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editor’snote INVENTORS AND ENTREPRENEURS might want to explore the potential lucrative market for a product to help bespectacled mask-wearers dispel the condensation that befalls them every time they move into a warmer environment. For a large segment of the Canadian population, seasonal change has made the fog of COVID-19 a literal condition. With that, though, can come a heightened awareness of, and appreciation for, some key building systems and design principles. For parts of the year, outdoor air is equivalent to a cold pair of glasses, with the same potential for uncomfortable reactions with indoor warmth. Our now frequently foggy specs can be a reminder of just how much energy, expense and engineering ingenuity goes into the air that circulates unremarked throughout buildings, typically only getting attention when it is attached to complaints that it’s too hot, too cold, too stuffy or too stinky. COVID-19 has given ventilation greater profile within the HVAC acronym and building services generally. Although most occupants have always intuitively valued ventilation, they haven’t necessarily paid deliberate attention to it previously. Some buildings are now well positioned to benefit from the general public’s awakening to fresh air intake and frequency of air exchange — operational functions likely not seen as the essence of savvy marketing campaigns at this time last year. COVID-19-inspired research could also have a significant impact on how buildings are designed and operated. Along with the traditional standards developers like ASHRAE and the vigorously emergent healthy building movement, many other industry players are tackling the challenge. For example, the Building Owners and Managers Association (BOMA) of Greater Toronto formed its own HVAC Advisory Council earlier this year to monitor and respond to unfolding discoveries about how the COVID-19 virus spreads. Elsewhere, www.REMInetwork.com recently reported on research into the optimal relative humidity for keeping COVID-19 at bay, which is believed to be in the range of 40 to 60%. In future, this target could become more common in design specifications or make its way into standards and codes. Turning to a threatening potential fallout of foggy glasses, they remind us that buildings can be perilous for people with impaired vision. Our feature on accessibility upgrades outlines some sound reasoning for what can often be low-capital investments in removing barriers and improving safety. Meanwhile, approaching design and development with a better understanding of the needs of all potential users can expand a building’s customer base and make it more competitive in the market. Barbara Carss barbc@mediaedge.ca @BarbaraCarss

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

Canadian Property Management | October 2020 3

contents

Focus: 6

Commercial Rent Relief: CECRA gives way to a new program that will channel funds directly to tenants and small business owner/operators.

Canada Infrastructure Bank Growth Plan: $2 billion committed for large-scale building retrofits.

10 Economic Delivery Agent: The largest office markets in Canada and the United States are heavily reliant on public transportation to get the workforce to their workplaces. 14 Data Centre Dynamics: REITs and cloud service providers extending their stretch in the Canadian market. 17 Pandemic Project Management: COVID-19 creates demands for new technological supports, but complicates implementation. 18 Development Trends: Public investment in infrastructure and tenants’ expectations continue to wield major influence. 21 Zero Carbon Design: Nova Scotia warehouse achieves certification through Canada Green Building Council pilot program. 24 Accessibility on the Agenda: Market demand, industry competitiveness and guidance tools contribute to awareness and uptake in the commercial real estate sector. 28 Incident Management System: A simple, scalable and flexible system to ensure communication effectively flows up and down the chain of command in times of crisis. 30 FireSmart Best Practices: Low-cost and no-cost measures can help safeguard people and properties in the wildland-urban interface.

4 October 2020 | Canadian Property Management

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OUT OF THE CROSSFIRE

New Rent Relief Program to Channel Funds Directly to Tenants By Barbara Carss

CANADA EMERGENCY Commercial Rent Assistance (CECRA) has now given way to a new, somewhat inaccurately named version of the federal-provincial/ territorial relief program to help businesses and not-for-profit organizations with strained financial resources due to COVID-19. As Finance Minister Chrystia Freeland announced earlier this month, the new Canada Emergency Rent Subsidy will provide support for fixed property expenses that could include commercial mortgage payments for qualified recipients who own their premises. The threshold for qualifying has also been adjusted. CECRA recipients had to prove a 70% drop in revenue from prepandemic levels, while the new program will apply a sliding scale to prorate the subsidy to recipients’ losses and needs. Perhaps most pertinently for both CECRA’s critics and commercial landlords somewhat caught in the 6 October 2020 | Canadian Property Management

crossfire, the new program will channel funds directly to tenants or mortgagees. As Freeland outlined, they can attain subsidies for up to 65% of their fixed property expenses. Businesses faced wit h compulsory shutdowns for COVID-19related public health reasons will be eligible for a further 25% top-up, taking the subsidy to as much as 95%. “A tenant-side rent bank or rent subsidy is what REALPAC has been asking for from the outset. We are also encouraged that mortgage support is also available in this version of the program,” says Michael Brooks, Chief Executive Officer of REALPAC, which counts many of Canada’s most prominent commercial landlords among its membership. “We will look closely at details, such as how the rent subsidy part actually finds its way to the landlord, but, all in all, it’s very encouraging,” The Canadian Federation of Independent Business (CFIB) likewise commends the

new program, although it continues to advocate for qualifying candidates who did not receive CECRA support because their landlords chose not to participate in the program. In such cases, CFIB argues overlooked tenants should be allowed to retroactively claim the funding they theoretically could have received during the six months CECRA was available. The new program will be retroactive for October in recognition of the gap from CECRA’s final expiry date on September 30. Looking forward, current funding parameters are promised until December 19, 2020, with extensions “to be adapted and targeted as needed” available until June 2021. “We are particularly pleased the government has delivered on CFIB’s three major recommendations for rent support: ensuring the program is independent of landlord participation; continues for the months ahead; and

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provides support to businesses with revenue losses on a sliding scale,” observes Laura Jones, CFIB’s Executive Vice President. “The additional 25% coverage for businesses facing closures due to public health orders is also good news.” COMPLICATED PROGRAM DESIGN The federal gover nment repor ts approximately $1.8 billion had been dispersed to more than 130,000 business through CECRA as of early October. In contrast, approximately 765,000 loans, equating to more than $30 billion, had been allocated through the Canada Emergency Business Account (CEBA) by the same date. That program initially provided partially forgivable loans of up to $40,000 for qualifying small and mid-sized businesses, but the maximum loan amount has now been increased to $60,000. CECRA’s comparatively sluggish performance can be attributed to a later

rollout, since it did not open for applications until May 25, and a more complicated program design. Landlords were the designated channel for delivery of relief in the three-party arrangement among the lender — taking form in the assigned program administrator, Canada Mortgage and Housing Corporation (CMHC) — qualifying tenants and commercial property owners. “It could have been a direct subsidy to tenants, but that’s not the architecture they chose,” muses Brooks Barnett, REALPAC’s Director of Government Relations and Policy. “We should recognize that these are not only unprecedented times for the economy, but also for public policy. CECRA will end up as a case study in a public administration textbook at some point, but it’s still not clear if it’s going to be a ‘Do this’ or a ‘Don’t do this’ example.” Landlords choosing to take on the role were obligated to: opt in on behalf of every tenant that met the program’s criteria; provide documentation of each tenant’s qualifications; and relinquish any later claims on the 25% of rent they would forego to participate in the program. While some observers disdain rules they say left tenants dependent on their landlords’ good graces, others note that commercial landlords also faced some difficult choices. “If they went with CECRA, they were giving away the ability to later collect rent they couldn’t collect during the COVID period and, for sure, they would not get it back,” says David Tang, a partner with Miller Thomson LLP, who is active in the firm’s charities and not-for-profit practice. “Most of the major landlord groups in this country were way ahead of the government in providing rent deferrals and abatements,” Barnett reports. “They were deferring rent and coming up with repayment plans themselves, which, under CECRA, had to be set aside.” BURDENSOME PROCESS Nor was the application process a task to take on lightly. “It was administratively very, very complex and very, very burdensome,” Barnett reiterates. Limitations in the online registration portal added to the challenge since space was allotted for a maximum of 50 tenants. However, he credits CMHC for its outreach to large landlords in establishing so-called “ambassadors” to shepherd them through the process.

