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VOL. 35 NO. 1 • APRIL 2020

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VOL. 35 NO. 1

APRIL 2020

Editor-in-Chief

Barbara Carss barbc@mediaedge.ca

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TEL: (416) 512-8186 • FAX: (416) 512-8344 Published and printed six times yearly as follows: March, April/May, June, Aug/Sept, Oct/Nov, Dec by MediaEdge Communications Inc. 2001 Sheppard Avenue East, Suite 500 | Toronto, Ontario M2J 4Z8 (416) 512-8186 Fax: (416) 512-8344 e-mail: circulation@mediaedge.ca Subscription Rates: Canada: 1 year, $60*; 2 years, $110* Single Copy Sales: Canada: $12* Outside Canada: US 1 year, $85 International $110 *Plus applicable taxes Reprints: Requests for permission to reprint any portion of this magazine should be sent to info@mediaedge.ca. Copyright 2020 Canada Post Canadian Publications Mail Sales Product Agreement No. 40063056 ISSN 0834-3357 Authors: Canadian Property Management Magazine accepts unsolicited query letters and article suggestions. Manufacturers: Those wishing to have their products reviewed should contact the publisher or send information to the attention of the editor. Sworn Statement of Circulation: Available from the publisher upon written request. Although Canadian Property Management makes every effort to ensure the accuracy of the information published, we cannot be held liable for any errors or omissions, however caused. Printed in Canada

editor’snote COVID-19 IS BOTH a major shock and not entirely surprising. As recently as last fall, few people would have ranked a global pandemic as the most worrisome threat to societal well-being and economic stability, but few strategic planners would have omitted it from the list of probabilities. The Building Owners and Managers Association (BOMA) of Canada produced the first edition of its Guide to Pandemic Planning well over a decade ago and, presciently it now seems, updated it just last year. Other industry-led efforts to promote resiliency, business continuity and recovery in response to natural or humantriggered disasters, and to safeguard people, property and data, have additionally bolstered overall readiness to respond to many of the issues that have arisen in the past weeks. Nevertheless, transitioning from a planning exercise to real-time unfolding events is unnerving for everyone. Industry associations have played a central role in connecting their members and helping them share their experiences and expertise throughout this pandemic crisis. Equally important, they’ve underscored the industry’s contribution to the Canadian economy and communicated its needs to all levels of government. Cheryl Gray, Head, Special Projects, with QuadReal Property Group’s operational excellence division, has surely happened upon an interesting year for her term as the first ever President of the Institute of Real Estate Management (IREM) from outside the United States. “The primary focus for IREM right now is to support our members and the property management industry by providing them with relevant information, tools and resources as they deal with the challenges of managing through the impact of COVID-19,” she recently told the REMI Network. Beyond the well-known stalwarts, COVID-19 has prompted new organizations like the Canadian Hotel Advisor Collective, a group of real estate, legal, financial and marketing services providers who quickly came together to support one of commercial real estate’s hardest hit sectors. “We’ve all placed a priority on helping the industry and our clients, and I think we are all pleased to be working together on this,” founding member, Bill Stone, Executive Vice President of CBRE Hotels told the REMI Network. Technology’s role is undisputed in keeping the industry— and the economy, in general — functioning throughout the lengthy and widespread lockdown. This issue’s features on smart buildings and proptech further explore technology’s reach and potential. (Accordingly, our digital news site at www.REMInetwork.com has enabled our editorial team to deliver timely reporting on the events and repercussions of the past tumultuous weeks. We invite you to stay with us as we see what happens next.) We also look back to the pre-COVID-19 view, with reports on the performance of the Canada Property Index in 2019, and insight on open-end real estate funds drawn from REALPAC’s information-collecting initiative last year. Although it’s far from breaking news that real estate follows a cyclical course and institutional investors are in it for the long haul, it seems like a fitting time to repeat that message. Finally, we present the annual Who’s Who in Canadian Real Estate survey. Thank you to Kerrigan Brown, AJ Campbell and Taras Kozak for collecting and coordinating this year’s results. Barbara Carss barbc@mediaedge.ca @BarbaraCarss

Canadian Property Management | April 2020 3

contents 4 April 2020 | Canadian Property Management

Focus: Real Estate News & Context 6

COVID-19 Response: Crisis management overlaps with business contingency and recovery plans.

10 Smart Pandemic Controls: Building technology supports infection detection, services for quarantined occupants and remote systems operations. 12 2019 Investment Returns: March turbulence jostles the perspective from 2020’s early weeks. 16 Open-end Funds: REALPAC queries 15 property fund managers collectively holding more than $143 billion in assets under management. 19 Who’s Who in Canadian Real Estate: Results of the 25th annual survey of office, retail, industrial and multi-residential portfolios. 30 Proptech Potential: Canadian commercial real estate companies are navigating the learning curve of data-based technologies and services. 34 Accessibility Progress: Updates proposed for Canada’s National Building Code.

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CRISIS, CONTIN RECOVERY Commercial Real Estate Sector Contemplates COVID-19 By Barbara Carss THE MODELLERS didn’t precisely foresee a global pandemic upending the economy in the early months of 2020, but analysts and strategic planners have long assumed that an event like the COVID-19 outbreak could occur. Now in its grips, they’re looking to a range of tools and resources to both respond to the immediate crisis and help chart the way forward. “For a forecaster, it’s a black swan,” acknowledges Adam White, Chief Executive Officer of the energy management analytics and advisory firm, Powerconsumer Inc., evoking the term for sudden, unexpected upheaval with severe consequences. “I would never have guessed they would have ever evacuated and shut down so much of the economy.” However, predictive modelling now provides insight into what might lie 6 April 2020 | Canadian Property Management

ahead. In White’s case, that’s calculating potential electricity cost repercussions for many larger commercial customers and small manufacturers in Ontario — information that can guide those sectors’ decision-making and perhaps be leveraged to lobby the Ontario government for intervention and aid. Commercial real estate operators are seeking similar kinds of advice across a wide spectrum of expertise as they deploy their crisis management, business c o n t i n u it y a n d r e c ove r y pl a n s . Discussing the issue during a recent REMI Network-sponsored webinar, Rob Wesley, Lead, Real Estate and Construction Services, with the business consulting firm, MNP, noted that many questions are arising around lease obligations, rent deferrals, security and

cleaning requirements that call for extra legal, insurance, financial, IT and building services acumen. “I would lean on, rely on and make sure you are communicating with your advisor team,” he urged. He tallied the many demands building owners/managers are now juggling as they: confront disruption to their own service delivery models and supply chains; deal with their tenants’ similar business concer ns; accommodate essential personnel and contractors who still need to be on-site in buildings; and coordinate the efforts of scattered staff wo r k i n g f r o m t h e i r h o m e s . Management teams are facing often unfamiliar financial, technical and social challenges, discovering the strengths and weaknesses of their

NGENCY, preparedness planning and learning lessons along the way. “I don’t think we are all the way out of our crisis management plan even though we have al ready tra nsitioned to contingency,” revealed Justin Taylor, Chief Operating Officer with Greenrock Real Estate Advisors. “Crisis management tends to be [thought of as] the short term, but we are certainly not seeing that in this situation,” concurred Cheryl Gray, Head, Special Projects, Operational Excellence, with QuadReal Property Group and the moderator of the discussion. MORE THAN DOWNSIZING Cash flow ranks high among the most immediate and pressing concerns for landlords and their tenants. Panellists

reiterated it’s important to stay on top of the steady announcements of federal and provincial/territorial programs and ensure tenants know about available supports. Off loading discretionary expenses can be a prudent way to find funds to redeploy to business contingency and recovery. “The cash flow side is a big and ongoing component of your continuity plan,” Wesley submitted. “It may not all be downsizing. There may be places where you’re spending more.” For example, he reminded webinar attendees that largely vacant buildings and fragmented online management involving dozens, or hundreds, of connections from staff homes are vulnerable to both physical and cyber breaches. “A lot of us are not as focused

on this as we might need to be,” Wesley cautioned. Extra cleaning and IT expenditures are likely showing up in many operating budgets. Looking to recovery, Wesley suggests new funds may also be directed to marketing. Meanwhile, the impact on leasing has been another frustration for cash flow. “Any deals that we had closing, those people can’t move in, they can’t get their permits,” Taylor recounted. “A lot of deals are not falling off the table, but they are certainly being delayed.” EYE-OPENING DISCOVERIES Sketching out what’s been relatively easy, Taylor reported that Greenrock’s management staff was already equipped to work from home or other remote Canadian Property Management | April 2020 7

COVID-19response locations. The company has since rolled out a few extra supports, such as delivering office chairs to staff members’ homes and introducing some online social and personal reflection opportunities, including a weekly meditation session and a Friday afternoon virtual happy hour. Even so, the scale of the remote workforce — some also sharing quarters with online-learners — is not something most flex-hour plans have contemplated. “We were fortunate, I think, that we had a lot of things already in place, but the dynamic of having partners, kids or roommates all in one place has confounded it,” Taylor reflected. Ironically, one of his more positive discoveries from a staff manager’s perspective is not necessarily good news for a real estate provider. Reporting a new appreciation for online meetings and oneon-one communication with staff, he speculates that many others have experienced the same “eye opener.” “I think I have spent more time with people individually than when I’m in the office, and this is something I didn’t

imagine,” Taylor recounted. “I also sense companies [now] realize they can work remotely to a much larger degree than they have.” Wesley l i kew i s e a g r e e d t h a t COVID-19 has accelerated what was already robust adoption of remote work and flex space, perhaps by as much as five years. On the flipside, however, it may have placed a brake on open floorplans and the steady densification of office space that’s been occurring over the past decade or more. “It may return to more private [office] space,” he hypothesized. As a second month of the workfrom-home regimen unfolds, there’s also plenty of anecdotal evidence that many people are weary of social distancing. “I think we will all have a heightened appetite for the social aspects [of office environments],” Wesley said. “For all of this, there is a sense that the longer this goes on, the more different the new normal is going to be.” zz

