Historic Yaletown building to get new look

An historic building in Vancouver’s trendy Yaletown district is about to get a complete renovation.
The Soho building at 1132 Hamilton Street, originally constructed in 1914, sits in an emerging premier location near a new Canada Line station at the corner of Davie and Mainland. Commencing in March 2010, construction crews will add three new floors to the existing three-storey building, along with a new patio and modern exterior.
Portions of the original brick interior will remain, but the exterior of the top two floors will feature a newer look as the building’s owner, Triple F Investments, a Mark James company, complies with a city requirement that refurbished Yaletown buildings have a modern appearance. The Soho is not classified as a heritage building.
Other improvements will include seismic upgrades and new HVAC, electrical, security, and safety systems. A total of 23,000 square feet (sf) will be placed above the existing 27,000-sf structure, which has a 9,000-sf floor plate.
The new facility will service office and retail clients. Avison Young, which is leasing the space for the owner, is targeting entertainment and media companies, software developers, engineers, architects and marketing and advertising firms as potential office clients.
The retail component is intended for large retailers with a head-office requirement, along with restaurants and high-end shops and services.

Ignatieff to speak to Vancouver Board of Trade

Federal Liberal leader Michael Ignatieff will speak at a Vancouver Board of Trade luncheon Oct. 13.
Ignatieff, who has come under fire after the resignation of his top lieutenant Denis Coderre, will discuss how Vancouver, the Pacific Gateway strategy and the province of B.C. fit into the Liberal vision. He will also explain how the party intends to provide a more prosperous and compassionate future beyond the 2010 Winter Olympics.
For more details on Ignatieff's speech, go to the Vancouver Board of Trade website via the link below.

http://www.boardoftrade.com/vbot_events.asp?pageID=32&eventID=1777&EventPage=ED

Canada's job market recovers

Canada's job market is stabilizing, says a new report from Statistics Canada.
Results released Monday show that new and renewable employment insurance claims fell 8.5 per cent in July, the last month for which figures are available. Ontario and B.C. led the job-market improvements.
The findings are likely to influence Canada's recovering commercial real estate market. Avison Young CEO Mark Rose and other industry leaders believe that improved employment will be the catalyst for the evential complete recovery of the Canadian office, retail and industrial real estate markets.
While the commercial real estate sector is as one broker puts it, "bumping along the bottom of the recession right now," ongoing stronger employment figures are viewed as an indicator of a fully stable market.
Part of the reduction in EI claims can be attributed to benefits expiring based on respective rules in each province. It will take a while, probably a few months, to determine the full impact of the reduced employment insurance claims, but commercial real estate insiders hope they are sign of better times ahead.
For more details on Canada's improvement employment picture, click on the link below to see a story in today's Globe and Mail.

http://www.theglobeandmail.com/report-on-business/ei-data-suggest-job-market-on-the-mend/article1304988/

Toronto's Miller to leave mayor's chair

Toronto mayor David Miller announced Friday that he will not seek re-election when his current term expires.
The move could have implications on the commercial real estate scene in Canada's largest city. You can check out a story on Miller's announcement in The Globe and Mail.

http://www.theglobeandmail.com/news/national/toronto/toronto-mayor-wont-run-again/article1301155/