“They were very helpful to the larger firms that have thousands of tenants. Some of these companies had to file for all tenants at the same time, which is an incredible amount of work to do,” Barnett recounts. “Also, the payout to firms was happening quite quickly once all the due diligence was done. By and large, I think CMHC needs to be commended for the speed at which they worked to get this together.” Meanwhile, Brooks suggests the government could be trading one program delivery challenge for another with its new direct subsidies. “The federal government will have to ensure that rent relief monies applied for by the tenant, actually get to the landlord, and actually is owing,” he says. “The anti-fraud parts of this will be daunting for them to figure out. That was possibly why it was originally structured through the landlord.” TENANTS’ INTERESTS Tang recalls mixed reaction last spring during one of his firm’s regularly scheduled COVID-19-related webinars, which focused on CECRA. Like most sectors, not all charities and not-for-profits were adversely affected, while those in need of assistance operate out of a range of different accommodations from office buildings to retail plazas to residential towers. “There was strong interest and there was some very real concern from the charity sector whether their landlords would take advantage of the program, and, anecdotally, that [concern] seems to have been borne out,” Tang says. He hypothesizes many landlords were forced to weigh two less-than-appealing scenarios: a red tape odyssey ending in a guaranteed 25% cut in rent income; or the r isk of even greater losses from insolvent tenants. Nevertheless, Barnett points to the many large landlords that have acted in their tenants’ interests — evidenced in their willingness to sign on for the July-to-September extension of what was originally conceived as a threemonth program. “I think many landlords generally see that, if there is any rent assistance available for any period of time, it would be in everyone’s interest to move forward and try to get it no matter how additionally arduous that might be,” Barnett says. “One thing COVID-19 has brought to the forefront is the value in strong working relationships with tenants.” zz Canadian Property Management | October 2020 7

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RETROFIT TO RECOVERY

$2-billion Fund Targets Energy Efficiency and Job Creation By Barbara Carss A PROMISED $2 billion investment in large-scale energy retrofits will be central to the Canadian government’s job creation ambitions. The funding was announced as part of a three-year, $10-billion spending package to be known as the Canada Infrastructure Bank (CIB) Growth Plan, and follows the pledge to spur a green and resilient economic recovery from COVID19 made in the Speech from the Throne earlier this fall. The $2 billion for energy retrofits is one of five thrusts in the CIB plan. It also includes: $2.5 billion for renewable energy generation, energy storage and interjurisdictional transmission; $2 billion to accelerate the expansion of broadband digital services to rural and other underserved communities; $1.5 billion for agricultural irrigation projects; and $1.5 billion for zero-emission buses and charging infrastructure. An additional $500 million has been allocated for required preparatory work before projects can proceed. The government calculates activity arising from this investment will create approximately 60,000 jobs and draw further investment to sustain and grow employment. “Every dollar of public investment in these initiatives is intended to attract additional dollars from private and i nst it ut iona l i nvestor s,” a f f i r m s Michael Sabia, Chair of the Canada Infrastructure Bank. PAYBACKS FORESEEN Efficiency Canada, a not-for-profit organization championing the dual environmental and economic benefits of energy and water efficiency, likewise envisages CIB and the Canadian economy will reap a bountiful payback on the $2 billion destined for energy retrofits. Small, independent businesses have long been active players in the energy efficiency sector, which was estimated to employ 436,000 workers in 51,000 companies and 8 October 2020 | Canadian Property Management

organizations prior to the COVID-19 outbreak. In addition, retrofit work is intrinsically linked to consumer savings, creating other spinoff economic benefits. “By adding energy efficiency to its mandate, the Canada Infrastructure Bank is sending a signal that energy-efficient buildings have widespread, long-term impacts,” maintains Corey Diamond, Executive Director of Efficiency Canada. “This is a critical component in scaling activity across the country, while creating jobs and reducing operating costs for building owners, managers and tenants.” The investment also supports Canada’s commitment to reduce greenhouse gas (GHG) emissions. Indeed, the target is only getting more onerous based on the Throne Speech indication that the government will legislate its stated aim to achieve net-zero emissions by 2050. “Considering that buildings contribute almost a third of total emissions, investing $2 billion in large-scale building retrofits is great news for our industry,” says Bala Gnanam, Vice President, Energy, Environment and Advocacy with the Building Owners and Managers Association (BOMA) of Greater Toronto. Many commercial landlords and tenants have suffered COVID-19-related business disruptions and revenue loss and, in landlords’ case, now face future uncertainty about operating income and asset value. Large-scale building retrofits could present an opportunity to shore up both. Meanwhile, industry insiders suggest condominium corporations might particularly welcome the funds. “Condominiums, unlike commercial buildings or even rental apartment buildings, do not have the ability to use the tax system to their advantage. All funds spent by condominium owners are made from their personal after-tax dollars,” notes Rob Detta Colli, Manager, Energy and Sustainability, with Crossbridge Condominium Services. “I think the $2

billion for large-scale building retrofits is a smart way to use public funds and, in condominiums, would help individuals and families directly.” WISH LISTS Energy efficiency champions also have plenty of ideas of how and where the investment could be best leveraged. While the Canada Infrastructure Bank was established as an entity that would work in tandem with provincial/territorial, municipal and Indigenous partners, Scott Rouse, Managing Partner of the consulting firm, Energy@Work, suggests it could also be something of a trend-setter as the Ontario government gets ready to renew its conservation and demand management (CDM) programs in 2021. “We, along with others, are hoping to see similar support for customer-centric CDM programs that help customers manage their electricity. Energy efficiency can be equally effective in helping Ontario’s economic recovery, as well as our environmental response to climate change,” Rouse asserts. “I hope some of the dollars will be invested to make our buildings, communities and infrastructure more resilient to extreme weather events,” Gnanam urges. “We need to improve their capacity to recover and resume normal business following an extreme event. Operational resilience is key for protecting our investments and ensuring strong, vibrant and resilient communities where businesses and families can prosper.” Michael Lithgow, Manager, Energy and Climate Action at Sunnybrook Health Sciences Centre in Toronto, also includes resiliency on his wish list. “I’d like to see more support for retrocommissioning of existing buildings and integrated design of new buildings, including iterative energy modelling, resiliency aspects and BAS (building automations systems) and metering design,” he tallies. zz

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FINDING THE

COMFORT ZONE Commuter and Customer Confidence Vital to Urban Density COMMUTERS’ WILLINGNESS to jump on the bus, light-rail car or subway is expected to be a driving factor in repopulating office space in some major North American markets, including Toronto, Mont rea l a nd Vancouver. Public transit wariness emerged as a com mon sentiment among respondents to JLL’s survey of C O V I D -1 9 - r e l a t e d w o r k p l a c e concerns earlier this spring, prompting the firm’s further examination of potential ripple effects for employers, businesses, parking demand, traffic congestion and the urban environment. “While at first it may appear that only a small number of North American cities have a heavy reliance on public transportation for their workforces, in reality, a considerable portion of the office 10 October 2020 | Canadian Property Management

market is concentrated in such cities,” the report observes. “This concentration of office space and office-using employment in transit-oriented markets highlights the challenge that may accompany a return to work in North America’s largest cities.” Recent studies in various major world cities have found little evidence to link public transit to COVID-19 clusters. Decline in ridership is apparent, however, with a report from the International Energy Agency citing a 50 to 90% drop globally during the lockdown months, translating to an estimated €40 billion (CAD $60.8 billion) revenue loss for transit authorities in the European Union alone. The perception of risk poses yet one more challenge for Canadian commercial landlords. Toronto, Montreal, Vancouver, Ottawa and Calgary are listed among 12 markets

deemed to be transit-oriented and where approximately one third of the North American office inventory is concentrated. Notably, Toronto and Montreal rank in the top five of the 25 metropolises JLL scrutinizes for the sheer numbers and the percentage of employees reliant on public transit. More than 13% of the labour force in both urban regions are transit users, or nearly 740,000 workers in Toronto and nearly 468,000 in Montreal. Toronto registers the third highest average tally (after New York and Chicago) of weekday transit trips, at 1.66 million; Montreal has the fifth busiest system with an average of 1.34 million weekday trips recorded. “People must continue to exercise caution when on public transit because physical distancing will be a challenge,” Christine Elliott, Ontario’s Minister of Health,