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HOTEL INDUSTRY TROUBLESHOOTERS Real estate, legal and financial services providers to the Canadian hotel industry have come together to support the sector through the COVID-19 crisis. The nine founding members of the new Canadian Hotel Advisor Collective (CHAC) see a role for themselves as advocates, troubleshooters and a wellconnected communication channel for industry stakeholders and potential procurers of hotel space. “The industry itself has been devastated; there is no question,” says Bill Stone, Executive Vice President of CBRE Hotels and a CHAC founder. “It will come back, no question, but in the interim there are challenges to face.” To begin, CHAC is preparing informational webinars to be broadcast on a recurring basis, and launching a website to offer a portal to resources, updates on industry-specific developments and a platform for communication to and among hotel providers and affiliated services. The collective is also working closely with the Hotel Association of Canada, and drawing on its various networks to help connect with the agencies now beginning to procure space for selfisolation facilities and alternative health care sites. “Municipalities, hospitals and governments generally are trying to sort out accommodations needs,” Stone reports. “We are trying to disseminate information and are reaching out to everyone from associations to municipalities to the hotel providers.” Currently, his conventional tasks in brokerage services are largely on hold. “Right now, we are in a no-bid market. We are not marketing assets,” Stone reiterates. Along with CBRE Hotels, CHAC members include: Colliers Hotels; Cushman & Wakefield; JLL; the consulting firm HVS; CFO Capital; Blake, Cassels & Graydon LLP; Cassels, Brock & Blackwell LLP; and industry event producer Big Picture Conferences. “The collective came together quite quickly,” Stone affirms. “We’ve all placed a priority on helping the industry and our clients, and I think we are all pleased to be working together on this.” For more information about the Canadian Hotel Advisor Collective, see the website at www.canadianhoteladvisorcollective.com

We are ALL in this TOGETHER Benjamin L. Shinewald President & Chief Executive Officer Président et chef de la direction BOMA Canada From the Coronavirus Summit to multiple “full house” webinars, BOMA Canada continues to focus on supporting our industry through the challenge of coronavirus – and towards the opportunity that awaits around the corner. With hundreds of members volunteering from coast-to-coast, frequent consultation with our National Advisory Council and strong, national coordination with our eleven local chapters, BOMA Canada is pushing to advance its mission of Connecting, Elevating and Resourcing the Real Estate Community. Now, a new and welcome challenge presents itself: Back to Work. BOMA Canada is proud to provide our Pathway Back to Work - Commercial Real Estate, Coronavirus and Re-Entry, downloadable in English and French for free from www.bomacanada.ca/coronavirus.

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SMART BUILDINGS HARNESSED FOR

PANDEMIC RESPONSE Infection Detection, Remote Operations and Ongoing Resilience By Jiri Skopek

WITH THE GROWING threat of infectious disease, smart buildings will play an increasingly important role to help detect and control their spread, facilitate the remote operation of buildings in lockdown situations and interact with the grid to increase energy resiliency. Advanced applications, smart buildings and smart grids that offer transactive modes of generation and usage have the potential to increase safety and resiliency and increase the sustainable production and consumption of electricity. The World Economic Forum estimates that the projected value to society in terms of cost savings for consumers and reduced carbon emissions surpasses any other individual digital initiative. As recent experience in China has demonstrated, there are also benefits in a pandemic. FEVER SURVEILLANCE Temperature sensing and imaging equipment that integrates intelligent video and artificial intelligence (AI) are becoming 10 April 2020 | Canadian Property Management

part of epidemic prevention and control. This has been deployed in China with the application of proactive surveillance to detect fever and rapidly diagnose infection. High-performance infrared thermal cameras, installed at the entrances of major train stations and airports, could capture thermal images of the commuter flow in real time to rapidly detect people with an abnormal temperature. This also reduces the cost and potential exposure to infection associated with manual temperature checks. AI established the identity of any passengers registering h igh temperat u res with i n the measurement area, making it possible to separate out people suspected to be infected and to identify who should be quarantined. However, such technologies would more likely viewed as an infringement on privacy in North America and Europe. That’s already emerged in the United Kingdom with the Daily Telegraph’s attempt to install desk

monitoring sensors and Barclays’ monitoring of the time employees spent at their desks. Both initiatives were scrapped due to pushback. Many hospitals already use smart applications to monitor hygiene. They include white light disinfection LED technology and washroom sensors to track whether staff are washing their hands for a sufficient length of time. Humidity levels can also be programmed by building management systems (BMS) to create indoor conditions that will minimize the survival rate of viruses. FACILITATING SOCIAL DISTANCING Smart technology can facilitate work, education and entertainment for people now self-isolating in their homes. As also seen in China, it should be possible to create a tele-medicine internet feed that enables residents to submit daily health status reports to a community worker, who is designated for a building or a district. The assigned health worker could

smarttechnology

emissions. A digital twin manifestation of the building can further extend the building operator’s capability to access all operational data remotely. ALIGNING WITH RESILIENCY While climate change may have slipped somewhat from people’s consciousness and priorities right now, it’s noteworthy that the pandemic and climate crises are both problems of exponential growth against a limited capacity to cope. In the case of the virus, the danger is that the number of infected people could overwhelm the health care system. With climate change, the concern is that emissions growth will overwhelm ability to manage consequences such as droughts, floods, wildfires and other extreme events. A brief interval of emissions reductions due to COVID-19 related pullbacks or shutdowns of emitters will not stop other extreme weather events that are already in motion. It will be critical to build resilience on all fronts — and the smart grid and building-centred transactive energy can be part of that effort. A smart grid is an electricity supply network that uses digital communications then respond with a message, a phone call, or even a home visit as needed. The city of Guangzhou launched such an application with an “I need” feature for quarantined residents to obtain daily necessities such as food and medications. As such technology becomes more commercially available, it could become a service that property managers could offer to tenants. The analytic and diagnostics capabilities of smart building AI and building automation can enable self-supporting and remote operations, which can be valuable in a pandemic. With cloud-based information about the HVAC and lighting control systems, the building operator can monitor and control the building remotely for maximum impact on energy consumption and maintain balanced thermal equilibrium in all seasons, no matter whether the building is fully occupied or almost empty. Regardless of the current exceptional conditions, this can optimize occupant comfort, save money and reduce carbon

technology to detect and react to local changes in production and demand. The capability to respond to the changing conditions and “talk to the grid” requires a smart platform that is capable of supporting a wide range of applications, including: HVAC systems; electric vehicles; and distributed-energy and whole-building loads. Platforms such as VOLTRON are rapidly being developed and tested, providing the capacity to respond to occupants’ needs, produce and store energy and communicate with the utility, the grid and other buildings. The smart grid is seen as a means to more efficient transmission of electricity; quicker restoration a f ter power disturbances; reduced operations and management costs for utilities; and ultimately, lower power costs for consumers. Combined with renewable power and storage, a smart grid also offers resiliency, which increases the grid’s coping capacity in times of pandemic or other catastrophic events. zz Jiri Skopek is an architect, planner and specialist in smart, green buildings and communities.

REMOTE VIDEO INSPECTIONS ABET SOCIAL DISTANCING

Smartphone-enabled video technology could assume an expanded role in fire safety inspections during the COVID-19 outbreak. The National Fire Protection Association (NFPA), the developer of widely referenced emergency planning, fire and life safety standards, has released guidance for conducting remote video inspections (RVI), stressing that they are equally as thorough as on-site scrutiny. Notably, RVI does not replace the human element of inspections, but it does allow for parties to the inspection to be separate from each other. Typically, someone on the building site — for example, the general contractor or a subcontractor who installed a particular component that is being inspected — operates the video recording device while receiving instructions from the inspector, who is in another location. A select number of jurisdictions in the United States have already adopted this approach. However, the NFPA acknowledges that a larger majority may have little familiarity with its possibilities. “We need to be as creative and forward-thinking as possible to ensure that communities remain adequately protected from fire and other emergencies,” asserts Kevin Carr, a Senior Fire Protection Specialist with the NFPA. “While RVI is new to many, it can represent an effective alternative to an on-site inspection.” – REMI Network Canadian Property Management | April 2020 11

investment

CAPRICIOUS 2020 Challenges Tinge 2019 Investment Returns By Barbara Carss The Canadian commercial real estate industry’s outlook and expectations offer a “before” and “after” picture of COVID-19’s sudden descent into the market during the early months of 2020. The following juxtaposes the perspectives from late January and early April – Editor. THE INDUSTRIAL-RETAIL seesaw continued to epitomize investment performance last year for the 47 institutional real estate por tfolios participating in the MSCI/REALPAC Canada Property Index. Results from the index producer peg the 2019 total return on 2,723 directly held standing assets scattered across eight major markets at 6.65%, but that overarching number cloaks significant variances between property sectors, and from market to market. “It’s a rate that, in general, was maybe a bit lower than people were expecting,” James Harkness, Executive Director with MSCI, told a late January gathering in Toronto. The slip from a 7.3% total return in the previous year is attributed to a decline in capital growth — at 2% versus 2.6% in 2018 — and to the lowest yet recorded income return, which nudged down 10 more basis points to rest at 4.6%. However, Harkness pointed to another unprecedented metric. 12 April 2020 | Canadian Property Management

