Canadian Real Estate Forum Magazine - Fall Issue 2013

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FALL 2013


Building New Space

OTTAWA: Densification & New Retail to Enhance Already Great Quality of Life

CALGARY: Lots of Musical Chairs Amongst Occupiers in Years to Come


Uptown – Victoria, BC LEED Gold Neighbourhood | Retail | 2I¿ FH Client Development Project

Performance Court – Ottawa, ON /((' *ROG &ODVV $ 2I¿ FH Joint Venture Development Project

North America, Office, Industrial, Retail, and Residential

Investment Management, Asset Management, Property Management, Ownership

Alta at K Station – Chicago, IL LEED Gold Multi-Unit Residential Morguard Acquisition

Performance, Growth, Governance, Risk Management, Sustainability, Community

V I S IT M O RG UA R D.C O M Mississauga 905-281-3800 | Montreal 450-446-4004 | Ottawa 613-237-6373 | Winnipeg 204-632-9500 Calgary 403-266-1695 | Edmonton 780-421-8000 | Vancouver 604-681-9474 | Victoria 250-383-8093 New York 212-332-2727 | New Orleans 504-904-8500 | Pompano Beach 754-220-7171 | Mobile 251-341-4500


THE REAL ESTATE FORUM TEAM: Hailey Chan Dennis Chui Emma Cimolini Maria Encarnacion Christina Marie Jager Katharine James Xiao Shu Lan Erin Osborne Jessica Petrucci Jean Pickering Katherine Radziszewski Frank Scalisi Sarah Segal Petra Srdic Gillian Wright




Informa Canada Inc. George Przybylowski Vice President Mark Stephenson Vice President About Informa BRINGING KNOWLEDGE TO LIFE Businesses, professionals and academics worldwide turn to Informa for unparalleled knowledge, up-tothe minute information and highly specialist skills and services. Our ability to deliver high quality knowledge and services through multiple channels, in dynamic and rapidly changing environments, makes our offer unique and extremely valuable to individuals and organisations. REAL ESTATE FORUM MAGAZINE The magazine is published three times a year to coincide with the following conferences: SPRING Edmonton/Montreal/Vancouver FALL Calgary/Ottawa WINTER Toronto EDITOR Michel Rémy Michel Rémy is the editor of, a commercial real estate publication that specializes in timely market information, news and networking. ASSOCIATE EDITOR Jean Pickering Informa Canada DESIGN ©2013 Informa Canada Inc. Disclaimer: The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of Informa Canada.

28 4 At a Different Pace but Growth is Growth

54 Marking 20 Years of REITs in Canada

6 The Altus Report – Retaining Tenants: Always Important, Now Critical

56 Wide Range of REIT Options

50 Is the tide turning for commercial real estate in Canada?

57 Stable Underpinnings

57 Just What Is A REIT, Anyway? 58 20 Years of REIT Milestones

THANK YOU to all our Sponsors and Advertisers Reach a Targeted National Audience. For more information on how you can advertise in Real Estate Forum Magazine, contact: Frank Scalisi at or 416-512-3815 A DV E RT I S E R

TO ADVERTISE, CONTACT Frank Scalisi Director of Sponsorship and Advertising Sales Phone: 416-512-3815 Email: See our ad on page 55 CONFERENCE INFORMATION For more information on Informa Canada Real Estate Conferences, visit the website at

PA G E #

Aberdeen Asset Management Inc. 21 Arcturus Realty Corporation 29 ATB Corporate Financial 37 BDO Canada LLP 25 Bentall Kennedy 9 Blackwood Partners 7 Broccolini Construction Inc. 23 Canadian Urban Limited 52, 60 (OBC) CANDEREL 11


PA G E #

CCIM Institute 43 Colliers International 35 Cushman & Wakefield 51 DTZ, a UGL company 17 FCT Commercial Services 26 First National Financial LP 59 (IBC) Harbour Mortgage Corp. 45 Informa Canada 48, 49, 53, 55 Jones Lang LaSalle 33


PA G E #

KingSett Capital 39 Miller Thomson LLP 47 Morguard 2 (IFC) Ottawa Real Estate Board 27 Romspen Investment Corporation 13 Standard Life 41 TREZ Capital 19 Yardi Systems Inc 5



At a Different Pace but Growth is Growth As the nation’s capital, Ottawa has long held a prominent position in the country’s real estate sector, and, to the west, the economic engine that is Calgary continues to forge its major-player path.


t’s no wonder that these eastern and the western cities hold the nation’s hopes for economic recovery and insights into where the country should grow and go. We’ll examine Ottawa’s outlook, relative to other Canadian cities, including Calgary, as well as the economic impact of immigrant migration and the key drivers to Ottawa’s growth. But we won’t stop there. As a major economic engine, Calgary is home to some of the greatest determiners in the real estate sector, but even here, emerging market uncertainty has many scratching their heads. Whether it is the uncertain pipeline plans or the hydrocarbon market, this Western frontier city has many factors to consider in the year ahead, including strategies for mixeduse, sustainable, high-density communities. When considering indicators in both markets, a key element of debate will be population growth and the everychanging governmental policies and politics that affect them. In Ottawa, the apartment market and whether the short- and medium-term outlook for multi-unit residential


Canadian Real Estate Forum / FALL 2013

sector holds, as well as how to best market the aging office building inventory that this city has in abundance will be discussed. While in Calgary, the continuing saga of downtown vs. Beltline vs. suburb office properties is played out in the development industry. Throw major transportation expansions into the mix, and the growth factor gets even more interesting! Speakers will touch on the changing retail landscape, as well as the projected impacts of credit markets on private equity funds, REITs and private investors. Our team at Informa Canada is proud bring together key thought leaders to discuss pertinent real estate challenges and solutions in our great cities. Together they will share their thoughts and help you on your own journey as we head into 2014.

George Przybylowski

Mark Stephenson

Vice President Informa Canada

Vice President Informa Canada

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RETAINING TENANTS: Always Important, Now Critical 2

By Sandy McNair

As a wave of new office buildings are completed over the next few years tenants in Calgary, Ottawa and elsewhere will have more leasing options and a much wider variety of locations, building designs, profiles and managers to choose from. For everyone in Calgary’s, Vancouver’s and Ottawa’s Commercial Real Estate Industry success will require everyone on their teams being at the very top of their game.


New Supply accelerates leasing activity and generates pressure on the existing inventory to replace (backfill) those tenants who have chosen to move to the new buildings. Depending upon the specific dynamics of each market and node the pressure on pricing and leasing can become intense.


New Supply Spikes Put Pressure on Existing Office Buildings Expressed as a percentage of existing inventories Calgary, Vancouver and Ottawa have the highest level of office space under construction with Toronto, Montreal and Edmonton trailing as confirmed by the chart below.

% of Total Existing Office Inventory Vancouver Edmonton Calgary Under Construction 7.9% 1.1% 11.9%

Toronto 4.6%

© Altus InSite, a Division of Altus Group Limited

Left: The three largest towers under construction in Greater Ottawa Area. 1: 22 Eddy Street, Gatineau, Q4 2013 – 477,406 sq. ft. 2: 455 de la Carriere, Gatineau, Q4 2013 – 350,936 sq. ft. 3: 90 Elgin Street, Ottawa, Q4 2014 – 585,000 sq. ft.


Canadian Real Estate Forum / FALL 2013

Ottawa 5.7%

Montreal 2.9%


If there had been a new supply drought in Calgary, Vancouver and Ottawa the current spike in new supply may be viewed as a catch up response to pent up demand and that may be the case in downtown Vancouver, but when looked at on a citywide level, there has been significant growth in office inventory since 2000 in all three of these markets as confirmed by the chart below.

% of Total Existing Office Inventory Pre 1960 1960 thru 1999 Since 2000

Vancouver 16.2% 61.9% 21.9%

Edmonton 9.8% 78.4% 11.8%

Calgary 3.1% 66.3% 30.6%

Toronto 13.0% 71.0% 16.0%

Ottawa 3.1% 77.3% 19.6%

Montreal 18.7% 68.0% 13.3%

© Altus InSite, a Division of Altus Group Limited



To anticipate what will happen in Ottawa one must first determine how successfully and quickly the Federal Government (PWGSC) will be in achieving their stated goals of putting more people in less but higher quality space. This shift in demand is being twinned with a material amount of new supply in Gatineau, in Downtown and elsewhere. The timing and magnitude of the backfill associated with populating the former Nortel Campus is yet another key variable. The net outcome may be painful for some office buildings. If we dive deeper into the Calgary Office Market there are currently under construction 25 office buildings containing 7.47 million square feet of office space. Even though 59.6% of that new supply has been pre-leased there is significant pressure on the existing office inventory due to disclosed and undisclosed backfill pressure. Offsetting this pressure are the facts that it will take several years to complete the new supply and a positive outlook for economic activity, energy prices and demand, growth in population and office jobs may all result in incremental demand for space. However, increasing the downward pressure on rents on the existing buildings are factors including tenants’ increased density (the use of less space to accommodate more workers), a soft, unclear or even flat outlook for energy demand and pricing, a more stratified and less homogenous view of the existing office inventory based upon image, age, commute times, tenant-specific quality of fit with each of their best leasing options. When leasing velocity is low the backfill is typically an issue for a small number of buildings and their owners, managers and leasing teams. If a market does not rebound promptly, then the pain becomes more distributed across a larger number of existing buildings. This is especially true as some tenants are induced by those buildings experiencing the most pain to move out of their existing space. The best building managers and their leasing teams achieve superior results relative to their peers throughout the business cycle. As the marketplace experiences some or all of the following; soft demand, increased vacancy, declining leasing velocity, increased supply of new and backfill space from landlords and sub-landlords and reduced rent expectations, not all office buildings and portfolios will experience the same success or pain. Left: The three largest towers under construction in Calgary. 1: 225 6th Avenue SW, Calgary, Q4 2017 – 1,399,600 sq. ft. 2: 300 3rd Avenue SW, Calgary, Q2 2015 – 810,987 sq. ft. 3: 620 3rd Avenue SW, Calgary, Q1 2017 – 588,324 sq. ft.


