National Real Estate Update on CBC’s Lang & O’Leary
Toronto Real Estate News – April 2012
Thousands of Federal Buildings Need Repair
Toronto Star
April 23 2012
The Rock Stars of Toronto’s Building Boom
Ottawa Citizen
April 23 2012
New CEO of BILD
Daily Commercial News
April 23 2012
You’ve Got a Target? We’re In!
Winnipeg Free Press
April 23 2012
The Week That US Industrial Took Centre Stage
CoStar Group
April 23 2012
US Clients View Canada as 51st State
Wall Street Journal
April 23 2012
Walmart Probe Could Cost Some Executives their Jobs
Reuters
April 23 2012
Sears Announces Closing of Transaction with Landlord
Canada News Wire
April 23 2012
Marriott Busy Updating Courtyards
Winnipeg Free Press
April 23 2012
Under The Radar Changes That May Burst the Housing Bubble
Macleans
April 23 2012
Land Dispute Threatens Olympic Golf Course
Globe and Mail
April 23 2012
New Plans for Century Park Throw Out Vancouver
Edmonton Journal
April 23 2012
Stage Set for Downtown Winnipeg Building
Winnipeg Free Press
April 21 2012
How Department Stores Can Stay Relevant
The Globe and Mail
April 21 2012
Experts Weigh In On GTA Transit
National Post
April 20 2012
Mattamy Homes Embraces New Urbanism
Toronto Star
April 20 2012
Ottawa Office Vacancies Expected to Rise
Ottawa Business Journal
April 20 2012
Can Sprawl Be Stopped In Ottawa
Ottawa Citizen
April 20 2012
Why a Toronto Casino is a Crapshoot
Toronto Star
April 20 2012
Workplace of the Future?
The static nature of real estate combined with the dynamic nature of technology evolution is that dichotomy that we need to deal with in office design.
Technology is changing how we work. With profiles of new “Workplace of the Future” offices designed for the Burgess Group, United Way for Southeastern Michigan and its own location in Washington, DC, SmithGroupJJR explains that it’s open and team-based, giving a new balance between “I” spaces and “We” spaces. Importantly, organizations that adopt are finding it is fundamental to their future, allowing happier employees, reduced real estate costs and competitive advantage.
To search for your new office space in Toronto try OfficeZilla!
Lease Audit – Grossing Up Operating Expenses
In the operating expense provisions of an office lease you may come across wording that allows the landlord to “gross up operating costs which vary with the use and occupancy of the rentable premises in the Centre as if the property were 97% occupied and operational.”
These costs are generally cleaning, waste removal, utilities and management fees if based on a % of operating costs. Leases allow these costs to be grossed up to a range of 95% to 100% occupancy.
On the surface, allowing the landlord to charge for more expense than they incur seems absurd. However, the concept is fair to the landlord – yes, you read that right – and fair to the tenant.
An extreme examplele to illullullustrate the point:
Assume there are two tenants in a 100,000 sq. ft. office building, Tenant A and Tenant B, who occupy 50% of the space each. The cleaning costs are $1 per sq. ft. per annum, or $100,000. Cleaning contracts allow vacancy credits to be given to the landlord if tenant(s) vacate the premises.
Now let’s say Tenant B vacates the premises for a full year, reducing cleaning costs to $50,000. Without a gross up, Tenant A would now pay 50% of $50,000, equalling $25,000, even though they are responsible for 100% of the cost. The landlord would be out of pocket $25,000. Grossing up the cleaning expense to 100% allows the landlord to recover all of its costs.
Lost in translalation
Where this concept often breaks down is in the calculations used by landlord administrative staff. We have seen situations where incorrect calculations have resulted in tenants paying more on those variable expense items than if the Centre were 100% occupied.
For example, occupancy has no bearing on labour or utilities for the lobby, elevators, outside areas, or other common areas. Even vacant leaseable premises require a minimum of heat in the winter.
A Colliers audit on a 7,000 s.f. office space in Ottawa netted a $32,000 recovery for our client. The landlord had applied gross up calculations to the utilities on vacant space. However, they had continued to cool, heat and light the vacant premises as though they were fully occupied in order to make the marketing and showing of the space more appealing.
Finally, vacant space rarely remains so for a full year and appropriate calculations are required to ensure the gross up is applied only to the time the space was vacant.
REMEDY
Have the ‘right to audit’ written into the lease agreement in order to ensure that the grossing up is done correctly. Clear, concise lease language such as the following is also essential:
“The landlord is entitled to gross up those items of operating costs which vary with the use and occupancy of the rentable premises in the Centre as if the Centre were (% rate to be negotiated) occupied and operational. For greater certainty the variable costs are cleaning and utilities. In no event shall the tenant’s proportionate share of the variable expenses be greater that would be payable if the property had been fully rented.”
For Additional Information Contact:
Frank Iannarilli
Director, Lease Audit
416.620-2876
frank.iannarilli@colliers.com
Solutia SDO Head Office, Toronto – Video Testimonial
Another great deal done with http://solutia.ca/ – Get more out of your agent and your space!
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What’s your commercial real estate agent ever done for you?
Apple To Open flagship store in Toronto at 1 Bloor West?
Stollery’s at the southwest corner of Yonge and Bloor streets
If this is true it would really shake up the market. How much would Apple pay for such an amazing flagship store?
Could it end up looking like the store in New York below?
Market Street revitalization pushes forward
Full article – Robyn Urback – Blog TO
Plans to update and improve Market Street — the thoroughfare that connects Front and The Esplanade on the south side of the St. Lawrence Market — continue to trudge on, though it sounds like a year-round pedestrian-only space isn’t in the cards.
When plans were first announced in 2010, it seemed as though private developer Woodcliffe Properties was working towards creating a space that would be free from vehicular traffic. Paul Oberman was the president of Woodcliffe at the time, a man well-known for his revitalization projects throughout Toronto, including the old North Toronto CPR Station / LCBO flagship store. Oberman died tragically in a plane crash in March 2011, and a movement later spawned to rename Market Street in his honour.
Videos as Recommendations – What do you think?
“My purpose in life is to change the face of the Internet. Make it easier to use, more interactive and dramatically more beautiful.”
Ryan Priest – CCO, Pixelcarve Inc.
Our passion is to create engaging and complete interactive experiences that intimately connect people with brands in unique and memorable ways. Our commitment is to grow your business through innovation, relevance and beauty, because we believe these are the cornerstones of unforgettable experiences that attract and retain clients.
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?
