Two of Canada’s largest industrial real estate players are swapping a 136,000-square-foot property about 100 kilometres southwest of Toronto that is leased to Amazon.
Dream Industrial Real Estate Investment Trust paid $31.8 million at the end of April for the facility atĀ 125 Maple Grove Road in CambridgeĀ that houses an Amazon delivery station, according to property records obtained by CoStar. The station serves as a last-mile facility where packages are loaded onto vehicles for delivery.
The seller was Pure Industrial, which isĀ two-thirds ownedĀ by New York City-based Blackstone. Pure Industrial, whichĀ has been looking to expand in Canada, would not comment on the deal. Toronto-based Pure Industrial said on its website the property is on a 12.5-acre lot, was constructed in 2001 and expanded in 2003.
As of March 31, Toronto-based Dream Industrial REIT owns, manages and operates a portfolio of 244 industrial assets comprising 358 buildings and 44.4 million square feet of gross leasable area across Canada, Europe and the United States.
Last month, Dream Industrial said it was teaming up with its parent Dream Unlimited Corp. and an unnamed global sovereign wealth fund toĀ create a new $1.5 billion joint venture. The joint venture is initially looking to buy $500 million of development sites in the Greater Toronto Area and other select markets within the Greater Golden Horseshoe Area, which surrounds the GTA.
Source CoStar.Ā Click here to read a full story
The real estate arm of one of Ontario’s largest pension funds has unveiled plans to transform one of Toronto’s most notable suburban malls, creating a plan for an initial 1.1 million-square-foot mixed-use development at CF Fairview Mall.
Opened in 1970,Ā Fairview Mall at 1800 Sheppard Ave. E,Ā with almost 900,000 square feet, was Canada’s first two-storey mall.
Cadillac Fairview, the wholly owned subsidiary of the Ontario Teachers’ Pension Plan, said that together with its partner Vancouver-based development and management company Shape, it had made a joint submission for the first phase of a master plan for the regional shopping mall.
“For more than 50 years, CF Fairview Mall has been a community hub in North York, serving the evolving retail, transit, entertainment and service needs of the local area residents and businesses,” said Wayne Barwise, executive vice president of development with Cadillac Fairview, in a statement. “As our longest operating shopping centre in the Greater Toronto Area, the master plan redevelopment extends our long-term vision.”
The first development phase is located next to Don Mills Subway station, on the south side of the shopping centre fronting Sheppard Avenue East. The plan calls for 1.1 million square feet of mixed-use, including three new buildings, two condominiums and one residential rental building, with retail and amenities.
Shape has previously worked with Cadillac Fairview as the residential development partner onĀ CF Richmond Centre,Ā where 2,000 new homes were added.
“Following our incredible success with RC at CF Richmond Centre, weāre ready to raise the bar, engage the local community and set a new standard for urban living with the complete reimagination of CF Fairview Mall,” said John Horton, president and chief executive of Shape, in a statement.
The plan at CF Fairview Mall follows an announcement by the real estate company in 2019 that it was spending $80 million to renovate 230,000 square feet of existing department store and other retail space, including a T&T Supermarket outlet. The mall renovation is expected to be completed by late 2022.
Source CoStar.Ā Click here to read a full story
The property is located at the corner of Hwy. 404 and Green Lane East, giving it close access to the Greater Toronto Areaās network of major highways.
Rice GroupĀ is the vendor and will also remain involved in the project.
In Fridayās announcement, Choice Properties REIT said the initial investment in the development is about $170 million, including the land and site preparation.
āThis development is a unique opportunity for Choice Properties to scale its existing industrial portfolio and further demonstrates the benefits of our strong and strategic relationship with Loblaw,ā said Rael Diamond, president and chief executive officer of Choice Properties, in the announcement.
āThe development is a significant opportunity in a key market to develop industrial land alongside the Rice Group, who is a long-standing development partner of ours.ā
Choice acquired the 75 per cent interest via a previously arranged āequity conversion rightā with Rice Group.
The development plan is for the trust to build a multi-phase industrial park with the potential for approximately 1.8 million square feet of logistics space. Choice and Loblaw entered into an approximately 100-acre land lease for the first phase at the property.
Preparation of the site is anticipated to take place over during the next 15 months.
The cost of the distribution facility is accounted for in Loblawās capital planning and projections. Loblaw expects to bring the facility into its operations in the first quarter of 2024.