Canadian Real Estate Forum / FALL 2013

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The best building managers and their leasing teams achieve superior results relative to their peers throughout the business cycle. As the marketplace experiences some or all of the following; soft demand, increased vacancy, declining leasing velocity, increased supply of new and backfill space from landlords and sub-landlords and reduced rent expectations, not all office buildings and portfolios will experience the same success or pain. Sandy McNair, Altus InSite

What is the roadmap to superior relative performance? During a market peak it is easy to be lulled into complacency and actively listen to your tenants less often or with less interest and passion for action. If you haven’t already, now is the time to step up your listening, communication and actions plans. It is clear that tenant retention, referral and recommendation of your buildings and your management services are the key to superior performance. Do you have formal processes to identify and communicate your strengths as well as recognize and address your weaknesses, as perceived by your tenants? What combination of improvements, if any, to your communication channels, your service offerings and your capital plans will have optimum impact on tenant retention while achieving superior rental rates? To do this well, requires much more than a periodic lunch or a review of the dispatch log as a lease expiry approaches. In 2014 and for the next several years the key to success will be retaining and stealing tenants. It would be unwise and risky to wait for incremental demand to fill or keep your building(s) full. The winners will be those teams and firms that are proactively listening to their tenants and are able to identify, communicate and implement the optimum bundle of services and physical experience to retain their current tenants and recruit new ones at desirable relative rents.

A Decade of Progress Ten years ago fully one third of all office building occupants in Ottawa, Calgary and across Canada did not report their building and property management related concerns or problems to anyone. Today that figure has been cut in half. Significantly, awareness, use, satisfaction and referral of centralized customer service and dispatch functions have climbed across the industry. However the gains are not evenly shared across the industry – the design and implementation of these programs varies widely from one manager to another with the result that some managers have experienced huge gains compared to others and the industry benchmarks.


Canadian Real Estate Forum / FALL 2013

Communication Channels is the first of a family of performance metrics that address Tenant Retention. The full family includes a series of performance measurement and industry benchmarks focused on each of: • Communication Channels, • Issue Resolution Rates, • Overall Satisfaction, Momentum, • Refer and Recommend this Building and • Refer and Recommend this Manager – that is, interest in moving to another building managed by the same management company. The result is that building owners and building managers now have the ability to measure the intention of tenants to stay and their willingness to pay a premium to do so. Also identified are the key property-specific actions needed to increase the tenants’ intention to say and willingness to pay a premium.

Performance Measurement and Industry Benchmarks The Industry Benchmarks vary from city to city and from year to year based upon market dynamics – the office market in Vancouver is very different from Calgary’s or Ottawa’s in terms of tenant mix, service requirements, manager capabilities, leasing conditions and so on, resulting in very different expectations and levels of perceived performance. Very rare is the firm or team that has the people and money to do everything they can think of, let alone at a very high level of performance. So the key has been and will continue to be focus. Focusing your communication initiatives, service refinements and capital budgets on the two or three key items and programs where they will have optimum impact on your tenants’ intention to stay and pay a premium to do so, is essential to success. As you enter the 2014 and 2015 planning cycles for your properties and portfolios, choose your Tenant Retention Initiatives well. For some, that may mean boosting your performance measurement and benchmarking capabilities. ■ Sandy McNair is the President of Altus InSite, a division of Altus Group. Since 1997 Altus InSite has conducted more than 1.7 million tenant satisfaction surveys for many of Canada’s leading office building owners and managers.


Ottawa Real Estate Forum T H A N K YO U TO O U R S P O N S O R S

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Canadian Real Estate Forum / FALL 2013

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Pending balanced budget spells opportunity for Ottawa “The shovels are in the ground,” enthused Ottawa Real Estate Forum chairman Nathan Smith. “These are certainly exciting times in the National Capital.”


Canadian Real Estate Forum / FALL 2013


he city is coming to the close of more than two-andhalf years of federal austerity at the same time as it embarks on a $2.1 billion light rail project,” said Cushman & Wakefield’s senior vice president, capital markets. “There’s already a buzz in downtown – as well as some traffic jams.” Smith observed that the downtown downturn to date, has not been as dire as forecast. “Our small industrial market remains Canada’s leader in vacancy and net rental rates, and we expect continued growth in tech as well as in one of North America’s top retail real estate markets,” Smith added. “The federal government eliminated 15,000 jobs, which had a direct effect on vacancies,” he said. “With Finance Minister Flaherty’s commitment to balance the budget by 2015 - 2016, those cuts will certainly come to an end.”

“Many investors have been in the Ottawa market for quite some time, are familiar with federal influence on market dynamics, and are already looking for opportunities as we move toward the end of the cutback process.” Nathan Smith, Cushman & Wakefield, Ottawa “Overall vacancy has edged up a bit in all markets,” Smith reported, “and has certainly moved away from the alltime lows that we experienced during the past few years.” “Many investors have been in the Ottawa market for quite some time, are familiar with federal influence on market dynamics, and are already looking for opportunities as we move toward the end of the cutback process.” Meantime, private developers will continue to respond to the federal government’s needs. “The next big project will be some form of redevelopment of Esplanade Laurier, once its tenants move into 90 Elgin,” he predicted. More opportunities, Smith says, are just over the horizon. “With the conclusion of federal government downsizing, there will likely be occasion for large developers and investors to help out, early on,” he said, “with opportunities anticipated at Tremblay Road and Tunney’s Pasture.” Robert Frank

Canadian Real Estate Forum / FALL 2013



An Opportunity to Renew the Office Stock

Bernie Myers sees the need to upgrade and renovate buildings in Ottawa’s office market as an opportunity.


he office market is in great shape. It’s been at low, single-digit vacancy for years,” says the vice president of Morguard Developments. “What all buildings experience over time is the need to upgrade; you can’t just sit on a building for 30 years and not expect to have to make it more current for the market. It’s a period of change that could affect the overall investment for a year or two but over the long haul, it’s a natural course for all real estate.” Morguard is constructing a 350,000 sq. ft., A-class building to LEED gold standards, which is already 60% leased. So far, none of the tenants are related to government. “It will be like nothing Ottawa has seen before – the most efficient office building in the city. That in our mind will give us a competitive advantage in that the operating costs will be lower than any building in its class,” says Myers. “We’re providing what the market needs. Some tenants may have been in a space too long, where the renovation need is so great, it’s easier just to move. As soon as you make that decision, you look for the latest and greatest, as far as building technology, heating, ventilation, and air conditioning – all of which add to operating costs and employee comfort. They’re looking for a great space that works for people, and being able to provide that with the latest technology puts us ahead.” Barbara Balfour


Building a Case for Strong Organic Growth in Ottawa Over the next nine months, Ottawa City Councillor Peter Hume plans to lead a discussion about how his city can plan for growth and expand its economic base beyond Federal Government jobs.


e can no longer be complacent about the employment base that we have in the case of the federal government, which consumes the vast majority of our office space,” says Hume, who chairs Ottawa’s Planning Committee. “It is the largest employer in our city and the biggest driver of our economy. We will always have that, but what can we do to strengthen that economic pillar? We’ve got to bring more investment to Ottawa.


Canadian Real Estate Forum / FALL 2013

“The federal government will always be here, but what can we do to strengthen that economic pillar? We’ve got to bring more investment to Ottawa’’ Peter Hume, Ottawa City Councillor We need to reach out to others and say we’re trying to create opportunity here.” Hume believes that the city, communities and industry all have a role to play for Ottawa to become the thriving place he wants it to be. For him, the city’s role is four-fold: it has to invest in promotion to attract migration, provide certainty for citizens so they know what to expect, ease the regulatory process for industry and housing developers, and transform the transportation system from a busbased network to a rail-based one. “Our official plan calls for a balance of jobs and housing,” he says. “It represents for residents the opportunity to determine their quality of life. If you want to work downtown, you can do that, but you also have the option of working where you live.” Tracey Arial

Source: Urban Strategies


Exporting Knowledge is Growth for Ottawa Of the three ways to create jobs and wealth in a community, Bruce Lazenby is pursuing the one with the most promise. In Ottawa, that means looking at ways to export knowledge-based business. GEORGE DARK

Better to plan for the inevitable Death, taxes – and densification: With the population of most major metropoli inexorably increasing, George Dark says that you can’t fight demography.