“We’ve had 10 years of capital growth being positive and that’s a cycle we have not seen before,” he said. The 2019 total return marginally surpasses the four-year average of 6.5%, while trailing a 10-year average of 9.2%. Drilling down to the component sectors, industrial properties soared above the allasset average, delivering an average total return of 16.4%. Retail properties slumped in the opposite direction, eking out an average total return of 1.8%, but losing 2.4% of capital value since 2018. “You can’t sugar-coat this,” Harkness ack nowledged — refer ring to the potpourri of assets, from super-regional malls to neighbourhood food-anchored convenience centres, falling into the retail category. Regionally, retail was healthiest in Vancouver, Toronto and Ottawa, albeit consistently the weakest performer, trailing generally strong returns for office, residential and industrial in the three cities. Total retail returns dipped below 1%

in Calgary and Montreal, while sliding into negative territory in Edmonton, Winnipeg and Halifax. “For anyone who is long on retail, it’s a tough number,” observed Michael Brooks, Chief Executive Officer of REALPAC, who steered the discussion as a panel of industry insiders was tasked with providing on-thespot reaction to the results. INDUSTRIAL RUNWAY On the upside, Teresa Neto, Chief Financial Officer of Granite REIT, predicted continuing industrial gains as e-commerce flourishes, new types of demand arise and new customers — also known as immigrants — steadily arrive. In the United States, e-commerce boasts a share of retail sales that’s about double its current stake in the Canadian market, and analysts there expect it to expand further. Already, the strongest industrial returns were found in Canada’s most populous regions: 22.8% in Toronto; 21.4% in Montreal; 15% in Vancouver; and 14.8%

investment

S QUARTER in Ottawa. Neto noted that rent typically accounts for 5% of logistics costs, translating into opportunities for industrial landlords positioned to provide distribution space in close proximity to urban customers. “A 2% reduction in your transportation costs gives you [room for] a 20% increase in rent,” she advised. “So there’s a lot of runway.” “There are a lot of areas on the industrial side, like cold storage, for example, where we’re expecting growth,” concurred Jon Ramscar, Executive Vice President and Managing Director with CBRE Limited. That’s in support of a p r e d i c t e d b o o m i n fo o d a n d pharmaceutical e-commerce. With that, comes another possible option for tapping into unused density that could help reposition struggling community shopping centres — an exercise Ramscar called particularly challenging in smaller markets. “You have to get creative,” he said. “More neighbourhoods [mall operators] are thinking about adding a residential tower on the corner of a retail site. What’s to say that doesn’t get converted into last-mile

“There are a lot of areas on the industrial side, like cold storage, for example, where we’re expecting growth.” delivery,” mused Christina Iacoucci, Managing Director with BentallGreenOak. “It’s often difficult to find sites big enough for these delivery facilities.” Panellists likewise identified land supply as a key and increasingly scarce ingredient for continued growth. “There is desire for a lot of development. Lack of land is a challenge in Toronto,” Neto reported. Oxford Properties is currently building Canada’s first multi-level industrial building in Burnaby, British Columbia, and it’s expected to be a spreading trend. “We’re probably going to start seeing that in Toronto,” she said. For now, index participants’ tight industrial vacancy rates — 0.9% in Toronto; 1.7% in Montreal and 2.8% in Vancouver — are seen as one of the

contributors to this year’s low income retur n. While enthusing, “on the industrial side, rents have just exploded”, Iacoucci noted that turnover has been more of a trickle. “When you’re in a market that is so low, how are you capturing those rents that are double-digit? Being able to produce that into an income return takes some time,” she submitted. REGIONAL VARIANCE Between the widely divergent industrial and retail bookends, residential and office properties stayed more on course with 2018 performance. Both surpassed the all-asset average for 2019, as residential properties delivered an average total return of 11.4%, with the office average total return at 7.1%. Canadian Property Management | April 2020 13

investment Residential returns were particularly strong in the eastern half of Canada. Notably, a total return of nearly 40% in Halifax was largely responsible for the city’s unprecedented ranking as Canada’s best performing market in 2019 — bumping Toronto and Vancouver into second and third. That’s attributed to a significant deal for a 14-building portfolio last year, reverberating in a market that recorded a 1% negative total return in 2018. “In a secondary market, one trade can swing the market so much,” Ramscar reiterated. Even with Halifax retail properties delivering a negative total return of nearly 16%, the chart-topping all-asset average total return shook out to 13.3%. Elsewhere, Toronto registered a 10.1% average total return, followed by Vancouver at 8.4%. Montreal also surpassed the national average, with a total return of 7%. Looking to the prairies, Calgary, Edmonton and Winnipeg continued to struggle. While Winnipeg was alone in recording a negative total return, all three cities experienced declining capital value. Calgary saw negative total returns for both office and residential properties, and also reported the highest office vacancy rate among Canadian markets. Industrial properties were the strongest performers for index participants in Calgary and Edmonton, but — with total returns of 2.7% and 3% respectively — well off the average national pace. Office was Winnipeg’s strongest sector, delivering an average total return of 1.6%. “There is clearly not momentum in these markets,” Harkness said. FUND PERFORMANCE Mea nwh i le, t he MS CI / REA LPAC Property Fund Index shows roughly comparable results on a smaller base. A p p r ox i m a t ely 1,0 0 0 a s s e t s — collectively equating to $37-billion of capital value versus the $184-billion collective value of the directly held assets in the Canada Property Index — contributed to an all-property 8.3% total return for 2019. Industrial was the top performer for the nine participating funds, delivering an average total return of 16.6%. Retail properties in the funds fared slightly better than those that are directly held, recording an average total return of 2.3%. Toronto was the top performing market with an average total return of 13%. Calgary bottomed out the list with a negative total return of 0.6%. zz 14 April 2020 | Canadian Property Management

SIGNIFICANT TURBULENCE HITS Q1

The first quarter ended very differently than it began across Canadian real estate markets, as a long-conjectured brake on momentum arrived in an unexpected form. Analysts foresee cap rates will hold steady in the coming months because few trades are expected. Rather, CBRE’s quarterly cap rates and investment report — the first for the new decade — is more an exercise in weighing and digesting the “significant turbulence” that has engulfed the business landscape. “It has become clear that the short-term economic impact of COVID-19 will be unprecedented and real estate asset values will not escape the carnage,” surmises Paul Morassutti, CBRE’s Vice Chair, Valuation and Advisory services. “However, at this point, there is little actual evidence of material cap rate expansion. NOI (net operating income) erosion as a result of widespread rent concessions will likely have greater impact.” The national average cap rate hovered just below 6% at the end of March with a 493 basis point spread above the 10-year bond yield. Similar to several recent previous quarters, rates were tightest in the multifamily sector, at an average of 3.79% nationally for Class A high-rise product, and in select industrial markets, including Vancouver, Toronto, Ottawa and Montreal. CBRE analysts project the office, industrial and multifamily sectors are better positioned to recover solidly once business activity resumes, while retail and hotels will take longer to catch up. Although the circumstances of the 2008 financial downturn were very different, Morassutti sees some likely parallels for commercial real estate. “That crisis saw deal flow essentially halt and resume once the smoke had cleared,” he recounts. “We fully expect that this will be the case in Canada as well-capitalized owners have little inclination to sell into a market at a discount if they believe conditions will be markedly different 12 months from now.” “In a world which came to a jarring stop for everyday life and conventional commerce, the principles of commercial real estate haven’t changed but implications have,” observes Carmin Di Fiore, Executive Vice President, Debt and Structured Finance, with CBRE. “Systemic pragmatism about the flow of rental payments through the real estate daisy chain is now the singular focus for tenants, landlords, lenders, regulators and governments.” Accordingly, it’s expected office landlords will be primarily focused on issues around rent deferrals and mechanisms for payment support well into Q2. Meanwhile, social distancing imperatives have accentuated somewhat diametrical trajectories for industrial and retail assets. The potential for strong e-commerce gains should bolster industrial fundamentals, while bricks-and-mortar retail reels from radically curbed consumer demand and retail tenants’ mounting business constraints. “The critical role of industrial assets in omni-channel and global supply chains is only forecast to increase and will ensure the sector remains well supported by strong fundamentals, especially on a relative basis,” CBRE analysts hypothesize. “Mandatory closures [in the retail sector] have had severe impacts on business revenues across the industry. Given current market conditions, it’s expected that this slowdown will have significant impacts on near-term operating proformas moving forward. That said, the magnitude of NOI deterioration is yet to be seen.” Multifamily landlords are deemed to have more of a cushion. “Due to the record strength in fundamentals pre-shutdown, its overall inherent resilience and its counter-cyclical relationship to economic downturns, the multifamily sector is well-positioned relative to other sectors and investment products,” maintains David Montressor, Executive Vice President with CBRE’s national apartment group. Nevertheless, Morassutti suggests all real estate players will be navigating much rougher terrain than the signs indicated three months ago. “Buckle up,” he advises. CBRE’s quarterly Canada Cap Rate and Investment Insights can be found at www.cbre.ca/en/ research-and-reports

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Canadian Property Management | April12:01 2020 PM 15 2019-03-20

investment

OPEN-END REAL ESTATE FUNDS

OPEN UP

Survey Results Fill Out Picture of Non-Listed Market OPEN-END REAL estate funds wield considerable clout in the Canadian investment landscape. Recently released results of REALPAC’s inaugural open-end fund survey show that 15 funds, under the auspices of 13 organizations, collectively held more than CAD $143.1 billion in assets under management at the end of 2018. That compares to a market cap of CAD $112.7 billion for TSX-listed real estate companies on the same date and CAD $40 billion in assets under management reported by 22 participants representing 50 funds in REALPAC’s 2018 non-listed closed-end fund survey. “REALPAC’s continued commitment to transparency and professionalism in the real estate investment market has informed its decision to undertake the 2019 open-end fund survey to build on the market information obtained from its closed-end fund surveys over the last three years,” states accompanying commentary from the organization representing many of Canada’s 16 April 2020 | Canadian Property Management

largest real estate companies, funds and institutional investors. The defining features of open-end funds — private investment vehicles that typically hold long-maturity incomegenerating assets a nd allow for contributions and withdrawals on an ongoing basis — are well matched to investors with long-term needs for stable, predictable returns. In contrast, closed-end funds have a specific investment period, set timelines for distributing all cash flows, and typically a higher proportion of valueadded assets — all making for a more volatile mix that can yield impressive or more disappointing payouts depending on market conditions on the termination date. Seven of the surveyed open-end funds report net asset value (NAV) in excess of $1 billion, with highest NAV surpassing $6 billion. A NAV of $16-million bottoms out the scale, but it falls well below four funds reporting NAV in the $251- to $500-million range at the next rung up.