Downtown Vancouver office vacancy remains low

Vancouver’s downtown office market remains tight, despite a rise in subleasing activity, local NAIOP chapter members heard Thursday.
“There aren’t a lot of large downtown office spaces,” said Avison Young principal Fergus Cameron.
“A lot of the space downtown is of a smaller size, and a lot of the space downtown comes from sublease space,” said Cameron. “The head lease market is still only 31/2%vacant.”
Cameron was speaking on a panel during NAIOP Vancouver’s monthly breakfast meeting. The panel included brokers Darrell Hurst, also of Avison Young, Mark Chambers of Cushman & Wakefield Ltd., and Rob Chasmar of Colliers International Inc. The four brokers analyzed Metro Vancouver’s sub-markets and offered brief forecasts up to 2012.
Their predictions on when average office vacancy would fall and average rents would rise ranged from the second quarter of 2010 to the first quarter of 2011.
Taking head lease and sublease space into account, the downtown market’s overall vacancy rate is 5%.
Cameron said some space is available but tenants want to preserve capital after going through tough times related to the global financial meltdown. Sublease opportunities have increased in recent months, and many sub-landlords have offered inducements as they attempt to reduce their rent obligations.
But, with many head leases coming up for renewal after the 2010 Winter Olympics, few are expected to bite on sublease opportunities.
“We’re going to see the rents and the inducements staying fairly flat in the next six months,” said Cameron.
Although subleases offer short-term rent reductions, sub-landlords may end up paying more over the long term than a tenant in a lease rollover situation, he said.
Downtown Vancouver is not slated to get any new office supply this year, and will have negative absorption of 500,000 square feet (sf). Limited new supply is expected to result in positive absorption of 100,000 sf in 2010 and 200,000 sf and 300,000 sf in 2011 and 2012, respectively.
The largest available office space in the core is resort developer Intrawest’s 96,000 sf in the Waterfront Centre, which is being offered on sublease. The next largest space is Nexon’s 37,000-sf former video game studio in Yaletown.
Upcoming vacancy of 30,000 sf or more includes the 71,500-sf of rentable space in the Hotel Georgia redevelopment, which includes office, retail and a boutique hotel as well as condos. Office space, now being marketed by Avison Young, is available for both lease and sale under a strata ownership arrangement.
Hotel Georgia , located at the northwest corner of Georgia and Howe streets, will be available for occupancy in mid-to-late 2010. Meanwhile, famed architect Norman Foster’s Jameson House at 838 West Hastings has 30,000 sf of office space available next year, while an existing building at 885 Dunsmuir has 63,000 sf and the Grosvenor building near Georgia and Burrard has 43,000 sf.
Panel moderator Tony Astles, executive vice-president of real estate services for Bentall, said the Vancouver office market, traditionally subject to considerable institutional investment, remains quite strong compared to the rest of North America.
“All in all, things are okay . . . Thank God we live in Vancouver,” concluded Astles.

Onex plans to invest in struggling U.S. market

Onex Corp. has announced that it plans to capitalize on opportunities in the struggling U.S. commercial real estate market.
"Our hope is that we will be able to partner with some of our institutional relationships to take advantage of the looming crisis in the U.S. commercial real estate industry," Onex managing director Andrew Sheiner told investors Wednesday.
Other Canadian companies with strong balance sheets and low debt have adopted a similar strategy as the U.S. commercial real estate market attempts to recover from the global financial meltdown and credit market crash. Avison Young CEO Mark Rose has made it known the brokerage firm has an aggressive U.S. expansion plan.
Onex's foray south of the border indicates the Toronto-based company could make wide-scale investors, especially as it plans to link with institutional investors, if it can find properties that fit.
Sheiner's comments were published in a Reuters article.
To check out the full story, click on the link below.

http://ca.reuters.com/article/businessNews/idCATRE58N3U320090924

League appoints former Cadillac Fairview executive as CFO

League Assets Corporation has hired a new chief financial officer.
Patrick Miniutti joins Victoria-based League after serving as managing director of real estate and financial and management advisory services firm Sunset Real Estate Services. He has also held vice-president and CFO, chief operating officer and chief accounting officer posts with Konover Property Trust, Crown American Realty Trust served as executive vice-president, CFO and chief operating officer with Konover Property Trust, Crown American Realty Trust and Cadillac Fairview Corp.
"We're delighted to have someone of Patrick's caliber and experience joining us," said League co-founder Emanuel Arruda in a news release. "He adds depth to the League team that will help us expand in the coming years."
Miniutti will work extensively with League's other co-founder, Adam Gant.
"I look forward to establishing a close working relationship with Patrick," said Gant. "Certainly, League will benefit from his background in accounting and tax, as well as in capital markets and real estate, including acquisitions and asset management."
Miniutti, a certified public accountant who holds accounting and MBA degrees from the University of Bridgeport and Michigan State, respectively, will work out of League's Victoria office.
League manages the IGW REIT, which contains a portfolio of Canadian commercial, industrial, multi-family residential properties valued at approximately $300 million. The REIT acquires and manages commercial real estate properties on behalf of 1,700 member-partners.
Taking its other investment pools into account, Leagues is manaing and developing assets that have a total build-out value of $2 billion.

