24 Nov

Industrial spaces are Vancouver’s most desired commercial assets

General

Posted by: Shahin Golestani

A new study by the Altus Group found that industrial real estate is the Vancouver market’s most prized investment asset, far outstripping other commercial property types.

The Vancouver Flash Report 2018 stated that in the past 8 quarters, nearly 5 million square feet of new industrial space has been injected to the market – and even this did not appear enough to compensate for the red-hot demand, as overall vacancy rate in this asset class went down to the 2% range as of the first half of this year.

Altus warned that while an additional 3.9 million sq. ft. of industrial space was under construction as of mid-2018, this would comprise less than a year’s worth of supply if the average absorption rate since 2015 is taken into account.

The trend is also expected to push the market’s net rental rates, already well above those in other major cities, even higher.

Read more: Industrial space is the next gold rush

Industrial transactions more than made up for the losses in the office and retail sectors during the first half of the year. The hotel segment, which exhibited an increase of $124 million in investment activity, also contributed to the overall health of Vancouver’s commercial market.

Earlier this year, an analysis by CBRE Group Inc. reported that Vancouver was the strongest industrial real estate market across the world.

In particular, warehouses have been cited by the study as the main factor in the exceptional performance that helped the market’s lease rates grow by 29% annually in Q1 2018 – significantly outpacing the worldwide average increase of 3% during that quarter.

“Industrial previously was almost like a forgotten asset class,” CBRE Vancouver vice president and sales manager Jason Kiselbach told Bloomberg. “But we haven’t even scratched the surface of the demand that’s going to continue to grow and put more pressure on the industrial market.”

“These rising lease rates really speak to the strength of the economy — the growth in population, consumer spending.”

 

by Ephraim Vecina 15 Nov 2018
Source: https://www.mortgagebrokernews.ca/news/commercial-mortgage/industrial-spaces-are-vancouvers-most-desired-commercial-assets-250711.aspx

 

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24 Nov

Two downtown Vancouver office buildings acquired for $57.5M

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Posted by: Shahin Golestani

Two Class A office properties in Gastown and Yaletown have been purchased by Toronto-based Allied Properties Real Estate Investment Trust

Tanya Commisso Western Investor

November 7, 2018
Two Class A office buildings in downtown Vancouver have been acquired by a Toronto-based real estate manager and developer for $57.5 million.
Allied Properties Real Estate Investment Trust has entered into an agreement to purchase 151 West Hastings in Gastown and 1220 Homer Street in Yaletown.
The West Hastings property includes 38,511 square feet of gross leasable area, currently leased to co-work company Spaces until 2033. The Homer Street property is comprised of 21,708 square feet, fully leased to Perkins + Will Canada Architects until 2023.
“We’re increasing our penetration in urban Vancouver just as [Allied] is transitioning to a primary Canadian office market,” said Michael Emory, president and CEO for Allied Real Estate.
Yaletown sale has already closed, while the Gastown sale is expected to close on November 30.

Source: https://www.westerninvestor.com/news/british-columbia/two-downtown-vancouver-office-buildings-acquired-for-57-5m-1.23490808

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24 Nov

Self-storage sector demand moving upmarket

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Posted by: Shahin Golestani

Lock-and-leave investment attracts bigger players and a push for high-end units

The Vaults in Calgary and soon in Kelowna: high-end storage features a clubhouse and units that start at $369,900, with enough room to stash your McLaren sports car | Vaults Development Corp.

It is no coincidence that two large self-storage facilities are close to Vancouver’s Olympic Village condominiums, where the demand for space is high and the homes are small.

The challenge, as in cities across Canada, is too much stuff and too little space.

The answer for a growing number of people is self-storage, and this has created one of the fastest-growing and diversifying subsectors of the commercial real estate market.

Self-storage in Canada is now an $840 million industry that experienced an annual growth rate of 7.3% from 2012 to 2017, according to independent research firm IBISWorld.

The potential is apparently enormous if the U.S. – the world leader in self-storage – is an indication.

“Despite recessions and demographics shifts, the self-storage sector has been beating all other major commercial property types with regards to earnings and stock performance,” noted U.S.-based Investor Management Services Ltd. in its 2018 outlook for the self-storage business in the U.S., where the sector posts US$38 billion in annual revenue and is growing by 3% a year.

Equate that to Canada and self-storage could expand into a $3 billion industry.

There are a number of trends – not all positive – that will affect the future self-storage business.

The positives include increased demand for storage by urbanites living in condominiums, a sector that now dominates residential real estate in most Canadian cities; the baby boom sector downsizing and putting possessions in storage; the rise of e-commerce and the resulting need for easily accessible storage facilities; storage demand from commercial firms; and the need for space for people to store boats, cars, motorcycles, snowmobiles and other toys.

The negatives include shrinking demand for storage due to technological advances, such as digital photography, digital files and digital books; smaller, cheaper electronics; and the trend toward minimalism and de-cluttering, which could reduce the storage needs for some consumers.

But, according to a recent Los Angeles Times study, the average North American house has about 300,000 items, and the children living in those homes have half the toys and books on the planet. De-cluttering, therefore, is perhaps more a dream than a trend.

Typical rent for a self-storage urban unit in Canada ranges from $1.75 to $2.50 per square foot, which is equal to a typical apartment rent in Burnaby. In core Vancouver neighbourhoods, storage rents can reach $3.75 per square foot, and average $2.95 per square foot. In smaller towns, rents are more likely to be around $1.40 per square foot, insiders said, but capitalization rates can top 6%, twice as high as Vancouver’s apartment rental sector.