anada’s cities need to stop asking what they are going to do about it and start asking how to best manage the growth as it comes along,” declared the urban strategist, who has provided strategic direction for many of Ottawa’s major urbanization projects. The longstanding model of bringing people from the suburbs into the city has run its course. “OC Transpo was long the model of how to do it,” Dark said. “Now a lot of light rail transit money will be invested more centrally, between Blair and Tunney’s Pasture. That has forced the city to wrap its mind around how to intensify around the stations in that “Canada’s cities need corridor.” “Will it increase the complexity of to stop asking what the city?” he asked rhetorically. they are going to do “Definitely. But the city needs to get on with the many things that are about it and start needed to make it successful, because asking how to best parks and infrastructure take a long time to implement.” manage the growth Dark contrasted Toronto, which as it comes along.” resisted grappling with how to deal with growth that happened anyway George Dark and found itself in gridlock. “Streetcars and subways were jammed, parks and amenities were full to overflowing and once-redundant schools slated for closure are now full of children,” he reported. “Toronto would have done better to focus on how to respond than to interminably question whether the inevitable would happen.” “It’s tough in any city to reconcile existing and prospective residents’ needs,” Dark recognized. “These become complex discussions, weighing existing values against increased population density. But so many people want to move downtown that you have to foster the dialogue, to build bridges between them.” “In that sense, Ottawa doesn’t have any unique issues that aren’t being experienced elsewhere,” he concluded. Robert Frank


Canadian Real Estate Forum / FALL 2013


t’s the only part of our economy we can massively grow to create more jobs so we can create more demand for housing,” explains the CEO of Invest Ottawa. While other methods involve transactions between buyers and sellers who live in the same area or buyers and tourists, these methods are harder to grow, says Lazenby, “unless you grow the total population.” Lazenby is focused on targeting “We’re the least China’s markets, foreign investment, and the six sectors believed to have expensive major the most potential: technology, life city in Canada to sciences, film, television and digital establish a business.” media, wireless, defensive security, and autonics. Bruce Lazenby, Invest Ottawa is also unveiling an Invest Ottawa ambassador program that highlights Ottawa’s uniqueness in the sector. “We’re the least expensive major city in Canada to establish a business,” says Lazenby. “There are more scientists and engineers here than in any city in North America except San Jose. “We’ve got the offices of 83 of the most important Fortune 500 companies here, and almost all are hiring. And the Ottawa companies in our portfolio have raised over $50 million in financing the first nine months of the year, which is twice as much as raised previously in the whole year.” As Ottawa grows, demand for other businesses and the real estate to house them will follow along, says Lazenby. “We’re very much focused on that export sector because we know that’s the best way to grow the economy.”

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Ottawa Apartment Market Temporarily Stalled Despite too many buyers, not enough product and little turnover, Ottawa is an important market to stay in over the long haul, says Alfred Hendry, CEO of Homestead Land Holdings Limited


The multi-res sector has attracted a glut of buyers looking for quality product in Ottawa, says Hendry. “Anything of good quality is quite quickly gone and at pricing that’s pretty rich at the end of the day.” He doesn’t expect the situation to continue long-term. “Because interest rates are so low and people are still nervous about other areas of the market, they’re keeping their money in multi-res because it is quite stable,” he sees. As the economy improves, “they will start to wonder if they can make a better return and they’ll start to take their money out of the

As investors pull their money from the sector... ...a traditional correlation between bond and capitalization rates will reappear. Alfred Hendry, Homestead Land Holdings Limited multi-res sector and place it elsewhere.” As investors pull their money from the sector, Hendry also believes that a traditional correlation between bond

and capitalization rates will reappear. “When financing rates go up, typically cap rates go up and when financing rates go down, typically cap rates go down. There’s a lag. There are extraneous factors right now that are causing the lag to take longer than we would expect.” Despite few trades in the Ottawa market, Hendry says he’s keeping an eye out for high-end product in class A locations. “We will selectively buy whenever assets do come to the market, but we want to be sure that we’re focussing on the right locations.” Tracey Arial


In a Class of it’s Own Of all the qualities that set Ottawa apart from other cities, it’s the consistency factor that makes it most attractive to businesses.


ttawa has a very conservative population “However, we’re in with solid personal income,” says Blair for a potential McCreadie, head of Canadian real estate at Standard Life Investments. “That’s a real advantage and downturn because businesses can spin off that. of government “However, we’re in for a potential downturn because of government downsizing. Ottawa’s core is definitely going to downsizing. change.” Ottawa’s core is McCreadie attributes this to Ottawa having always been a demand market, at a time when demand is waning. definitely going to Traditional downtown office dwellers are now vacating older change.” buildings for more efficient spaces with reduced leasing costs. Because modern spaces are in limited supply, Blair McCreadie, Standard McCreadie believes they are insulated from risk in the short Life Investments to medium term.


Canadian Real Estate Forum / FALL 2013

“We’re an institutional landlord, and continuing to provide good quality reliable space with efficient service potentially puts us ahead of the private guys. We’re not afraid to spend capital on our buildings to make them more modern, which result in lower utility and occupancy costs.” Real estate is still a very desirable asset class, he says. “We had been in a long period of cap rate compression, interest rates had been falling and now we’ve seen a 100 basis points increase in 10-year Canada bonds. That means we’ll see upward pressure on cap rates. “Buyers that dominated the sector in the first half of the year were REITS, which have disappeared from the marketplace for the time being. However, there’s a large pool of capital behind them, including groups like ourselves.” Barbara Balfour

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CMLS third annual Canadian commercial mortgage market survey shows strong liquidity, the re-emergence of commercial mortgage-backed securities and a run-up in Government of Canada Bond yields, but borrowing costs are now rising. STEVE McEWEN

Costs Going Up on Commercial Mortgages


MLS defines the size of the Canadian mortgage market at about 175 billion – that would be the sum of all outstanding commercial financing,” says Steve McEwen, an Ottawa-based vice-president of the company. “Last year was a very big year. It was probably about 35 billion in new origination which was up from the previous year, so liquidity is strong. There’s a lot of appetite for land. Mortgages are sexy again. There’s no issue with the supply of money. That’s an important message to get across.” McEwen says that commercial mortgage-backed securities are becoming more popular in Canada. He expects that the market will see about a billion four in securitized loans this year,

a big increase from 500 million last year. The Federal Reserve’s announcement to end quantitative easing last spring also resulted in the increased popularity of Government of Canada bonds. Higher bond yields haven’t translated into upward pressure on cap rates yet, but McEwen believes that’s coming. Prices may also recalibrate to match higher yields. “Borrowing costs are increasing and they’re increasing fairly substantially,” says McEwen. “I think we’ve traded through the bottom and we’re finally starting to move back up. The ones who have been saying over the last five years that rates are going to go up are finally right.” Tracey Arial


Retail in the Capital: Ottawa’s Latest Nothing illustrates a city’s economic growth quite like construction sites in major shopping districts. Ottawa retail is under some exciting transformations. Here’s a snapshot of what’s happening in the city as described by Lawrence Hildebrand, Principal, Northwest Atlantic (Canada) Inc. 22

Canadian Real Estate Forum / FALL 2013


ixed-use development is big in Toronto and is happening in Ottawa as well. Multilevel retail is gaining in popularity, and so is the podium concept whereby retail establishments are located at the base of a high-rise condo tower. “Retailers are finding that great success comes when they locate in areas where people live and work,” Hildebrand says. Outlet centres, too, look promising. A new outlet mall is coming to Ottawa’s West End in 2014, in Kanata. “I think it will be a very successful project,” Hildebrand says. “Outlet is a part of the retail industry that hasn’t done very well in Canada, but it’s now really starting to take hold.” Whether the

concept will create a traffic problem remains to be seen – even in Toronto where a new outlet mall is thriving, it’s too soon to tell – but he believes Ottawa’s infrastructure will be able to handle any extra traffic the new centre generates. A few Ottawa malls are undergoing major expansions, including Rideau Centre. Can the city accommodate all of this extra real square footage? Hildebrand sees no reason for it not to. “Ottawa has always had a very strong retail market from a consumer perspective, and so much security in the labour force, that I believe these additions will be welcome by consumers and will perform very well.” Michelle Morra-Carlisle


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Getz points out is exciting for The Meadowlands Mall project which his firm manages and the other property Owners in similar circumstances. Getz is equally interested in the Tangers project. He’s heard that the one in Halton just West of Toronto has already led to traffic jams on the 401. “If this one also attracts that kind of volume, there has to be in part a redistribution of sales from other areas, the question is from where?” Ottawa currently has approximately 24 sq. ft. of retail space per person which is similar to the U.S. but about 50% higher than the Canadian average. With one of the best demographic profiles in the Country this makes sense but also places the market at the top end of the inventory spectrum. The three major enclosed malls – Bayshore, Rideau Centre and St. Laurent – also have expansions underway


Major Ottawa Changes Underway With Ottawa’s retail sector continuing to grow rapidly, industry veteran Richard Getz ponders potential changes in shopping patterns, increased traffic to new areas and the continued consolidation of real estate Ownership now including two retail giants!

