Office vacancy is on the rise in major Canadian markets, says Avison Young's 2010 Forecast.
The report, released today, says the national vacancy rate for office space is up 270 basis points (bps) to 9.0% and is poised to reach 10% by the end of this year.
Calgary (plus-410 bps to 10.1%), where many speculative office buildings are starting to come on the market, and Toronto (plus-340 bps to 10.5%), which is witnessing the launch and effects of new downtown office towers, took the biggest hits. Regina and Winnipeg, on the other hand, experienced modest vacancy increases.
Vacancy in Regina inched up to 1.5% from 1.2% and Winnipeg's rate increased to 5.4% from 4.8%.
Meanwhile, Vancouver vacancy is expected to encroach 8% this year after ending 2008 at 5%.
To check out the Avison Young 2010 National Forecast, click on this link.
http://ow.ly/W562
Showing posts with label commercial real estate. Show all posts
Showing posts with label commercial real estate. Show all posts
Wednesday, January 13, 2010
Friday, November 6, 2009
Segal explains how Fields started
Here's more from Joe Segal's session at the November NAIOP Vancouver breakfast. In this segment, the legendary commercial real estate investor, philanthropist and retailer recalls how the Fields department store chain, a predecessor of Zeller's, started up . . .
4. “I started in the war surplus business, and in that business I sold everything from medical equipment to lighter flints to pounding equipment . . . You name it. It was a great experience.
"I had five bargain-centre stores. I used to buy army trucks. They were four-by-fours or six-by-sixes. Big trucks . . . So what are you going to do with the trucks. These were brand new trucks. They had maybe 400 kilometres on them – 2,000 was a lot. I would buy these things 20 at a time, and I would take the four-by-fours and would put a tack on the map and sell them as firetrucks in every small (community) in the (Greater Vancouver Regional District), on (Vancouver) Island, next door, (across) British Columbia. The six-by-sixes became logging trucks . . . I would get maybe $5,000. They would cost me $400 anyway. I was in the surplus business and I had five bargain-centre stores. At that time, Sears had just opened. You know, I have to tell the story that Sears put me in the retail business. I had a person that walked in the door and said, ‘I’ve just bought a deal from Sears.’ I said, ‘What’s the deal?’ He said, ‘Twenty thousand dresses and skirts. Women’s clothing.’ This was the end of the season catalogue. Sears had a catalogue operation on Smithe (Street) . . . He said, ‘I haven’t got the money to pay for them. I paid $1 a piece for them – 20,000 units.’ I said, ‘Okay, I won’t lend you the money, but I’ll give you a profit . . .’ So I bought 20,000 skirts and dresses and, you name it, women’s clothing . . . I gave him a profit of 10 per cent . . .
"Now, what am I going to do in a war surplus store with ladies’ dresses and ladies’ blouses? So I went down Hastings Street and mid-block between Abbott and Carroll, there was a 15-foot, perfectly empty store, and I rented it. I opened up with these 20,000 units and I had two or three ladies to run it, and that’s how I got into the clothing business. And after that, I started developing a relationship with Sears. In Vancouver, it never snows, and I would buy snowsuits from right across Canada. From Halifax. Toronto. Regina. Operations of the end of the season . . . One thing led to another. In the old days, you didn’t operate by a computer. You operated by the sliding rule. You know what a slide rule is? . . . You determined how many you were going to sell based on the early calls. Your 10-day calls. Your 30-day calls . . . If the trend flattened, you had a lot of surplus inventory. I would buy the surplus inventory. In December or November, or whatever it was, it was getting toward the end of the season. I would buy tons of this stuff and, then in December, when the calls picked up, I would sell it back to them . . .
"That’s how Fields started. At that time, I had all my ads and everything set up to start my first Fields store. If it wasn’t (going to be called) Fields, it was Thrifty. I said to myself: This is Thrifty and it’s going to guide me, because Thrifty is a connotation that’s cheap. It’s price-sensitive, and I don’t know where this business can grow. It may go up quick . . . so I changed the name to Fields, which really meant that it wasn’t a high price. It wasn’t a low price. It was the right price.”
4. “I started in the war surplus business, and in that business I sold everything from medical equipment to lighter flints to pounding equipment . . . You name it. It was a great experience.
"I had five bargain-centre stores. I used to buy army trucks. They were four-by-fours or six-by-sixes. Big trucks . . . So what are you going to do with the trucks. These were brand new trucks. They had maybe 400 kilometres on them – 2,000 was a lot. I would buy these things 20 at a time, and I would take the four-by-fours and would put a tack on the map and sell them as firetrucks in every small (community) in the (Greater Vancouver Regional District), on (Vancouver) Island, next door, (across) British Columbia. The six-by-sixes became logging trucks . . . I would get maybe $5,000. They would cost me $400 anyway. I was in the surplus business and I had five bargain-centre stores. At that time, Sears had just opened. You know, I have to tell the story that Sears put me in the retail business. I had a person that walked in the door and said, ‘I’ve just bought a deal from Sears.’ I said, ‘What’s the deal?’ He said, ‘Twenty thousand dresses and skirts. Women’s clothing.’ This was the end of the season catalogue. Sears had a catalogue operation on Smithe (Street) . . . He said, ‘I haven’t got the money to pay for them. I paid $1 a piece for them – 20,000 units.’ I said, ‘Okay, I won’t lend you the money, but I’ll give you a profit . . .’ So I bought 20,000 skirts and dresses and, you name it, women’s clothing . . . I gave him a profit of 10 per cent . . .
