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editor’snote KNOWLEDGEABLE SOURCES interpret the 2030 target date as December 31 (not January 1), leaving about 100 months until the greenhouse gas (GHG) output of Canada’s building inventory is expected to be about 38 megatonnes (Mt) lower than it was in 2019. Arguably, the second biggest challenge of that objective — after the sheer enormity of reducing emissions to that degree — is for the average person to envision the form that a megatonne of carbon dioxide equivalent (CO2e) takes and to grasp its consequences for the environment and economy.

The currently favoured equivalencies compare achieved GHG reductions to a number of cars taken off the road or a certain number of trees planted. If such a thing were feasible, plotting GHG emissions on a misery index might convey a more forceful message — i.e. a megatonne of CO2e: erodes this much waterfront property; sparks this many wildfires; unleashes this much extreme weather; backs up this much sewage; and pushes up insurance premiums by this amount.

There are likely no straightforward computations for calculating that, but highly sophisticated metrics and accounting systems are now emerging to help quantify the risk and impact of climate change in every sector of the economy. Let’s hope there is also a task force somewhere working on a basic yardstick that can provide the general public with more meaningful context.

Because here is an equivalency that’s probably easier to grasp. More than 132 months have elapsed since construction began on Toronto’s still-to-be-completed Eglinton Crosstown light rail transit (LRT) line. There is much, much more to accomplish on a vast, nationwide scale in approximately 76% of that amount of time between now and the close of 2030.

Perhaps with an eye on that countdown, the Canadian government is indicating that new clean electricity regulations and a green buildings strategy are imminent. In this issue, we look at the preparations for both, and how investment in buildings and infrastructure could align with emissions reduction targets.

New construction and retrofit/renovation projects will need to minimize GHG emissions and better withstand climate volatility and extremes. The Urban Land Institute is also prioritizing infrastructure investment that supports equity, affordability and sustainable economic growth through the expansion of public transportation, broadband availability and a range of housing types for owners and renters of all incomes.

Speaking during an online media briefing this spring, Arshad Mansoor, President and Chief Executive Officer of the U.S.-based Electric Power Research Institute, underscored the urgency of transforming the archaic status quo.

“We are not ready for the climate that we are facing today and that we will be facing tomorrow,” he asserted. “The drought that we’re seeing — one in a hundred years. The flood happening in Germany last year — one in a hundred years. The wildfires in Australia, the wildfires in the [U.S.] west — one in a hundred years. Getting our planning processes, getting our infrastructure to be climate-ready, is a Herculean effort that we have to start working on now.”

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contents

Focus: Capital Planning, Investment & Upgrades 6

Investment Appetite: Food-anchored retail continues to be a preferred real estate asset, while other retail formats climb up from the depths of the COVID-19 pandemic.

12 Reimagining Retail: EV charging stations, omnichannel intersections and outdoor spaces offer hooks to draw in shoppers.

17 Infrastructure Priorities: Urban Land Institute urges investment that will drive equitable, sustainable economic growth and support community culture and identity.

24 Clean Electricity Regulations: Fossil-fuel-fired power plants to mostly go offline by 2035.

28 Real Estate Transparency: Global metrics assess regulatory certainty, market governance, transaction oversight, data availability and ESG factors.

30 Healthy Returns: Study finds a positive correlation between occupant well-being and building value.

Articles: 20 Extreme Weather Preparedness: Canadian Centre for Occupational Health and Safety advises: assess risk; develop plan; communicate intent.

22 Twisted Threats: Canada’s vast territory is the world’s second most common stage for tornado destruction.

Departments 3

Editor’s note

Building Science & Structural Engineers Building Envelope Assessment & Remediation Structural Restoration Due Diligence/Pre-Purchase Assessment Property Condition Assessment Structural Engineering Roof Consulting

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INVESTMENT APPETITE Food-Anchored Retail a Preferred Real Estate Asset FOOD-ANCHORED RETAIL plazas remain a staple on the commercial real estate menu, again emerging as the preferred asset type in Altus Group’s Canadian Investment Trends Survey in the second quarter of 2022.

Other retail venues fall further down the rankings of 16 types of properties within the office, industrial, retail and multifamily sectors, but beleaguered tier-1 and tier-2 regional malls — placed ninth and 16th respectively — appear to be pulling up from the depths of the COVID-19 pandemic.

“While still reporting a negative momentum ratio, these assets show the slow, 6 September 2022 | Canadian Property Management

yet steady recovery seen in the retail space as consumers feel more comfortable going back into stores,” contends accompanying survey analysis. “While retail assets are slowly recovering, assets in secondary markets continue to struggle as investors scramble to puzzle out consumer needs. These assets could be prime for redevelopment to aid investors in catering to shifting consumer preferences as they become more apparent.”

Meanwhile, CBRE’s recently released Canada Retail Rent Survey for the first half of 2022 tracks little change in asking rent levels across most property types in 10 major

urban markets, but the small amount of movement has largely been positive. That’s drawn from a scoped pool of “wellperforming Class A centres with a strong/ stable tenant mix” and premised on a 10-year lease term with standard tenant inducements.

“Market activity and sentiment appears to be on the rise across Canada, with cities noting an improvement in touring activity or vacancy over the last six months,” the report’s key findings highlight. “Neighbourhood centre rental rates have increased in three of 10 markets, the most of any single format type.

This coincides with high activity levels in these

post-pandemicperspective

PROJECTIONS LOOKING LESS ROSY Investors and asset managers expressed more reservations about Canadian commercial real estate this spring than when they were queried last fall, but they remained generally more optimistic than their peers in the United States. Results from the REALPAC/Ferguson Partners Canadian Real Estate Sentiment Survey for the second quarter of 2022 distill opinions from leading industry players to plot overall confidence in market conditions at 58 on a scale of 100 — a considerable muting of expectations from a score of 72 in the spring of 2021.

U.S. industry insiders delivered a score of 51 for Q2 2022 on their comparable sentiment index. Survey respondents in both countries expect a setback in the coming months, with future conditions rated at 54 in Canada and at 46 in the U.S..

Nearly a third of Canadian respondents predicted market conditions will be somewhat worse by the spring of 2023, while 42% foresaw somewhat or much better outcomes. In the U.S., 40% of respondents predicted somewhat or much worse conditions by Q2 2023, with 22% of respondents looking forward to somewhat or much better conditions.

More than three quarters of Canadian respondents reported an increase in asset values in the 12 months between April 2021 and April 2022 versus 64% of U.S. participants. Looking ahead, 40% of Canadian respondents predicted asset values would rise further by spring of 2023, while just 23% of U.S. respondents foretold an upward trend.

In summarizing the views of participants, the survey producers point to the predominance and deep pockets of Canada’s institutional investment sector as a favourable stability factor, but this is balanced against uncertainties within the industry and the larger global context.

Emerging from the pandemic interlude, investors and asset managers are grappling with evolving demands for office space, climate change adaptation imperatives, pricier debt and supply chain slowdowns.

“Canada continues to be a very stable and desirable place to allocate capital,” Ferguson Partners analysts conclude from the key findings of the survey “There is still capital waiting to be deployed in real estate and the [post-pandemic] reopening of society is helping the office and retail sectors. However, investors are more tempered, because of rising interest rates and inflation, which are impacting development pro formas and the economy overall.”

Nearly a third of survey respondents reported debt capital was somewhat less available in Q2 2022 than it had been one year earlier, while 42% said their access was about the same.

Only 19% projected that debt financing would be somewhat or much more easily attainable

by Q2 2023, with 29% expecting it will be somewhat less available.

A majority of survey respondents — 55% — reported access to equity capital was about the same as it had been in the spring of 2021 and they expected that trend to hold steady to spring of 2023. A larger share of the remainder — 24% — foresees equity capital will be somewhat more difficult to obtain by Q2 2023, with 21% suggesting it will be somewhat or much more available.

centres, particularly from F&B (food and beverage), grocery and personal services users.”

PRODUCT/MARKET COMBOS The Altus survey’s product/market barometer, which parses out the hierarchy of investment prospects across eight metropolitan markets — Vancouver, Calgary, Edmonton, Toronto, Ottawa, Montreal, Quebec City and Halifax — finds food-anchored retail solidly in the top 15 preferences. Calgary, Edmonton, Montreal, Vancouver and Toronto are all seen as lucrative locales, with Calgary ranked highest.