CORE STRATEGY FAVOURED Data collected between August and late November last year reveals open-end fund contributors heavily weighted to institutional investors, while fund managers generally favour multiple asset classes and are more wedded to core strategy — based on stabilized, fully-leased income-producing assets — than their peers overseeing closedend funds. While one fund reported a predominantly non-core focus in excess of 90% of investment, the greater majority — 13 of 15 — have core investment in the 76 to 100% range. “It’s not surprising that a core strategy is employed by a majority of the open-end funds because of the stability of the assets, which provide reliable cash flow and better liquidity for investors,” the survey commentary notes. Other distinguishing differences emerging from REALPAC’s two-track surveys include: open-end funds’ greater propensity to invest outside North America, with 55% of

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investment investment allocation in Europe compared to a European stake in the 24% range for closedend funds; and a lesser reliance on leverage, with most funds setting a maximum threshold in the 31 to 40% range versus the majority of closed-end funds with maximum thresholds between 51 and 75%. Open-end fund managers can also typically draw on a long record of dealmaking. Five funds report they have made between 51 and 75 investments; two have made between 76 and 100 investments; and three have made more than 100 investments. “With the characteristic of open-end funds being long-term vehicles and the fact that some of the participating funds are a few decades old, it is not surprising that the number of investments made fall on the higher end of the scale,” the commentary notes. INVESTOR MIX Fund managers typically steer the interests of a greater number of investors than in a closed-end fund scenario. Eight of 15 surveyed funds tallied more than 100 investors, with the largest pool topping out at 1,662. Six other funds reported between 11 and 75 investors, while just one fund counted fewer than 10. Corporate pension funds were the most predominant investor type — represented in eight of the 15 funds, with a contribution stake ranging from 4% to 63% across those funds. In most cases, though, corporate pension contributions equated to less than 50% of investment.

Public pension funds were the sole investor type in three of the funds, while contributing to a total of seven of the funds at levels ranging from 100% to 4%. Endowments and foundations were also active investors, represented in seven funds, but with a contribution stake below 50% in six of those cases. Insurance companies, funds of funds, direct contribution pensions, investment banks and fund managers themselves add to the institutional investor mix, along with the assorted “other” category, defined as “high-networth investors, corporations, foreign charity, trusts, group retirement solution platforms and general institutional investors”. Meanwhile, retail investors figured in six of the funds, at levels ranging from 95% to 0.3%. Although only three of the 15 funds report any foreign capital investment, one of those is 100% subscribed by foreign investors. ASSET MIX Nine of the surveyed funds are targeting new development, which is generally in sync with sector-wide trends. MSCI’s historical overview shows development as a growing component of capital value across the Canada Property Fund Index over the past decade, hitting a high of 9.5% in 2019, up from a low of 3.9% in 2012. Five funds appear to be sticking in that range with targets of five to 10%, while the remainder are poised more aggressively, including three with targets in the 16 to 20% range. That aligns with challenges fund managers report facing, including “the

REDEMPTION GATES BOLSTER STABILITY

competitive landscape for product, which results in a challenge to find institutional grade real estate in Canada.” Currently within Canada, Ontario, British Columbia, Alberta and Quebec capture the vast share of open-end fund investing, which is largely directed to the industrial, office, retail and multi-residential asset classes. All 15 funds report holdings in Alberta, but more investment occurs in Ontario and British Columbia despite the slightly lower participation of 14 funds. Notably, 11 funds hold upwards of 40% of their portfolio in Ontario, while no fund has a similarly sized share in Alberta. Outside the big four, Atlantic and prairie provinces host a modest level of fund activity. Nova Scotia tallies the highest number — five — while New Brunswick receives the highest level of investment from any one fund, at 12%. Open-end funds are entirely absent from Prince Edward Island, Yukon, Northwest Territories and Nunavut. Funds show varying commitments to the four predominant asset classes, but office and industrial capture both the highest number of funds and the largest share of their investment. Fourteen of 15 funds channel 86% to 3.8% of total investment into industrial properties. Thirteen of 15 funds invest in office, with allocations ranging from 71% to 15.3% of their total investment. Land, hotels and seniors residential projects make up a tiny fraction of a minority of open-end funds’ holdings. There is no investment in student housing. zz

REALPAC’s recent survey of 15 Canadian open-end real estate funds offers insight into when and why fund administrators would suspend the ability for investors to redeem their holdings. It’s a step that some property funds based in the United Kingdom have taken as the COVID-19 outbreak triggers economic uncertainty and market volatility. Twelve of the 15 Canadian funds have the same ability to deploy redemption gates. “The ability to gate or suspend redemption is an important mechanism that general partners have to address a possible max exodus at a time that may have long-term repercussions for the fund,” accompanying commentary from REALPAC states. “Redemptions can be suspended, and have been numerous times globally, for a variety of reasons including market closures, cyclones, cyber-security incidents or difficulties in valuation of certain assets at a time of significant redemptions.” Most recently, U.K. based property funds also suspended redemptions in the days following the June 2016 Brexit referendum results. The 2008 financial collapse and the September 2001 terrorist attacks in the United States have similarly spawned suspensions. “The use of this mechanism is often to curb a possible contagion in the affected sector and diminish the impact it may have on financial stability,” the REALPAC commentary clarifies. The investor profile revealed in REALPAC’s survey results is one heavily weighted to institutional investors. That’s unsurprising since openend funds — private investment vehicles that typically hold long-maturity income-generating assets and allow for contributions and withdrawals on an ongoing basis — are considered well matched to investors with long-term needs for stable, predictable returns. The 15 open-end funds responding to REALPAC’s survey report a varying schedule for, and limits on redemptions. However, conventionally, it’s not a routine practice for investors. Just six funds reported redemptions in the three years of 2016 to 2018. Five funds provide a quarterly window for redemptions, while four funds allow monthly redemptions and three permit daily redemptions. Alternatively, two funds restrict it to a onetime annual opportunity, while the remaining fund applied the specifics outlined in the limited partnership agreement. More than half of the Canadian funds set no threshold for the value of withdrawals. The other seven reported seven different formulas for allowable redemptions, including stipulated percentages of net asset value (NAV), assets under management (AUM) or the requesting limited partner’s own holdings.

18 April 2020 | Canadian Property Management

WHO’S WHO 2020 PRESENTED BY:

SPONSORED BY:

TOP

TEN

OWNED IN CANADIAN REAL ESTATE

OFFICE OWN ONLY

MILLIONS OF SQ. FT.

RETAIL OWN ONLY

MILLIONS OF SQ. FT.

APARTMENT OWN ONLY

MILLIONS OF SQ. FT.

Healthcare of Ontario Pension Plan Inc.

12.104

Choice Properties Real Estate Investment Trust

37.092

Healthcare of Ontario Pension Plan Inc.

3.215

I.G. Investment Management, Ltd.

3.080

Manulife Real Estate

2.610

Healthcare of Ontario Pension Plan Inc.

8.288

Lanesborough Real Estate Investment Trust

1.053

Fiera Properties

2.320

Lionheart Property Management Inc.

1.053

Northam Realty Advisors

1.672

I.G. Investment Management, Ltd.

0.951

QuadReal Property Group

1.472

Sabjoy inc.

0.950

Ivanhoe Cambridge

1.425

Oxford Properties Group

0.834

Concert Properties Ltd.

1.020

QuadReal Property Group

0.761

Cadillac Fairview Corporation Limited

0.400

Manulife Real Estate

0.697

Tower Building Management

0.280

INDUSTRIAL OWN ONLY

I.G. Investment Management, Ltd. 4.003 Manulife Real Estate

3.039

Fiera Properties

2.270

Smart REIT

2.216

Ivanhoe Cambridge

2.023

Cadillac Fairview Corporation Limited

1.000

Shindico Realty

0.521

Fiera Properties

0.654

M&R Holdings

0.356

Canadian Urban Limited

0.641

MILLIONS OF SQ. FT.

OTHER OWN ONLY

MILLIONS OF SQ. FT.

Healthcare of Ontario Pension Plan Inc.

11.192

Lanesborough Real Estate Investment Trust

88.329

Ivanhoe Cambridge

7.877

Oxford Properties Group

0.910

Fiera Properties

7.155 7.020

Cadillac Fairview Corporation Limited

0.500

I.G. Investment Management, Ltd. Davpart Inc.

5.318

Shelter Canadian Properties Limited

0.035

Concert Properties Ltd.

2.283

Northam Realty Advisors

0.762

Manulife Real Estate

0.643

Timbercreek Asset Management

0.320

Armadale Property Management Inc.