Green concrete maker tries to leave imprint

A Canadian company is building a case for a greener, stronger concrete but is fighting resistance in the construction industry, writes Terry Inigo-Jones in today's Globe and Mail.
Whitemud Resources Inc., mines kaolin, a white-coloured clay, in southern Saskatchewan and turns it into metakaolin, which is used as a supplement to cement. But the firm has met with resistance.
“The cement and the concrete industry is enormous worldwide. … And they do things a certain way and they have done those things that way for years and years and years,” Barry Lester, chairman of Whitemud, told Inigo-Jones, a contributing freelancer.
“To get people to consider making a change we are trying to turn the freighter, and it takes a long time to turn it,” said Lester. “That's the challenge that we are running up against.”
Whitemud bears watching as Canada's commercial real estate industry attempts to deal with the recession and its ongoing effort to reduce construction costs.

To check out the full story, click on the link below.

http://www.theglobeandmail.com/real-estate/building-with-a-more-durable-greener-concrete/article1296004/

Rose: Avison Young has big plans in U.S.

Avison Young is laying the groundwork for a major expansion into the U.S.
Mark Rose, the Toronto-based commercial real estate company's CEO, told syndicated columnist Mike Myatt, a leadership coach who writes the Leadership Matters blog, that Avison Young plans to move into several U.S. markets as soon as possible.
"As you might expect, with the U.S. market being one of the largest and most vibrant real estate markets in the world, we have big plans for expansion in the U.S.," Rose told Myatt. "We have already established a presence in the Chicago market, and have set our sights on immediate expansion in the key markets from coast to coast. Additionally, as a diversified company, we expect to expand in all facets of the commercial markets, in all property types, in order to meet the widespread demands of our institutional and corporate clients."
Rose made the comment in an insightful interview in which he explains how and why he became Avison Young's CEO. You can check out the full interview by clicking on the link below.

http://myattleadershipmatters.wordpress.com/2009/09/17/ceo-interview-mark-rose/

Investors remain confident in Calgary market

Calgary commercial real estate investment activity will pick up this fall, says the managing director of Avison Young's Calgary office.
"Whenever you go through a period of slow activity, pent-up demand happens," Todd Throndson told the Calgary Herald. "People want to do things. There's a lot of money that's on the sidelines that is going to need to get active.
"Now it may wait as long as it possibly can before it gets active to see how far down pricing can go. But it's going to have to get active. Especially with the institutions. They are going to have to place that money into something."
Throndson made the comment following the release of Avison Young's latest Calgary investment report, which shows that overall transaction volume for office, retail, industrial, multi-family, industrial land and residential land was $842 million for the first seven months of this year with 68 sales.
The total is down$1.35 billion, or 62 per cent, from the same period in 2008. But Throndson told the Herald that investment activity will improve going into the fall as prices deflate a little and buyers indicated their willingness to pay slightly more.
"People are starting to move forward with what they think is the new reality in the world," he said. "I do think there's going to be more activity over the last four months of this year," he said.
Although the numbers are down year-to-date until the end of July, there are some positive aspects which indicate a healthy investment market, said Avison Young, including a high average price and few distress sales.
Peter Cuthbert, vice-president of real estate for Standard Life Investments Inc., told the Herald that more than five million square feet of downtown Calgary office space now under construction, including the Bow tower and Eighth Avenue Place, will create an over-supply situation. But, Cuthbert added, investors remain confident in the Calgary market.
"The interesting thing about Calgary is the stock of downtown core office is fairly tightly controlled by institutional players," he said. "So in a market like this, they're unlikely to sell out of it. The market's turned down. No one's quite sure what's going on and nobody's actually selling buildings in that segment, so how do you put a price on it?"
Standard Life, which has about 20 per cent, or one million square feet, of its portfolio staked in the Calgary and Edmonton markets, is actively pursuing acquisitions in Western Canada. He predicted the slowdown prevalent in the first half of this year will be temporary.
"We are pursuing opportunities," he said.

REITs continue to raise capital as economy improves

Canadian Real Estate Investment Trusts (REITs) continue to raise large amounts of capital for an anticipated increase in investment over the the second half of this year.
Scott's Real Estate Investment Trust announced today that it has entered into an agreement to sell, on a bought-deal basis, $20 million (all prices Canadian) of convertible unsubordinated debentures. National Bank Financial Inc., and Dundee Securities Corporation are leading the investor syndicate that is underwriting the offering.
Bloomberg reports that Artis Real Estate Investment Trust (AX-U CN), the owner of commercial properties in Western Canada, has agreed to sell 3.4 million shares for $9 each to raise about $30 million. The announcement boosted the Artis REIT unit price to a 10-month high closing price of $9.48 on Monday. Artis had 33.5 million units outstanding as of Aug. 31.
Meanwhile, shopping-centre owner Primaris Real Estate Investment Trust (PMZ-U CN) has announced it will issue at least $75 million in debentures convertible into trust units at a unit price of $16.70.
Primaris REIT units closed Monday at $14.
According to Avison Young brokers, REITs have been busy raising capital as they clean up their balance sheets, pressures related to the global financial meltdown subside, and yield rates justify more investment. The increased efforts to raise capital are viewed as signs of increasing investor confidence.
They coincide with forecasts that more attractive deals in all asset classes will come on the market in the next six to 12 months.