“Ottawa currently has approximately 24 sq. ft. of retail space per person which is similar to the U.S. but about 50% higher than the Canadian average.” Richard Getz, Colonnade Development


enewal fever has hit every neighbourhood in Ottawa. It will begin with the new Sobeys urban grocery store on Metcalfe, the first such project in Ottawa in decades and continues with Target, the Tangers Outlet Mall, Whole Foods, Sporting Life, H&M, Victoria’s Secret, Crate & Barrel, and Williams-Sonoma, all of whom and more plan moves into the market. Target should technically more than double Zellers sales output and traffic from the same space which


Ottawa Among Top Five Markets in Canada KingSett’s senior partner responsible for real estate investment across Canada says that Ottawa doesn’t need to do anything to attract investors. It is already among the top Canadian real estate investment markets. 24

Canadian Real Estate Forum / FALL 2013

or planned for many of the aforementioned Tenants. Whole Foods and Sporting Life will anchor the Lansdowne Redevelopment. The main REIT/Fund holders already control the majority of Retail space, now Choice REIT was formed with 35 million sq. ft. of space equalling $7 billion in assets with plenty of development land. Canadian Tire is next. What will this mean for existing developers both large and small? All good questions in a rapidly growing and changing market!


e would be happy to invest in any of the apartment, industrial, office or retail assets in Ottawa,” says Joe Mazzocco. “Industrial is not a very big universe in Ottawa, so it’s probably not one that we would likely find too many opportunities in, but in office, retail or apartment, there are lots of opportunities and I think that we can find some to invest in.” In the coming year, he expects retail and institutional investing in Ottawa and across the country to continue growing and he agrees with the general consensus that interest rates will go up over time, even if they drop slightly and bounce around a bit in the short term. Ottawa’s attractive points include the fact that it’s a government town. Mazzocco says that having a strong tenant driving the office market provides stability over time. The importance of the market has led KingSett to place most of its current Ottawa assets within its core fund, which means they won’t be sold. “We do have a few assets left in Ottawa in our value add fund, in which we are program buyers and sellers; so we will be selling them over time, but we’d love to buy more.” Tracey Arial

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fter thousands of government layoffs in a city heavily reliant on the sector, Ottawa’s economy has slowed, creating a mood best described as somber. But thanks to its superior quality of life and highly educated workforce, Greg Rogers has no doubt Ottawa will bounce back soon. “There are two big challenges in the Ottawa market,” says the executive vice president of Minto Developments Inc. “One is the fear factor injected into the market as a result of layoffs, which has impacted house sales. “The second challenge is its lack of diversity; it has not done as good a job as it could have in attracting other industries. “But we also have an opportunity to leverage what we have, which is a population ready to serve a number of other industries, whether it’s tech or something else.”

“The redevelopment of Lansdowne Park, a new casino and the light rail system will have major long term benefit, making it easier for people to get to work, build a stronger downtown core, and make Ottawa more attractive.” Greg Rogers, Minto Developments Inc.

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The more employers take advantage of the workforce, the better the economy will grow, says Rogers. So far, government downsizing has been mitigated by major, multi-year capital projects such as the redevelopment of Lansdowne Park, a new casino and the light rail system. “These projects will have major long term benefit, making it easier for people to get to work, build a stronger downtown core, and make Ottawa more attractive,” says Rogers. With a 25 per cent market share in Ottawa. Minto will remain active in the suburban living market while also building more urban, high-rise condos with a mix of retail amenities at street level. “We’re trying to do vertically what we used to do horizontally,” Rogers explains. “We’re locating buildings in communities that have good schools and accessible parks, and we’re continuing to deliver to the market what it wants.” Barbara Balfour


Canadian Real Estate Forum / FALL 2013


Major expansion for Rideau Centre

Gap opened up and was big news. Ottawa has historically been under stored but successful in attracting great brands”. With every new major retailer that comes to the nation’s capital, it “makes it easy to get next one.” The centre will see be adding a flagship Zara as well as “Ottawa – which used to have to compete with Calgary and Simons taking on an extra 100,000 sq. ft. Other notable Toronto for major retailers – is now coming into its own,” said retailers slated to take part in the increased centre are Cindy VanBuskirk. “Now we can all share in each other’s success.” Victoria’s Secret and J. Crew. “Canada is a great retail market that survived the great economic downturn really well and people have looked to he Rideau Centre general manager added that Canada for expansion opportunities,” noted the general Ottawa’s increased retail manager. success of late has spurred While the centre’s future will “Canada is a great retail market that a significant redevelopment of the see an increase its parking survived the great economic downturn capacity, increasing the food court centre that will include renovations and an expansion of the really well and people have looked to as well as integrate two connecproperty, which is about to tion points with the planned LRT, Canada for expansion opportunities.” the Rideau Centre will not forget undergo a major expansion and renovation, adding 230,000 sq. ft. its past, “as we will carefully Cindy VanBuskirk, Rideau Centre to the mall. remove and preserve the heritage VanBuskirk believes the portion of façade that will be reaptiming for the $360 million project is apt, as Ottawa has come plied to the exterior of the planned expansion.” a long way in the retail market “since the 1990s when The Kevin Woodhouse


Canadian Real Estate Forum / FALL 2013


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Calgary impervious to interest rate uncertainty Optimism is pervasive in Calgary’s commercial real estate market, observes Randy Cameron.


Canadian Real Estate Forum / FALL 2013


algary has been very active during the past few years and, like the rest of the real estate industry in Western Canada in general, the land development business has been going very, very well,” said Dundee Industrial REIT’s interim CEO. “It’s incredible how resilient Alberta has been, particularly Calgary, where a lot of new commercial office development is coming on stream,” Cameron continued. “A few years ago, some people were predicting that Calgary would have a 20% per cent plus vacancy rate due to the large amount of new development going on. It never got anywhere near that. Despite all those new projects, that commercial space has been fully absorbed.” He attributed the city’s long-term strength, in part, to pension funds’ long-term view of real estate assets.

“It’s incredible how resilient Alberta has been, particularly Calgary, where a lot of new commercial office development is coming on stream.” Randy Cameron, Dundee Industrial REIT “If you look at any city in Canada where there is downtown or industrial development going on, a lot of it is being done by, or for, pension funds,” he said. “Increased bond yields have driven REITs; which are reluctant to raise debt capital in current market conditions, to the sidelines. Pension funds have, to a large extent, stepped in to fill this void.” Although investors have priced three-year bonds at about 3 per cent, Cameron cited reports which judge that figure to be too punitive. “There are credible sources who believe that the 10-year US Treasury yield will decline to about 2.2 per cent and indeed they have recently been declining, this should be good for REIT values,” he reported. Although Cameron doesn’t anticipate a return to skyhigh interest rates any time in the foreseeable future, “even if they rise somewhat in late 2014, I think they’ll need to level off at a level the world economy can sustain.” “If they do rise because central banks are concerned about inflation,” he concluded, “all prices will rise accordingly – including rents.” Robert Frank

Canadian Real Estate Forum / FALL 2013



Inland port rises on the Prairies “Calgary has become a bit of an inland port,” according to Jon Mook.


t’s strictly driven by West Coast ports being at capacity,” explained the Barclay Street vice president. “CN and CP yards will continue to expand. Seacans are being dropped off at a growing number of non-railway intermodal yards that have sprung up during the past 3-5 years.” “It’s positive,” he said, “though, with only a limited number of players are engaged in that presence, it will likely proceed at a controlled pace.” Airport development is also poised to grow, with new runway to be built. “It will be driven by groups that need to be there,” Mook observed. “Companies

like FedEx and Purolator have to be next to the air side.” “Since they will be paying at the upper end of the market, they have to

“There’s a considerable amount of product built during the past 12-18 months coming on board, which will make the distribution space market competitive, and the demand is there”. Jon Mook, Barclay Street have a reason to be there,” he continued. “If you don’t need to be right next to the runway, though, it’s less expensive to be a couple of blocks to a

mile from the airport.” Mook shared the optimism that pervades the Calgary commercial real estate market. “There’s a considerable amount of product built during the past 12-18 months coming on board, which will make the distribution space market competitive, and the demand is there,” he affirmed. “Many prospective players want to see how this 3 million sq. ft. will be absorbed,” Mook said. “That will dictate how many of them will come to the market next summer. If leasing activity, especially for large-bay distribution facilities greater than 50,000 sq. ft. isn’t as great as the market hopes, you won’t see as much development for these larger facilities.” Robert Frank


The View from Here Canada today boasts a low unemployment rate, a healthy housing market, record employment and a better fiscal situation than the United States.


ver the next 18 months Canada might not match the U.S. in terms of performance, however, as our neighbours to the south enjoy an economic recovery and as pent-up demand propels their housing industry and consumer spending. Then there’s Alberta. In a class apart and with the strongest population growth in Canada alongside the also-thriving Saskatchewan, its position is enviable. What will the next year and a half bring? Below are a few projections as seen by Warren


Canadian Real Estate Forum / FALL 2013

Jestin, Senior Vice President & Chief Economist, Scotiabank: - Growth: “As people move there from other provinces, from outside the country and by natural increase, Alberta is leading the country in population growth. That provides a pretty solid platform for consumer spending, the housing industry and commercial real estate. Income growth, too, has been solid in Alberta, particularly full time employment.” - Cautionary notes… On the oil side: “We’re exporting record

amounts, at least we were until the spring. But the U.S. is producing more, so unless we get alternative markets, that volume will go down and the prices may be in jeopardy.” On the natural gas side: “The difference between offshore markets and domestic markets is massive. We’ve seen some weakening in natural gas prices, and volume exports to the U.S. have been falling off in recent years. The magic elixir is being able to get it out… particularly into the Asian markets where the prices are four times higher.” Michelle Morre-Carlisle


Wealthy and well-educated, young Calgarians want beltline condos “The beltline became a big residential area 35 years ago, because it made more sense than the downtown core,” recalled John Torode. “Now, 1st Street is a nice neighbourhood with restaurants and some fashion retail, with some opportunities for infill.”