Just two other product/market combos — single-tenant industrial in Montreal and suburban multifamily in Toronto — surpass the appeal of food-anchored retail in Calgary. Calgary retail is also notably in the handful of Canadian

More information about the REALPAC/Ferguson Partners Canadian Real Estate Sentiment Survey can be found at https://realpac.ca/product/canadian-real-estatesentiment-survey-q2-2022.

markets to post increased asking rents during the first half of this year. CBRE pegs rents for neighbourhood centres in the range of $38 to $40 per square foot (psf) and for convenience/strip plazas at $35 to $40 psf.

Other retail property types are clustered at the bottom end of the Altus chart, with enclosed community malls in Quebec City and tier-2 regional malls in Halifax deemed the two least attractive opportunities. Tier-2 regional malls in Quebec City, Calgary and Edmonton are also in the bottom 15, along with enclosed community malls in Halifax and Edmonton.

CBRE’s rental rate survey does not cover Quebec City, but regional mall rents in Halifax are cited in the range of $65 to $85 psf, while enclosed community malls command rents in the range of $15 to $18 psf.

Asking rents for Edmonton’s regional malls are pegged in the range of $110 to $130 psf, with enclosed community malls securing rents in the range of $40 to $55 psf.

Power centres still make the top half of property preferences for respondents to the Altus survey, but recorded a negative buyversus-sell ratio for the quarter, meaning more investors would consider selling than buying. Apart from food-anchored retail, Canadian Property Management | September 2022 7

post-pandemicperspective

“Momentum has continued to build over the last few months, mostly in centres anchored by grocery, pharmacies, banks etc. — everyday essentials that have proved to be resilient.” industrial assets figure prominently on investors’ wish lists with multi-tenant industrial, single-tenant industrial and industrial land ranked second, third and fifth respectively. Suburban multifamily assets also crack the top five preferences.

MODERATE Q2 UPHEAVAL CBRE’s Q2 Canada Cap Rates & Investment Insights chart an upward trend in cap rates for every retail property type, with national averages rising to 5.8% for anchored strip plazas, 5.6% for regional malls and 6.45% for power centres. Yet, the firm’s analysts conclude springtime upheaval was relatively moderate.

“Given the fact that retail cap rates entered the quarter at higher levels compared to other sectors, the yield increases seen for the asset class in Q2 2022 were relatively mild,” the CBRE

report submits. “Outside of the urban streetfront and high street categories, the national average cap rate figures for each of the remaining retail property types only increased by between 7 basis points (bps) and 11 bps quarter-over-quarter.

This was significantly lower than other asset classes where national average yield figures rose by as much as 30 bps.”

That’s in line with the view of an industry insider anonymously highlighted with Q2 results of the REALPAC/Ferguson Partners Canadian Real Estate Sentiment Survey.

“Real estate pricing overall is too high, apart from retail, which is being priced more fairly,” it states.

Drilling down to markets, Colliers Canada reports Q2 retail cap rates remained steady in five of the 10 major markets it surveys, but edged up in Vancouver, Calgary, Toronto, Ottawa and

INDUSTRIAL ASSETS DELIVER OUTSIZED RETURNS Canada stands out in global investment performance data for outsized returns on industrial assets during the first quarter of 2022. MSCI pegs the annualized total return at 35.7% — a surge from the two-year annualized total return of 22% recorded in the fourth quarter of 2021.

Only the United Kingdom and the United States saw higher Q1 returns on industrial property, at 40.5 and 50%.

Meanwhile, Canada’s all-property annualized total return was 12.3% for the quarter. That’s well back of the UK (19.3%) and US (22.9 %) benchmarks, but a significant improvement from the previous quarter’s two-year annualized return of 5.6%. Notably, Canadian retail assets delivered a 7% annualized total return for Q1, up from the negative 3.3% two-year annualized total return as of Q4 2021.

That’s the same general pattern seen across the MSCI global quarterly property index, which tracks property-level performance of more than 20,000 quarterly valued assets in 26 countries. The index all-property total return was 4.4% for Q1 2022, down from 5% in the previous quarter, but surpassing the 4.1% return of Q3 2021.

Other accompanying MSCI data highlights the increasing weight of industrial assets and diminishing status of retail holdings within the index. That follows five consecutive quarters in which industrial has outperformed all other property sectors, while retail now has the lowest weighting — representing 15.3% of the capital value of the index — of the four major property sectors.

As of Q1 2022, the industrial sector accounted for 31.5% of the capital weight of the index, up from 21.6% in Q1 2020, and marking the first time industrial captured the largest share of capital value among the four major sectors. Office slipped to second with 28.3% of the capital value, down from 33.8% in Q1 2020. Residential accounted for 20.4% of the capital weight of the index — up from 12.1% at Q1 2012 and 16.3% at Q1 2017.

More information about the MSCI Global and Canada property indices can be found at www.msci.com/research-and-insights.

8 September 2022 | Canadian Property Management

Halifax. Despite that trajectory, Vancouver and Toronto post the lowest rates in the country, with cap rates for regional malls in the range of 4.75 to 5.5% in Toronto and 4.25 to 6.25% in Vancouver. Strip plazas recorded caps in the range of 3.5 to 5.25% in Montreal and 4.75 to 6% in Toronto.

Prospective purchasers are also eying strategically located retail sites for infill or redevelopment potential.

“The appetite for redevelopment of suburban retail has driven some deal volume in retail. As the housing shortage intensifies in Canada, governments are increasingly receptive to large mixed-use developments in place of suburban malls,” the Colliers Canada Cap Rate Report notes.

CROSS-BORDER COMPARISONS Looking at how Vancouver and Toronto compare to a much larger field in the United States, the two Canadian markets stand out with the lowest retail vacancy rates and lowest and third-lowest cap rates among 53 urban regions (51 in the U.S.) examined in the Lee & Associates North America Market Report. It cites Vancouver’s retail vacancy rate at 1.2% and Toronto’s at 1.7%, while Seattle, Boston and Raleigh, North Carolina, round out the five tightest markets, all with a 2.7% vacancy rate.

Of those five, Toronto boasts the largest retail inventory at more than 300.5 million square feet, while Vancouver’s complement is about 58% smaller at 124.6 million square feet. Nevertheless, Canada’s largest city is modestly stocked with retail space compared to the five most expansive markets, ranging from nearly 622 million square feet in New York City to 425.5 million square feet in Houston.

Vancouver’s cap rate is pegged at 4.1%, followed by San Francisco at 4.5% and then Toronto at 4.6%. Orange County, California, and Los Angeles are ranked fourth and fifth, with respective cap rates of 5.1 and 5.3%.

Vancouver cracks the top five for Q2’s highest sales price psf at USD $418.08 (CAD $536). Toronto’s top sales price, at USD $317.46 psf (CAD $407) also sur-

post-pandemicperspective passes the U.S. index average of USD $237 psf.

There is currently about 1.3 million square feet of new retail space under construction in Toronto and about 982,000 square feet in Vancouver. That’s well back of the pace in the five most active U.S. markets, ranging from 4.4 million square feet in progress in Houston to 2.3 million square feet underway in Washington, DC. Both Toronto and Vancouver post propertywide average retail asking rents that surpass the U.S. index average of USD $23.28 (CAD $29.80) psf. In Toronto, a Q2 average asking rent of CAD $32.66 (USD $25.48) psf in Q2 continues a consistent uptick in the five quarters since Q2 2021, when average asking rent was at CAD $31.55 (USD $24.61) psf.

Vancouver’s average asking rent was down slightly in Q2 — at CAD $34.13 (USD $26.62) psf compared to CAD $34.25 (USD $26.71) psf in the previous quarter — but is up more significantly from a Q2 2021 average of CAD $32.54 (USD $25.38) psf.

“Momentum has continued to build over the last few months, mostly in centres anchored by grocery, pharmacies, banks etc.

— everyday essentials that have proved to be resilient,” reports Nicole Moniz, a Lee & Associates Vice President based in Toronto.