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acknowledged last spring as the Province released a guidance document for transit authorities. “I urge everyone to follow our public health guidelines. They may seem simple, but they are effective in helping to prevent the spread of COVID-19.” WELCOMING CONSUMERS A coalition of Canadian business organizations, including the Building Owners and Managers Association (BOMA) of Canada, is sim ila rly emphasizing the oft-repeated mantra of social distancing, hand-washing, vigilant disinfection of frequently touche d su r fa c es a nd col le ct ive obligation for mitigating risks to others. T hey’ve joined forces to endorse the POST Promise — an acronym for People Outside Safely

Together — a voluntary pledge with an accompanying illustrative logo, which businesses serving the public are invited to take to reinforce and signal their commitment to public health. To do so, they can register online by affirming they will adhere to five principles to safeguard the health of staff and customers, and will make formal efforts to convey supporting information to all users of the venues they oversee. POST Promise declarants then receive confirmatory signage to alert their customers. “The idea is to create POST Promise as a touchstone. It’s an indication that businesses are aware of their responsibilities, and that applies as much on main street as on Bay Street,” explains Benjamin Shinewald, President and Chief Executive Officer of BOMA Canada, who sits on the board of directors of the new not-for-profit initiative. “It’s not a certification and it’s not a BOMA Canada program. It’s a reassurance to customers, but the logo could also be a reminder to customers that they’ve got an equal role to play in public health.” Other participating organizations include the Business Council of Canada, the Canadian Federation of Independent Business, the Canadian Global Cities Council, the Retail Council of Canada and Restaurants Canada. Shinewald notes transit authorities would also be welcome to participate since they are literally delivery agents for key players of the post-pandemic recovery. Accordingly, Ontario’s guidance document outlines how transit authorities can support: smoothly flowing passenger traffic through stations and on and off vehicles; onboard social distancing; heightened sanitation; and ongoing communications with commuters. “This guidance for transit agencies will provide consistent, clear and practical information that transit agencies can use to help stop the spread of COVID-19 and keep Ontarians moving safely,” suggests Ontario Transportation Minister Caroline Mulroney. COMMUTING CHOICES Along with Toronto and Montreal, the JLL report ranks Vancouver and Ottawa among the 10 major North American urban regions with the highest share of habitual transit riders in their workforces — equating to 11.7% in Vancouver and 11% in Ottawa. That drops off to 8.8% of the workforce in Calgary and 7.2% of workers in

RESEARCH TO GAUGE RETURNS ON PUBLIC TRANSIT

COVID-19 has forced Canada’s transit authorities to grapple with the twin challenges of public health logistics and declining revenues. The federal government is now commissioning research to assess public transit’s economic impact and the investment returns on public transit infrastructure, along with gaps in spending and service that need to be filled. Researchers are invited to submit proposals to the Social Sciences and Humanities Research Council (SSHRC) to examine how Canadians’ access to transit affects their economic and social well-being, and related topics such as best practices for transit planning, operational public health standards and the impact of economic downturn. Up to 10 grants of $30,000 will be available for knowledge synthesis projects, which are designed pull together existing research and data from multiple sources in various sectors to produce a comprehensive overview of current status and identify where further action might be needed. “This project with the Social Sciences and Humanities Research Council will give municipal leaders across Canada new information and tools so they can make smart decisions about public transportation infrastructure that will meet the needs of their communities today and well into the future,” says Catherine McKenna, Minister of Infrastructure and Communities. Infrastructure Canada’s $33-billion Investing in Canada Infrastructure Program will commit the largest portion of available funds to public transit. A new COVID-19 related stream has also been added to the program, targeting pandemic-resilient infrastructure. “The knowledge synthesis projects will leverage Canada’s capital in social sciences and humanities research to address changing transit needs and services,” submits Dr. Ted Hewitt, President of the Social Sciences and Humanities Research Council. “The resulting information in areas such as the impacts of COVID-19 and pressing transit, land use, urban planning, and public health and safety questions will help transit users, planning authorities and communities throughout Canada.” Canadian Property Management | October 2020 11

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“It’s an indication that businesses are aware of their responsibilities, and that applies as much on main street as on Bay Street.” Edmonton. However, less than 5% of the workforce relies on public transit in 10 of the surveyed metropolises, all in the United States. Traffic congestion gives Toronto and Montreal less flattering standing in the top 10 cities where commuters lose the most

time during their annual travels — pegged at 135 hours per year in Toronto and 117 in Montreal. JLL analysts point to potential tightening of that gridlock if more workers switch from transit to personal vehicles. “Even in cities with lower percentages of transit ridership, any shift in

CANADA RETAINS HIGH GLOBAL RANKING FOR TRANSPARENCY

Canada’s expanding breadth of transparency metrics provides real estate investors with some of the best available insight into the financial performance, environmental, social and governance (ESG) factors, digital adeptness, market oversight and regulatory compliance of their holdings. Ranked fifth out of 99 countries, Canada once again places in the top tier of “highly transparent” nations in the recently released 2020 edition of the JLL/LaSalle Global Real Estate Transparency Index, plotting the comprehensiveness, consistency and accuracy of reporting requirements and options. “The 2020 Index is launched at a time of massive economic and societal disruption. During times of such uncertainty, the need for transparent processes and accurate, timely data becomes more important than ever,” says Christian Ulbricht, JLL’s Chief Executive Officer. “The current disruption may well force the pace of change. We fully expect the mass adoption of technology, together with advancement in data availability and sensor technology, to accelerate the integration of proptech, helping to boost real estate transparency. The real estate industry is now harnessing huge amounts of data, but we will need to ensure that privacy and security are protected by ethical behaviour.” The United Kingdom, United States, Australia and France comprise the top four of the highly transparent category. New Zealand, the Netherlands, Ireland, Sweden and Germany also join Canada on the list of top-tier countries defined as the “world’s leading investment destinations.” That’s based on 210 distinct measures, grouped into six variously weighted categories to derive a score on a scale of 1 to 5, with 1 representing total transparency. With a composite score of 1.51, Canada’s rate of improvement since 2018 is noted for outpacing the global average. Scores within the highly transparent group of nations range from the U.K.’s 1.31 to Germany’s 1.93. “These 10 markets are pushing the boundaries of transparency through technology, a focus on sustainability, anti-money laundering regulations and enhanced tracking of alternative sectors,” the accompanying report submits. Sustainability factors, which account for 10% of the total score, contribute to improved results in this biennial index update, with one third of countries registering better scores than in 2018. Nevertheless, the report’s authors express disappointment that scores for sustainability transparency are generally lower than the other five categories — performance measures; market fundamentals; governance of listed vehicles; regulatory and legal; and transaction process. Canada is among the top six for sustainability transparency. It earns special mention for energy-use benchmarking, ESG guidelines, proptech uptake, and as one of just four countries with financial performance metrics for green buildings (along with France, Australia and South Africa). Across all global participants, average transparency scores have improved by 1.1% since 2018. That’s progress, but a more moderate degree of progress than the past four editions of the index — in 2012, 2014, 2016 and 2018 — when scores improved by an average of at least 2%. In contrast, the 2010 index, following the global financial crisis, recorded the most muted improvement in the average score, at 0.7 %, of the past 14 years. With 2020 surveys having been completed in March, just before COVID-19-related shutdowns and associated stresses, analysts are already contemplating what the 2022 index may reveal. For more information about the Global Real Estate Transparency Index 2020, see the website at www.joneslanglasalle.com.cn/en/trends-and-insights/research 12 October 2020 | Canadian Property Management