B.C. multi-family investment market begins to stabilize

British Columbia's multi-family investment market is starting to stabilize, says an Avison Young report released today.
"The market stumbed through the latter part of 2008 and the beginning of 2009 with barely enough sales to indicate new realistic market pricing," says Avison Young principal Rob Greer. "Now, that seems to have completely changed. The market is currently very active with a sense of renewed confidence on the part of investors."
Avison Young's Q2 2009 BC Multi-Family Investment Report shows a total of 14 multi-family-property transactions were completed in the second quarter of this year, down slightly from 17 in the first quarter. However, total dollar volume increased 51 per cent to $89.8 million from $59.3 million during the same period.
"In the second quarter of 2009, we definitely saw the market pick up," says Avison Young multi-family investment advisor Michael Brodie. "We saw quite a flurry of activity towards the end of the second quarter. The doom and gloom prevalent at the end of 2008 and in the early part of 2009 has disappeared."
According to the report, buyers have pressured vendors and their brokers to market properties based on "actual income and opportunities for real returns." Purchasers, while drawn to attractive financing available from Canadian Mortgage and Housing Corporation (CMHC) and the consistency of multi-family returns, have returned to fundamentals that emphasize cash flow.
"Individual private investors were the most active in the second quarter of 2009," says Avison Young sales associate Matt Saunders. "Most vendors continue to be private investors who are either retiring or looking to reposition their finances."
As long as specific yield targets are met, the market will continue to see a high level of activity for the rest of this year, says Greer. But landlords have to be careful not to be too aggressive with rental increases, or else suites could sit vacant for several months.
Overall, he expects the market to witness increased sales activity in both dollar volume and number of transactions in the latter half of 2009 as capitalization rates stabilize and interest rates remain at historical lows.

The full report can be viewed at http://www.avisonyoung.com/.

Beedie joins PIRET board of trustees

Vancouver developer Ryan Beedie and one of his top confreres have joined the Pure Industrial Real Estate Trust’s board of trustees.
PIRET announced Monday that Beedie and Jim Bogusz, chief financial officer for the family-owned Beedie Group, will serve as independent trustees.
"We are very pleased to announce the addition of Mr. Beedie and Mr. Bogusz to our board of trustees," said Darren Latoski, PIRET’s acting CEO, in a news release. "As Canada's only pure-play industrial REIT, we believe there will be many benefits in working with The Beedie Group, Western Canada's largest industrial landlord. The addition of these two new trustees will complement the strengths of PIRET's existing trustees."
Vancouver-based PIRET, which deals exclusively with industrial properties, also increased the board to eight trustees from six. The moves come after Beedie Industrial Projects Ltd., an affiliate of the Beedie Group, acquired 13.6 per cent of PIRET’s issued and outstanding units on July 31.
The Beedie Group specializes in the design, construction and management of industrial and commercial buildings. Since Beedie became president in 2001, the group has developed more than 17 million square feet (sf) of industrial real estate across B.C.
Its portfolio includes approximately six million sf of industrial buildings, along with significant land positions in major industrial locations in Metro Vancouver, the Fraser Valley and Alberta.
Bogusz, a chartered accountant since 1986, co-ordinates the Beedie Group’s financial management, information systems and financial reporting. He has considerable experience with real estate mergers and acquisitions, corporate strategy, and guidance through company growth and change.

NAIOP panel to diagnose Vancouver office market

Expert panelists will diagnose Metro Vancouver's office market during this month's NAIOP Vancouver breakfast.

Avison Young brokers Fergus Cameron and Darrell Hurst will join Mark Chambers of Cushman & Wakefield and Rob Chasmar of Colliers International Inc., as they discuss the global recession's impact on downtown and suburban commercial real estate markets.