“Consumers are still showing a willingness to spend,” says Macyn Scholz, Lee & Associates’ Director of Research in Vancouver. “This can be attributed to pent-up demand from pandemic restrictions, as well as increased foot traffic in downtown areas due to the return to office.”

RECOVERY REVERBERATIONS “Vancouver has witnessed a significant increase in activity from return-to-office plans and travel where people and cruise ships have returned close to the financial district and Vancouver port, adding an influx of residual foot traffic to the CBD (central business district) and other major retail corridors,” concurs Adrian Beruschi, a CBRE Senior Vice President in Vancouver.

CBRE’s survey finds asking rental rates have remained steady for most retail formats in Vancouver, with the exception of a downward trajectory for enclosed community malls. Montreal has seen an uptick in asking rents for convenience/strip plazas with stable asking rents for other retail formats. Rents have also been steady across the board in Toronto, in tandem with a pickup in leasing levels.

Arlin Markowitz, Toronto-based CBRE Executive Vice President, reports the

“creative” landlord-tenant agreements of the pandemic period are much rarer. However, industry insiders foresee potential future fallout in the extensive network of belowgrade retail concourses, known as the PATH, connecting most of the major office and institutional buildings in the financial district.

“Location-wise, interest is most prominent in Class A properties, with touring levels recovering more slowly in tertiary properties.

Activity on the PATH has also resumed and among Class A product, it is no longer a question of whether the space will be filled, but of pricing instead,” Markowitz says.

Anonymous insight in the REALPAC/ Ferguson Partners sentiment survey includes a more cynical observation. “The pathways need to be rethought — 25% of clients are back to the office — the pathway retail is not sustainable,” it contends. zz More information about the Altus Canadian Investment Trends Survey can be found at www. altusgroup.com/insights/canadian-cre-investmenttrends. The CBRE Canada Retail Rent Survey can be found at www.cbre.ca/insights/reports/canadaretail-rent-survey-h1-2022. The Lee & Associates North America Market Report can be found at www.lee-associates.com/research-article/2022-q2north-america-market-report.

Canadian Property Management | September 2022 9

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CAPTIVATING CONSUMERS

Image courtesy of Mason Studio

Retail Operators Focus on Experience, Convenience and Community

By Rebecca Melnyk SHOPPING has conventionally been tied to consumer need or desire for material goods, but retailers are now considering how people spend their time, not just the money in their pockets. New theories centre on how experiences, convenience and a sense of community can draw people to a physical site.

A seminar earlier this year at the Toronto Interior Design Show tackled some of those issues. Electric vehicle charging stations, omnichannel shopping and better use of outdoor spaces were all flagged as potential influences.

12 September 2022 | Canadian Property Management

ROADSIDE REIMAGINING Ilana Weitzman, Vice President of Strategic Development at Electric Autonomy Canada, identified the transition to electric vehicles and associated evolving travel patterns as a prompt for new designs. Gas stations along the highway have mostly been stop-and-go spots where people fuel up within five minutes, whereas charging can take 20 to 40 minutes.

“These vehicles now have a range of 480 kilometres, but you do need to rest and stop, and where do you do that? This is an incredible opportunity to completely

reimagine what that could look like,” she observed.

With this in mind, Electric Autonomy co-sponsored a global architecture competition for a purpose-built roadside oasis for EVs. Scottish architect James Silvester submitted the winning design concept, “More With Less,” featuring inner courtyards for relaxation and a timber-framed canopy that hangs over charging zones to shelter cars and people from harsh elements.

“You can imagine, if you’re getting out of one of these vehicles with a dog or toddler,

post-pandemicperspective how much more comfortable it is to not have to cross a vast parking lot along your way,” Weitzman suggested.

Silvester’s design will be built in the next two years by the Canadian convenience store operator and independent fuel retailing company, Parkland Corporation, the competition’s other co-sponsor. The design is modular so it can be scaled to other types and sizes of retail venues.

Other concepts submitted to the competition integrate outdoor public spaces, incorporate rooftop solar to augment power supply, or include leisure space with shopping pavilions, stations to view internet streaming and more upscale restaurants than a gas station’s typical fast-food fare.

Meanwhile, the transition to EVs is expected to broaden the base of fuel retailers since it will no longer be tied to the storage and dispersal of flammable substances containing hydrocarbon contaminants.

“We’re not just talking about the vehicles themselves. We’re talking about the built environment and how that built environment is going to change, adapt and pivot for this new technology,” Weitzman asserted. “Now, smart retailers can get into this space.”

OMNICHANNEL COLLISION Stanley Sun, design principal and co-founder of Mason Studio, sketched out the potential for mobile retail and how it might bridge bricks-and-mortar with online purchasing, while filling a community support function.

It’s part of an ongoing effort, undertaken with his studio partner, Ashley Rumsey, to explore how physical spaces can create enhanced experiences for omnichannel shopping.

For example, the Calgary retailer, Fresh Fruits, has re-purposed retired city buses to take purchasing opportunities to areas of the city that lack physical food retailers or segments of the population that don’t have access to online shopping. As well, Sun proposes underused parking lots as venues for pop-up retail and “curated windows” from which passersby could choose and order products.

“When you’re scrolling your phones, as you’re lying in bed shopping, what is that physical experience around you to actually facilitate that?” Sun mused. “Right now, we are talking about digital environments, but you’re also in a space, so how do we create spaces that actually facilitate digital interactions?”

The design partners envision what they term the “omnichannel collision” through spaces that offer connections to retail, but not necessarily in an explicit way. That

James Silverster's competition-winning design concept: Less is More.

space could also help create social and community connections — drawing people into situations where they can talk about their needs and preferences, and discover common objectives.

“Retail has so much more value than we are giving it,” Sun maintained. “It's an opportunity to bind people. It becomes the social glue and an opportunity for collision.”

SHOPPING CENTRE SHIFT Demalling is the buzzword for transforming and reanimating shopping centres. Supreet Barhay, principal at WZMH Architects, shared some examples from her firm’s work.

That includes Promenade Shopping Centre, located in the Thornhill suburb of Toronto’s neighbouring city, Vaughan, where a phased intensification project is slated to add 18 infill mixed-use towers over the next 20 years. Within Toronto city boundaries, Shops at Don Mills — the now teenaged redevelopment of a former enclosed mall into an open-air centre — represents another future-proofing option.

“Shopping centres are becoming new community hubs,” Barhay remarked.

At Shops at Don Mills that’s seen in summer concerts, winter skating and the many restaurants that pull in local patrons.

Yet, where demalling is not necessary or feasible, shopping centres are still evolving with changing times and consumer demands.

Barhay suggests food and experiential retail have become even more of an attraction as society eases out of the COVID-19 pandemic and many mall operators are expanding what was conventionally about 15 to 18% of the retail offerings. They are also harnessing digital technologies to gather more insight into shoppers’ routines and

preferences, and to offer a new range of services.

For example, WZMH Architects recently partnered with Microsoft Research’s Urban Futures Workshop through its Sparkbird innovation lab to retrofit a portable trailer where neighbourhood residents can directly learn about their local air quality.

Wayfinding apps also help shoppers effectively use their time, providing route guidance and real-time information about store occupancy levels.

Other trends are carryovers from the pandemic when empty parking lots became catalysts for outdoor commerce and engagement such as drive-through entertainment, food trucks with temporary seating or hubs for pick-up and return of products. Parking lots might also contribute to the mall’s energy supply, such is now being tested in a demonstration project where solar canopies integrated with battery storage have been installed.

Barhay cited a Deloitte survey on postCOVID attitudes that found customers are increasingly looking for green features.

They want biophilic designs, good air quality and natural light.

They also want to see more local Canadian products and parking options for bikes and EV chargers. She suggests there could be positive results from welcoming bike paths to traverse the site and positioning the mall as a destination on those routes.

“Creating variation will attract customers back into the shopping centres,” Barhay submits. “We need to take it to a completely different level.” zz Rebecca Melnyk is Editor of Canadian Facility Management and Design.

Canadian Property Management | September 2022 13

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ABOVE AND BEYOND High performing hospitals raise the standard for patient care As Canada’s healthcare sector evolves thanks to technology and an increased focus on health and wellness, improved patient care is the desired outcome. Hospitals deemed “high performing” are leading this allimportant charge, driven by the philosophy that consistent, ongoing effort is needed to ensure the highest level of care.