Photo: Qyd, Wikipedia

“They’re discovering that everyone wants bigger ones, so there is a need for large suites, which consequently are trading quickly,” he said. Torode added that downtown demand for condos is about to spike. “It’s just a question of Calgarians wrapping their minds ikewise, with people walking more, 17th Avenue around living in a condo, because most haven’t even visited on the edge of the beltline has become a major one yet,” he observed. “They might work retail node,” he continued, “though there are more restaurants and “They might work on the 35th on the 35th floor of a downtown office but the first time they look out the bars as well now.” floor of a downtown office tower, window of my living room they say “The population density has grown significantly, driving demand,” Torode tower, but the first time they ‘Wow, this is something else!’” “The issue is density,” Torode added. added. “There’s an empty city block that, look out the window of my “Right now the lowest-density land that six-to-eight months hence will contain a Walmart, a grocery store, and Canadian living room they say ‘WOW, you can find has to be five-times coverage, so you have to build something of scale.” Tire outlet.” this is something else!” “Densification is going to happen,” “You’re going to see more of that,” he asserted. “A lot will involve parking-lot he predicted. “More big-box like Best John Torode, Torode Realty Ltd. infill that will beautify the streetscape. Buy, which set up on 17th avenue.” Plus TELUS’ new downtown high-rise office tower will have Although most developers have gravitated toward apartments on top of it. It will be quite the building.” smaller suites, Torode suggested that the market isn’t keeping Robert Frank up with demand for bigger residences.




Evolving Workplace Drivers Real Estate and HR concerns of today’s top execs 34

Canadian Real Estate Forum / FALL 2013

large oil and gas company wanted to move from downtown Calgary to the suburbs. First, however, it created internal focus groups at every level of the organization. Participating employees had to sign confidentiality and non-disclosure agreements but were directly involved in the decision to relocate. Andrew MacLachlan, executive vice president, Jones Lang LaSalle Real Estate Services, which represented the company, says large corporations increasingly solicit feedback from their employees when making such commitments. “I think that’s a big step forward,” MacLachlan says. Particularly among large-cap companies, he sees a definite mindset towards employee engagement, recruitment and retention as executives seek ways to drive efficiency and reduce overhead costs. To this end they are working closely with human resources

because of HR’s understanding of employee costs. “They’re large, publically traded companies and they’re paying attention,” he says. Environmental sustainability is another important driver among top executives. “There’s always the eco that says we want the best, want to be perceived as the best and will pay for the best. That exists, and it’s healthy,” MacLachlan says. But then in the oil patch, considering the costs of and exploration against the rewards of a successful well, “Believe it or not, rent and payroll look cheap,” MacLachlan says. “Sometimes executives get distracted by the hundred million dollar well and its potential to generate a billion dollars in revenue for your company. The mentality is, ‘I need that drilling engineer, that production engineer, that land man, and I don’t care what they cost’… So salaries are high in Calgary.” Michelle Morra-Carlisle



Where is Liquefied Natural Gas Taking the Sector? Western Canada’s natural gas sector has seen dramatic changes in terms of technology and the new supply of natural gas across North America. From the perspective of Greg Stringham vice president of Markets & Fiscal Policy at Canadian Association of Petroleum Producers, the most pressing issue for the sector today is market access.


he most important question facing the West is: Will there be new LNG (Liquefied natural gas) facilities built in Canada in time to face competition from the U.S.?” Stringham says. A current surge in supply of both oil and gas is causing constraints on the infrastructure system. The sector is on the cusp of many decisions that will affect pipelines, rail and marine traffic up the west coast, pipelines to Eastern Canada, and the whole idea of liquefied natural gas. And, Stringham says, companies of all sizes will be affected by the outcome. “International companies, midsize and junior companies all face the challenge of ensuring this product they now produce can get to access world markets at world prices,” he says.

Western Canada is also waiting to see what direction prices will take. As Stringham explains, oil prices are globally set, so it remains to be seen whether Canada can remain connected to that global price or will see future discounts. As for natural gas, price is continentally set. “Many producers,” he says, “are now saying, ‘Can I get outside that continental constraint by using liquefied natural gas for these global markets that are paying oil prices for their natural gas?’” Michelle Morra-Carlisle


Public-private partnership poised to reverse flight to the suburbs


algary is well positioned to repopulate its central core by adopting smart-growth plans that marry public policy objectives with tangible economic opportunities for developers. “Calgary’s not alone,” observed Larry Beasley. “We’ve made amazing progress across the country building city-core communities that people want to live in.” Beasley, who triumphed at transforming downtown Vancouver, now advises other cities how to revive their cores as high-density, multi-family, mixed-use, walk-able, transit-oriented communities. He was so successful there that more children now live in downtown Vancouver than any individual neighbouring suburb. “Nearly 30 per cent of inner-city households are families with children,” Beasley noted.” Calgary could easily do likewise.” “It is already very livable, safe and has great infrastructure,” he affirmed, “but to capitalize on the great development opportunities in the Calgary core, it’s not enough to have an explicit public policy and few developers who tap into the kick-start part of the market: young singles and empty nesters.” “Ultimately, you need to get the public sector involved to be successful,” Beasley explained, “because individual developers can’t deliver the schools, community facilities, child care, parks, safety and noise- and


Canadian Real Estate Forum / FALL 2013

privacy-manage“Ultimately, you need to get the ment that governpublic sector involved to be ment can.” “For the private successful... because individual sector to delivers developers can’t deliver the the housing, there needs to be some schools, community facilities, public funding to child care, parks, safety and make these things happen,” he noise- and privacy-management continued. “People that government can.” don’t buy homes based on efficiency Larry Beasley, Beasley and Associates, or cost. They base Planning Inc. their choice on the quality of experience that they will enjoy there.” Beasley said that a thoughtful, well-articulated policy and support for an understanding industry is the way to get there. “When they took the risk in Vancouver and tested the market with these new products, families signed up in droves,” he concluded. “It’s a remarkable downtown core, because you now see thousands of children there.” Robert Frank

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The Evolving Business Space – Current Trends



Knowledge Workers are Focusing More, Collaborating Less REPRESENTS PERCENTAGE OF AVERAGE WORKWEEK.


What trends are impacting business spaces? Gensler, a global architecture, design, planning, and consulting firm works with businesses in various industry sectors. Nila Leiserowitz, Gensler’s managing principal, shares what her clients are talking about: eal estate consolidation continues to happen “because square footage per person is down to 175 sq. ft.; after 2017 it will be down to 100 sq. ft. per person for several reasons, including reduction of real estate costs, and technology allowing people to be more global,” Leiserowitz says. Real estate consolidation continues to happen “because square footage per person is down to 175 sq. ft.; after 2017 it will be down to 100 sq. ft. per person for several reasons, including reduction of real estate costs, and technology allowing people to be more global,” Leiserowitz says. As human resources become a recognized, key factor to business success, companies in many major cities are moving out of the suburbs and into the urban core because that is where the talent is. Also, more than ever, companies are recognizing the importance of health and wellness by offering natural light, flexible work hours, healthy food choices and more. “A healthy worker is a productive worker who tends to drive innovation,” Leiserowitz says.

2008 2013



Time not accounted for in these percentages was listed as “other.” Source: Gensler








Despite such efforts, not all workers are satisfied. A recent study by Gensler found that many have difficulty focusing at work. Creating spaces that foster teamwork, Leiserowitz says, must be balanced with nurturing individual minds: “People need spaces where they are not distracted by noise and a lot of information coming their way.” The current workforce in Canada spans four generations, but designing a space for all four generations isn’t difficult, Leiserowitz says: “They’re asking for very similar things. Tools to be effective, access to information, and a choice in terms of where they work, whether in a conference room, a café, or their own office. These things aren’t generational, they’re just fundamental.” Michelle Morra-Carlisle


Mixed-Use Developments ONE-STOP REAL ESTATE


When looking at a site’s potential, his company looks at ixed-use development is becoming popular in whether it will be possible to build either vertically or horimany large cities, both from a developer’s standzontally and achieve effective volumes and frontages point and for the occupants who live, work and without having a negative effect play in the area. Besides being “Offices, restaurants and retail all have on the occupants. “Offices, sustainable and pedestrianfriendly, a well-located mixed- different design parameters. So if they’re restaurants and retail all have different design parameters,” he use site offers, to a highly dense population of users, proximity to all on one site, they need to be blended in says. “So if they’re all on one retail and restaurants. Similarly, a way that won’t complicate or impact site, they need to be blended in a way that won’t complicate or it brings to those businesses a how each one functions within its space.” impact how each one functions built-in clientele. within its space.” When determining which Vince Dods, Gibbs Gage Architects Dods also stresses that some areas are suitable for mixed-use, sites are simply unsuitable for mixed-use, and the impordevelopers must consider exactly what type of mixed use tance of not forcing such development where it isn’t approwill be built. One size doesn’t fit all according to Vince Dods, priate. For example, he says, “We wouldn’t want to put partner with Gibbs Gage Architects in Calgary. “Mixed use residential on a site where there is no market for people could be residential-retail, or office centric with associated wanting to live there; or a retail site that doesn’t have expoand ancillary uses and amenities that would serve the office sure, visibility, ease of access to be successful.” population,” he says. “The term ‘mixed-use’ in general Michelle Morra-Carlisle doesn’t imply that every site is the same.”


Canadian Real Estate Forum / FALL 2013

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Opposites Attract? Office markets in Calgary and Edmonton usually hold opposite attractions for investors and property managers, but recently Calgary has felt more like its quieter cousin.


“It’s a small market,” says Guatto. “It doesn’t absorb t takes three years to build a new office building in much. The average annual absorption for downtown office Calgary and that might be a business cycle,” says space in the financial core is somewhere around 100,000 Greg Guatto, president and CEO of Aspen square feet a year.” Properties, a privately held real estate company based in the Recently things have turned city of Calgary. “If the demand side of the market “If the demand side of the market around. Guatto says he’s heard that a half million square foot building starts to increase because the energy starts to increase because the new might be built on spec in Edmonton, companies want to take more space, energy companies want to take while Calgary’s market has slowed everything changes. The energy companies don’t know where they’re more space, everything changes.” down. “The leasing market has been going to be in 12 months. When you somewhat soft. The REITs have not Greg Guatto, Aspen Properties think you’ve got a good handle on been very active. Meanwhile, rental where it’s going, it changes quickly.” rates have remained strong and occupancy levels are Edmonton, on the other hand, is stable. Half of the currently high and there’s been very limited product that’s buildings house companies that serve as gateways to the been put on the market for sale.” north, while the other half are full of politicians and civil Tracey Arial servants who work for the Alberta Provincial Government.