āThis new facility reflects our continued drive to advance our supply chain to better serve our customers and meet their evolving needs,ā said Robert Sawyer, chief operating officer, Loblaw.
āThis is also a strong demonstration of the benefits of our strategic relationship with Choice Properties.ā
The project is one of several developments Choice now has underway across Canada.
As noted in its Q1 2022 financial results, projects include:
ā high-rise residential projects in Brampton, Ont., next to the Mount Pleasant GO Station and the other in the Westboro neighbourhood in Ottawa.
ā two active industrial projects expected to deliver about 600,000 square feet of new generation logistics space, at Horizon Business Park in Edmonton, and in Surrey, B.C.
Choice is also continuing to advance rezoning for 11 mixed-use projects representing over 10.5 million square feet.
It recently received zoning amendment approval for a significant mixed-use project at Grenville and Grosvenor Streets in Toronto.
Choice Properties owns, operates and develops commercial and residential properties.
The REIT currently holds 114 industrial properties totalling 17.2 million square feet and has approximately 6.5 million square feet under development or in various stages of the rezoning and planning process.
Loblaw is Canadaās largest retailer, operating in the food and pharmacy, health and beauty, apparel, general merchandise, financial services and wireless mobile products and services sectors.
It has more than 2,400 corporate, franchised and associate-owned locations, employing more than 190,000 full- and part-time workers.
Rice Group is a vertically integrated retail, industrial and infrastructure developer supporting and providing site works, servicing, construction management and design and approval for internal projects and partnerships.
The company manages the development of a portfolio in excess of 1,200 acres primarily in the GTA.
The portfolio consists of approximately five million square feet of industrial and commercial space, with more than 10 million square feet in the pipeline.
Source Real Estate News EXchange.Ā Click here to read a full story
On the southeast corner of Markham and Ellesmere roads in Scarborough, the site of 1151 Markham Road has recently seen a Zoning By-Law Amendment application submitted to the City of Toronto by the Lash Group Of Companies. Proposed by the developer is a 44-storey building designed by Turner Fleischer Architects that would be comprised of 440 residential units and 223m² of retail gross floor area located next to a planned stop on the Durham-Scarborough Bus Rapid Transit (DSBRT) corridor.
The site is currently occupied by a single-storey commercial building and its associated surface parking lot, which is being used as a presentation and sales centre for the company’s multi-phase ME Living condominium development currently mid-construction at the south end of the same block.
The new proposal comprises a total of 31,349m² of gross floor area, resulting in a density of approximately 15.89 times the area of the lot. According to its architects, the eight-storey-tall podium of the proposed building has been designed to achieve an “appropriately scaled street wall condition” with a “unique base building design” that features a rounded corner, with a step-back above the sixth storey.
The tower element of the proposal runs from level 9 to 44, plus its mechanical penthouse. The curved wall at the northwest corner of the building continues from the base of the building, remaining constant throughout the tower’s rise to the very top. The architects suggest this provides for unique architecture which gives emphasis to the intersection.
The residential lobby would be accessed via Ellesmere Road on the north side of the building. The ground floor would also be the home of a mail/parcel room, retail and residential garbage rooms, stairwells, and bicycle storage.
Above the ground floor, all levels with the exception of Levels 2, 9 and 38 have been designed to exclusively with residential units. A total of 440 units are proposed in a mix of 305 one-bedrooms (69%), 88 two-bedrooms (20%), and 47 three-bedrooms (11%).
Level 2 would include indoor amenity space and bicycle storage, while Level 9 would exclusively offer both indoor and outdoor amenity, and Level 38 would be used for indoor and outdoor amenity space in addition to residential units. There is a total of 1,760m² of residential amenity space proposed, 1,497m² of it interior and 263m² of it exterior. The programming of the amenity areas has not yet been decided on.
There would be four levels of below-grade parking beneath the building. The parking garage would have a total of 149 spaces, 147 of which would be reserved for residential units, and two of which would be provided for retail parking. A total of 367 bicycle parking spaces are also proposed, of which 324 are proposed for long-term use and 43 spaces are proposed for short-term use.
The proposal for the new development also includes new STUDIO tla-appointed landscaping and streetscape improvements at grade along Markham and Ellesmere roads, and would expand the proposed 823m² public park next door to the east through an on-site dedication of around 72m².