commute patterns toward cars could further exacerbate previously existing challenges with congestion and traffic,” they conclude. This is not the first crisis-triggered decline in transit use during the 21st century, but it is arguably the most universal and long-lasting. JLL analysts foresee an eventual rebound like those following the September 2001 terrorist attacks and outbreaks of other infectious diseases like SARS and H1N1 influenza, and that transit-oriented development will continue to hold sway in the market. In the shorter term, they predict duallocations or even wider networks of dispersed office nodes, employer-sponsored shuttle services, ride-sharing initiatives and cycling infrastructure investment could all be on the rise. Demand for parking may not subside to the extent that transit-oriented development plans have envisioned, but competing demands for space are expected at street level. REASSIGNING SPACE “Owners and developers should review existing parking capacity and take into consideration commuters who may want to take advantage of bike and scooter share programs to avoid trains and buses,” JLL analysts advise. “Changes to the pedestrian path could encourage more walking if sidewalks are widened or cleared of obstructions, converted to pedestrian-only traffic or made safer through better sanitation and sidewalk lighting to take advantage of alleyways.” The International Energy Agency likewise tallies a number of major global cities that a re reassigning space previously reserved for vehicle traffic. “As the COVID-19 crisis disrupts mobility routines, some regional governments and cities are seizing what they perceive as a unique opportunity to promote potentially lasting new mobility behaviours that favour active mobility,” the IEA report states. “Policies being pursued include speed limits and car-free zones in city centres, making road reallocation permanent and investing in new infrastructure such as bicycle lanes, b i c yc l e p a r k i n g a n d ex p a n d e d walkways. Cities are also providing rental services and subsidies for the purchase and maintenance of traditional and electric bicycles.” zz The report, Public Transit Challenges in a PostPandemic World is part of JLL’s 2020 Forecast Series. For more information, see the website at https://www.jll.ca/en/trends-and-insights/research.

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DIGS FOR THE DIGITAL ECONOMY

REITs and Cloud Service Providers Staking Out Data Centre Space By Barbara Carss

AT LEAST 84 commercial buildings nationwide were abuzz during protracted COVID-19-related business shutdowns earlier this year. They house the data centres that have literally underpinned the continued functioning of Canada’s economy and Canadians’ interconnectedness during the past months. Even before a global pandemic wreaked havoc, a handful of U.S. based data centre REITs dramatically outperformed office and retail REITs in that country’s FTSE Nareit index last year. JLL reports the five specialized REITs collectively delivered a 44.2% return in 2019. Since then, one of those REITs has increased its presence of Canada. Equinix will acquire a portfolio in 13 data centres from BCE Inc., expanding its holdings from two co-location facilities in downtown Toronto to seven new markets: Vancouver, Kamloops, Calgary, Winnipeg, Ottawa, Montreal and Saint John, New Brunswick. The $1.04-billion (USD $750 million) allcash deal is slated to close later this year, at 14 October 2020 | Canadian Property Management

which time more than 600 Bell customers within the data centres will automatically transition to Equinix. “The acquisition of these 13 strategic assets further extends the depth and breadth of Equinix’s global platform,” says Jon Lin, Equinix President in the Americas. “Additionally, it opens key gateways for North America to Asia through Vancouver, and North America to Europe through the submarine cable systems in the Millidgeville [Saint John] area.” The other U.S. data centre REIT now active in the Canadian market is also in expansion mode and planning to triple its operating capacity — from 20 to 60 megawatts (MW) — in the Greater Toronto Area. To begin, Digital Realty Trust recently opened up 6,000 square feet of new co-location space, adding 1.5 MW of capacity at its Vaughan facility, which was formerly home to the Toronto Star’s printing plant. "Toronto is a more critical market than ever as businesses recognize the growing

importance of the region as one of the next major technology hubs in North America," submits William Stein, Digital Realty’s Chief Executive Officer. “We continue to expand our colocation capabilities in strategic regions around the world.” Looking back to the fall of 2019, Digital Realty ranked Toronto in the top ten of 60 major international hubs for the digital economy. Based on indicators for economic growth, business and consumer demand, supporting infrastructure, labour force skills, openness to innovation, governance and quality of life, Toronto was also projected to nudge up two places on the so-called Digital Capitals Index, into 8th spot by 2029. Both REITs reported gains in the second quarter of 2020. Digital Realty’s quarterly revenues of USD $993 million (CAD $1.3 billion) represented a 21% increase from the first quarter and 24% increase from Q2 2019. Equinix realized a 6% increase over Q2 2019 as USD $1.47 billion (CAD $1.92 billion) in

marketmomentum earnings marked its 70th consecutive quarter of revenue growth. INVESTORS INTERESTED “Data centres have been in strong demand from the rapid growth in cloud services, especially with the growth in data and knowledge sectors and companies outsourcing. They are being used by various industries such as grocery fulfilment, retailers and banks,” says Kruti Desai, Manager, National Research Insights, with Altus Group. “From an investment perspective, based on expected continued demand, data centres are still highly sought after, offering an alternative investment product and stable returns.” She projects large cloud service providers will gain a greater market share as organizations increasingly outsource their in-house data management services, and keepers of highly sensitive information, such as insurance and financial services and health care providers, become more confident in these third parties. “Cloud providers are attempting to meet the needs of higher compliance standards by offering more secured services aligned with FIPPA (Freedom of Information and

Protection of Privacy Act) or PHIPA (Personal Health Information Protection Act) in Ontario,” Desai says. “Demand for data centres will likely remain high, but it is expected that the demand will mostly come from large cloud service providers.” That’s already the case in Toronto and Montreal, which, together, are home to about 70% of Canada’s data centres. Vancouver has the next highest concentration with 10, then there are four each in Calgary and Winnipeg. “Toronto has experienced significant positive net absorption primarily driven by west coast U.S. based cloud operators. Montreal continues to grow and will further expand as telecommunications connectivity continues to improve. Demand is also primarily from U.S. west coast technology corporations,” reports Conan Lee, who is based in Seattle as Managing Director of JLL’s data centre and telecommunications advisory services. “Two major builds are occurring outside Vancouver to result in what will be the largest delivery of supply that British Columbia has ever experienced. The developments will be a true test to the theory that there is pent up data centre demand in this region.”

Among emerging trends, industry analysts like David Cappuccio of Gartner Research & Advisory point to something of an equivalent to last-mile delivery, which he terms an “infrastructure delivery strategy”. “This puts workloads and data where they make the most sense for the business. Rather than data centres, we are moving toward centres of data, placed and optimized to provide the most business value. This also expands the role and responsibilities of central IT to one of a business enabler, rather than a purveyor of equipment and software,” he submits in a 2019 report entitled Infrastructure is Everywhere: The Evolution of Data Centers. COVID-19’s longer term impact on that evolution is still to be determined. In the short term, data centres have clearly experienced surging traffic not recently seen on highways. “Many companies’ technological capabilities have been tested as they’ve been forced to transition their employees to work from home and, for some, their overall digital strategy has been called into question,” Desai observes. “COVID-19 has pushed the workforce rapidly toward the digital economy.” zz