IPOs, REITs and Finally, Yield! It’s an exciting time for REITs in Canada as real estate owners access the capital markets in record numbers. What will the foreseeable future bring?


ndrew Phillips, managing director and head of real estate at TD Securities sees no sign of REITs abating. “Demand for yield amongst investors, to fund retirement income – and considering where long-term interest rates are now – it’s still pretty compelling,” he says.


Canadian Real Estate Forum / FALL 2013

Today’s record number of IPOs and new REITs, while impressive, beg the question of whether the market can accommodate many more. According to Phillips, there is always room for large, highquality REITs. “When market conditions get difficult, people tend to gravitate to larger cap stocks because that is where the liquidity is,” he says. “Later, the bid builds its way into medium cap size stocks. Then finally people think, ‘Some of these smaller REIT IPOs may offer compelling value and perhaps more growth than the larger ones.’” As for any smaller owners out there that might be considering becoming a REIT, Phillips

offers this tip: “In a regular market, the sweet spot for REITs is probably in the $175M to $225M range. In a strong market we’ve seen smaller stories be quite successful, but these smaller ones have to be coupled with a very compelling growth story: What strategic advantage could they have? That’s what we look for.” As REITs continue to thrive in Canada, Phillips believes their growth will likely expand beyond national borders. Much as many of the real estate professionals who run pension funds in this country are expanding outside of Canada because they see opportunity abroad, he says, “some of the larger REITs see that same opportunity.” Michelle Morra-Carlisle

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Tips from Calgary’s Hundred Year Flood The City of Calgary spent eight years building a modern emergency response system to deal with the flood of the century.

ayor Naheed Nenshi signed the first state of local emergency at 10:22 in the morning on Thursday, June 20, 2013. By then, Calgary’s new emergency operations centre had been open and functioning for five hours. Everyone knew what to do, thanks to eight years of transformation and six days of storm tracking by emergency officials. “We track 50 storms a year,” says Bruce Burrell, the director of the Calgary Emergency Management Agency (CEMA) and the city’s Fire Chief. “We track these things for days before they are projected to hit Calgary and 90% of the time it means nothing.” This time, early preparation saved lives. As a record 45 millimetres of rain fell on Calgary, up to 200 people from 29 different government agencies descended on a mostly-underground bunker that had only been completed eight months earlier. For fifteen days, they coordinated the evacuation and shelter of 75,000 people from 26 neighbourhoods. By the time the waters receded, 83-year-old Lorraine Gerlitz had drowned in her apartment. Thousands of people lived in temporary camps because their homes were damaged or destroyed. The Stampede grounds, Saddledome and many business towers were flooded. The petrochemicals from a derailed freight train were lying in the Bow River. Everyone agreed it could have been worse. “Our model has been adopted as a best practice by the Emergency Management Committee of the Conference Board of Canada and written into two ISO technical documents,” said Burrell. “We’re incredibly pleased that it actually worked in a large-scale incident the way we thought it would.” Tracey Arial


Calgary development hinges on economic and interest-rate vectors Roman Drohomirecki believes that it’s wait-and-see as to whether new office towers, beyond those already announced, will be added to the downtown Calgary skyline during the next few years.


more coming in 2016 and 2017, something will have to give a little. Although e’re bullish on Calgary,” declared Ivanhoé Cambridge’s rates are holding at the moment, they may come off a bit.” co-COO. “Given the tight market, though, most of our “We’re already seeing some of that in growth is going to be organic. We’ve got well-leased shopping centres “When some of this new product Vancouver,” he continued. “The deals that are mostly involve landlords who are that are generating great sales, so there’s potenhits the market in 2014, with more happening trying to retain their existing tenants. They’re tial opportunity for expansion and redevelopment.”for expansion and redevelopment.” coming in 2016 and 2017, something pursuing renewals years in advance, to pre-empt the risk that the occupants of their buildings “Nonetheless, the city has a history of will have to give a little.” might start to look around – provoking another frothy development. A lot of office towers development cycle.” have already been announced, and currently Roman Drohomirecki, Drohomirecki underscored that interest rate there is a bit of a prelease frenzy going on.” Ivanhoé Cambridge movement is a key variable at the moment. “We’re seeing there’s a fair bit of sublease “It’s no longer a question of whether interest rates will move,” he emphaspace available now that can fulfill short-term needs, so we probably won’t sized. “They will increase, and – when they do – how quickly they jump and how see more announcements in the short-term.” high they go before they plateau will shape our real estate investment decisions.” “The velocity of deals has slowed down dramatically,” Drohomirecki also Robert Frank observed. “When some of this new product hits the market in 2014, with


Canadian Real Estate Forum / FALL 2013

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“The space they’re occupying now will have to be backfilled by other companies, but that won’t happen for three or four years until the buildings get built and they can move in.” Alex Wong, Avison Young

RioCan REIT - KingSett East Village Project


Calgary’s Office Market Stable for Now Despite many new developments and minimal oil and gas investment, office leasing isn’t expected to change much in the next year. We’ll only begin seeing musical chairs a few years down the road.


he leasing activity right now is flat,” says Alex Wong, Avison Young’s executive vice president. “It’s not super active, nor is it downsizing.” Downtown, Office leasing in Calgary depends heavily on the oil and gas industry, which makes up 60 to 65 per cent of the downtown office market. The industry is in a bit of a lull right now, investment capital is limited and the price of gas is “way low.” Yet with the price of oil over $100, most companies have good cash flow to support their oil and gas assets. The major Oil and gas companies are looking at future growth and with that in mind are planning for consolidation and expansion.


Canadian Real Estate Forum / FALL 2013

One of those growth options could very well be the new leasing mandate Avison Young recently received for a 1.2 million sq. ft. AAA LEED building in East Village. The project is a RioCan - KingSett joint venture for their 2.7 acre site, which was acquired last spring. The new building will be custom-built and designed so tenants can optimize their floor plan for multiple layouts. The building will also have the advantage of 15-plus connections to the LRT and pedestrian networks. That project adds to those already underway, including Imperial Oil’s plans to move 700,000 sq. ft. of space from downtown to Quarry Park. MEG and Brion also plan to consolidate into new spaces. Wong states none of those projects have any effect on today’s leasing market. “The space they’re occupying now will likely be backfilled by other companies, but that won’t happen for three or four years until the buildings get built and they can move in,” he said. By then, others may be ready to expand, as has happened in the past. “When Encana moved last year, they left a two buildings which we were the leasing agent for,” said Wong. The existing tenants in Bankers’ Hall took their vacancy. “We sublet all the space that they left to, CNRL and others. When they left the Canada Trust Tower, Apache took their space.” Tracey Arial


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he city has a purpose filled inventory of about 35,000 units and approximately another 12,000 condos, according to Tim Sommer, vice president, investment sales, capital markets, Cushman & Wakefield Ltd. “Those condos have been largely filling the new product void because there’s not a lot of new nice stuff in Calgary – and it has been proven that people will pay for new nice stuff.� As a result of the supply “There’s not a lot shortage, rents have risen dramatically. For developers, it’s a good of new nice stuff time to start building rental. in Calgary – and Sommer says there are close to 900 units in Calgary being talked it has been about or planned, another 600 or proven that so in the suburbs planned or under construction, as well as people will pay 2,000 on high-density sites downfor new nice town being considered for rental. The area is also attracting rental stuff.� developers from out of town. Tim Sommer, Cushman Sommer expects to see tradi& Wakefield Ltd. tional rental rates in Calgary in the range of $1.80 or $1.90 per sq. ft., and new rentals in the range of $2.20 to $2.50 per sq. ft. “The other thing to watch, though,� he says, “is that while we all talk about price per sq. ft., tenants look at price per month. There appears to be a ceiling of around $1,600 for a 1 bedroom or around the low $2,000’s for a 2 bedroom. We have to take that into account as well.� Michelle Morra-Carlisle

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The Office Market: Calgary Anticipates More Growth Ahead Calgary is going through another development boom. Among the office developments underway are the Town Sky Project, 8th Avenue Place and Brookville Place – totalling approximately five million sq. ft. by 2017.


over to the area from the core. As for the suburbs, the office t’s a good sign that developers and the financing market is doing well. “The only segment that’s kind of slow community have long term confidence in in the suburbs is the engineers and architects that rely on Calgary,” says Greg Kwong, executive vice presigrowth in the oil and gas sector,” Kwong says. dent and regional managing director of CBRE Limited. Fortunately, CBRE’s Q3 statistics On the demand side, the downtown “Developers and the show that vacancy rates in Calgary’s A, B office leasing market has somewhat flattened over the last four months, though financing community have and C class markets remain fairly low, in the single digits. It’s older stock or D class Kwong sees signs that growth will be strong long term confidence in that’s a concern, with a current 30% again by January or February. “Capital vacancy rate. markets have shut down as relates to Calgary.” Meanwhile, the sector waits in anticiinvesting in junior oil and gas companies,” Greg Kwong, CBRE Limited pation for pipelines from Western to he says. “But everyone thinks it’s only a Eastern Canada. “That would certainly be a short-term blip, since office leasing was boon to helping further growth in Northern Alberta’s oil absolutely going 150% until April of this year.” industry,” Kwong says. In the Beltline this “flatline” isn’t as dramatic as downMichelle Morra-Carlisle town, though lately there is less tendency for leasing to spill