There are approximately 1,800 self-storage companies in Canada, but bigger players are absorbing many traditional mom-and-pop operations. Toronto-based Storagevault Canada Inc. (TSX-V:SVI), which has a $935 million market cap and is the only Canadian storage company listed on the Toronto Stock Exchange, has spent a reported $800 million over the past two years buying up more than 100 of its competitors across Canada.

A potentially profitable direction toward higher-end storage is Calgary-based Vaults Development Corp., which is opening a second facility in Kelowna. Its flagship Calgary facility stores luxury autos, recreational vehicles, boats and other high-end toys.

“Our first units sold for $329,900 and are currently $369,900 and $379,900,” said Vaults spokesman James Murray. “We don’t rent space.”

The company’s largest Calgary unit is offered at $899,900. Common areas include an on-site clubhouse and a large wash bay. In Kelowna, Vaults is building a luxury storage facility with 19 units ranging from 1,677 square feet to more than 4,600. Prices start at $399,900, and Murray said pre-sales are now underway.  

Source: https://biv.com/article/2018/11/self-storage-sector-demand-moving-upmarket

 

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23 Nov

Canada’s commercial market promises an even stronger 2019

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Posted by: Shahin Golestani

By all current indications and trends, interest and investment volume in Canada’s commercial real estate market will enjoy a strong 2019, a new report from Morguard Corporation assured.

In its 2019 Canadian Economic Outlook and Market Fundamentals Report, Morguard stated that the commercial segment’s attractiveness to a wide range of investors will remain its key feature well into the next year.

“Over the past 18 months, investors placed capital into the market with confidence, resulting in record-high sales volume. The market shows no signs of slowing, as investors continue to show interest in core and core-plus quality properties with strong tenant profiles in Canada’s major urban centres – while site intensification and repositioning opportunities continue to shape the Canadian real estate landscape,” Morguard director of research Keith Reading said.

Among the main drivers of this strength would be the Canadian economy, the steady expansion of which will foster a healthy labor market and growing consumer spending.

“Sustained economic expansion over the next few years bodes well for the Canadian commercial real estate sector as a service provider to the economy. Canadian commercial property sales activity will remain robust over the near term, against a backdrop of positive overall sector performance,” Morguard explained in its report brief.

Read more: More commercial opportunities coming with other pot products

Demand will continue to outpace supply in the top-performing office and industrial sectors.

“For the office asset class, the mature phase of the cycle was extended, resulting in a record high pace of investment during much of 2018. Industrial property investment trends were also generally bullish, as the asset class placed first in terms of market performance during 2018.”

Capital flow into the multi-suite residential segment, which reached new heights this year, will remain healthy in 2019.

“The national vacancy rate is expected to hold at or near the cycle low, resulting in modest upward pressure on monthly rent averages. Demographic shifts, housing conditions and migration patterns will continue to boost rental demand, while low levels of new construction activity will provide little relief from the shortage of vacant units available for prospective renters.”

Retail spaces, which remain among the heaviest hitters in terms of consistent performance, will also enjoy a good 2019 despite mixed leasing volume and greater industry risks.

“While retail sales growth continues to moderate, properties with development or repositioning potential are expected to generate strong interest among the investment community looking ahead to 2019.”

Construction is due to begin by the end of 2019.

Article by Ephraim Vecina 22 Nov 2018
Source: https://www.mortgagebrokernews.ca/news/commercial-mortgage/canadas-commercial-market-promises-an-even-stronger-2019-250988.aspx

Thinking about buying a business, expanding your existing business, buying a land or property acquisition? Contact me and get a second opinion on your financing options for BUSINESS ACQUISITION & COMMERCIAL LOANS | EQUIPMENT LEASING | COMMERCIAL LINE OF CREDIT | CONSTRUCTION & LAND ACQUISITION, INFRASTRUCTURE & INDUSTRIAL LOANS |

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We help individuals and companies with borrowing needs between $500,000 and $200 million. We specialize in: Term loans, Operating loans, Construction loans, Lease financing.

From $500,000 to over $200 Million COMMERCIAL LOANS, FINANCE & REFINANCE for Major INDUSTRIES:
Construction | Commercial Real Estate | Infrastructure | Mining & Metals | Petroleum, Oil & Energy | Cannabis | Pharmaceutical | Telecommunication | Hospitality, Hotel, Motel, RV Park & Camping Sites) | Hospital & Health Care | Farming & Agriculture | Civil Engineering | Mechanical or Industrial Engineering | Electrical Power | Education | Transportation, Trucking, Railroad | Warehousing , and more.

COMMERCIAL LOANS
New Purchase, Merger & Acquisition | Refinancing & New Financing | Equipment Leasing & Finance |
Commercial Buildings | Hotels and Motels | Offices and Medical Buildings
Plazas and Shopping Centers | Multi-Family Residential | Subdivision Servicing |
Industrial Buildings | Condominium Conversion Projects | New Residential
Condominium Construction Builder Inventory loans |Seniors Housing | Long Term Care Facilities | Development Lands | Apartment Buildings

CONSTRUCTION, DEVELOPMENT & LAND LOANS
Large Construction, Development & Land Loans |
Condominium Construction Loans for low, mid and high-rise |
Single Family and Townhome Projects Loans |
Construction of Single or Multi-Tenant, Commercial Buildings such as Retail, Industrial, Office, Storage, Hotel,Multi Unit Residential |
Commercial Mortgages on Investment Properties |
Subdivision Servicing |
Condominium Conversion Projects |
Condominium Construction Builder Inventory loans |
Development Lands |

RESIDENTIAL MORTGAGES & REFINANCE
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Refinance
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Mortgage for New Canadian Immigrants (Newcomers) or Non-Residents
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