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Deployment Logistics in a Global Pandemic By Robert Podlesnik THE REAL ESTATE SECTOR has embarked on a technological transformation over the past decade, with increasing numbers of decision-makers appreciating how automation, big data and the cloud can apply to a range of functions. Today, with the COVID-19 pandemic rippling through virtually every aspect of business and life, companies in the commercial real estate sector are looking to adopt more tech to achieve greater efficiencies and provide more effective tenant service. Nevertheless, compelling circumstances don’t make the implementation of new technology any easier — especially in the midst of a pandemic. While cost, business disruption and cultural antagonism to change are a concern for many, other companies have forged ahead despite COVID-19’s added layers of ambiguity and flux. They’ve undertaken implementations that have ranged from targeted software upgrades to onboarding entirely new platforms. Pandemic conditions present both the case for, and challenges to, implementing software and systems. Social distancing is still the norm for almost all aspects of property management and, indeed, much of the economy. People are slowly returning to work, but most team members still work remotely. Office and retail businesses are operating under severe constraints and perhaps cannot interact with their tenants, prospects and vendors as they normally would prepandemic. That can make advanced software designed for commercial property management — and the ability to virtually connect widely dispersed stakeholders and sets of data — more appealing than ever. Looking back to the spring of this year, the onset of the pandemic severely impacted the commercial real estate sector. Companies were pressed to quickly reassess corporate strategy, risk analysis and forecasting, and to mobilize action with a

remote team that was working with clients that were not even physically in the properties anymore. Companies had to maintain properties under new regulations brought on by the pandemic. Vendor management had to run devoid of paperwork or physical contact. Tenants had to be kept in the loop, and information needed to be shared between staff members in a cohesive and nondisruptive way. If there ever was a dire need to be online and in the cloud, this was it. Companies that forged ahead to implement upgrades, or even engage in massive software implementations, were seeking a technological benefit in trying circumstances. Arguably, too, they were foreseeing that operations might not revert to pre-pandemic norms. Implementations were perceived as a way to mitigate that operational risk. STEERING IMPLEMENTATION In many ways, successful implementation in today’s extraordinary circumstances relies on the same factors it always would. Committed leadership is a key first step. Other important facilitating measures include: • Understanding what needs to be done, how to make it happen and formulating a strong business case; • Lining up expertise in change management; • Getting software subject matter experts and other staff resources on board; • Being flexible enough to make necessary concessions to the pandemic environment, such as reengineering timelines, and recognizing that in-person consultations are not feasible. It’s also important not to lose sight of ultimate added value and long-term benefits. Successful companies have focused on tenant satisfaction, retention, longer leases, higher property values and

attractiveness to investors as a mid to longterm goal. With technology, one can realize the amplification of these goals. Technology providers involved in an implementation have their own special set of responsibilities. For starters, they should adequately prepare their own teams to carry out implementations remotely, keep lines of communication with the client open and declare any possibility of delay or special challenges up front. There might be some trial and error — for example, workshops that ordinarily would take two or three days often take considerably longer. The idea of an eight-hour remote workday is very different now. How long can one expect to be on video calls all day before reaching a point of saturation? Tech providers can help in little ways, such as by keeping meetings short and purposeful. They might even consider injecting some levity into the proceedings, such as theming the meetings. Creating a solid foundation for an implementation is the key to finding the collaboration sweet-spot in a remote work environment. E-learning solutions, video conferencing, chat rooms and webinars are some of the tools that can be especially helpful to facilitate user acceptance testing, client training and other steps. Several major Canadian property management companies have been able to implement new technology solutions recently without significant disruption to their tenants’ leasing process, portfolio oversight and property operations. With strong leadership, clear vision and organized project planning, implementation does not have to be a source of dread for any commercial property manager. zz Robert Podlesnik, is Senior Director of Canadian Operations, Yardi Canada Ltd. For more information, see the website at www.yardi.com. Canadian Property Management | October 2020 17

COMPLETION CALIBRATIONS Canadian Developers Contemplate Catalysts and Obstructions CANADIAN DEVELOPERS are generally less focused on interest rates and more concerned about tariffs than their peers elsewhere, a new survey of more than 400 global players with at least USD $200 million worth of projects in progress reveals. While in sync with the global view that public investment in infrastructure and tenants’ expectations are the two most influential forces driving development decisions, Canadians assign even more weight to these considerations than respondents from most other global regions. They also stand out for a higher propensity to use private equity to fund projects. The bulk of the findings in the newly released Altus Group Global Property 18 October 2020 | Canadian Property Management

Development Trends Report are tied to opinions collected in early 2020 before COVID-19’s full hit landed in the world’s commercial real estate markets. Accordingly, Altus analysts conducted in-depth interviews with seven prominent senior executives, including two Canadians, in July 2020 to explore how that sudden impact may have heightened existing pressures or undermined the optimism expressed earlier in the year — then concluded that the development sector has not dramatically altered course, for now. “It’s evident from the report that the global development sector is facing a complex set of challenges due to long-term market pressures, many of which are exacerbated by the pandemic and its evolving impacts,”

says Scott Morey, Executive Director at Altus Group. “However, the industry is recognizing opportunities balanced with a cautious approach.” Canada is in line to receive a large share of the investment represented in the report. Seventeen percent of respondents have projects underway or in the pipeline in this country, making it the second most active global region after the United States, where 31% of respondents are engaged. Survey participants also have projects, in descending percentages, in Australia, the United Kingdom, Germany, France, the United Arab Emirates, Singapore, Thailand, Vietnam, Columbia, Brazil, Hong Kong and Mexico.

developmenttrends Meanwhile, the already significant sway of infrastructure investment is expected to become even more dominant as governments attempt to stimulate a resurgence of jobs and spending. Public transit projects, in particular, are deemed critical determinants in the pattern of and dema nd for sur rounding u rba n development. Seventy-four percent of su r vey respondents ra n ked infrastructure as a major influence on development planning — a notably larger share than the 60% who flagged the global economic outlook as a factor. Survey respondents would likewise welcome reduced development charges, a more straightforward approvals process, and public-private partnerships. These are identified as the top three actions governments could undertake to encourage private investment, with two of those measures also pertaining to concerns about construction project costs. Government investment in training and national immigration policies are also expected to factor in expanding and maintaining a required construction labour force. “Uncertainty related to government action and inaction has amplified views

both positively and negatively,” Altus analysts surmise. “While government has been integral to establishing a floor for economies, there are concerns about the various stimulus measures in place and uncertainty regarding what may happen when these measures end.” REGIONAL PERSPECTIVES Drilling down to regional perspectives, Canadian developers are largely in sync with many global trends, but are outliers in a few others. Interest rates are less likely to be unnerving in Canada, where only 39% of respondents deemed them a significant influence on development planning decisions versus the global average of 51%. However, cross-border trade issues, which nearly 51% of Canadians called significant, raise major concerns for just 43% of the overall survey base. Canadian respondents were somewhat less likely to give significant credence to the global economic outlook — 57.4% versus a global average of 60.2%. They were also less likely to see climate change as an influential factor — 54.1% compared to a global average of 56.2%.

Building Science & Structural Engineers MACRO UNCERTAINTY Looking at the entire global picture, escalating project costs, environmental regulations and labour shortages in the construction trades are ranked the top three challenges that the industry faces. More than two-thirds of respondents acknowledge that the risk of economic downturn is colouring their decisions about new construction investment. Many are also looking to snag some potential bargains if or when the pandemic fallout continues. “Macro uncertainty due to the pandemic has resulted in ‘lots of dry powder,’ or cash reserves, waiting on the sidelines. Developers expressed surprise that significant distressed asset opportunities have not yet emerged,” the report states. “They are focusing on continuously evaluating conditions, being prepared and waiting attentively for more opportunities to emerge.”