The site is located approximately two kilometres east of the McCowan RT station located on TTC Line 3, while bus routes ply both Ellesmere and Markham roads. The RT station will be closed by the time this building could be built, but work is underway on the Scarborough Subway Extension to replace it with a Line 2 station, opening around 2029-2030.At the same time, plans are advancing for a Bus Rapid Transit line along Ellesmere Road between Scarborough Town Centre and the cities of Durham Region to the east, which would have a stop located beside this proposal.
More information on the development will come soon, but in the meantime, you can learn more from our Database file for the project, linked below. If you’d like, you can join in on the conversation in the associated Project Forum thread, or leave a comment in the space provided on this page.
Source Urban Toronto. Click here to read a full story
The Canary District was initially the home of the Pan/Parapan Athletesā Village of the PanAm Games that took place in Toronto in 2015, with a half dozen blocks developed with buildings that have since become condos, apartments, and a George Brown College campus. Since then, the more blocks have gradually been developed, or are under construction now, or have seen proposals submitted to the City for their redevelopment. Most recently, Block 13 ā the last development site within the original village north of Mill Street ā has seen Zoning By-law Amendment and Site Plan Approval applications submitted by Dream Unlimited and the Kilmer Group, proposing an architecturally distinct, mixed-use building designed by Henriquez Partners Architects of Vancouver, whose major Toronto work is Mirvish Village, now in the late stages of construction at Bloor and Bathurst.
Located at 495 Front Street East, the site is vacant and currently being used as a construction staging area for other developments in the Canary District and West Don Lands.
The proposal has a total gross floor area of 63,944m², resulting in a density of 8.46 FSI. Approximately 963m² of that area consists of retail uses along the entirety of its Front Street East frontage, contributing to a pedestrian-friendly public realm, in addition to space provided through setbacks that make way for additional areas for outdoor patios, landscaping, and a potential public art feature at the main intersection with Bayview Avenue.
The massing of the building has been highly articulated to visually break down its scale. The proposal includes a mid-rise base building that gradually steps up from 7 storeys at the corner of Mill Street and Tannery Road up to 13 storeys at the corner of Front and Bayview, creating a “gateway” to Front Street along with the 16-storey Canary Park Condominium that is located to the north.
The proposal also includes a 24-storey tower above the 7 storey podium ā reaching a total 31 storeys ā that has been located on the southwest corner of the site in an effort to respond to adjacent taller buildings, and minimize shadows on the Corktown Common Park that is located across Bayview from it.
A unique approach to the arrangement of balconies and balcony āwingsā in addition to an ombrĆ© type brick pattern that fades from pink to beige as it ascends, works to distinguish the proposed building from other buildings within the Canary District of the West Don Lands.
A total of 859 residential units are proposed, 333 ā almost 40% ā of which would be family-sized two- or three-bedroom units, including 45 two-storey townhouse units that would have sidewalk access from Bayview, Mill, or Tannery.
The proposed unit mix is 35 studios (4%), 491 one-bedrooms (57%), 213 two-bedrooms (25%), 33 two-bedroom townhouses (4%), 75 three-bedrooms (9%), and 12 three-bedroom townhouses (1%). The majority of units above (except on the third floor) will have balconies, many of which are designed with screens for weather-protection. A number of units on the third floor would have private terraces facing towards the northwest corner of the courtyard, situated above the townhouses.
In the centre of the site would be an interior courtyard which would be accessed from the two ground floor lobbies and would provide an amenity space for the residents of the building. Other building amenity spaces would total 4,959m² and be dispersed around the entire development, comprising 1,429m² of indoor amenity space along with 3,530m² of outdoor amenity space. Programming has not yet been determined.
Within two parking levels, a total of 279 parking spaces are proposed, including 157 resident spaces, and 122 visitor spaces which are to be shared with the commercial uses. A total of 898 bicycle spaces are proposed, including 806 resident spaces, 86 visitor spaces, and 6 retail spaces.
Existing transit routes within the vicinity of the site include three streetcar routes that run along King and Queen streets, as well as two bus routes, one travelling north-south, and the other travelling east-west.
There is also significant transit planned for the area, including the Cherry Street LRT Extension, which will connect with the Waterfront East LRT Extension, running from Union Station to the foot of Bay Street, and along Queens Quay East to the Distillery Loop. In the future, the LRT is planned to be extended south along Cherry Street over the Keating Channel to serve the westerly portion of the Port Lands. Also planned in the area is the Ontario Line, a 15.6 kilometre-long subway line running from the Ontario Science Centre in the northeast to Exhibition Place in the southwest via Downtown. A Corktown station is planned nearby the proposed development.