0.307

6TH ANNUAL WHO’S WHO

A ranking of the Canadian condo industry’s major players and portfolios PA R T O F T H E

* May Issue P A R T

O F

T H E

SPONSORED BY:

TOP

TEN

MANAGED IN CANADIAN REAL ESTATE

OFFICE MANAGE ONLY

MILLIONS OF SQ. FT.

RETAIL MANAGE ONLY

MILLIONS OF SQ. FT.

APARTMENT MANAGE ONLY

MILLIONS OF SQ. FT.

Del Property Management Inc.

129.450

CBRE Limited

59.661

The DMS Group

20.673

CBRE Limited

40.300

Del Property Management Inc.

38.931

MetCap Living Management Inc.

20.000

Colliers International

30.835

Colliers International

14.003

Greenwin Inc.

13.495

BentallGreenOak

23.127

BentallGreenOak

11.412

GWL Realty Advisors

19.447

Morguard

7.251

Briarlane Rental Property Management Inc.

13.551

Triovest Realty Advisors

15.172

10.979

10.108

5.637

Sterling Karamar Property Management

Epic Investment Services

Avison Young Real Estate Management Services

4.059

10.016

9.513

GWL Realty Advisors

Medallion Corporation

Brookfield Property Partners Avison Young Real Estate Management Services

Shape Property Management Corp.

3.632

Gateway Property Management Corporation

9.090

7.300

McCor Management

6.108

McCor Management

3.472

Sterling Karamar Property Management

8.714

Sterling Karamar Property Management

2.431

GWL Realty Advisors

7.142

Shelter Canadian Properties Limited

5.306

INDUSTRIAL MANAGE ONLY

MILLIONS OF SQ. FT.

OTHER MANAGE ONLY

MILLIONS OF SQ. FT.

CONDO MANAGE ONLY

MILLIONS OF SQ. FT.

CBRE Limited

26.700

BentallGreenOak

25.982

Avison Young Real Estate Management Services

2.161

Crossbridge Condominium Services Ltd.

81.485

Triovest Realty Advisors

21.009

AWM-Alliance Real Estate Group

0.675

Rancho Management Services

39.354

Colliers International

18.132

30.507

GWL Realty Advisors

17.057

Real Estate 360 Property Advisory

ICC Property Management Ltd.

0.572

InterRent REIT

30.507

Crombie REIT

16.593

Colliers International

0.462

Pacific Quorum Properties Inc.

27.386

Realspace Management Group Inc.

7.251

0.425

24.874

Morguard

6.920

Shelter Canadian Properties Limited

AWM-Alliance Real Estate Group

Apollo Property Management Ltd.

0.414

16.172

Taft Management Inc.

0.246

Gateway Property Management Corporation

McCor Management

0.233

Icon Property Management

14.000

BGIS

0.005

Percel Inc.

13.800

Apollo Property Management Ltd.

13.320

PA R T O F T H E

Epic Investment Services P A R T O F T H E

5.055

Downing Street Property Management Inc.

3.556

SPONSORED BY:

CANADIAN PROPERTY PROPERTY MANAGEMENT MANAGEMENTWHO’S WHO’SWHO WHO2020 2017 OFFICE TOTAL SQ. FT. MANAGE (MILLIONS)

Del Property Management Inc.

OWN

INDUSTRIAL BOTH

MANAGE

OWN

RETAIL BOTH

211.886 129.450

CBRE Limited

146.923 40.300

CJM Property Management Ltd.

108.255

Crossbridge Condominium Services Ltd.

81.485

Choice Properties Real Estate Investment Trust

69.224

0.015

MANAGE

OWN

APARTMENT BOTH

MANAGE

26.700

59.661

0.095

1.000

0.316

16.457

2.069

37.092

18.132

14.003

2.591

23.127

25.982

11.412

4.496

Morguard

53.600

5.039

Oxford Properties Group

50.139

GWL Realty Advisors

47.706

Rancho Management Services

46.252

1.192

Triovest Realty Advisors

41.200

15.172

Cadillac Fairview Corporation Limited

36.900

Cominar REIT

36.411

11.056

12.696

19.447

0.400

2.260 7.256

Smart REIT

35.115

Ivanhoe Cambridge

34.238

0.643

0.028

0.500

0.384

2.216

31.868

0.154

0.177

2.023

14.689

0.443

3.039

0.533

0.697

10.429

8.288

0.702

14.915 0.540

3.986 1.278

9.926

10.609

28.674

Pacific Quorum Properties Inc.

28.646

Pure Industrial Real Estate Trust

27.000

Gateway Property Management Corporation

26.526

Realstar Management

25.488

Northview Apartment REIT

25.208

Homestead Land Holdings Limited

24.724

The DMS Group

22.621

0.178

1.137

0.633

Epic Investment Services

22.038

10.108

5.055

6.875

First Capital Realty

20.927

Timbercreek Asset Management

20.920

30.507 0.761

1.330

8.619

0.102

3.215 0.014

13.148

Boardwalk Rental Communities

24.874

0.675

0.265 28.674

0.180

0.042

0.691

0.049

0.233

0.805

27.386

27.000 0.196

0.127

9.090

0.201

16.172

25.488 1.157

24.051 24.724 20.673 0.544

0.165 9.513

0.320

Brookfield Property Partners

20.751

Canderel/ HumFord

20.494

MetCap Living Management Inc.

20.000

Avison Young Real Estate Management Services

18.316

Greenwin Inc.

17.804

0.160

Crombie REIT

17.549

0.956

16.593

Apollo Property Management Ltd.

17.139

0.608

0.191

Skyline Apartment REIT

16.502

0.270

19.422

11.238 11.325

4.402

3.655

1.111 20.000

7.300 0.180

3.218

5.637

0.128

0.117 0.470

2.161 0.347

13.495

3.378

1.926

13.320 16.502

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April2020 2020 | | Canadian CanadianProperty PropertyManagement Management 624 April

39.354

9.480

11.192

0.675

0.910

19.100

0.010 1.472

4.887

28.173

14.710

2.610 12.104

0.024 0.834

33.460

7.877

31.906

0.462

0.151 1.000

5.823

33.465

0.008

3.337

4.776

15.351

1.425

Manulife Real Estate

0.038

0.117

1.497

7.142

2.166

21.009

0.252

Healthcare of Ontario Pension Plan Inc.

13.560 13.665

15.900

35.428 0.240

7.251 4.059

0.174 0.054

35.720

29.154

8.102 13.866

17.057

RioCAN REIT

29.372

6.920

16.886

Starlight investments

H&R REIT

BOTH

0.001

30.835

AWM-Alliance Real Estate Group

OWN

81.485 3.153

65.017

30.297

MANAGE

108.000

67.520

30.569

MANAGE

1.381

0.060

Colliers International

ICC Property Management Ltd.

BOTH

OTHER

38.931

BentallGreenOak

QuadReal Property Group

OWN

CONDO

0.414

OFFICE TOTAL SQ. FT. MANAGE (MILLIONS)

OWN

INDUSTRIAL BOTH

MANAGE

OWN

RETAIL BOTH

MANAGE

OWN

APARTMENT BOTH

MANAGE

Dream Industrial REIT

15.900

Briarlane Rental Property Management Inc.

15.662

0.145

0.979

0.987

13.551

Sterling Karamar Property Management

15.593

0.941

1.269

2.124

10.979

Davpart Inc.

15.126

0.052

OWN

CONDO BOTH

MANAGE

OTHER MANAGE

OWN

BOTH

0.425

0.035

0.091

15.900

I.G. Investment Management, Ltd.

15.054

Shelter Canadian Properties Limited

14.905

Killam Apartment REIT

14.693

Allied Properties REIT

14.100

0.602 0.500

1.573

5.318

3.080 0.029

5.370

7.020 0.889

0.127

1.062

4.003 1.690

0.281

1.751 0.415

0.011

0.951 0.203

5.306

0.539

5.143

14.693 0.226

13.271

Sociètè de Gestion Cogir

14.000

Icon Property Management

14.000

0.280

14.000

Percel Inc.

13.800

KDM Management Inc.

13.622

0.015 0.565

1.220

1.294

3.000

Sterling Karamar Property Management

13.285

Concert Properties Ltd.

13.008

Goldview Property Management Ltd.

12.537

Fiera Properties

12.400

Wilson Blanchard Management Inc.

11.968

1.474

0.645

0.263

0.110

McCor Management

11.932

6.108

1.524

3.472

0.595

Rentalys Solutions

11.575

Mainstreet Equity Corp.

11.140

Westcliff

10.906

Drewlo Holdings Inc.

10.634

Medallion Corporation

10.016

Prologis

10.000

Harvard Property Management Inc.

9.891

1.668

Minto Properties Inc.

9.733

0.911

Park Property Management Inc.

9.320

InterRent REIT

9.200

GWL Realty Advisors Residential

9.153

1.020

1.084

2.431

1.260

2.283

9.000

8.714

5.492

0.048

0.850

0.281 0.167

2.392

0.277 2.320

7.155

2.270

0.654 9.471 0.233

0.187 0.134 0.941

0.371

0.521 11.410

11.388 11.006

0.299 0.098

10.536 10.016

10.000 2.443

0.990

2.229

1.031

0.091

0.050

1.500

0.870

0.048

6.830 7.723

0.014

30.507 9.153

Downing Street Property Management Inc.

9.076

GPM Property Management Inc.

9.005

1.048

3.556

0.876

Berkley Property Management Inc.

9.000

0.750

0.400

0.250

Realspace Management Group Inc.

