, because of the history of the building, because of the uniqueness of it,” Lewis said. “The market is very good for real estate in Toronto, period. But for commercial, it’s really exceptional.”

But Lewis isn’t saying what the property is worth, arguing that traditional formulas calculating square footage don’t necessarily apply, given the uniqueness of the building, especially now that it’s been renovated.

“To tell you the truth, I guess we’ll find out on the 27th what its value is,” she said, adding it’s always gone for a premium. She said commercial lease rates are comparable to the “triple A” rates of the bank towers.

“I think it’s because people can create an identity in that building that you can’t if you’re just on one of the floors of one of the bank towers,” she said, adding companies want something that’s different.

According to property records, the building sold in 1999 for $2.2 million and again in 2005, when Woodcliffe purchased it for $10.1 million.

Built for George Gooderham, then president of the Bank of Toronto and owner of Gooderham and Worts distillery, it even included an underground tunnel to the bank.

It also houses a manually operated Otis elevator that is still staffed to this day, to move passengers up and down the floors.

The original staircase wraps around the elevator, with large windows offering unique views. Many heritage buildings in Toronto were knocked down in the 1950s, 1960s and 1970s, but though the Flatiron fell into disrepair over the years, it was also preserved and renovated, most recently by Oberman.

“Paul always wanted to preserve historic buildings. He found a way of making those buildings in itself profitable instead of ripping them down,” she said, citing an ongoing project on Market St., where four buildings are being saved, instead of a new condo building going up.

In August, architect Michael Taylor argued for Market St., on the west side of the St. Lawrence Market, to be renamed Oberman Way. An online petition was set up.

Lewis has taken the Woodcliffe job in part to continue Oberman’s legacy with the help of their six children, who range in age from 20 to 26. They are committed to finding beautiful buildings to restore.

“Life is busy. It’s challenging, but it’s also distracting, and that’s probably good,” she said. “Life is different, very different without Paul.”

Putting the Flatiron up for sale was a tough.

“Of course, it’s a difficult decision to make,” she said. “But I think it’s the right one.”

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