More information on the development will come soon, but in the meantime, you can learn more from our Database file for the project, linked below. If you’d like, you can join in on the conversation in the associated Project Forum thread, or leave a comment in the space provided on this page.
Source Urban Toronto. Click here to read a full story
A sprawling, two-phase industrial condo development is coming to Bramptonās Highway 410 corridor, and given the scarcity of available space in the GTA, the site should be well coveted.
Comprising approximately 750,000 sq. ft across five buildings ā including 106,000 and 317,000 in the first two buildings of phase 1 ā the Heart Lake Business Park will be well situated indeed, a major selling point. The site, which is a co-development between Fiera Real Estate and Berkshire Axis, has access to Highway 410, and ā should it become green lit ā the controversial Highway 413 is to be located about 10 km to the north, connecting it to the 427 as well as the eastern GTA.
According to Fraser Plant, Executive Vice President at Cushman & Wakefield, which has been responsible for finding Heart Lake Business Parkās tenants, the site is one of the last greenfield developments of such scale in the regional market.
āItās also situated in an area with a large labour force and itās a few minutes from Caledon in the heart of Brampton,ā Plant said. āBrampton has been a well-established industrial pocket for the last 15 or 20 years, and intensification along Queen Street definitely helps. This site could be used as last-mile hubs servicing a dense, urban, suburb with a large concentrated pool of residents.ā
āItās definitely one of the fastest growing areas residentially. Lots of big homebuilders have land in the area ā the Matamys, Greenparks, Country Homes ā and there are thousands of homes in the area,ā said Frank Tullio, Sales Representative with commercial brokerage Spear Real Estate. āThere will be a fantastic labour force here once it fills in, plus with the highway access you can draw upon people from Brampton, Caledon, York Region, who wonāt have trouble accessing this industrial area.ā
An auspicious future lies ahead, he added, given low vacancies throughout the GTA.
āNorth Peel is really on the rise, with a lot of development and industrial and residential pockets. It will be a very busy area within the next 10 years.ā
The units are described as industrial condos and come as small as 3,000-5,000 sq. ft or as large as 40,000-60,000 sq. ft. According to Cushman & Wakefield Executive Vice President Michael Yull, firms in the e-commerce field will drive tenancy, especially in the larger units, and the company has mandates to secure long-term leases typical of the industrial space.
āWere going to do longer leases of 10-15 years, depending on the type of use going into the building.ā
The first phase is slated for delivery during the first quarter of next year.
Source Storeys. Click here to read a full story
A year after COVID-19 vaccines were rolled out, Torontoās retail vacancy should continue tightening amid increasingly propitious market conditions this year, said a report from Jones Lang LaSalle (JLL).
Developers are emphasizing essential-oriented retail properties now, as well, after retail demand plummeted in the wake of the pandemic two years ago, causing retailers to pause expansion plans. It also didnāt help that COVID-induced supply chain bottlenecks caused construction costs to escalate. Amid federal and provincial government restrictions imposing capacity limits or outright lockdowns, most recently compounded by the Omicron wave, retail absorption is consequently lagging pre-pandemic levels.
JLL nevertheless anticipates that the retail sector will rebound through the remainder of the year, now that mandates have been lifted across Canada. Asking rents in Torontoās retail sector increased in Q1 from the fourth quarter of last year, partly as a result of fewer retail completions creating inventory pressure and there being more retailers looking to move into physical stores than move out, mirroring robust consumer demand in 2021, which retailers expect will continue through this year.
Retailers with outdoor access, and that are close to shoppersā homes, are seeing especially strong revenues. In the last 12 months, power centres, neighbourhood centres, and general retail were retailersā choice spaces. Moreover, shopping malls have also witnessed some stabilization in the past year, according to JLL, with vacancy bottoming out amid increased leasing activity. Retailers are also taking advantage of pandemic-induced vacancies in the sector.
Construction in the Toronto market still decelerated because material costs rose significantly. In fact, Toronto was one of the metropolitan regions most affected by construction costs escalating last year ā the construction price index for non-residential building increased by 15%. Materials werenāt the only expenses that increased in price: skilled labour shortages resulted in upward pressure on wages, JLL noted. Many retailers resultantly opted to stay put than incur higher fees moving into new spaces.