"Now, what am I going to do in a war surplus store with ladies’ dresses and ladies’ blouses? So I went down Hastings Street and mid-block between Abbott and Carroll, there was a 15-foot, perfectly empty store, and I rented it. I opened up with these 20,000 units and I had two or three ladies to run it, and that’s how I got into the clothing business. And after that, I started developing a relationship with Sears. In Vancouver, it never snows, and I would buy snowsuits from right across Canada. From Halifax. Toronto. Regina. Operations of the end of the season . . . One thing led to another. In the old days, you didn’t operate by a computer. You operated by the sliding rule. You know what a slide rule is? . . . You determined how many you were going to sell based on the early calls. Your 10-day calls. Your 30-day calls . . . If the trend flattened, you had a lot of surplus inventory. I would buy the surplus inventory. In December or November, or whatever it was, it was getting toward the end of the season. I would buy tons of this stuff and, then in December, when the calls picked up, I would sell it back to them . . .
"That’s how Fields started. At that time, I had all my ads and everything set up to start my first Fields store. If it wasn’t (going to be called) Fields, it was Thrifty. I said to myself: This is Thrifty and it’s going to guide me, because Thrifty is a connotation that’s cheap. It’s price-sensitive, and I don’t know where this business can grow. It may go up quick . . . so I changed the name to Fields, which really meant that it wasn’t a high price. It wasn’t a low price. It was the right price.”
Tuesday, October 20, 2009
TD Bank boss not worried about bad CRE loans
TD Canada Trust's CEO says commercial real estate loan defaults won't have a big impact on his bank's bottom line.
Speaking at an investment conference in Toronto, Tim Hockey said the bank's loan outlook remains unchanged. Hockey expects bad loan cases to rise, and their resolutions usually lag the overall economy's recovery, but he does not foresee major problems as Canada continues to rebound from the recession.
To read a Reuters story on Hockey's appearance at the Toronto event, click on the link below.
http://tinyurl.com/yku3wke
(Monte Stewart writes about commercial real estate for Avison Young. www.avisonyoung.com)
Speaking at an investment conference in Toronto, Tim Hockey said the bank's loan outlook remains unchanged. Hockey expects bad loan cases to rise, and their resolutions usually lag the overall economy's recovery, but he does not foresee major problems as Canada continues to rebound from the recession.
To read a Reuters story on Hockey's appearance at the Toronto event, click on the link below.
http://tinyurl.com/yku3wke
(Monte Stewart writes about commercial real estate for Avison Young. www.avisonyoung.com)
Wednesday, October 7, 2009
Avison Young plans to expand services
Avison Young is in the process of changing the real esate service provider business model.
It will take a bit of time for the transition to be complete. But Michael McKiernan, managing director of Avison Young's Chicago office and vice-president Hiren Thakar offer a glimpse of what's to come in an an interview with REJournals.com.
"The expectation is that the industry will evolve from (multiple) advisory services into one entity capable of implementing an overall strategy," said McKiernan. "Clients are looking for this. They will drive the demand because it will be more cost effective for them."
Avison Young plans to bring typical consulting services like property management and construction management under one roof and build strong client relationships as a one-stop provider with integrated solutions.
To check out the full article, click on the link below.
http://www.rejournals.com/news/213091-avison-young-evolves-with-industry
It will take a bit of time for the transition to be complete. But Michael McKiernan, managing director of Avison Young's Chicago office and vice-president Hiren Thakar offer a glimpse of what's to come in an an interview with REJournals.com.
"The expectation is that the industry will evolve from (multiple) advisory services into one entity capable of implementing an overall strategy," said McKiernan. "Clients are looking for this. They will drive the demand because it will be more cost effective for them."
Avison Young plans to bring typical consulting services like property management and construction management under one roof and build strong client relationships as a one-stop provider with integrated solutions.
To check out the full article, click on the link below.
http://www.rejournals.com/news/213091-avison-young-evolves-with-industry
Tuesday, October 6, 2009
Office product fuels biggest demand
Office space was the most sought-after commercial real estate product in Canada during the first half of this year.
According to Avison Young's National Fall Newsletter, office product amounted to $1.2 billion worth of investment between January to June. But that figure was down from $2.9 billion in 2008 as the Canadian market continued to feel the after-effects of the global financial meltdown and U.S. credit crash.
Vancouver's $506 million worth of investment accounted for most of the office dollar volume. But West Coast office investment was skewed heavily upwards by German investor Deka Immobilien GmbH's surprise unsolicited purchase of Bentall V in downtown Vancouver for $297 million. That deal still stands as the largest in Canada this year.
German investors were also active in other Canadian office markets, purchasing Phase II of the Bell Office campus in Montreal for $94 million and Stampede Station Phase I in Calgary for $74 million.
Meanwhile, overall investment in office, retail, industrial and multi-family properties fell by almost 60% to $3.4 billion from $8.4 billion.
To check out the full newsletter, go to www.avisonyoung.com
According to Avison Young's National Fall Newsletter, office product amounted to $1.2 billion worth of investment between January to June. But that figure was down from $2.9 billion in 2008 as the Canadian market continued to feel the after-effects of the global financial meltdown and U.S. credit crash.
Vancouver's $506 million worth of investment accounted for most of the office dollar volume. But West Coast office investment was skewed heavily upwards by German investor Deka Immobilien GmbH's surprise unsolicited purchase of Bentall V in downtown Vancouver for $297 million. That deal still stands as the largest in Canada this year.
German investors were also active in other Canadian office markets, purchasing Phase II of the Bell Office campus in Montreal for $94 million and Stampede Station Phase I in Calgary for $74 million.
Meanwhile, overall investment in office, retail, industrial and multi-family properties fell by almost 60% to $3.4 billion from $8.4 billion.
To check out the full newsletter, go to www.avisonyoung.com
Friday, September 18, 2009
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/
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/
Tuesday, September 15, 2009
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.
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.
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