“High performing hospitals have a proven track record for delivering the best patient outcomes,” says Erica Brabon, Director, Energy and Sustainability at Black & McDonald.

“This is achieved in a number of ways— through public-private partnerships, excellent communication, state-of-the-art building technology, leading-edge programs and services, and above all, a facilities teams that ensures operations never disrupt the core mission of the hospital.”

Of course, maintaining such a facility is a complicated process that demands additional best practices. Systems are constantly tracked in real time for energy and carbon impacts, while regular reporting on energy consumption persquare-foot ensures the equipment is running at its most efficient. When operational changes are required, no decision is made without the

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support of all hospital stakeholders, putting occupant comfort and wellbeing consistently at the forefront.

ENERGY-SAVING UPGRADES As an example of a recent operational change, Brabon refers to the variable air volume (VAV) system work her team completed at Women’s College Hospital. After assessing the need to optimize the system to improve performance and achieve higher efficiency, the resulting reconfiguration has led to significant savings.

“Everyone in the partnership contributed to the success of the initiative,” she says. “And as per our overriding goal, the money saved from these improvements can go back into patient care.”

Women’s College Hospital is no stranger to undergoing energy efficiency upgrades.

A decade ago, the award-winning facility underwent and extensive redevelopment that transformed it into the state-of-the-art building we know today, dedicated to ambulatory care and ground-breaking advances in women’s research, health, and education.

Brabon adds that it’s thanks to partnerships like these, and through working with a number of stakeholders that are equally invested in the success of a building, that amazing outcomes are achieved. Additionally, she says listening to the operations teams, and when possible, developing their ideas into a business case and implementation plan to increase a facility’s performance, can lead to great results.

“We do this through our ‘Good Catch’ program where operators can share their ideas on energy efficiency,” she says. “Exploring the market for innovation, looking outwards and reflecting inwards, is known to lead to invaluable results.”

BLACK & MCDONALD’S KEY SERVICES From the conceptual stage of a high performing hospital project, Black & McDonald works closely with designers and builders in selecting equipment and in lifecycle planning to ensure constructability and sustainability throughout construction, commissioning, and on into operations and maintenance.

In the role of a Facilities Management (FM) services provider, Black & McDonald’s scope covers the provision of all-inclusive

mechanical equipment maintenance and plant services, including preventive maintenance, lifecycle management, tenant requests, tenant improvements and project management. FM services include a full complement of personnel— plant managers, chief engineers, building operations, and administrative and technical staff.

Soft services include the provision of security services and systems, landscaping, pest control and snow removal.

Black & McDonald is also responsible for the specialized hospital systems, which include lab exhaust systems, medical gases, lab vacuum system, clean steam production, water purification systems, central dispatch systems, parking, fire and contingency planning, and the maintenance of hospital rolling stock. Over the long term, the team continues to play an integral role in maintenance, sustainability, and lifecycle considerations for all its high-performing hospitals.

Meanwhile, a dedicated 24/7 bi-lingual Central Contact Centre offers comprehensive coverage, ensuring a speedy response thanks to on-site and truck-based licensed trades.

To find out more about Black & McDonald’s services, please visit: www.blackandmcdonald.com

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INFRASTRUCTURE AGENDA

Essential Investments Flagged to Support Societal Imperatives

By Paul Angelone and Scarlett Collier The Urban Land Institute (ULI), which counts more than 45,000 real estate and development professionals in its worldwide membership, has launched an initiative to build strategic partnerships, gather technical resources and promote sustainable, collaborative approaches to infrastructure planning and implementation. The following is an excerpt from the ULI Infrastructure Framework, which sets out the rationale, guiding principles and objectives for the initiative – Editor.

THE QUALITY of infrastructure, along with consumer demand, is a key driver for real estate development investment.

Core physical infrastructure investments such as regiona l t ra nspor t ation, electricity, water and broadband are essential for building construction and use, but are often off-site and rarely controlled by the developer or investor.

Typically, developers and investors work with the infrastructure already in place, connecting the buildings through constructing access points and helping to pay for the infrastructure through impact fees, value-capture revenues, property taxes and other user fees. Often, the infrastructure shapes the development based on physical limitations as well as regulatory and financial policies, together with the end-user or tenants,

who determine the development’s type, size and scope.

The real estate development process creates a direct value-enhancing relationship between those who build and maintain infrastructure, the developers of buildings, and the end user or tenant. The community benefits by being able to access services and use social infrastructure, which is often maintained by the local or state/provincial government and sometimes by the developer since both infrastructure and real estate development build community and place.

The greatest value can be generated for the real estate developer, the investor, the municipality and the community when strategic infrastructure investment is concentrated around proposed or existing community hubs and follows smart growth principles such as: reducing sprawl;

encouraging density; preserving open space, farmland and natural landscapes; designing walkable and connected neighbourhoods; and creating a range of housing affordability options. It is also important to ensure that this infrastructure investment can be adaptable to future needs and allow for infill urban development.

URBAN IMPERATIVE Infrastructure is a building block for communities everywhere that includes the key spaces that build community — anchor institutions, the civic commons and housing — beyond just the more traditional core physica l in f rast r uct u re such as transportation, water, sanitation, energy, broadband and other utilities. Because infrastructure provides the means for connection, creative place-making and Canadian Property Management | September 2022 17

developmentoutlook opportunity, smart infrastructure investment is an imperative for cities now and in the future, especially as more interconnected systems are needed.

In addition to physically constructing the buildings to house institutions such as schools or other public facilities, the real estate industry can be a leader in supporting those public policies and programs that enable infrastructure that allows for best practices in urban development. This broad view of the definition of infrastructure

enables it to be leveraged in different ways throughout the real estate development process from building physical infrastructure as part of site preparation to the construction of buildings and other public facilities allowing for the end-users to move into the properties.

This also recognizes that real estate development and infrastructure investment do not happ en wit h i n a vacuu m. Just

having a t ra nsit stop or access to electricity and water does not translate into new development opportunities.

Instead, it is a combination of those social, economic and physical elements, along with a policy framework to guide development in a more holistic and integrated way, that results in the creation of long-term real estate and community value.

An extraordinary need exists for new infrastructure investment to manage a rapidly urbanizing world as well as to maintain already built infrastructure. The United Nations estimates that more than half the world’s population (55%) is already urban, and this share is expected to grow to more than two-thirds by 2050, with nearly all future population growth occurring in cities. This growth is putting pressure on existing systems especially because a concurrent need exists to invest in infrastructure that increases social equity, mitigates the worst impacts of climate change and builds resilience.

E st i m a t e s va r y a b o ut t h e t o t a l investment required globally, but more than USD $7 trillion annually over the next 15 to 30 years is generally the expert consensus opinion of what is needed. T his represents 13% of the collective GDP of 38 OECD (Organisation fo r E c o n o m ic C o - o p e r a t io n a n d Development) countries and 8% of total global GDP. PRINCIPLES AND PRIORITIES This framework must be viewed through the lens that continuing inequities threaten local, national and global social and economic foundations, especially because infrastructure serves as the organizational framework for building community and place. Now is the time to prioritize effective infrastructure-led development that builds long-term real estate and community value through a holistic and integrated approach instead of disconnected investments. Key priorities include: Investment to Increase Equity and Sustainability

Holistic and integrated investment in neighbourhoods and business districts should take historical and systematic inequities into account, enable sustainable operations and maintenance, and address climate change.

This requires efficient allocation of resources and fiscal responsibility by planning, designing and building infrastructure for multiple co-benefits, value enhancement and productivity.

18 September 2022 | Canadian Property Management

developmentoutlook Public Transportation and Mobility

Access to jobs, economic opportunities, social interactions and mobility is essential. Public transportation provides the regional framework for compact, people-centric urban development, enables significant real estate and value creation opportunities and mitigates climate change. Public transportation should be reliable, frequent and accessible.

Climate Change Mitigation and Adaptation

Many of the infrastructure investment strategies to mitigate and adapt to climate change are similar to those that enable more holistic and integrated urban development.

This should include decarbonization and a path to zero emissions through modernizing the energy grid and enhancing everyone’s ability to invest in and have access to renewable energy, energy storage, vehicle electrification and grid-interactive buildings, as well as building communities that can withstand and bounce back from extreme weather events.

