Co-Workers E-mail to a Client – 4,000 to 5,000 sf

I am on a file with a co-worker and he sent the following email to a client… which I agree with.

We continue to see quite a few sublets come to the market, a lot of which are built out. One thing you may want to consider is taking advantage of a sublease at discounted rents. The reason I mention that is that vacancy is still low and the majority of landlords are not bending on their rental rates. TD Centre will will be more negotiable, come next year, but only for larger size tenancies of 10,000 -15,000 and greater. My advice is, if you are month to month, to let us know what you are looking for so we can keep our eyes out for something that could be a match. If you are in the same size range as before and want to save some money, your best solution will be to find a sublease that is already built out today versus on a direct basis in 2010.

I agree with him. The time to capitalize on a quality sublease is today… or maybe this summer.
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Commercial Real Estate News Toronto – 1/2 February 2009

First Capital Realty to acquire units in Allied Property REIT – firstcapitalrealty.ca – FCR-T – First Capital Realty announced that it has agreed to acquire from institutional investors an aggregate of 1,766,800 units of Allied Properties REIT in exchange for common shares of First Capital Realty at a ratio of 0.81 First Capital Realty shares per Unit. Based on the five day volume weighted average price of First Capital Realtys shares on February 6, 2009, this equates to $14.23 per Unit.
First Capital Realty News Release, Feb 09, 2009 RTTNews.com, Feb 09, 2009 Canada News Wire, Feb 09, 2009

Allied Properties REIT responds to unsolicited proposal – alliedpropertiesreit.com – AP.UN-T – After reviewing the proposal from First Capital Realty and its implications for Allied’s business and unitholders, the Trustees have decided not to enter into discussions with First Capital, as they disagree with the stated benefits of the proposal and do not consider a combination to be in the best interests of Allied unitholders. Allied has become a large, durable urban-office franchise and intends to remain focused on the consolidation of Class I and like office properties in major urban markets.
Allied Property REIT News Release, Feb 11, 2009

First Capital may bid for Allied Properties REIT – firstcapitalrealty.ca – FCR-T – First Capital Realty Corp., the country’s largest community shopping centre owner, has taken a major position in office landlord Allied Properties REIT and has not ruled out a takeover. Toronto-based First Capital’s interest in the office properties, which are made up of small buildings, is focused on gaining access to Allied’s numerous ground floor retail operations in dense urban centres — in particular Toronto’s lucrative downtown.
Financial Post, Feb 09, 2009

Three Toronto Real Estate Brokerages Being Investigated – Over the past couple of months the Real Estate Council of Ontario (RECO) has issued a freeze order, freezing the accounts of three Toronto real estate brokerages. A list of the brokerages can be found on RECO’s website. When a real estate brokerage is representing a seller, they are typically responsible for holding the purchaser’s deposit in their Real Estate Trust Account until closing. RECO regularly audits brokerages to ensure that they are operating in accordance with REBBA.
MoveSmartly.com, Feb 09, 2009 CBC.ca, Feb 09, 2009 Toronto Star, Feb 09, 2009

With Federal funds work on Toronto Union Station to begin – Construction hoarding goes up at Union Station on Monday, a sure sign of life for the city’s long-desired facelift for the key transportation hub. Also coming to life – and not a moment too soon for Toronto – is a surge of federal government interest as a major financial partner, not the bit player once imagined, in the renewal. Mayor David Miller, thrilled at Ottawa’s freshly minted enthusiasm, if not about the likely process for flowing funds, says the city is moving ahead, rather than wait for a dollar figure for the federal contribution.
Globe and Mail, Feb 08, 2009

Canada’s commercial construction outlook dims – It is clear, based on a number of key indicators, that the short-term outlook for commercial construction in Canada has deteriorated over the past six months. First, office-based employment for the country as a whole has stagnated, dropping by 23,000 jobs since last summer. Second, according to Cushman & Wakefield LePage, the office vacancy rate for the country as a whole has increased from 5.9% in third-quarter 2008 to 6.1% in fourth-quarter 2008.
Daily Commercial News, Feb 11, 2009

CB Richard Ellis quarterly net income falls 94.7% – cbre.com – CB Richard Ellis Group Inc. one of the world’s largest commercial real estate services firms, said its quarterly net income fell 94.7 percent, but it beat Wall Street’s outlook, sending its shares up 11 percent. Fourth-quarter net income fell to $6.5 million, or 3 cents per share, from $122.4 million, or 54 cents per share, in the year-earlier quarter, the company said on Tuesday. Those results do not include noncash goodwill and other intangible asset impairments.
Reuters.com, Feb 11, 2009

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Commercial Real Estate News

Had a little break there over the holidays, here are some of the commercial real estate related articles that have come out recently.

Bay Street rattled as wind sends glass flying from office tower – The accident happened at the nearly finished Bay-Adelaide Centre, on the corner of the same name, at about 8:20 a.m. as winds were whipping up a severe winter storm. The winds caused a set of heavy cables, strung from a derrick crane atop the building to a winch on the ground, to sway against the building and shatter four panes of glass between the 30th and 40th floors of the 51-storey tower.
Globe and Mail, Dec 22, 2008

The World’s First Green Revolving Door: A Good Turn Generates Energy – Ever feel like you’re going around in circles and not doing anyone much good? Royal Boon Edam Group Holding B.V. of the Netherlands has found a use for that wasted energy. It’s created the world’s first revolving door that generates energy with every turn. Boon Edam developed its door for the Driebergen-Zeist railway station in the Netherlands, which was recently revamped by the green architecture and design firm RAU.
GreenerBuildings.com, Dec 21, 2008

Toronto’s green agenda can also inspire – Mayor David Miller wants Toronto to be among the greenest cities on the planet. Last week’s city council decision to ban the sale of bottled water at city-owned facilities and impose tighter curbs on plastic bags at retail stores are positive measures that push us closer to that vision. Better, they set a template that will embolden other jurisdictions in Greater Toronto and beyond. Some will even exceed the city’s targets, pushing the goal of a green, sustainable planet closer to reality.
Toronto Star, Dec 09, 2008

Toronto, Calgary office markets to sag: Colliers – colliers.com – Office vacancy rates in Toronto and Calgary will jump in 2009 as new buildings open during an economic downturn. Colliers International said that while many of Canada’s business rental markets should fare well, property owners in the country’s biggest city and its economic juggernaut both will face financial woes in the coming months. “Calgary and Toronto will feel the fallout of the global economic slowdown as these two markets share the same short-term oversupply issues.
CBC.ca, Dec 24, 2008 Financial Post, Dec 24, 2008 Canada News Wire, Dec 24, 2008

Classic supply-demand conundrum unfolds in office market – colliers.com – Canada’s major office markets are about to be flooded with new supply amounting to several million square feet – just as the economic slowdown is raising alarm bells over whether there will be enough people left to occupy the space. While the imbalance of supply and demand is cause for concern, real estate observers remain confident that lessons learned from faltered markets of the early 1990s, along with “good old-fashioned due diligence,” will keep the market at least steady over the next year.
Globe and Mail, Dec 30, 2008 Commercial Property News, Dec 30, 2008