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developmenttrends DEMAND FOR LOGISTICS FACILITIES DRIVES CONSTRUCTION Toronto continues to offer slim prospects for industrial space seekers — registering a mere 2% availability rate at the end of September — even though more than 2.7 million square feet of new supply came onto the market between July 1 and September 30. CBRE’s third quarter statistics also reveal reduced industrial availability over the course of summer 2020 in Vancouver, Edmonton, Winnipeg and Montreal. Nationally, CBRE pegs the average availability rate at 3.5% across the 10 major markets it surveys, ranging from Toronto’s North American low of 2% to 9.7% in Calgary. Only Halifax and Ottawa recorded increases in availability, as more than 6.7 million square feet of industrial space was absorbed nationally during the third quarter. Average net rents slipped marginally from $9.17 to $9.16 per square foot, but the average sales price climbed at a steeper angle, from $156.41 to $159.57 per square foot. Booming e-commerce trends underpin the robust numbers and are believed to be fueling new purpose-built construction as tenants foresee fewer releasing opportunities at turnover. “There remains a lack of readily available top-tier logistics facilities across Canada,” CBRE analysts observe. “Investors, tenants and developers recognize that e-commerce and logistics demand are here to stay and they’re making big forward-looking industrial commitments,” concurs Paul Morassutti, CBRE’s Vice Chair. The 10.4 million square feet of space now under construction in Toronto is expected to make a relatively small dent in demand, and lease out well ahead of completion. Q3 2020 was the 14th

Canadian developers have more experience using private equity to fund new projects, with 34.4% reporting they have done so on multiple occasions compared to the global average of 25.3%. An equal number of Canadian respondents have relied on private equity or private debt to fund one project — 27.9% — while 21.3% report using private debt for more than one project. That, too, is higher than the global average of 17.6%. Meanwhile, the risk of an economic downturn is more likely to weigh in Canadian decision-making about new construction investment (73.8%) versus some of their global peers. Notably, only 56.1% of respondents from the U.K. voiced the same hesitation, while 68.1% of respondents did across the entire survey base. In contrast, Canadian participants exhibited less consternation about choice of asset type, with only 39.3% reporting that a downturn could affect the decision, compared to 68.3% of respondents in the U.K. and 59.3% in the U.S. A somewhat higher percentage of Canadians deemed escalating project costs and environmental regulations to be key challenges. They were less concerned about labour shortages in the construction trades, with 57.4% deeming it a major challenge 20 October 2020 | Canadian Property Management

consecutive quarter that average net rents increased, edging up this time by $0.05 to reach $9.76 per square foot. Year-over-year, the average net rent rose by about $1 per square foot, largely due to more pronounced spikes in the fourth quarter of 2019 and first quarter of 2020. Beyond Toronto, Montreal and Vancouver also record industrial availability rates of less than 3%. Vancouver added 803,000 square feet of new supply during the third quarter, but still saw a 10 basis point drop in the availability rate, taking it down to 2.8%. Average net rent dipped in Vancouver down $0.07 per square foot to rest at $13.52. Approximately 4.3 million square feet of new space is currently under construction. Montreal’s industrial availability rate now sits at 2.5% after a further 10 basis point slide during the summer. On the flip side, average market rent has increased by more than 27% since 2018. The most recent quarter saw a $0.05 increase, pushing Montreal’s average net rent up to $7.19 per square foot. More than 792,000 square feet of space was absorbed in the same period. About 241,000 square feet of newly completed industrial space came onto the market and 1.4 million square feet is currently under construction. “Given the recent demand for industrial product, developers have become more confident in the city’s warehouse and distribution market, resulting in an uptick in the number of projects currently in the planning stages of development,” CBRE analysts report. “The Canadian industrial market hasn’t missed a beat,” Morassutti reflects. “In fact, it has unprecedented momentum and is truly the rock star of the commercial real estate world right now.”

compared to the global average of 65.%. That stands out even more in contrast with Australia, where 66.7% of respondents called trades shortages an impediment, and the U.K., where 70.7% of respondents voiced concern. APPLYING NEW TOOLS When it comes to adopting strategies and practices to address business challenges, Canadians are among the most proactive adherents of sustainable development, staff training and upskilling, and digital transformation of back offices. They outdistance their U.S. neighbours in the uptake of advanced construction practices — at 42.6% versus 31.9% — but trail the pace set in Asia, Latin America, Australia and the United Kingdom. While ahead of most other global regions on the sustainable development front, the 49.2% of surveyed Canadian developers who are delivering sustainable projects still lag Australia’s 57% quotient. Nevertheless, Altus analysts speculate COVID-19 will push up that tally everywhere in the years to come. “Interestingly, the lens on what ‘environmental’ means has shifted focus,” the report muses. “The top priority and focus is human health and customer well-being. Sustainable real

estate development is now seen as an opportunity.” Canadians developers surpass the global adoption rate for eight of 11 identified construction and project management technologies including: smart buildings; construction site robotics; building information modelling (BIM); process automation; virtual reality; drones; geospatial; and connected job sites. Thus far, though, all are a long way from the market standard with no more than 39% of Canadian respondents having implemented any of them. Canadian developers fall behind the global average in adopting the two least common technologies: 3D printing and 5G. Just 11.5% of Canadian respondents have adopted 3D printing compared to the global average of 18.4%; 3.4% of Canadians have implemented 5G versus 5.1 per cent of total respondents. Canadian uptake of prefabrication is slightly below the global average — reported at 28.3% versus 31.2% across all respondents — and well behind the U.S. adoption rate of 41.6%. zz The complete findings of the Global Property Development Trends Report can be found at www.altusgroup.com/featured-insights/globalproperty-development-trends-report-2020.

developmenttrends

LOW CARBON, LOW COSTS Warehouse Tenants Minimize Heating Bills By Mark Hutchinson A 65,000-SQUARE-FOOT warehouse in Dartmouth, Nova Scotia, earned Canada’s first certification for Zero Carbon Building Design (ZCB-Design) in the fall of 2019 as part of the Canada Green Building Council’s (CaGBC) pilot program for the zero carbon standard. East Port Properties, the developer and manager of the five multi-tenant buildings that comprise the Wilkinson Warehouses, leveraged experience delivering energy-efficient projects to demonstrate the potential for a lower-emitting industrial sector. East Port President Judy Wall took up the challenge, building on the company’s track record as the developer the first multi-tenant warehouse in Halifax to be certified under the LEED program more than 10 years ago. Warehouses have traditionally been designed as a lowestcost product, especially since developers don’t always know what the building’s final use will be or how that usage might change over time. However, developers like East Port are seeing an increased demand for sustainable real estate and are creating a market for smart spaces and value-add property management services. Signing on to the 15-building CaGBC pilot program is part of that effort. By 2030, Canada has vowed to cut greenhouse gas emissions by 30% below 2005 levels. CaGBC created the ZCB to support that process. It combines design and performance certification; measures the carbon balance of a building; and makes carbon reductions the key indicator for building performance.

The East Port team knew the key elements that would have significant impacts on building energy use: reduced air leakage; better insulation; efficient heating systems; and automated controls to reduce dependence on human intervention to operate the system. The building design started with a tight and well-insulated building envelope. The insulation value of the roof was upgraded to R-40, and then built using airtight, insulated, tilt-up concrete sandwich panels for continuous R-20 insulation value. According to Wall, one of the prime spots for heat loss is at the loading docks. Verticalstoring dock levelers, a product typically used in cold storage warehouses to keep the cold inside the building, were used to further reduce air leakage. A central in-floor system supplies heat via air-to-water heat pumps. This central heating system consists of six air-to-water heat pumps and a peak-load/back-up condensing natural gas boiler that provides a constant f loor temperature of 17⁰ Celsius. Electronically commutated motor circulator pumps in single-bay zones drive hot water distribution. Overhead unit heaters, metered and billed directly to the tenant, supply additional heating. Controls were installed to stop in-floor heating circulators from running in areas with open overhead doors. East Port also installed a net-metered solar photovoltaic system through Nova Scotia Power’s Net Metering program. The system is sized to offset the cost of fuel sources — assuming a heating energy intensity of 1.6 equivalent kilowatt-hours per square foot. With these heating considerations, it

would be possible for tenants to realize a no-cost central heating bill if they were vigilant to limit how long their overhead doors remain open. The efficiency of the design was especially apparent during an eight-hour power interruption, when it was -15⁰ Cs outside, but the indoor temperature dropped only 0.5 degrees. Going beyond the Zero Carbon standard, East Port opted for some features not typically found in a warehouse, such as Solera windows and skylights to maximize the use of daylighting. The buildings are also equipped with automated, energy-efficient ventilation systems and LED lights with motion sensors. While that translated into an approximate 10 to 15% cost premium compared to the Zero Carbon standard, East Port is now seeing a return on that investment. Higher net rents are achieved from tenants seeking lower heating energy bills and more comfortable workspace. A second warehouse has since been certified and construction is in progress on a third also targeting the standard. In addition, East Port is pursuing ZCB Performance certification. Performance certification proves the project’s operation has earned zero carbon emissions over a one-year period, as required by annual verification. zz Mark Hutchinson leads the Green Building Programs at Canada Green Building Council (CaGBC), including overseeing the LEED and Zero Carbon Building Standard certification programs. For more information, see the website at www.cagbc.org. Canadian Property Management | October 2020 21