Affordable, Reliable Internet

Availability of widespread, high-speed broadband networks is critical for everyone.

As the world becomes more digitalized, those without access will be increasingly left behind.

Broadband should be viewed as necessary infrastructure that is as essential as electricity and water for communities to thrive and grow economically.

Housing

The public sector should lead in developing an infrastructure framework to spur public/ private partnerships to support the development of the full spectrum of housing types at all income levels. This will require some regulatory changes, such as zoning reform. The demand for housing will shape all other infrastr ucture investments.

VALUE CAPTURE A survey of ULI global membership generally concluded that government — at all levels — should play a leadership role in financing and funding investments that provide a public good, but that might not offer a return on investment within a period typical for marketdriven transactions.

However, the private sector can also play an important role in the implementation of infrastructure priorities. That occurs through the complementary opportunity for the private and non-profit sectors to develop infill projects within the broader infrastructure ecosystem designed and implemented by the public sector.

Value capture is a tool that enables the recovery and reinvestment of land value increases resulting from public infrastructure investment, and can help a city looking to fully leverage its public investment in infrastructure in a sustainable manner. The uplift through value capture can be used to fund public realm improvements and equity initiatives such as affordable housing and new employment opportunities. This approach

also avoids a common misalignment between who funds, who uses and who benefits from an infrastructure development project. zz T h e U L I i n f r a s t r u c t u re f r a m e w o r k , Prioritizing Effective InfrastructureLed Development, can be found at https://knowledge.uli.org/-/media/files/ research-reports/2021/uli-infrastructureled-development_final.

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Canadian Property Management | September 2022 19

EXTREME SITUATIONS Weather Serves up Threats for Every Season LIKE MANY NATIONS, Canada is seeing an increase in the number of extreme weather events happening each year due to climate change. In 2021 alone, there were 13 catastrophic weather events causing billions of dollars in damages.

These events can take the form of heatwaves, wildfires, floods, extreme cold, tornadoes, hurricanes, hailstorms or smog.

During an emergency, important decisions need to be made swiftly. A lack of resources, protocols or trained personnel can lead to panic, the consequences of which can be severe. A well-developed emergency response plan that accounts for each type of climate emergency can reduce the risk of worker injuries and incidents, and prevent or minimize damage to property, equipment, materials, and the environment.

20 September 2022 | Canadian Property Management

An extreme weather event may not have happened nearby, but that doesn’t mean it won’t have an impact. Climate emergencies can bring about hazards such as fires, explosions, poor air quality, building collapses, structural failures, spills and the unintentional releases of chemicals. There may also be equipment malfunctions, loss of power and water, or stranded workers to contend with.

Some questions include: • What are the capabilities to respond to an emergency?

• How does the layout of the premises factor in?

• Is there ready access to emergency services under regular circumstances?

• Will these emergency services be available to a specified workplace in a widespread emergency?

ASSESS RISK Perform a vulnerability assessment to identify which extreme weather events could occur in the area, then determine what the hazards and risks would be to workers and the organization if those events happened. Specific hazards and risks will depend on several factors such as location, weather trends, severity, as well as the size and type of the workplace.

After all the hazards have been identified for each climate emergency, conduct a risk assessment to evaluate the risks that each of these hazards pose to workers, property and the environment.

To assess risk, consider the likelihood and severity of harm or damage. This assessment will help with prioritization and resource allocation during emergency planning and, most importantly, the

riskmanagement HIGHER CANCER RATES SEEN IN AFTERMATH OF WILDFIRES Canadian researchers have conducted the first-ever epidemiological study of cancer trends in the aftermath of wildfires. Findings published this spring in the international medical science and health news journal, The Lancet, reveal a heightened incidence of brain and lung cancers in the vicinities where wildfires have occurred, but little discernible increase in blood cancers.

The research team — from McGill University, Statistics Canada and Health Canada — drew data from the 1996 Canadian Census health and environmental cohort, which tracks a statistically representative sampling of approximately 3.6 million people for the occurrence of cancer and cancer-related mortality in the period from 1996 to 2015. This was further scoped to people between the ages of 25 and 89 who had resided in Canada since at least 1986, lived outside Toronto, Montreal or Vancouver (i.e. in cities with fewer than 1.5 million residents) and within a 50-kilometre radius of areas burned in a wildfire. Those areas were pinpointed using Canada’s national burn area composite (NBAC) geographic information system (GIS) database.

Wildfires emit an array of carcinogens including polycyclic aromatic hydrocarbons, benzene, formaldehyde, phenols and heavy metals.

Health researchers are additionally focused on the potential consequences of long-term or chronic exposure given that some regions are routinely prone to wildfires.

“Although some pollutants return to normal concentrations shortly after the fire has stopped burning (eg, fine particulate air pollution), other chemicals might persist in the environment for long periods of time, including heavy metals and polycyclic aromatic hydrocarbons. As such, exposure to harmful environmental pollutants might continue beyond the period of active burning through several routes of exposure,” the study authors hypothesize.

The study conclusions emphasize that there are many variables to consider, but this initial examination finds a 10% higher rate of brain cancer and 4.9% higher incidence of lung cancer among those exposed to wildfire emissions in the previous 10 years. The authors note that there are many more factors to be considered and tackled in future research, including other types of cancers to which wildfire exposure may contribute and the health impact of the psychological stress wildfires are likely to cause for nearby residents.

They also project that such research will become increasingly relevant. “With the changing climate, wildfires are predicted to become more prevalent, severe and longer in duration in the future, and are increasingly recognized as a population health problem,” they reiterate.

Long-term exposure to wildfires and cancer incidence in Canada: a population-based observational cohort study is available with open access on The Lancet Planetary Health website at www.thelancet.com/journals/lanplh/home

development of proper emergency response procedures.

For example: Is there an area where flammables, explosives or chemicals are used or stored? Consider the possibility that one event could trigger others. A fire caused by extreme weather off-site could reach the chemical storage area. The extreme heat could cause an explosion, structural failure and trigger other events.

PREPARE RESPONSES Once the potential risks and consequences of each climate emergency have been identified, determine the actions required to protect workers, property and the environment. Emergency response plans for extreme weather events should include written procedures on how to respond, along with the responsibilities of designated people.

Consider the following: • Can steps be taken to prevent or minimize the impact of an emergency?

• What resources will be required (such as trained personnel, fire fighting and rescue equipment, personal protective e qu ipment, f i rst a id suppl ies, communication equipment or power generators)?

• Where are they located?

• Are potential impacts on these resources also being accounted for?

• Will other emergency supplies need to be provided (e.g., food and water)?

Detailed lists of emergency response personnel including their cell phone numbers, alternate contact details and their duties and responsibilities should be readily accessible within the plan. Include large-scale maps and/or drawings showing evacuation routes, service conduits (gas, water and wastewater lines, as well as stormwater drainage), first aid supplies, emergency equipment and gathering areas or muster points. Mark out the designated shelter areas and an inventory of emergency supplies.

Outline a process for checking the local weather forecast and air quality advisory, and a communication plan for sending weather alerts to workers. Include emergency procedures for workers who may not be in the primary workplace, including those who work outside, travel, work in remote areas, work alone or are responsible for overseeing critical processes and equipment.

COMMUNICATE Include details on how plans will be initiated and communicated with workers in the event of an emergency. Note that the usual channels of communication should not be relied upon to function normally.

Plans should factor in how long it will take for internal and external emergency services to respond. In the event of climate emergencies, there could be a delay in response due to an increase in demand for these services.

The plan should also provide workers with separate written instructions about their emergency response duties.

Outline procedures on how to safely monitor, shut down or continue to operate critical processes, equipment and other devices that may cause injuries or damage in the event of a power failure or malfunction.

Emergency planning is important from both a workplace and community perspective because an organization may be able to offer services to others in an emergency.

Given the broad range of potential climate emergencies, the plan and protocols are likely to be contained in a substantial document. Ensure the emergency preparedness committee is reviewing the plan and its effectiveness regularly so it can be revised when needed. zz The preceding article was provided by the Canadian Centre for Occupational Health and Safety. For more information, see the website at www.ccohs.ca.