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Canadian Real Estate Forum / FALL 2013

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Nordstrom retail giant heats up Canadian retail market In the next few years, the American retail giant known as Nordstrom will be opening as many as 10 locations across Canada, plus dozens of smaller discount outlets.


t’s only the latest in a long line-up of American retailers to seize untapped opportunity in the Canadian market. Nordstrom’s first location outside the U.S. is set to open its doors in the fall of 2014 in Calgary’s Chinook Centre shopping mall. The 147,000 sq. ft. store will be set up near Target, another U.S. giant that has just made its first foreign foray in Canada. Similar venues are planned to open in Ottawa and Vancouver by late 2015. Known for its preference for generously sized prime locations, Nordstrom initially faced a serious challenge posed by the limited prime retail space loca-






tions in the crowded Canadian market. When Sears Canada announced in 2012 that it would return leases at three premier mall locations in Vancouver, Calgary and Ottawa, it created a perfectly timed opening for Nordstrom’s entry. “When Sears sold some of its holdings, we were able to partner with Cadillac Fairview,” says Nordstrom Canada president Karen McKibbin. “Nordstrom relies on partnership, as success is never achieved in a silo. Canadian-run management teams will train for three months at our flagship Seattle location. We’ll need some 300 to 400 new employees to staff our first store in Calgary alone.” With the luxury of expansive floor space, McKibbin believes that Nordstrom’s entry into Canada will “enliven our stores and inspire - which is why we’ll be bringing our newest and best store design to Canada.” Limiting lineups is one way Nordstrom intends to adapt to new markets. “Nordstrom equips its staff with tablets and mobile point-of-sale devices to ensure that a customer’s experience is consistent with today’s mobile lifestyle,” McKibbin says. “The final act with a customer will reflect trust, rather than a large partition that separates them from staff, creating distance. “Every year, our goal is to augment service, so there is never a finish line. That creates a healthy tension, which we embrace.” To ensure that the customer always remains the first priority, Nordstrom staff will include workers “who enjoy working with people and who get a real personal satisfaction from helping customers get what is best for them,” says McKibbin. “We empower our people to be the customer’s most trusted advisor. They have to love fashion and use sound judgment to take care of the customer of the moment.” Kevin Woodhouse

Canadian Real Estate Forum / FALL 2013


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Is the tide turning for commercial real estate in Canada? Real estate leader survey indicates growing concern about the economy and impact of higher interest rates

By Carolyn Lane

C Carolyn Lane


onfidence among Canada’s commercial real estate leaders continued to wane due to concerns about the economy’s outlook and other global factors. This and other findings were revealed in the Third Quarter 2013 Canadian Real Estate Sentiment Survey released by the Real Property Association (REALpac) and FPL Advisory Group. “Higher interest rates and higher volatility in the equity markets will likely make for more challenging times in the coming year. Perhaps this will lead to a greater separation in values between higher and lower quality assets. This range compressed significantly during the recent period of high liquidity in debt and equity markets,” commented survey respondent Allan S. Kimberley, vice chairman & managing director, CIBC World Markets. The quarterly survey measures the current and future outlook of Canada’s top commercial real estate executives on overall real estate conditions, values, and availability of capital. Respondents are senior executives and board members, including owners

Canadian Real Estate Forum / FALL 2013

and asset managers, financial services providers, and operators and related service providers. A range of asset classes are represented, such as retail, office, industrial, hotel, multi-family, residential, and seniors residential.

Top-line survey findings included: • Interest rate increases in the coming year are seen as inevitable by most and will have widespread implications throughout the industry. • Capitalization and interest rate changes are expected to counteract strong demand for real estate, keeping asset values mostly flat. • Although still seen as available, debt capital is becoming more selective and expensive in response to rising rates. • Equity capital is accessible for the right kind of assets, though there is a concern that a growing number of investors view opportunities abroad as more attractive. continued on page 52




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TO ADVERTISE IN THIS FEATURE, CONTACT FRANK SCALISI, Director of Sponsorship and Advertising Sales, Phone: 416-512-3815, Email: Canadian Urban Limited is pleased to announce the appointment of James P. Peyton to their Board of Directors and Investment Committee. Mr. Peyton worked in a variety of positions with General Motors Asset Management Corporation over the course of 24 years culminating in his role as Portfolio Manager. He created and managed a portfolio for GM of Canada’s pension plan

from scratch to over $2.0 billion over a fifteen-year period. Mr. Peyton’s real estate investment expertise will be a great asset to the Canadian Urban Board. Canadian Urban assists domestic and international institutional investors in their quest to create and grow their real estate portfolios. We are a national investment advisor active in the industrial, office, retail and residential sectors.

Is the tide turning for commercial real estate in Canada? continued from page 50

The value and scope of the Canadian commercial real estate boost to spark stronger investment spending.” sector cannot be underestimated. In 2011 alone, the Even though Q3 REALpac survey respondents may be industry generated $63.3 billion in economic activity, feeling less confident, it is equally clear from their comments according to a ground-breaking study released earlier this that they are rapidly adjusting their strategies to prepare for year by REALpac and the NAIOP Research Foundation. Some a new cycle. As one respondent commented, “In general, I $21.6 billion was spent on capital investment, about $14.9 think we’re probably at the bottom end of a 20-year cap-rate billion on new buildings, and $6.7 billion on capital compression cycle. Those who will succeed on a go-forward improvements, renovations and upgrades. basis will be those that specialize and have very strong operREALpac members have ational capabilities.” “The expectation of rising interest tremendous clout, owning in excess Said participant Larry Dybvig, of $180 billion in real estate assets president, Grover, Elliott & Co.: rates will push capitalization and in the major markets across the “The expectation of rising interest country. Members include real yield rate requirements up, and that rates will push capitalization and estate investment trusts, publicly will likely slow transaction activity yield rate requirements up, and that traded and large private companies, will likely slow transaction activity and flatten asset value trends.” banks, brokerages, crown corporaand flatten asset value trends.” tions, investment dealers, life In addition, “the markets are Larry Dybvig, Grover, Elliott & Co. companies, lenders, and pension cooling as the inevitable rise in funds. interest rates starts to materialize. Generally, concerns about the Canada’s economy have Many long-term asset owners seem to have taken advantage been widespread. TD Economics forecasts growth to fall to a of historically low rates and have stable portfolios and cash modest 1.7% in 2013 due to a sub-par external backdrop and flows, but new and future acquisitions will have to contend subdued domestic demand before picking up pace to 2.5% in with rising rates and a slower market,” said Jeff Devins, pres2014-15. However, it maintains that one of the biggest posiident, Crestwood Capital Partners Ltd. tives for Canada is the strengthening U.S. economy, as For more information and to download a copy of the Canadian Real Estate “stronger demand for our biggest trading partner should Sentiment Survey, go to > Publications > Canadian Real Estate help give Canadian business a much-needed confidence Sentiment Survey.


Canadian Real Estate Forum / FALL 2013


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Carolyn Lane


stablished in 1993, Canadian REITs have evolved to become a profitable investment class benefitting investors and the economy as a whole. The Real Property Association of Canada (REALpac) has played and continues to play a leading role in the evolution of REITs, advocating for legislative changes to clarify and strengthen the rules affecting the security to improve the environment for both the Association’s REIT member companies and investors. Most significantly, REITs give the average investor exposure to real estate investments. Without this investment vehicle, institutional pools of capital such as pension funds would have owned most of Canada’s commercial real estate. REITs, which already existed in the U.S. and Australia, gained a foothold here during the recession and related commercial real estate bust in the early-to-mid 1990s. Up until then, the precursors to REITs were openended mutual funds that made it possible to invest in real estate. As noted in REALpac’s Canadian REIT Handbook, investors could buy into these funds for as little as $100 and had the right to redeem their units for cash at any time. When the market teetered on the brink of collapse in the ‘90s, investors jumped in to cash out as property values sank like stones. The funds, forced to try to sell their assets into a weakening market to raise money, were so desperate they asked regulators to let them halt the run on redemption. “Those were dark days for real estate,” said Edward Sonshine, CEO of RioCan REIT and long-time member of REALpac, at a recent panel discussion on the evolu-

Canadian Real Estate Forum / FALL 2013




By Carolyn Lane


Today, Real Estate Investment Trusts in Canada are well established as stable investment choices – but getting to that point had its fair share of challenges


Marking 20 Years of REITs in Canada


tion of REITs during the RealREIT Real Estate Forum held September 24 in Toronto. The panel was moderated by Michael Brooks, former REALpac CEO, who played a pivotal role in leading the charge for market and regulatory transformation in Canada, which ultimately gave rise to the REIT vehicle. “We had no options, no buyers, no lenders and tenants were falling like ten pins. Funds were useless. REITs gave us a way to recapitalize and move forward at a time when no one trusted real estate companies, “ explained Sonshine. “It was an incredible creative time, but we managed to pull off the creation of REITs with the backing of regulators, added Patricia Koval, Partner, Torys LLP, another respected architect of REITs in Canada. “One of the biggest challenges in those early days was gaining retail investor confidence.” “To begin with there was a high distrust level from the industry. A lot went into creating good governance, said Tom Schwartz, President & CEO, CAPREIT. “There were many milestones. When the limited liability was lifted, for example, this was a big moment as we stopped being sidelined by institutional investors and became more sophisticated. In some ways we all grew up in the 2000s.” Some of the most significant changes have taken place in the last 13 years – once the public market’s comfort level with REITs was well established. The sector was also transformed by what REALpac and others refer to as “The Halloween Massacre.” On October 31, 2006, the federal government shocked the investment market by announcing legislation taxing



Turbulent Economic Times Require Targeted Marketing to Influential Real Estate Decision-Makers • The Canadian Real Estate Forum magazine is an official conference publication building on the powerful brand and strong awareness that the Forum has across the country. • This unique magazine-style publication disseminates information that will be discussed at the Forum in a high quality print to a targeted group of senior real estate executives that includes everyone attending the conferences as well as to a much broader national audience. • Three issues per year. Spring issue (Edmonton, Montreal, and Vancouver), Fall issue (Calgary and Ottawa), Winter issue (Toronto) Real Estate Forums. As a result, this one of a kind program enables your corporate message to reach over 5,000 key real estate executives and professionals across Canada.