8.927

0.849

7.251

0.827

Warrington PCI Management

8.687

3.832

ONNI Group

8.568

Plaza Retail REIT

8.384

Colonnade BridgePort

8.325

0.151

2.642

0.005

9.000

1.269

5.100

2.307

0.845

0.250

0.298

4.042

2.177

2.250 0.981

1.505

8.384 3.610

Canlight Management Inc.

8.322

Nadlan-Harris Property Management Inc.

8.100

Crown Property Management Inc.

7.405

3.669

SDM Realty Advisors Ltd.

7.207

2.879

A.A Property Management

7.000

Northam Realty Advisors

6.919

2.860

1.290

2.000

0.050

0.565 0.050

0.665

0.057

0.550 5.612

0.564

3.736 3.117 1.672

3.092

1.128 0.762

0.464

0.098

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0.064

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Canadian CanadianProperty PropertyManagement Management | | April April2020 2020 257

CANADIAN PROPERTY PROPERTY MANAGEMENT MANAGEMENTWHO’S WHO’SWHO WHO2020 2017 OFFICE TOTAL SQ. FT. MANAGE (MILLIONS)

Globe Property Management

6.790

Dream Office REIT

6.619

OWN

INDUSTRIAL BOTH

MANAGE

OWN

RETAIL BOTH

MANAGE

OWN

APARTMENT BOTH

MANAGE

OWN

0.300

CONDO BOTH

MANAGE

6.474 6.424

0.613

5.811

Centurion Apartment REIT

6.424

0.613

5.811

Menkes Property Management Services Ltd.

6.370

M&R Holdings

6.192

MF Property Management

6.033

Kevric Real Estate Corporation

5.839

2.718

0.352

0.798

0.077

2.329

0.172

1.247

0.356

0.183

4.329 6.033

3.658

Shindico Realty

5.629 5.575

Osgoode Properties

5.298

Blackwood Partners Corporation

5.010

Times Poperty Magement Inc.

5.000

Whitehill Residential

4.740

0.095

0.125

0.139

0.098 0.261

2.683 0.136

0.215

0.610

1.482

0.521

3.084

0.085

0.589

1.410

0.058

2.020

5.104 2.113

0.730

0.147 5.000 4.646

Canreal Management Corp.

4.731

0.202

3.351

1.177

Real Estate 360 Property Advisory

4.651

0.467

0.029

0.207

Skyline Retail REIT

4.502

PRO REIT

4.446

0.741

2.634

0.493

2.152

1.078

0.723

4.343

0.673

0.700

0.750

0.668

Prospero International Realty Inc.

4.203

0.288

0.284

1.141

2.490

Equium Group

4.153

0.424

0.675

0.018

0.119

2.918

Richmond Community Management Services Corp.

4.035

0.010

0.233

0.069

0.083 0.671

Dayhu Investments Ltd.

3.873

0.010

3.800

Melcor Developments

3.752

Kelson Group

3.656 3.632

NorthWest Healthcare Properties

3.591

Richmond Property Group Ltd.

3.151

1.650

0.004 2.017

Aspen Properties

Shape Property Management Corp.

0.072

0.102 0.463

3.747 0.208

0.081

1.484

3.769 0.751

0.641

0.072

0.044

0.180

0.078

0.070

3.586 3.632

0.200

KRP Properties

3.109

Meritus Group Management Inc.

3.048

Royop Development Corporation

3.041

0.131

0.021

0.995

Lawrence Construction/Grant Management

2.934

0.055

0.173

0.091

3.100

0.900

1.501

0.009 3.048 0.506

Williams and McDaniel Property Management

2.902

0.075

0.175

Ronmor Holdings Inc.

2.804

0.463

0.078

Kings College Management Limited

2.605

0.450

Melchior Management

2.535

0.185

0.228 0.067

Brown Group of Companies Inc., The

2.521

0.011

Gulf Pacific Property Management Ltd.

2.506

0.722

Westcorp Property Management

2.495

8 April 26 April2020 2020 | | Canadian CanadianProperty PropertyManagement Management

0.572

4.502

Martello Properties Services Inc.

3.958

BOTH

6.474

BTB Real Estate Investment Trust

3.902

OWN

6.490

Skyline Commercial REIT

Hollyburn Properties Ltd.

MANAGE

6.619

Centurion Apartment REIT

Canadian Urban Limited

OTHER

0.220

0.202

1.250

0.052

0.201

0.708

0.925 2.652

2.052 1.890

0.502 0.183

0.644

9.900 0.045

0.161

0.105

0.983

0.431

0.020

0.009

0.645

1.266

1.336

0.265 0.316

0.503

1.474

0.222

CANADIAN PROPERTY MANAGEMENT WHO’S WHO 2020 OFFICE TOTAL SQ. FT. MANAGE (MILLIONS)

OWN

0.154

Old Oak Properties Inc.

2.459

Arnon Corp.

2.410

The Enfield Group Inc.

2.382

“Atlantis Realty Services, Inc.”

2.216

State Building Group Forest Hill Homes

2.100

Blackwood Partners Corporation

2.020

Guardian Property Management Services Ltd.

2.016

WJ Properties

1.946

Skywater Property Management

1.890

Tillyard Management Inc.

1.831

BlueStone Properties Inc.

1.745

INDUSTRIAL BOTH

MANAGE

OWN

RETAIL BOTH

MANAGE

0.064 1.279

OWN

APARTMENT BOTH

0.117 0.179

1.469

0.276

0.100

1.000

0.148 1.010 0.215

0.615

0.915 0.455

1.690

Lameer Management

1.669

0.138 0.303

0.816 0.950

1.690 0.013

Equitable Real Estate Investment Corporation ltd.

1.664

Southwest Properties Ltd.

1.605

Huntington Properties Ltd.

1.584

0.105

Axwood Enterprises

1.575

0.450

BUSAC Real Estate

1.359

1.163

CAPREIT

1.335

0.619

Tower Building Management

1.305

0.135

ANTREV & ASSOCIATES Inc.

1.245

0.524

0.352

0.280

1.141

IMP Group International

1.133

York Heritage Properties

1.106

Preston Group

1.063

Provincial Property Management Limited

1.060

Niot Investments Holdings Ltd.

1.050

0.050

Concorde Group Corp.

1.010

0.100

Rathcliffe Properties

1.000

0.750

Bedford Properties & Estates

0.750

Taft Management Inc.

0.670

Merkburn Holdings Ltd.

0.585

Glenview Management Limited

0.569

0.953

0.440

0.110

0.138

0.180 0.419

0.070

0.427 0.196 0.100

0.120 0.311

1.240

Fana Group of Companies

0.022

0.544

0.415

Gillin Engineering & Construction Ltd.

0.897

0.103

1.425

Lanesborough Real Estate Investment Trust

0.822

2.224

0.095

Around The Lakes Property Management Limited

Armadale Property Management Inc.

0.041

1.890 0.726

0.092

Kroma Management Ltd.

0.266

1.797

0.147

0.907

BOTH

1.980

0.450

Tandem Group

0.397

0.036

1.501

0.986

OWN

1.000

0.800

MARCARKO Ltd.

MANAGE

2.020

1.741

1.000

MANAGE

0.292

1.705

2.326

BOTH

OTHER

2.233 0.052

Metcalfe Realty Company Limited

Sabjoy inc.

OWN

0.008 0.409

Madison Properties Inc.

HighPoint Property Management

MANAGE

CONDO

1.080

28.278

0.355 0.217

0.193

0.647

0.017

0.576 1.053

0.068 0.250

0.100

88.329

0.979

0.087

0.756 1.063 0.500

1.200 0.100 0.100

0.540

0.370

0.300

0.600

0.900

0.050

0.950

1.000

1.000 2.326

0.986 0.907 0.167

0.155

0.160

0.307

0.045

0.064 0.822

0.750 0.750 0.196

0.227 0.327

0.313

0.208

0.245

0.246 0.013 0.014

0.014

0.019

CanadianProperty PropertyManagement Management | | April April2020 2020 279 Canadian

CANADIAN PROPERTY MANAGEMENT WHO’S WHO 2020 OFFICE TOTAL SQ. FT. MANAGE (MILLIONS)

Vancor Group Inc.

0.527

Condominium Living Management Inc.

0.518

Northland Properties Inc.

0.496

Aldgate Group

0.485

Greenrock Property Management Ltd.

0.478

Summa Property Management

0.379

OWN

INDUSTRIAL BOTH

MANAGE

OWN

RETAIL BOTH

0.068

MANAGE

OWN

APARTMENT BOTH

0.019

0.118

0.430

0.330

MANAGE

0.069

0.300

0.052

0.004

0.021

Edie & Associates

0.344

0.201

0.143

CLV Group

0.320

0.180

R.W. Commercial Property Management Inc.

0.250

Gistex

0.250

0.080

Leimerk Developments Ltd.

0.245

0.046

Sluis Properties

0.187

17A Properties

0.160

Oak Bridge Properties Inc.

0.144

BOTH

0.275 0.325 0.140

0.250 0.170 0.067

0.132 0.020

0.167 0.160

0.080

0.014

0.050

0.016

0.125 0.030

Twin City Management Ltd.

0.093

Dove Square Property Management Inc.

0.092

0.022

0.021

0.050

BGIS

0.028

0.004

0.016

0.007

BayShore Property Management

0.006

0.071

0.093 0.005 0.001

Lionheart Property Management Inc.

0.006 1.053

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28 10 April 2020 | Canadian Property Management

OWN

0.030 0.035

0.352

0.141

0.343

MANAGE

0.035

0.350

0.101

0.097

BOTH

0.496 0.020

Goodwood Property Investment Ltd.

Regency Group

OWN

OTHER

0.518

Gold Castle Holdings Ltd.