Retail sales in Toronto rebounded strongly in 2021, increasing by 4% over 2019. Not even Omicron could put a damper on retail revenues, either. However, Toronto trails other major Canadian markets to the extent that it was the countryās worst performer last year. Following government strictures that resulted in closing to the public, labour shortages and a sputtering supply chain are causes for concern in 2022.
According to a Bank of Canada survey, a third of Canadian firms said capacity constraints are stunting their sales targets, and now, because of the Russia-Ukraine war, exorbitant fuels costs have made transporting goods more expensive. Food sales in Ontario recovered in 2021 and that trend hasnāt dissipated this year, although they remain 16% below pre-pandemic levels, as a result of indoor dining capacity limits. Still, food services sales are expected to recover this year and peak in August.
But JLL says central provincesā major cities, including Toronto, lag both Atlantic and western cities when it comes to retail and recreational foot traffic. Still, increased traffic on Bloor Street has put so much upward pressure on rents that they are close to 2019 levels, albeit below $300 per sq. ft. JLL postulated that landlords will achieve pre-COVID rental rates within two years.
Source Storeys. Click here to read a full story
One of Canadaās most iconic apartment and mixed-use communities, the Cherryhill Village in London, Ont., has been sold in a record-setting $571-million transaction.
Ottawa-basedĀ Minto,Ā KingSett CapitalĀ and a private partner sold the community, which includes 12 concrete construction apartment towers, a shopping mall and office space, to TorontoāsĀ Park Property Management.Ā
āBased onĀ Altus GroupĀ sales records commencing in 1995, the sale of Cherryhill Village will be the largest reported single multiresidential asset transaction in Canada both in terms of number of suites (2,114) and dollar value,ā saidĀ TD SecuritiesĀ managing director David Bloomstone in an exchange of emails with RENX.
Bloomstone and the TD Securities team brokered the transaction on behalf of Minto, which had owned/managed the properties for over a decade.
The purchaser, Park Property Management, is a Canadian-based entity owned by the Otto family of Germany. Founded in the 1960s by Werner Otto, who died about a decade ago, the firm is still operated by family members.
Park Property Management has about 300 employees.
This is the second major transaction involving Otto family holdings in Canada in recent days. The familyās industrial division, Sagitta Development and Management, closed on the sale of a $461-million Greater Toronto Area industrial portfolio to two KingSett Capital funds on Friday.
āThatās a big acquisition by Canadian standards (Cherryhill). It doesnāt happen very often,ā said Park Properties president Gerd Wengler in an interview with RENX.
He said Sagitta is being wound down as a result of the industrial divestment and the business will now focus on Park Propertyās multiresidential portfolio in Canada. He noted that itās actually a return to the companyās roots.
āWerner Otto, the founder of the company, started buying real estate in Canada in the 1960s. First it was all residential rental buildings, but then they expanded into industrial. They developed and bought industrial buildings,ā Wengler explained.
āThe residential rental apartment part has grown much further and for at least 20 years we really havenāt bought any industrial.ā
Park Property Management now owns 10,141 apartment units in Canada and manages a total of 11,275 rental units.
Wengler said this portfolio is attractive for several reasons, including a potential future value-add on excess land at the 40-acre property.
āItās in pretty good shape, but since weāre long-time holders and a family business, we will make sure that everythingās in good shape and will stay that way for many decades to come,ā Wengler said. āThereās also an opportunity to develop and build even more apartments, which is something we will look into in the future.ā
Bloomstone said there is capacity to essentially double the amount of apartments in the community, with up to 2,050 new units in multi-phased developments.
The commercial aspects of the property are an add-on for Park Property. The shopping centre has 22 tenants and the office building is focused on health-related businesses. Together they comprise about 190,000 square feet of space.
āWhen we acquire apartment buildings there are sometimes small office or retail components that come with them, but theyāre nothing that weāre really interested in (buying as standalone assets),ā he explained.
Cherryhill Village has a history which stretches back almost 60 years.
āCherryhill Village is a landmark, master-planned residential community which has been a part of Londonās history since the 1960s,ā Bloomstone noted. āIt is a well-known and respected community both within London and Ontario.ā
Derek Lobo, the CEO ofĀ SVN Rock AdvisorsĀ in Burlington, said the community was built between 1965 and 1975 by European immigrants Sam Katz and Ewald Bierbaum.
His firm brokered the 2011 transaction to Minto (for $215 million, also a record for a single apartment property transaction at the time) and was an advisor to TD Securities for the latest sale.