Canadian Property Management | September 2022 21

SUDDEN TWISTS Tornadoes a Possibility from Spring to Fall

By Craig Smith and Jim Mandeville CANADA IS THE WORLD’S second most tornado-hit nation after the United States, with an average of 80 to 100 such incidents reported annually from March through October. In late July this year, tornado touchdowns in Ontario and Quebec left power outages and massive cleanup for communities, businesses and residents caught in the stormy path of destruction.

Severe storms can produce intense w i nd s, wh ich , u nder t he r ig ht circumstances, can lead to tornadoes.

P r op e r t y m a n a ge r s sho u ld no t underestimate the power of combined wind and water threats when thunderstorm warnings are issued.

For example, the Derecho storm that cut a swath through southern, central and eastern Ontario during the 2022 May long weekend did so with very little warning. It caused 10 deaths, extensive damage and the destruction of several buildings.

22 September 2022 | Canadian Property Management

In August 2021, a tornado touchdown in Barrie, Ontario — bringing winds of up to 210 kilometres per hour — left 150 damaged homes and $75 million in damage along the five-kilometre path it travelled.

Globally, data shows there’s been only a slight increase in weather, water and climate disasters between 2011 and 2021 compared to the previous decade, but Canada is experiencing more frequent and severe wildfires, windstorms, hailstorms and rainstorms — all of which can cause damage to buildings.

The Insurance Bureau of Canada estimates that 2021 saw $2.1 billion in insured damage from flooding, wildfires and extreme weather events, resulting in a higher number of claims and a significant spike in insurance rates.

While there’s little that can be done to protect a building from a direct hit of a tornado, certain building types can withstand high winds better than others.

Concrete and steel buildings are more resilient to severe wind impacts — although, often these structures are clad in glass curtain walls, which can shatter, allowing water to enter the structure while also creating the hazard of falling glass.

Conventional wood frame structures are generally not as strong as concrete ones.

Direct impacts from tornadoes or extreme straight-line winds can cause substantial structural damage, including the displacement of roofs and, in rare circumstances, total structural collapse.

Modern construction practices are helping to minimize this risk in new buildings.

Features like hurricane straps on trusses and vertical reinforcements, installed during the framing stage, can significantly increase the durability of these structures. During new construction, especially in areas prone to severe wind events, additional structural reinforcement, even in excess of local codes, is highly recommended.

riskmanagement

Canada is the world’s second most tornado-hit nation after the United States.

Unfortunately, these modifications are not always possible or practical in existing buildings due to the extensive redesign that would be required.

However, owners and managers can upgrade the building envelope (roofing, cladding, windows and doors) to make it more resilient to wind damage.

Building owners and managers should prioritize emergency planning and be proactive. Preparedness is key to mitigating and managing damage and maintaining the safety of occupants.

Recommended proactive measures in advance of a storm include: • Secure loose objects outdoors. Garbage bins, potted plants, lawn furniture and bicycles can become deadly projectiles in high winds. Move them indoors or tie them down.

Storm-related power outages can bring power surges when electricity is restored. Surge protectors help to protect electronic devices from voltage spikes.

Back up electronic devices. This is critical for both building management and occupants. Critical data should be stored off-site in case computers or devices are damaged or inaccessible.

• Install surge protectors.

•

• Ensure adequate insurance coverage.

•

Facility managers should check policies to make sure they include coverage for wind or rain damage. This generally includes damage caused by flying debris or falling branches or trees, or damage when water enters through openings caused by high winds.

Test emergency plans. This can often reveal parts of the plan that need improve-

ment. Annual testing helps to ensure that building staff and occupants will know what to do should the need arise.

In the aftermath of a tornado or severe storm: • Stay informed. When a severe storm hits, updates should come in regularly, as will notifications of follow-up storms in the area.

• Ensure the health and safet y of occupants. Remain in contact with

tena nts/residents usi ng proper communication and protocols before, during and after a severe storm.

• Inspect buildings once the storm has subsided. Tornadoes’ strong winds have

the potential to hurl debris hundreds of metres so inspect the exterior thoroughly.

Otherwise, the next time it rains, there may be some unexpected water damage to contend with. zz

Craig Smith is Director, Commercial Business Development, and Jim Mandeville is Senior Vice President – Large Loss with FIRST ONSITE Residential & Commercial Proper ty Restoration Services. For more information, see the website at https://firstonsite.ca.

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Canadian Property Management | September 2022 23

GRID EXPECTATIONS Fossil-fuel-fired Power Plants Placed on Notice

By Barbara Carss

FOSSIL-FUEL-FIRED power plants are creeping closer to stranded asset status. The recently released framework for Canada’s looming clean electricity regulations (CER) makes it clear that utilities and other entities selling power into public transmission and distribution networks have about 12 years to cut the greenhouse gas (GHG) emissions from their production processes down to nearzero levels.

The January 1, 2035 deadline for compliance is expected to be a persuasive argument against bringing new fossilfuel-fired generation online in the interim. Suppliers will need to focus on how to retrofit or replace existing gasand coal-fired plants. Meanwhile, the framework suggests industries and large institutional facilities with gas-fired cogeneration will not be subject to the 24 September 2022 | Canadian Property Management

CER initially, provided they do not sell any electricity into the grid.

“Canada is ready to take the next step in fighting climate change by developing an electricity grid that is net-zero emissions by 2035,” declares Steven Guilbeault, Ca nada’s Minister of Environment and Climate Change. “This is a key part of our government’s plan for a healthy environment and healthy economy.”

Although it is missing some central details — such as emissions intensity thresholds and exact qualifications for allowed exemptions or extensions to the compliance deadline — the framework sets outs the general rules that will guide the pursuit of a net-zero electricity grid.

This follows an earlier round of consultations last winter, which is reported to have drawn more than 160

written submissions and “numerous discussions with key interested parties” i n clu d i n g p r ov i n c i a l / t e r r it o r i a l governments, Indigenous communities and industry.

“Achieving a net-zero electricity supply is key to reaching Canada’s climate targets in two ways,” the preamble to the framework states. “First, it will reduce GHG emissions from production of electricity. Second, using clean electricity instead of fossil fuels in vehicles, heating and industry will reduce emissions from those sectors too.”

Clean energy proponents maintain the regulations send an important signal to the market.

“A regulation like this can provide certainty to industry, to investors, so that they can start investing in the right type of assets to get to a net-zero grid by 2035,” says Binnu Jeyakumar, Director

emissionsreduction

“It’s less taxing on clean energy generation when demand is reduced, and several provincial utilities are not exploiting energy efficiency savings potential.” of Clean Energy with the research and policy think tank, the Pembina Institute.

“We have not had that kind of certainty in our electricity system. It can be a game-changer.”

PROBLEMATIC FLEXIBILITIES FLAGGED As proposed, the regulations will apply to any fossil-fuel-fired generating unit above a yet-to-be-specified “small megawatt” capacity that produces electricity sold in a regulated system. Almost all designated units will have to meet an emissions performance standard — expected to be “set at a stringent, near-zero value in line with direct emissions from wellperforming, low-emitting generation” — by Jan. 1, 2035 at the latest.

However, there would be slightly different rules for units commissioned before 2025, which would be bound by

the new near-zero emissions standard as soon as they reach the end of their prescribed life. For now, there is no definition or mechanism to stipulate what a prescribed life is, but the framework suggests it could be based on a fixed number of years from a unit’s date of commissioning.

Once they hit the applicable deadline, regulated units that cannot stay within the mandated emissions threshold would be taken out of service. Those that can comply would have to financially compensate for any residual emissions below the maximum allowable threshold, likely via the carbon tax rate or the purchase of carbon offsets.

Some criteria for exemptions or circumstances for extending the deadline for compliance are also outlined.

Notably, fossil-fuel-fired generation

could be pressed into service without penalty during emergency situations defined as “extraordinary, unforeseen and irresistible”.

There could be some leeway for a unit to stay in service beyond its prescribed life to provide backup contingency for renewable generation, which would be tied to yet-to-be-defined annual limits on emissions and hours of operation.

Finally, the framework proposes that “newer” natural gas units built before the adoption of the regulations could be allowed to operate for a “short prescribed period” past 2035, but neither “newer” nor “short prescribed period” are defined.