Atlas Properties

MANAGE

CONDO

0.088

Minimize your danger by using ECAO registered fire alarm contractors

”

he Ontario Fire Marshal’s (OFM) office has determined that a five-alarm fire, in November 2019 that displaced hundreds of residents from a North York high-rise and killed one person began in an eighth floor unit’s bedroom. The OFM completed their on-scene investigation at the apartment complex on Gosford Boulevard near Jane Street and Steeles Avenue West Tuesday afternoon. They said the fire began in one of the two bedrooms in the unit closest to the living room and not the kitchen. Preliminary reports said the fire did not look suspicious and investigators are still looking for possible ignition sources. They hope to have an answer in the near future. There are a lot of fire regulations and practices for which building owners and property managers are responsible. ECAO will be offering exclusive seminars in the future to educate you about your responsibilities under Fire code regulations to keep your building safe. Everyone knows that fires are costly for building owners and property managers. The Electrical Contractors Association of Ontario (ECAO) hopes it can help support property owners and managers by ensuring buildings have properly installed and maintained fire alarm systems. This is done by hiring an ECAO Registered Fire Alarm Contractor (RFAC). By using an RFAC, accredited Certi-Fire electricians can cover fire alarm installation, maintenance, testing and verification; and they can also perform all your electrical needs for your building. One stop electrical services!

DID YOU KNOW THAT A CERTI-FIRE ELECTRICIAN IS ONE OF ONLY TWO, RECOGNIZED BY THE ONTARIO FIRE MARSHAL, ALLOWED TO INSTALL, TEST AND VERIFY A FIRE ALARM SYSTEM?

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Electrical Contractors with the ECAO are your one stop service professionals for all your skilled electrical work and fire alarm needs. Our members have years of recognized experience & extensive training in all aspects of electrical construction work including: • Communications • Commercial • Fire Alarm specializing • Industrial in Installation,Testing, • Residential Verification & Repairs

Find a Registered Fire Alarm Contractor (RFAC) in your area Certi-Fire electricians are trained to meet the requirements for proper fire alarm installation, testing, verification, and maintenance. Get a Certi-Fire electrician on site by talking to your licensed Electrical Contractor, and address all your property management fire alarm concerns.

smarttechnology

PROPELLING PROPTECH Focus Evolves from Cost Savings to Revenue Generation CANADIAN REAL ESTATE companies lag somewhat behind their global peers in the uptake of the IT and data-based technologies and services collectively labelled as proptech. Analysis of recent survey data from 188 companies worldwide shows Canadian respondents generally in sync with prevailing views of proptech potential, but still at a relatively early stage of recognizing and pursuing the full range of opportunities it could deliver. “Canadian real estate companies are awakening to the digital era, albeit a bit slowly,” concludes Saqib Jawed, Partner and Proptech Lead with KPMG in Canada. “Historically, it’s been a conservative industry, but companies can no longer afford a wait-and-see approach,” asserts Lorne Burns, National Lead with KPMG Canada’s building, construction and real estate group. 30 April 2020 | Canadian Property Management

Those observations are a prelude to a snapshot of Canadian attitudes and proptech initiatives — drawn from and compared against the complete findings of last fall’s global proptech survey from KPMG — which suggests proptech is more piecemeal than strategically deployed in many cases, hindering the capacity to integrate data collection and interpretation. KPMG analysts also urge companies to better harness proptech for tenant services and to more aggressively address cyber-security vulnerability. As an optimistic starting point, Canadian companies boast universal buy-in with 100% of participating companies reporting that they have a staff position dedicated to leading digital transformation and innovation. For more than two-thirds of companies, a senior executive, defined as “C-suite level or equivalent”, fulfills the role.

Yet, progressing to the seemingly logical next step, just 36% of Canadian real estate companies have developed and implemented a formal digital strategy and just 8% have done so enterprise-wide. That’s significantly divergent from the global survey results, which reveal 58% have a digital strategy and 29% of companies have rolled them out across their entire enterprise. Analysts see reverberations in companies’ self-assessment of their degree of systems integration, fulsomeness of there data strategies and their cyber preparedness — noting that companies with a digital strategy are more advanced in all cases. FRAGMENTED SYSTEMS The global average score for systems integration was a rather unimpressive 5.4 out of 10, but Canadian companies scored themselves even more critically. An average of 4.7 out of 10 was lower than other

smarttechnology

regional scores cited in the global report, which reported averages of 5.09 in the Americas (including the United States), 4.86 in the United Kingdom, 5.73 in the rest of Europe and 6.14 in Asia. Even so, KPMG analysts are wary of those numbers. “KPMG’s anecdotal evidence suggests that the average self-assessment of 5.38 is, at best, optimistic. According to our estimates, a property manager or developer can operate up to 30 stand-alone systems to manage finances, operations and different stages of the property value chain (acquisition & construction, marketing & sales, property management, customer & facility services, portfolio optimisation, etc.),” the global proptech report states. “The lack of integration across systems and functions results in inefficiency, task duplication and, most significantly, unreliable reporting and several variations of the truth.”

To a large degree, fragmented and incompatible systems reflect the operationsdriven agenda that both the global report and Canadian snapshot highlight. Improving efficiency has been a primary rationale for introducing smart technologies with less consideration given to how its datagenerating capability could mesh with other building systems. EXTRACTING VALUE Global and Canadian survey results confirm that capital budgeters continue to view proptech potential from a cost-savings rather than revenue-generating perspective. Seventy-six percent of Canadian respondents identified “improved efficiency” and 55% tapped “improved decision-making” as main objectives of proptech investment. A smaller proportion, at 24%, saw it as an avenue to “improve customer engagement”,

TOOL FOR DEAL-MAKING FUNCTIONS Proptech’s encroachment into traditional deal-making functions has caught the attention of 400 global commercial real estate (CRE) executives responding to Altus Group’s annual survey of the industry’s uptake of digital and data-based tools. They foresee technologyenabled multifamily co-living will be the most significant disruptor to the status quo within the next three years, while trends like office co-working, retail brandbox and industrial flex space cause upheaval in other property sectors. On the flipside, survey interpreters suggest industry leaders — including approximately 40 Canadian participants — are generally optimistic about the gains in efficiency and deeper dive into the market that proptech can deliver. Insight is drawn from representatives of companies with at least USD $250 million in assets under management, amounting to more than USD $2 trillion in collective holdings across the survey base. “Several of the most disruptive technologies as identified by CRE leaders — online transaction marketplaces, cryptocurrencies and social media apps — are platform and transaction-based and arguably disintermediary in nature with the intent of connecting processes and people,” the recently released Altus CRE Innovation Report observes. “Technologies viewed to have a high potential for significant cost savings and operational efficiencies are oriented around analytics and automation.” Notably, only 2% of CRE executives reported they had not used an online platform for a transaction or deal. Of these, online lending marketplaces were most popular — seeing take-up from 63% of survey participants — while only 49% of respondents used online property exchanges. Respondents based in the United Kingdom are among the most prolific online deal-makers, while Canadians are generally less enthusiastic than their peers in other regions and slip below the global average in use of three of four types of online platforms. For example, one third of Canadian respondents have used online property exchanges versus 64% of respondents from the UK; 43% of Canadians have used online leasing marketplaces versus 68% of

respondents from the UK; 58% of Canadians have used online lending marketplaces versus 80% of UK participants. Canadian respondents stand out more for their focus on data analytics — reporting fewer impediments related to fragmented data or lack of corporate buy-in than did their peers in other global regions. Even so, 45% of Canadian respondents indicate that issues related to data accuracy are an impediment. Globally, data management challenges are seen to be increasing in step with a rapidly expanding sources of data, but Altus analysts also see signs the industry is committed to sorting through the issues. “Despite the growing complexity stemming from the proliferation of data, the industry is clearly shifting from a stage of trial and testing to one of practical innovation to solve their current challenges,” maintains Bob Courteau, Chief Executive Officer of Altus Group. Survey respondents were also generally upbeat about how proptech melds with the CRE workforce — suggesting that jobs are shifting rather than disappearing. While a large majority expect some tasks and professional roles will be eliminated, they also predict new types of jobs will be created. More error-free work accomplished in less time should also free up resources for other kinds of higher-value projects. Drilling down to commercial real estate’s various disciplines, automation is projected to benefit property management the most and make the least impact on investment and finance. Meanwhile, a practical application of automated valuation models (AVMs) is not expected just yet. “Applying AVMs to commercial real estate is a challenge the industry is facing given the complexity and numerous variables involved in the valuation of commercial buildings. However, the appraisal industry continues to develop artificial intelligence/machine learning to automate and speed up processes such as reviewing leases and searching for sales comparables,” the report notes. The complete text of the Altus CRE Innovation Report 2020 can be found at https://www.altusgroup.com/services/en-us/reports/creinnovation-report-2020

Canadian Property Management | April 2020 31

smarttechnology NEW QUEBEC TAX CREDIT COVERS PROPTECH All Quebec-based businesses are eligible for a new tax credit announced in the 2020 provincial budget in mid-March. The investment and innovation tax credit, to be known as C3i, will be available for purchases of computer hardware, management software or manufacturing and processing equipment made before January 1, 2025. “Business competitiveness increasingly relies on an advanced level of digitization. However, studies show that approximately 75% of Québec businesses have low technological readiness,” the budget document observes. “This tax measure will provide support of close to $526 million over five years to improve business competitiveness.” Small and medium sized businesses (SMBs) can receive a refundable credit on the portion of costs greater than $5,000 when they purchase computer hardware and/or management software, or the portion of costs in excess of $12,500 for the purchase of manufacturing and processing equipment. Tax credits will be non-refundable for large corporations with assets and gross income of at least $100 million. The C3i credit is prorated to the economic vibrancy of Quebec regions with a rate of 10, 15 or 20% depending on where a business is located. Businesses in the Montreal and Quebec City regions are capped at 10%, while most other urban areas of the province are in the 15% zone. The budget also introduces a tax credit for businesses investing in share capital of Quebec SMBs active in green technologies, information technology, life sciences, innovative manufacturing or artificial intelligence. Qualifying investors can receive a 30% tax credit, to a maximum of $225,000 annually, for eligible investments. Investors must be Quebec-based corporations, and have an arm’s length relationship with the SMB and core business activities unrelated to finance and investment. In addition to meeting criteria for innovative production/services, SMBs must have paid-up capital of less than $15 million and gross income of less than $10 million to qualify. Tax credits will be allocated for a maximum of $1 million of annual investment in each eligible SMB. “Over the next five years, investments eligible for this measure will total more than $120 million,” the budget document states. “The new tax credit will represent $30 million in support for the development of innovative SMBs by 2024-2025.”