āWe initially sold the property in 2011, and it was the largest single apartment transaction in Canada at the time,ā Lobo wrote in an email exchange. āItāll likely be the largest again this year.ā
Lobo believes Cherryhill Village remains the second-largest single apartment community in Canada.
āWhat makes Cherryhill unique (is) not just its size, but itās a naturally occurring retirement community,ā he added.
Such communities arenāt originally designed for seniors, but due to local conditions, the neighbourhood and amenities will attract these types of residents over a period of time.
Bloomstone said the timing for such a transaction in London is opportune.
āThe opportunity to acquire scale in a singular transaction that has both upside in rents and densification opportunities was attractive to a wide range of investors both public and private,ā Bloomstone wrote.
Long known as a city with a significant apartment market, London has plenty going for it, including a rising population and strong local economy.
Its population is expected to grow by almost 12 per cent during the next decade, which would push it to over 600,000 residents.
āGiven the low vacancy rates, growth of new industries such as agri-food, digital media and technology, along with the stability of the health and education sectors, London is well-positioned to continue to support strong rental dynamics including the construction of purpose-built rentals,ā Bloomstone wrote.
Source Real Estate News Exchange.Ā Click here to read a full story
KingSett CapitalĀ has beat out some hefty competition to close one of the most significant real estate deals in the GTA in recent memory.
KingSett has acquired 21 strategically located industrial properties from Sagitta Development & Management for $461M, which is believed to be the second largest deal in the local sectorās history. Seventeen of the properties are located in Mississauga and were so coveted that KingSett was bidding against heavy hitters, including REITs and institutional funds, but unlike its competition, it was able to tap different funds to source the purchase capital.
āWe can do a few things most others canāt do, if not anyone else can do, and that is having multiple funds participate in the same transaction. We can take a portfolio thatās quite disparate, buildings that are quite different from one another and donāt really share many characteristics, we can take that portfolio of disparate assets and marry them to various funds,ā said Rob Kumer, President and Chief Investment Officer of KingSett Capital.
āThe location is hyper-compelling. These are, for the most part, centre-ice Mississauga locations, but also the price is well below replacement cost. Theyāre just not building these buildings anymore. To buy land ā if you can find the land, which you canāt ā in these locations, youād be paying $4-5M an acre, which, at 40% coverage, gives you a land cost per buildable square foot of $250. To buy this land and recreate whatās there would be $400-450 per sq. ft. We bought the buildings for $330 per sq. ft.ā
The buildings are approximately 1.47M sq. ft and 99% leased, and while just over half of the tenants pay below-market rents, which create very tight cap rate conditions, the average lease term is below three years and will allow KingSett to capitalize on market rates fairly frequently. Industrial real estate in the GTA is arguably the hottest segment of Canadaās entire real estate market, with supply severely constricted and demand so strong that companies are advised to give themselvesĀ 18-month search buffers.
āIn a land-constrained market and inflationary environment where creation costs are accelerating, thatās a pretty compelling value proposition,ā Kumer said. āPart of the value proposition is buying things below replacement costs. A lot of the other buyers are focused on large bay distribution industrial, which have great operating fundamentals as well, but weāre focused on buying things below replacement cost in locations that are irreplaceable.ā
That construction costs are increasing across the board is ameliorating the values of existing assets because the economics of tearing them down and building brand new, in many cases, donāt make sense Kumer added.
In the GTA, non-residential construction development charges grew by 54% between 2018 and 2021, while the permitting and approvals processes are slow and therefore expensive. A Building Industry and Land Development Association benchmarking study found that official plan amendments in Toronto take an average of 32 months, while receiving site plan approvals takes 30 months, and rezoning 25 months.
Then, there are the land costs ā even in the GTAās remote reaches like Bradford, the approximate cost of an acre has swelled to $1.5M from $600,000 a few years ago. Diana Hoang, Founder and Managing Director ofĀ Spear Realty, says a lot of industrial landlords in the GTA realize theyāre bargaining from places of strength and are trying to take advantage of conditions.
āA lot of owners are taking closer looks at the value of their buildings because this is definitely a high point,ā she said. āTo date, groups are saying, āWow, this is the time to sell,ā and weāre seeing more product come on stream. More owners are definitely exploring the possibility now.ā
Source Storeys.Ā Click here to read a full story
From the metaverse to office occupancy, bricks-and-mortar shopping to the dramatic rise in quasi-retail fulfillment centres,Ā Avison YoungĀ chair and chief executive officer Mark Rose had a lot on his mind as he prepared for a presentation this week at theĀ World Economic ForumĀ in Switzerland.