Jeyakumar points to a 900-megawatt (MW) gas-fired generating plant under construction in Alberta, which is scheduled to be commissioned in 2023,

STRATEGY TO CUT BUILDING EMISSIONS PROMISED FOR SPRING 2023 A newly released discussion paper sets out a proposed emissions reduction agenda for cutting about 38 megatonnes (Mt) of greenhouse gas (GHG) output from Canada’s building inventory within the next eight years. Buildings sector insiders and the general public were invited to submit comments by Sept. 16, which will be considered in refining the Canada Green Buildings Strategy promised for the spring of 2023.

Earlier this year, the Canadian government earmarked $150 million for the strategy to support deep retrofits and the phase-out of fossil-fuel space and water heating in existing building stock, while encouraging net-zero emissions performance in new construction. The initiative aligns with national targets to reduce GHG emissions by 40 to 45% below 2005 levels by 2030 as a step toward net-zero emissions by 2050.

“Canada’s green buildings strategy will help grow our economy and achieve our ambitious climate objectives,” asserts Jonathan Wilkinson, Canada’s Minister of Natural Resources. “I look forward to hearing from Canadians on the path forward.”

To meet the 2050 net-zero goal, it’s projected that 3 to 5% of existing buildings will need to undergo deep retrofits annually beginning no later than 2025 and all new construction will need to be net-zero-carbon-ready by no later than 2032. The strategy is to be premised on attracting private capital investment, promoting affordability, complementing the GHG-reducing efforts of other economic sectors, reflecting equity, diversity and inclusion and enabling Indigenous climate leadership.

The discussion paper identifies six broad components of the strategy, each with a series of suggested measures, to steer development and investment decisions, promote innovation and expand workforce expertise. That includes plans to: revise or introduce new regulations; fund research and training; augment retrofit financing; and decarbonize the government’s own real estate portfolio.

“Given the scope and scale of the challenge, the Canada Green Buildings Strategy is needed to mobilize commitment from all parts of the sector — public and private — to strategically deploy investment toward the market transformation and the cost compression needed to rapidly and cost-effectively transform the built environment,” the discussion paper states. “To achieve net-zero emissions from Canada’s building sector, we need to take a market transformation perspective and that means working across jurisdictions to set a high bar and prepare the market to meet it.”

Some of the suggested priorities include: accelerated adoption of building codes and standards to impose energy efficiency and climate resilience performance requirements; incentives and/or regulatory mandates for the electrification of space and water heating; widespread rollout of energy benchmarking, labelling and disclosure; mortgage financing that reflects climate risk; incorporation of life-cycle carbon into building performance metrics; training for the green building workforce; and consistent collection and comparability of data.

Canadian Property Management | September 2022 25

emissionsreduction as an example of some of the CER’s potentially problematic flexibilities. She cautions the drafters of the regulations not to assume prospective investors won’t risk gambling on new fossil-fuel-fired facilities that lack abatement technologies in advance of 2035.

“One would have imagined that the carbon pricing itself should have sent a strong enough signal to deter that 900-MW gas-fired plant. So I think there is a need for stronger signals in the short term,” Jeyakumar muses. “Investments can happen in the next couple of years and, under the wording of the regulation framework, some of these plants can qualify for exemptions and can end up operating past 2035 without having to meet that standard.”

TECHNOLOGY-NEUTRAL STANCE Currently, more than 80% of Canada’s electricity comes from low-emitting sources, including nuclear, hydroelectric and other renewables. Alberta, Saskatchewan and Nova Scotia are the provinces most reliant on fossil-fuel-fired generation for base electricity load, while gas-fired peaking plants are a fixture of Ontario’s system to augment supply during periods of high demand.

The framework commits the CER to a “ t e ch nolog y-neut r a l” st a nc e on complying with 2035 low-emissions thresholds, which would allow for options such as transitioning to hydrogen or installing abatement technologies. As stated in the preamble, the CER is envisioned as a prompt for: “energy efficiency, demand-side management, dynamic pricing and a range of efficiency, abatement and non-emitting generating technologies such as: carbon capture and storage (CCS); solar; wind; geothermal; small modular nuclear reactors (SMRs); hydro; distributed energy systems; interties; and energy storage.”

Although there is nothing overtly promoting energy efficiency or demand management within the CER framework, net-zero and conservation advocates stress that it should be viewed as part of a package of complementary initiatives. The electricity grid will be transitioning away from reliance on fossil-fuel generation in sync with projected escalating electricity demand as consumers switch to electrified options for heating and transportation. In this, there is a presumed vacuum for provincial/ territorial governments to fill.

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“It’s less taxing on clean energy generation when demand is reduced, and several provincial utilities are not exploiting energy efficiency savings potential,” observes Brendan Haley, Director of Policy with the advocacy and research organization, Efficiency Canada, which promotes the dual economic and environmental benefits of energy and water efficiency. “An energy efficiency resource standard would be a natural complement to the clean electricity standard, but these are typically implemented at provincial levels.”

“Provinces need to have a plan on how they are going to get to a net-zero grid by 2035,” Jeyakumar concurs. “Within that plan, it’s essential that it includes not only investments in renewable energy, but also programs to incentivize energy efficiency and demand-side management.” zz The proposed framework for the clean electricity regulations can be found at www.canada.ca/en/environment-climatechange/services/canadian-environmentalprotection-act-registry/publications/ proposed-frame-clean-electricityregulations.html.

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26 Untitled-9 September12022 | Canadian Property Management

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OPEN CREDENTIALS Canada Transparently Reinforces Investor Confidence CANADA RETAINS its fifth place ranking and its status as a highly transparent real estate market in JLL’s newly released biennial survey of key drivers of investor confidence. For 2022, the Global Real Estate Transparency Index evaluates 94 countries and 156 urban regions on 254 metrics related to regulatory certainty, market governance, transaction oversight, data availability and ESG factors, drawing on both quantitative and qualitative evidence.

“We believe that a robust global benchmark is an essential tool for the real 28 September 2022 | Canadian Property Management

estate industry,” asserts Richard Bloxam, JLL’s Chief Executive Officer, Capital Markets. “Transparency is the foundation which allows corporate occupiers, investors and lenders to operate and make decisions with confidence.”

He tallies “geopolitical conflict, the climate emergency and wide scale changes in how we live and work, together with mounting economic pressures” in the defining backdrop of this year’s results.

Those are conveyed via composite scores in range of 1 to 5 — with 1 being the highest possible score — and a further breakdown

into six variously weighted sub-categories.

The five most transparent markets are all repeats from 2020. The United Kingdom tops the list with a score of 1.25. France and the United States come next with matching scores of 1.35, followed by Australia at 1.38.

Canada’s composite score of 1.44 is a 0.07 improvement since the 2020 analysis and one of the 10 largest gains achieved across the database.

Seven other countries — the Netherlands, Ireland, Sweden, Germany, New Zealand, Belgium and Japan — also rank in the highly transparent tier with scores ranging

benchmarking from 1.54 to 1.88. Finland’s score of 1.96 earns it the top place among the 22 countries in the second tier of transparent markets, which ends with Thailand’s score of 2.63.

Investment performance measurement and the country’s regulatory environment are weighted most prominently among the sub-categories, together accounting for 48.5% of the composite score. Other transparency considerations hinge on tracking of market fundamentals, monitoring of transaction processes, governance of listed investment vehicles and sustainability reporting.

Canada’s highest rank is third in the regulatory and legal sub-category, which includes considerations such as real estate tax, land use planning, building controls, property registration, enforceability of contracts and debt regulation.

Its lowest rank is 10th in transaction processes, which includes considerations such as pre-sale information, professional standards for agents, bidding processes and regulations to address money laundering.

Interestingly, Canada actually outperformed its composite score in this sub-category, with a score of 1.20. However, five countries — the U.K., France, Ireland, Denmark and New Zealand — attained perfect scores of 1.

Four countries — the U.S., Australia, the U.K. and Ireland — likewise achieved the highest possible score for governance of listed investment vehicles, a category in which Canada was ranked eighth with a score of 1.17.

Leaders fell farthest from the mark for availability of data about market fundamentals, which the U.S. bested with a score of 1.48, and sustainability reporting, where France and the U.S. registered matching top scores of 1.70.