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imagers used in building inspections have only been prevalent for about 15 years—and the technology has come a long way. “Today’s imagers are flexible and detail-oriented, and they are

portable enough to take anywhere,” says Mabbott. “Equipped with rotating screens that can deliver real-time temperature graphs, we’re able to produce professional reports for our clients in a matter of minutes.” Given most system components show an increase in temperature when malfunctioning, today’s high-powered infrared cameras enable qualified inspectors to see the heat signatures associated with high electrical resistance before the circuit becomes hot enough to cause an outage or explosion. There can be several reasons for a malfunction, but David Carter, an electrician with Black & McDonald, says the most common root causes include: loose connections; aging equipment; and overloaded circuits. Equipment that builds up heat can also be an indication of poor installation or that cooling systems are not functioning properly. “Whatever the reason for the increase in temperature, detecting it early can lead to substantial cost savings for the facility operator, not to mention peace of mind,” he says.

HOW OFTEN SHOULD THERMAL IMAGERS BE USED? Though recommended as part of a routine maintenance program, there is no ‘one size fits all’ approach to thermal imaging—it all depends on the type of facility and the age of the equipment. “We often perform thermal scans on office electrical panels annually, and industrial equipment quarterly,” says Carter. “But there are many components in our electrical, plumbing and HVAC systems that have benefitted from regular thermal image scans.” The best approach, adds Mabbott, is a custom approach. “At Black & McDonald, we look at several items before proposing a proactive maintenance program for our clients,” he says. “Some of these items include: type of business, age of equipment, run duration of machinery and the client’s budget.” For electrical panels, Black & McDonald will often propose two options—the first being a basic surface scan of the breakers to see if there are any obvious issues with overheating. “If we discover anything abnormal we would then remove the covers for a closer look as to the cause,” he says. The second option is a more in-depth inspection involving the complete removal of all covers to expose all of the electrical components. “We then scan all lugs and terminals, check that all wires are tightly connected and measure voltages to ensure that everything is as expected.” When performing a thermal image scan at a building for the first time, Carter recommends his clients opt for the in-depth inspection as an “initial tune up” and overview of the equipment. Subsequently, surface scans may be all that are required given most of the issues will have been identified up front. The bottom line is this: electrical outages and fires can be costly, disruptive, and dangerous. Taking the right steps to prevent them is in everyone’s best interest. For more information on Black & McDonald’s thermal imaging services, please visit www.blackandmcdonald.com

capitalimprovements

GREEN PARALLELS

Accessibility Momentum Tracks Sustainability Trajectory By Barbara Carss

MARKET PRESSURE and industry competitiveness could propel accessible commercial real estate in the coming decade, much the way those complementary forces have already bolstered energy efficiency and low-carbon footprints. Speaking at the inaugural Accessibility Professional Network Conference in late 2019, an industry advocate and an early adopter of Rick Hansen Foundation Accessibility Certification (RHFAC) drew parallels between sustainability’s progress and potential wider commitment to accessibility. “There is the beginning of awareness among our members that accessibility is good for business, and that’s not unique to our industry,” Benjamin Shinewald, President and Chief Executive Officer of the Building Owners and Managers Association (BOMA) of Canada, told the gathering in Toronto. “We are at early stages, which is an exciting moment, but a moment that shows how much work we still have to do.” “We’ve been into sustainability for 15 years, but we have not been talking about this until quite recently,” concurred Laura Malley, Director of Property Management for Triovest Realty in British Columbia and property manager of Marine Gateway, a Vancouver mixeduse complex and co-winner of the BOMA Canada Rick Hansen Accessibility Challenge Award, which was added to slate of BOMA Canada National Awards for the first time in 2019. “We do care, but we have 24 October 2020 | Canadian Property Management

not had the resources to figure out what we should be doing.” That’s changing with the 2017 arrival of RHFAC and BOMA Canada’s affiliation with the program, which provides guidance on inclusive design and measures to enhance how people of all abilities use, move through and interpret what’s occurring within built space. The Accessibility Challenge Award recognizes the BOMA member building achieving the highest RHFAC score. Building owners/ma nagers a re encouraged to consult BOMA Canada’s Accessibility Guide, available as a free download. As of April 2019, the BOMA BEST assessment and benchmarking tool for existing buildings awards innovation points aligned with RHFAC criteria — a step Shinewald foresees will help push the issue into more owners/ managers’ consciousness and onto budgetary priority lists. “I am very confident that is going to work because people in my industry are super competitive,” he submitted. SPLIT RESPONSIBILITIES Yet, he cautions that constraints and challenges inherent to commercial real estate, and particularly in existing buildings, could temper positive intentions. Structurally, older buildings can be literally fraught with obstacles, while, conceptually, commercial space is something of a

collection of fiefdoms. Owners/managers have clear authority over common spaces, but little flexibility to impose noncontractual conditions in tenants’ premises. The latter reality could cause confusion where la nd lord s at t a i n R H FAC certification in their controlled domains, but occupants and visitors encounter less welcoming situations in tenants’ spaces. A lter nat ively, tena nts may have accessible suites, but occupants and visitors could face encumbrances in common areas along the way. “It is extremely complicated in our industry, where people rent space and just want to be left alone, to instigate this conversation,” Shinewald observed. Looking to sustainability comparisons, Malley noted that tenants’ openness to green lease conditions has been nurtured and achieved gradually over several years. In turn, accessibility efforts could benefit from experiences of implementing sustainability measures that have proven to be cost-effective, contribute to productivity and boost buildings’ profile in the marketplace. “I do think there is going to be market pressure, and market pressure will wake the industry even more,” Shinewald predicted. “As with sustainability, you can do small things for free that aren’t capital plan items. To call it ‘retrofit’ is almost too grand of a word because that sounds complicated and expensive.”

capitalimprovements RHFAC GUIDANCE Stepping into the newly completed Marine Gateway in early 2016, Malley took on a wide range and full agenda of tasks in overseeing 255,000 square feet of office space, 245,000 square feet of retail and 466 units of housing in two residential towers — all connected to a hub of Vancouver’s public transit system that channels approximately 2.5 million commuters through the property every year. “It’s a really unique and beautiful complex in Vancouver,” she asserted. “And it’s a very busy development.” Early promotion of RHFAC, related to the B.C. government’s commitment to fund up to 1,100 accessibility assessments in commercial, institutional and multiresidential buildings from the fall of 2017 to March 2019, aligned with her professional concerns and reignited youthful memories of Rick Hansen’s 1980s-era Man in Motion world tour. “I’m a Gen X-er,” she said. “I signed up so fast, I actually spelled our company’s name wrong.” Findings from that accessibility audit proved particularly insightful to explain and address why a residential tenant had fallen while in the outdoor plaza. The RHFAC auditor pointed to the changing surface slope, which pedestrians with visual impairments would find difficult to detect. Since then, money has been budgeted to install tactile tiles that provide another kind of cue. Visual fire alarms to notify people with hearing impairments — another absent feature the RHFAC auditor identified — have also been installed. Other improvements undertaken or added to the capital project list include: reshaping handrails with rounded rather than blunt endings; ensuring that common area seating has armrests to support balance as users stand up or sit down; eliminating sharp edges in bicycle racks; and installing mirrors in elevators so users can better see potential hazards inside when the doors open. “Now that these issues have been brought to my attention, I see things everywhere,” Malley reported. Since taking on her role as Triovest’s B.C. Director, with associated responsibility for a 5-million-square-foot portfolio, she also plans to attain RHFAC designated professional standing so she can apply the knowledge in decision-making and guide staff and contracted service providers. She counts Ryan Bragg, Principal of Perkins + Will Architects, among the enthusiasts.