EXPOSURE TO KEY PEOPLE IN THE REAL ESTATE INDUSTRY Canadian Real Estate Forum subscribers include senior executives of the real estate industry from: • Public and private real estate organizations • REITs • Pension Funds and pension fund advisors • Banks, trust companies, life insurance and other financial institutions • Corporate real estate executives among Canada’s 500 largest companies • Federal and provincial governments • Brokers, law firms and other intermediaries

• The magazine has a strong shelf life by offering high quality articles and analysis on the major themes and topics examined at a conference along with comments and insights from leading experts and well-known practitioners. • There is no other national business magazine that is specifically targeted at all the key Canadian real estate decision-makers who are active in office, industrial, retail and multi-unit residential sectors across the country. This is the unique element that the Canadian Real Estate Forum offers you – an opportunity to reinforce your marketing message to a very exclusive audience at a very affordable rate.

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Most significantly, REITs give the average investor exposure to real estate investments. Without this investment vehicle, institutional pools of capital such as pension funds would have owned most of Canada’s commercial real estate. REITs, which already existed in the U.S. and Australia, gained a foothold here during the recession and related commercial real estate bust in the early-to-mid 1990s. income trusts. However, as evidence that the government still wanted to encourage investment in real estate, REITs were spared on the condition that they would derive at least 90% of their revenue from property sources. REALpac spearheaded the charge to protect REITs and ensure they were clearly differentiated from income trusts. REIT assets, for example, have tenants where income trusts do not. While the financial crisis in 2008 took a toll on the sector, it was surprisingly short lived. Fueled by investor confidence and low interest rates, Canadian REITs experienced an unprecedented boom that has continued into 2013. Concerns about the growing scarcity of quality assets, rising interest rates and global economic instability have entered the picture, but thanks to a 20-year track record of resilience and steady returns, investors have a high level of confidence in REITs and their leaderships’ ability to manage risk and maintain growth.

This year, as the industry celebrates the 20th anniversary of REITs in Canada, REALpac was pleased to see our advocacy efforts pay off when Bill C-48, the Technical Tax Amendments Act, 2012 received Royal Assent on June 26, 2013. These legislative changes will enable the further expansion of an already strong investment vehicle – and help to strengthen our economy as a whole. Perhaps Pat Kovel summed up the outlook for REITs the best, “As an asset class, REITs have done very well. Good management, good framework, good governance and quality real estate assets will keep REITs moving and successful as we go forward.” Carolyn Lane is Vice President of Membership, Marketing & Communications for Real Property Association of Canada, Toronto ( Carolyn can be reached at 416-642-2700 ext 223 or

Wide Range of REIT Options Investing in a REIT is much like purchasing a mutual fund or common stock. Daily unit prices are listed in all major business media under “Trust Units” and REIT units can be purchased from any broker/dealer licensed to sell equities in Canada. The following six types of REITs are all considered attractive investment options: Hotels

Office buildings


Canada’s popularity as a vacation and business destination fuels the hospitality industry. Canadian REITs are consolidating a fragmented hotel market and making possible the development of new supply that meets the needs to today’s consumer.

Prudent development practices, longterm tenancies and strong growth markets throughout Canada are attractive characteristics for ownership of Canadian office buildings.

Diversified new shopping retail centre formats are meeting consumer demand for both convenience and entertainment experience. Canadian REITs play a leading role in meeting the changing demands of this fast-evolving industry.

Nursing and retirement homes Canada’s aging population stands behind the increasing demand for nursing and retirement facilities, a situation that will only accelerate over the next 40 years.

Residential Properties such as apartment buildings are an extremely stable investment as tenant demand is high in good times and bad. Relaxed rent controls, rising home prices and a trend among onetime homeowners choosing to rent for flexibility and location all drive growth.

Industrial Industrial is the largest real estate asset class in Canada, offering a highly stable tenant base and low costs in terms of maintenance, capital improvements and tenant inducements.

Diversified Investors can also choose a single REIT that diversifies in some or all of the above categories.


Canadian Real Estate Forum / FALL 2013

Just What is a REIT, Anyway? A REIT is a publicly traded organization that invests predominantly in income-producing real estate assets. REIT units are an equity investment, providing investors with attractive yields, plus the potential for capital appreciation.


he concept was introduced in the United States in 1960 to provide individual investors with the opportunity to participate in different sectors of the real estate market. Income earned by a REIT flows through to its unit holders without being taxed at the REIT level, giving regular investors similar flow-through income to that enjoyed by direct owners of commercial property. Just like a mutual fund, REIT investors benefit from

enhanced buying power, diversification, liquidity and professional management. REITs are required to distribute virtually all distributable income to unit holders monthly or quarterly – usually with a tax-deferred component. Assets of a REIT do not deplete in the same way that, say, an oil and gas royalty trust might, so, as long as the REIT has a track record for good governance and quality income-producing buildings and properties, they are a viable investment structure.

Stable Underpinnings REITs must adhere to stringent leverage and financial reporting criteria, leading to steady cash distributions, conservative portfolio management and transparent communication with investors. These include:

Conservative Leverage

Board of Trustees

The Declaration of Trust sets out a maximum debt capacity for the REIT.

In keeping with the principles of good corporate governance, the Board of Trustees governs the operations of the REIT, approving key decisions such as change in management, acquisitions and dispositions, the assumption or granting of mortgages and the granting of options under an option plan.

Professional Management Investors benefit from professional management of the portfolio and the underlying properties – often a hybrid of asset management expertise and industry-specific operational expertise.

Regulatory Requirements Similar to any public company, REITs are required to comply with securities legislation and the rules of the applicable stock exchanges including those of continuous disclosure, insider trading and the sale of units.

Steady Distributions REITs are required to distribute virtually all distributable income to unit holders. Monthly or quarterly distributions are intended to increase overtime as the REIT and its profitability grow.

Canadian Real Estate Forum / FALL 2013





Growth of Canadian REIT Industry: 1994-1998

Limited Liability and S&P: 2002-2005

• 1995 was first internalized management of a REIT (Realfund, followed by RioCan, CREIT and Summit REIT). • 1997 first senior care REIT. • 1996, 1997 installment receipts used. • May 1998 market caps of REITs in Canada at 4.5 billion. Largest REIT at $750 million (RioCan). • Technology bubble burst, 1998 to 2000, impacts sector and wide economy. • Mergers and acquisitions: 1999 RioCan acquisition of Realfund for $814 million and Summit REIT acquires Avista REIT for $198 million. • 2001 exclusive US commercial real estate REIT (IPC/US REIT). • 2001 new generation of open-ended REITs (i.e. redemption feature).

• • • •






Legacy REIT suspends dividends in 2003. Alberta Income Trust Liability Act in 2004. Trust Beneficiaries Liability Act in 2004. Manitoba, BC and Saskatchewan follow shortly thereafter. Quebec already had legislation. • January 26, 2005, REITs made inclusive of the S&P composite index.

The “Halloween Massacre”: 2006-2010 • October 31, 2006 tax fairness plan – The Rise of the Sift. • Impact on the existing REITs and restructuring. REITs to maintain 90% of their revenue from properties, pay 90% of taxable income in dividends and are RRSP and RRIF eligible investments.

New Accounting: 2011 • 2011 introduction of IFRS standards in Canada.

Tax Amendments: 2013 • Bill C-48, the Technical Tax Amendments Act, 2012 received Royal Assent on June 26, 2013.


Canadian Real Estate Forum / FALL 2013

Troy Barker Assistant Vice President Commercial Mortgages


Damir Jesic Manager Commercial Mortgages

source for all your

Darryl Bellwood

real estate

Director Commercial Mortgages

financing needs We analyze your needs and develop a customized proposal detailing your loan strategy, preferred terms and best rate solution. Because mortgage lending is our specialty, we are able to anticipate and YLZVS]L [OL [V\NOLZ[ JOHSSLUNLZ [OH[ HYPZL PU KL]LSVWPUN Ä UHUJPUN ZVS\[PVUZ while providing you with ongoing expert service and advice.

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Thank you for 25 years of shared success.





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Our approach is simple. We use our experience and network to deliver the returns our clients require. Over the past forty years Canadian Urban has assisted numerous domestic and international institutional investors in their quest to create and grow their real estate portfolios. We are a national investment advisor active in the industrial, office, retail and residential sectors. Consistently ranked among the top performers in the Canadian real estate investment arena, we partner with our clients to deliver stable and solid returns. Whether your group is considering adding to your real estate portfolio or entering the market for the ďŹ rst time call us at: Toronto: 416-367-1300, Edmonton: 780-424-7722 or Toll free: 1-877-612-7722

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