Comparisons of the 20th ranked scores reinforce the discrepancies between some of the sub-categories. Notably, the best 20th placing is Belgium’s 1.46 for transaction process; the worst is Slovakia’s 3.08 for sustainability.

Canada placed fourth in the sustainability sub-category with a score of 1.90, just behind the U.K.’s 1.80 and one notch ahead of Australia’s 2.10.

“The sustainability transparency subindex is the lowest scoring within the survey on average,” JLL analysts confirm. “Beyond the leading markets, there is still low implementation of mandatory standards in areas such as building resilience standards and emissions reporting, as well as in the uptake of green leases and financial performance tracking. The regulatory environment and industry practice around measuring and

“Transparency is the foundation which allows corporate occupiers, investors and lenders to operate and make decisions with confidence.” reporting sustainability metrics is also highly fractured across jurisdictions and companies, making it even more difficult to navigate.”

Meanwhile, JLL analysts cite recent Canadian initiatives that complement burgeoning investor interest in alternative asset classes and sustainability.

“In Canada, higher-frequency and nontraditional data has become more available, while the national government’s move towards TCFD (Task Force on Climaterelated Financial Disclosures) aligned

company reporting and a beneficial ownership registry have also been supplemented with plans to drive higher sustainability standards, like Toronto’s Transform to Net Zero strategy and Vancouver’s Zero Emissions Buildings plan,” they observe. zz More information about the JLL Global Real Estate Transparency Index can be found at www.us.jll.com/en/trends-and-insights/research/ global-real-estate-transparency-index.

CANADA EXCELLING AT FOSTERING TECH TALENT Eight Canadian urban centres rank in CBRE’s recently released analysis of the top 50 North American markets for fostering tech talent and related economic growth. Toronto attains the highest placing among Canadian contenders, deemed to be offering the third best combination of factors that attract a skilled workforce and provide employers with human resources and competitive economic attributes.

That’s a one-notch ascent from the 2021 rankings to exchange places with Washington, D.C., which dropped to 4th this year. Among the remaining top 5, the San Francisco Bay Area and Seattle are unmoved in first and second, while Metro New York continues in the fifth spot.

Toronto now has the third largest tech workforce of the five top markets — 289,700 — after posting 44% employment growth in the years between 2016-2021. While San Francisco Bay (379,000) and Metro New York (344,500) surpass that in sheer numbers, they recorded more modest respective gains of 12.6% and 2.6% during the same period.

Vancouver cracks the top ten for 2022, rising three positions to eighth place, while Ottawa and Montreal make the top 20 at 13th and 15th respectively. Waterloo Region (24th), Calgary (28th), Edmonton (35th) and Quebec City (39th) fill out the Canadian complement.

Additionally, Halifax, London, Ontario and Winnipeg are identified as part of the “next 25” emerging North American markets — ranked ninth, 10th and 12th for their tech growth potential. Notably, London, with a total of 13,700 tech-related jobs in 2021, boasts 99% growth in the sector’s workforce during the previous five-year period.

Canada accounts for about 1 million or slightly more than 15% of the 6.5 million tech jobs in the two countries. Comparatively, the sector has more economic impact in Canada, representing about 6.4% of the national workforce versus 3.9% in the United States. Toronto, Vancouver, Ottawa and Montreal collectively host more than 635,000 tech jobs, while Waterloo Region, Calgary, Edmonton and Quebec City are home to nearly 133,000.

Last year, Toronto and Vancouver recorded the largest number of tech job gains among the 50 top markets. Toronto also added the most positions — 88,900 — in the years between 2016 and 2021, while Vancouver saw the third most new jobs, at 44,640. Nearly 45% of Toronto’s added tech contingent, equating to 39,700 jobs, was hired during the COVID-19 pandemic — another list-leading statistic over the course of 2020 and 2021.

Ottawa, Toronto and Waterloo Region make the top five for quotient of their workforces holding tech-related jobs. Ottawa leads that list with 11.6% of its total employment in the tech sector, slightly ahead of the San Francisco Bay area with 11.4%.

“This sizeable concentration of highly skilled workers offers an environment conducive to innovation,” the report submits.

The Scoring Tech Talent report can be found at www.cbre.com/insights/books/scoringtech-talent-2022.

Canadian Property Management | September 2022 29

benchmarking

HEALTH VALUES

Analysis Links Occupant Well-being to Investment Returns

A NEW REPORT from the Center for Active Design (CfAD), in collaboration with QuadReal Property Group, points to the positive ways healthy building strategies can drive value in real estate. Released in June 2022, the report’s findings support the notion that investing in the health of a building leads to higher tenant satisfaction ratings and better financial outcomes.

“Demand for healthy buildings has never been higher, and now the case for investing in them is even stronger,” maintains Joanna Frank, President and Chief Executive Officer of CfAD, the operator of the Fitwel standard. “This research makes clear the value of benchmarking to transform the information about a portfolio into a pathway that owners and investors can act on to plan future investments.”

“For our industry, benchmarking and certification helps create a standard set of health and wellness indicators that redefines best-in-class buildings,” concurs Meirav Even-Har, National Manager, Wellness & Healthy Buildings, with QuadReal Property Group.

That’s become particularly in demand since the onset of the • Supports Social Equity through strategies that increase healthpromoting opportunities for a range of vulnerable populations, COVID-19 pandemic. Commercial building owners are under greater including children, elderly, disabled or socio-economically pressure to provide data that shows exactly how their properties are disadvantaged persons. impacting the health and well-being of those who live and work there.

• Enhances Access to Healthy Foods through strategies that expand The report’s findings point to the following correlations: the availability of fruits, vegetables and other nutritious food options.

• properties located in walkable districts with plenty of amenities and access to nearby services command higher rents; QuadReal benchmarked 60 properties across Canada, capturing a • properties that conduct regular maintenance and implement mix of commercial and multi-residential occupancies. CfAD analysts operational strategies to clean, monitor and improve building then cross-referenced Fitwel scores with tenant satisfaction surveys and financial information supplied by QuadReal to derive further systems have higher occupant satisfaction ratings; insights on the paybacks of health attributes. That was translated into • properties with healthy food access via food courts, farmers a net promoter score (NPS), which is a measure of the likelihood markets or grocery stores in close proximity to the building are building occupants will recommend it to their peers, and was also used more attractive to residents and represent a great opportunity to identify areas where investment in health attributes might further augment returns. for developers.

For example, stair design and lactation rooms were identified as two Fitwel has also recently introduced a portfolio benchmarking tool of the least implemented attributes that could improve tenant designed to help building owners and investors assess how either a satisfaction. Generally, both commercial and multi-residential single asset or an entire portfolio influence occupant health. It provides buildings attained the highest scores for occupant safety and the lowest calculations to draw linkages between operating decisions and mental, for access to healthy foods. However, the analysis shows that access to healthy foods is associated with a higher NPS for the building, social and physical health outcomes. suggesting potential untapped value.

“Improving the health of building occupants is inarguably a good The Fitwel standard has seven components: • Promotes Occupant Safety through strategies that decrease risk thing, but unless they notice the benefit themselves it can be difficult of crime and injury, protect cyclists and pedestrians from to argue for investments in those strategies. With this analysis in hand, vehicular traffic. real estate stakeholders can now make healthy building strategies a • Instills Feelings of Wellbeing through strategies that promote strategic and financial priority,” the report submits. inclusion, relaxation and perceptions of safety.

“We have found a clear correlation between a higher Fitwel score • Increases Physical Activity through strategies that incorporate with a greater willingness of occupants to recommend the building to opportunities for movement into everyday life. their friends and colleagues. This reinvigorates our conviction to invest • Impacts Surrounding Community through strategies that broaden in healthy buildings and benchmark wellness more broadly in our impacts beyond the health of on-site occupants to neighboring portfolio,” says Jamie Grey-Donald, Senior Vice President, areas.

Sustainability & EHS, at QuadReal. zz • Reduces Morbidity and Absenteeism through strategies that promote decreased rates of chronic disease and mental health The Health Drives Value in Real Estate report can be found at conditions, and reductions in disease transmission. www.fitwel.org/benchmarking-report.

30 September 2022 | Canadian Property Management

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