“The reasons for these low numbers are likely similar at home and abroad: the speed at which big data has arrived on the scene has left companies ill-prepared.” with just 20% tying the investment to “revenue maximization”. Accordingly, the report implores real estate owners/managers to view data as more than an incidental output of operational efficiencies, and to invest in extracting and capitalizing on its value. Globally, the survey found that only 25% of respondents “have a well-established data strategy that enables the capture and analysis of the right datasets”, but that shrinks to just 5% of Canadian companies. Forty-four per cent of survey respondents report that data tends to be generated and kept in silos, benefiting immediate users, but not widely shared or consistently scrutinized for all potential insight. 32 April 2020 | Canadian Property Management

“The reasons for these low numbers are likely similar at home and abroad: the speed at which big data has arrived on the scene has left companies ill-prepared,” the report surmises. “Canadian real estate has a valuable opportunity to embrace digitization to better serve tenants, customers and tenants’ customers by using data to gain a deeper understanding of their needs and behaviours.” Similarly, the global report makes links between companies’ digital strategies and the burgeoning demand for what’s been dubbed “property as a service” (PaaS) from co-working providers. “The widespread adoption of PaaS is an

acknowledgement of the need to become customer-centric,” it hypothesizes. TRANSPARENCY & CYBERSECURITY While real estate companies may be latestarters in tapping into the value of their data, nefarious players are well aware that is lucrative. Analysts recommend proactive cyber-vigilance with a healthy increment of corporate nervousness to drive regular and rigorous testing. Globally, 69% of respondents claimed to be quite confident or very confident of their companies’ cyber-security, while 24% stated they lacked confidence. In this case, the 7% of respondents in the “don’t know” category would also seem to be indicative of less-thanrobust vigilance. “Somewhat surprisingly, more than a fifth of respondents had undertaken none of the five cyber-security assessments we asked about in the survey: cyber maturity assessment; system/building penetration testing; continuity management in case of breach; supplier security risk management; and data protection under the European Union’s General Data Protection Regulation,” the global report states. Drilling down to Canadian responses, six in 10 indicated they were confident of their organization’s readiness to deal with cybersecurity risks. Meanwhile, 40% had not formally assessed cyber preparedness. “Companies should be wary of overconfidence and institute formal measures to stay on top of security measures,” Canadian scrutineers stress. Here, too, analysts urge companies to view the investment as more than an operating cost. “Information security should be viewed as a strategic function and a source of competitive advantage,” the global report asserts. “Transparency is crucial here. By being forthcoming about how they handle data and privacy — even to the extent of showing how they deal with data breaches — real estate companies can differentiate their brands and foster greater trust among consumers.” zz The complete text of Canada’s PropTech Journey, How Canadian real estate companies are faring in the digital age can be found at https://home.kpmg/ca/en/home/ insights/2020/02/canada-proptech-journey.html. The complete text of KPMG’s global survey, Is your digital future in the right hands? can be found at https://home.kpmg/cn/en/home/insights/2019/11/ kpmg-global-proptech-survey.html

First and foremost, we hope you and your family are well. If this virus has touched your life or a loved ones’ life, please know our thoughts are with you. Community is the heartbeat of the IFMA Toronto & South Central Ontario Chapter, and as someone who is a valued member of this community, you know how strong FMs are together.

Bernice Lilley, CFM

PRESIDENT

In recent weeks, we’ve seen the human and economic effects of COVID-19 – but we’ve also seen the best of each other. We see it in doctors, nurses, and first responders who are on the front lines helping people directly affected by this situation. And we see it in grocery store clerks, maintenance staff, sanitation workers, and all the essential services on the front line, who are helping to keep us moving forward. Thank you to everyone for doing their part to get us through this challenging time. We value the safety and well-being of our members, staff and the FM community, and have taken the necessary precautions to prevent further spread of the disease by postponing a few events until further notice, including the annual April Leadership Series. We have carefully considered the guidance of the World Health Organization (WHO), the Public Health Agency of Canada, and Centers for Disease Control and Prevention (CDC) and other reputable associations to make informed decisions. These resources along with additional information are available on our website and we encourage you to visit often. In collaboration with our sponsors and event partners, our programming team is planning for the remainder of 2020. Ensure to watch out for updates on our e-Newsletter and social platforms. Lastly, we are working closely with IFMA International on a strategy to offer virtual learning of the FMP, CFM and SFP courses. On behalf of the Board of Directors, we wish everyone health and wellness during these unusual and sometimes challenging times and encourage you all to continue to follow the advice given by our government health agencies. Warm Regards,

Bernice Lilley, CFM President, IFMA Greater Toronto & South Central Chapter

4711 Yonge Street, 10th Floor, Toronto, ON M2N 6K8 Canada 416.346.4729 | www.ifma-toronto.org

accessibility

SIGHTS AND SOUNDS OF ACCESSIBILITY

Vision and Audibility Measures Proposed for National Building Code A PACKAGE OF PROPOSED changes to Canada’s National Building Code aims to improve navigability and safety in large buildings for people with mobility, vision and/or hearing constraints. This includes: new barrier-free design principles linked to specified minimum requirements for turning space, clearance from structural protrusions and equitable access to all building entrances; an emphasis on ensuring universal ability to comprehend and use controls and recognize and respond to hazards; and stipulated features in public spaces such as washrooms, change rooms, service counters and theatres/ assembly rooms. Code drafters acknowledge that it’s the first significant update of accessibility measures since 1985, and that a more progressive model code is needed to promote fairness and consistency. Proposed changes would apply for new construction and major renovations in larger commercial and multiresidential buildings governed by Part 3 of the code only if and when the provinces and territories choose to adopt them. However, manyjurisdictionshavealreadydemonstrated an openness to change. “The different approaches on accessibility are starting to cause significant disharmony amongst the provinces and territories. This is largely because several provinces and territories have started to develop their own requirements to improve upon the status quo,” the code change rationale from the Canadian Commission on Building and Fire Codes (CCBFC) states. “Often the terminology and criteria for establishing better-than-code requirements varies by jurisdiction, making it difficult to compare one criterion to the next. This patchwork of programs and lack of consistency across Canada is causing confusion amongst industry, regulators and the general public.” 34 April 2020 | Canadian Property Management

The 54 proposed accessibility provisions were released for public review in January. That follows an earlier phase of review in the fall of 2019 when proposed changes were introduced that would mandate grabbars in bathtubs and showers in all new single-family and multi-residential construction. In many cases, developers and building owners competing for tenants or condominium buyers already build in accordance with some of the proposed new measures. Notably, the current code requires 50% of building entrances to be accessible to pedestrians, which, in essence, often forces people with disabilities to cover extra distance to enter a building or leave a property. Under the proposed change, all public building entrances must be accessible, but service entrances would be exempted. “The impact of such a requirement, when addressed at the design change, is minimal,” the CCBFC’s code change rationale states. “In new buildings, most entrances are accessible.” MINIMAL COSTS PROJECTED Other proposed changes may be newer concepts or less instinctively understood for developers, owners and managers. However, many of the measures, particularly those related to improving navigability and safety for people with vision and/or hearing limitations, are projected to have minimal cost impact in new construction. Some could also be fairly easily and costeffectively implemented in existing buildings if owners, managers or condo boards chose to be proactive. Perhaps the simplest proposed measure requires that doors and doorframes for washrooms, in public corridors and at the exit to an egress be visibly distinct from

surrounding wall surfaces so that people with impaired vision can more easily detect them. The capital outlay for tactile warning surfaces — proposed as a measure to help people with impaired vision to identify open edges around stairs and changes in surface elevation — would be somewhat higher, estimated at $60 to $120 per square foot depending on chosen materials and whether it is cast in place or applied on the floor surface. In support of universal comprehension, it’s proposed that instructional signs identifying exits, floor numbering and emergency evacuation procedures must be: in both visual and tactile format; mounted in specified locations where building users will universally know to find them; and placed within the sightline of wheelchair and other mobility device users. Similarly, control devices (often button- or cardactivated) must provide both audible and visual feedback signals — i.e. a chime and a light turning from red to green. Other proposed changes specify minimum illumination levels in areas where such controls must be activated, around signage and above escalators and moving walkways. The cost for tactile signage is pegged at $50 to $80 per sign, but audible/visual feedback signals are deemed to add no extra cost “when addressed at the design stage of control”. Meanwhile, added costs of heightened task-specific illumination are estimated at less than 10% of total lighting and branch wiring costs, equating to less than 1% of construction costs. “It should be noted that the lighting levels being proposed are consistent with lighting levels already required in the National Building Code for lighting of certain rooms in spaces in public areas,” the code change rationale adds. zz

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