Rose was among a group of international experts who spoke about theĀ rise of the stay-at-home economyĀ at the forum and shared some of his ideas with RENX.
Rose said office occupancy is between 30 and 50 per cent of where it was pre-pandemic, but noted that in years past when people were generally at the office five days a week, they were often only sitting at their desks 40 per cent of the time.
Today, he believes most office workers would prefer to be in the office from Tuesday to Thursday but work from home other days, which would significantly cut down on their commuting times.
However, he expects it will take another two years before thereās a firmer handle on office occupancies and the issues surrounding return-to-work. He believes there are benefits to employees interacting with their colleagues and superiors in an office environment.
āMore people will come back because thereās a little bit of fear of missing out, fear of not being promoted or fear of not hearing something that might help to develop them.ā
Rose thinks companies may still need as much office space as in the past, but that it will be utilized differently.
āIt means the office needs to be a bit more experiential and give people a reason to be there. But today, workers have the upper hand. Theyāre dictating their wants,ā he said.
āNow, I hope we donāt see this, but if it does change and if there are recessions and people need jobs, I think employers will probably make this part of their offers: folks are going to need to come to the office a bit more.ā
Itās acknowledged that fewer people going to offices has also negatively impacted surrounding retail businesses, due to lower foot traffic and a wider embrace of online shopping.
Rose said having fewer people on the streets has also led to concerns about safety and rising crime in some cities, particularly in the United States. Criminals may feel they can get away with more if there are fewer witnesses around.
āI think weāre starting to see most people in the office in Vancouver and I think theyāre starting to come back in Toronto, but until we get the safety of numbers in cities, it feels a little different,ā said Rose. āIt feels a little more unsafe.ā
Rose frequently travels as part of his job and said it has broken his heart to see homeless people lying in front of closed-up stores in places including San Francisco, Austin, Denver and New York City.
Heād like to see public-private partnerships created to deal with housing, livability, safety and security issues.
Rose said peers who declared the death of traditional retail early in the pandemic had it wrong, as people want to get out of their homes to shop and interact. Some data shows online shopping is decreasing in some markets and people are returning to malls, he said.
To illustrate this, Avison Youngās Retail Vitality Index for the week ending May 8 showed foot traffic in Canadian malls was up 102 per cent since Boxing Day in 2020.
Rose also believes that a distinction must be made between retail properties that act as showrooms and retail fulfillment centres.
āWe have never seen this level of explosion of retail real estate in the history of the world,ā said Rose. āIt just happens to be called industrial or fulfillment.
āDistribution retailers didnāt go away. Buying got bigger, warehousing and logistics got bigger. It didnāt get smaller and retailers are behind it. Itās not just Amazon.ā
Grocery-anchored retail also remains strong, according to Rose, as people want to look at and choose their produce and other items before buying it.
Rose believes the metaverse ā a virtual-reality space in which users can interact with a computer-generated environment and other users ā will play a key role in the evolution of retail.
āWeāre going to move from Oculus (virtual reality) glasses to holograms over the next three to 10 years,ā said Rose.
āYou walk into the metaverse store, take a box off the shelf where the shoes are and use the hologram to put them on your feet to see what they look like. And I can almost guarantee you that theyāre going to be able to give you the sensation of what youāre trying on.ā
Rose said the United Kingdom has mandated all properties be graded to rate their environmental performance. If the building doesnāt meet certain standards, in the future the owner wonāt be allowed to lease it.
He envisions similar policies being instituted in Canada, as tenants prioritize being in efficient, healthy and environmentally friendly buildings.
Some retail and office landlords have experienced hardships due to the pandemic as they were initially forced to close, or open with limitations, and rent collections were sometimes impacted.
Those who own older and less efficient buildings were often hit harder and now face significant choices.
āIf you had a C-class mall in a small city that is running off of fossil fuels, you had a problem in the first place,ā said Rose. āIt has nothing to do with the pandemic.ā
Rose said building owners who canāt afford, or arenāt interested in, upgrading or redeveloping such properties, should consider divesting to those that have the finances and ability to do it.
He also believes there should be more conversations involving governments and the private sector regarding infrastructure investment to help make buildings cleaner and more efficient.
Source Real Estate News Exchange.Ā Click here to read a full story