NAIOP's e-mail notice on the breakfast asks whether Vancouver's office market has reached its Armageddon or is in for a soft landing. Cameron, Hurst and the other panelists will also discuss whether Vancouver has suffered as a "branch plant" city, and attempt to identify market makers and breakers.

The panel, moderated by Bentall LP vice-president Tony Astles, will also forecast local sublease inventory take-up and identify industry sectors that are expanding and shrinking.

The breakfast will be held Sept. 24 at the Hyatt Regency hotel.

Vancouver hires green building specialist as deputy city manager

Vancouver’s municipal government has appointed Sadhu Aufochs Johnston as its new deputy city manager.
Johnston, 35, a native of England who was raised in the U.S. and holds dual Canadian and American citizenship, will join the City of Vancouver from Chicago, where he serves as Mayor Richard Daley’s chief environmental officer.
“We have in Sadhu Aufochs Johnston a seasoned city administrator and a highly experienced leader who has pioneered environmental programs, strategies and regulations for the United States’ third largest city,” said Vancouver city manager Penny Ballem in a news release.
Johnston has spent six years with the City of Chicago as the mayor's assistant on green initiatives, commissioner for the department of environment, and chief environmental officer. He helped develop Chicago’s climate action plan, blue cart recycling program, green permit program, green building program and other initiatives.
A graduate of Oberlin College in Ohio and Vassar College in New York state, he has received Crain’s Chicago Business 40 under 40 and Building Design and Construction 40 under 40 awards.
“Growing up as a child, I spent many summers in Vancouver visiting family,” said Johnston in the news release. “Ever since then, as I worked to make U.S. cities green, I looked to Vancouver for inspiration. I’m thrilled to be coming to live and work in this inspiring city and to be part of a team engaged in making Vancouver healthier, greener and more environmentally friendly.”
Johnston will assume his duties with the City of Vancouver on Nov. 2.

Rose: Market returning to normal

The Canadian commercial real estate market is returning to normal, says Avison Young chairman and CEO Mark Rose in an interview with the Globe and Mail.
Rose said confidence is coming back, but the bellwether will be rising employment figures.
"When they start to rise we will know we are in recovery," he told the Globe. "Rising employment will mean there will again be increasing demand for office space, for retail and demand for industrial products and manufacturing."
Meanwhile, he anticipates new forms of mortgage-backed securities are going to fill the financing gap.
"They are just too valuable a product and fill too great a need," he told the Globe.
Rose also anticipates that lenders’ demand for 35 per cent and 40 per cent equity will come to an end soon.
"All it will take is just one lender to jump in to get the ball rolling," he says.

To access the Globe story, click on the link below.

http://www.theglobeandmail.com/report-on-business/let-the-healing-begin/article1271433/

To view the Avison Young website, go to www.avisonyoung.com

Globe reports on B.C. mid-year investment

The Globe and Mail Web site has posted a story on the Avison Young B.C. mid-year B.C. investment report. To access the story, click on the link.

Http://www.theglobeandmail.com/real-estate/bcs-wild-west-show-reined-in/article1270817/

B.C. investor confidence continues to rise

Vancouver, BC – British Columbia commercial real estate investment activity shifted downward in the first half of 2009 as the province continued to feel after-shocks from the global financial meltdown.
The 23 transactions completed in the first half of 2009 represented the lowest first-half number of deals witnessed in the province in the past seven years, according to the recently-released Avison Young Mid-Year 2009 British Columbia Real Estate Investment Review. However, investor confidence continues to improve as investor confidence continues to improve and global economic restraints ease.
Total dollar volume in the first half of 2009 fell 12% to $643 million from $734 million in the second half of 2008. (It is important to note, though, that the majority of those second-half 2008 deals were negotiated in the early part of 2008, before the fall 2008 equity market crash.)
Year-end 2009 sales volume is on track to meet last year’s level of $1.27 billion.
Industrial deals (11) outnumbered office (8) and retail (4) transactions. But office deals accounted for 79%, or $506 million of the $643 in total dollar volume, while industrial amounted to 15%, or $96 million, and retail reflected a modest 6%, or $41 million. The average sale price in the first half of 2009 increased to $29.2 million from $24.5 million in the second half of 2008 and $14.5 million in the first half of 2008.
The semi-annual report tracks office, industrial and retail investment sales in B.C. greater than $5 million.
To see the full report, go to: http://www.avisonyoung.com/library/pdf/Van_Research/Invest_MID_09.pdf