IMPLEMENTING THE ACCESSIBLE CANADA ACT Accessibility Standards Canada held its first public consultation throughout September to help identify priorities for research, outreach and addressing current and future needs of a growing segment of the population. The federal agency, established in 2019, is mandated under the Accessible Canada Act to develop accessibility standards for all federally regulated organizations and to more widely promote accessibility and inclusiveness through research and public engagement. “As we aim to contribute to a barrier-free Canada, we must learn from the expertise and lived experience of persons with disabilities, other experts and partners,” says Phillip Rizcallah, Chief Executive Officer of Accessibility Standards Canada. All interested parties were invited to submit responses to questions related to improving accessibility in: • employment; • the built environment; • information and communication technologies; • communication, other than through technology; • the purchasing of goods, services and facilities;

• the design and delivery of programs and services; and • transportation. In particular, the consultation sought insight from: people with disabilities; organizations working with people with disabilities; technical experts; municipal, provincial, territorial and Indigenous governments; community-based and Indigenous organizations; and private industry. The first four accessibility standards, now in development, will address: language in communications; outdoor spaces; emergency egress from buildings; and employment. In addition to federal departments, agencies and Crown corporations, federally regulated sectors include banks, broadcasting and telecommunications, and the federal transportation network, including airlines and airports, port services and sea vessels, railways and road services that span inter-provincial borders. For more information, see the website at www.canada.ca/en/accessibilitystandards-canada

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Canadian Property Management | October 2020 25

capitalimprovements “He is absolutely going to enfold the lessons we learned from Marine Gateway 1 into Marine Gateway 2,” Malley affirmed. PROMPTS FOR PROGRESS Looking at how and where the pace of progress could pick up, Shinewald and Malley outlined a few mutually reinforcing possibilities, including government intervention, technology and peer pressure. Institutional investors and their associated real estate ventures have typically been leaders in environmental, social and governance (ESG) policies and practices, and Shinewald foresees they may introduce new job functions for accessibility, similar to forging the sustainability manager job category 10 to 15 years ago. “I am not aware of anyone in the industry who has a fulltime position managing accessibility currently,” he said. “Sooner or later, this will be a leadership moment.” “Smart buildings are the new buzzword. I can see a connection with accessibility and smart buildings,” Malley added. “Coming in with an app for accessibility would probably be a very savvy move.” As always, governments hold carrot-and-stick powers. They could offer incentives, impose regulations or enact a combination of the two. Especially in office space, governments also figure in market demand. “They are big customers of ours,” Shinewald said. “So they can just be demanding customers.” zz BOMA Canada’s 2020 Accessibility Guide, How to create inclusive buildings for people of all abilities, can be found at http://bomacanada. ca/accessibility-2020.

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FEDERAL UPGRADE FUNDS OFFERED ANNUALLY The proposal call for this year’s round of the federal Enabling Accessibility Fund closed in mid-July, but an annual budget of $20.65 million will be available until 2027-28 to support efforts to make the built environment more accessible and inclusive. Building owners and facilities managers can qualify for full funding, up to $100,000, to install ramps, accessible doors and accessible washrooms. Projects are approved on a first come, first served basis, and proponents have 24 months to complete the work. This year, new measures were introduced to streamline the allocation of funds for the three most common low-capital accessibility upgrades. A new flat-rate costing formula replaced the previous requirement to submit construction quotes and other budget information. Applicants could match their proposals to standardized specifications and, in turn, receive a grant equivalent to the estimated project costs. “I hope that the changes made to the Enabling Accessibility Fund will help organizations across the country get their projects underway and continue to make our workplaces and communities more inclusive and accessible for everyone,” Carla Qualtrough, Minister of Employment, Workforce Development and Disability Inclusion said last June, as she opened the call for proposals. The fund also covers other types of small-scale construction, renovation or retrofit projects, such as implementation of communications technology or universal design. Applicants who offer, or plan to offer, employment opportunities for people with disabilities have preferred status for access to funds. Property and facilities managers additionally have an opportunity to align their talent recruitment strategies with the enabling fund’s youth innovation component. It selects youth accessibility leaders, aged 15 to 30, who work with an organization to develop a proposal to address barriers to accessibility in workplaces or public spaces. Young candidates conceptualize and submit project proposals for initiatives valued at up to $10,000. In 2019, 119 proponents received funding to collectively deliver $1 million worth of investment. “This program is an example of the fantastic youth accessibility leaders from across Canada who are working towards improving inclusion and access in our society,” Qualtrough observed. “Our youth are creative, adaptive, comfortable with technology and resourceful, and those are exactly the skills that we need to leverage now, more than ever.”

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A TEMPLATE FOR SITUATIONAL AWARENESS Standardized Crisis Response through the Incident Management System By Simone Skopek

PROPERTY AND FACILITY managers who face a natural, man-made or multicausal crisis have a duty to: 1) keep their staff and occupants safe; 2) protect the real estate assets they manage; and 3) resume business quickly. In organizations with large portfolios, there is the added challenge of managing centralized activities, including coordinating the emergency response throughout the organization and addressing the urgent needs in business areas such as human resources. For any large organization to manage a crisis, there are two fundamental requirements. First, there must be accurate and timely situational awareness regarding all the critical areas. This information must find its way up the chain of command to those in authority — i.e. senior management who need this information to make informed decisions. From there, the second fundamental requirement is that senior management 28 October 2020 | Canadian Property Management

relays clear directives to all workers in the field. The importance of situational awareness going up to the nerve centre of the organization and clear directives coming down and across the organization cannot be overemphasized. Unfortunately, “bottom-up meets topdown” communications can be confusing unless there are clear channels that do not cross one another, and which contain communications from the people who have the right information and the authority to act. For example, problems can arise if every employee is allowed to use their own best judgement to determine to whom they will distribute an e-mail. With a lot of information f lying around, people become overloaded. As they scramble to sort out exactly what is happening and who is doing what, situational awareness and directives may be confusing, even contradictory,

and/or important messages can be overlooked. The Incident Management System (IMS) is a universal system of communications to facilitate situational awareness and directives, which is used by emergency management professionals all over the world. It can be applied to almost any type of organization, including those that oversee large real estate portfolios. The globally accepted unified Incident Management System was developed out of the need for government and nongovernment resources to work together to tackle large-scale incidents. It arose in the early 1970s when devastating wildfires in southern California destroyed vast areas of forest, killed eight people and cost more than $18 million per day in total expenses and damage. Many services, both private and public at all levels of government, were involved in

riskmanagement tackling the fires. This created an impetus for the development of a national interagency management syst em , sp aw n i ng t h e I nc id e nt Management System. It is based on community command and control procedures developed by the military. It is simple, scalable and flexible, and offers an effective way to harmonize response to a multi-faceted crisis. CONSISTENT KEY FUNCTIONS For property and facility management organizations, IMS offers a standardized approach to emergency management, encompassing: personnel; facilities; e qu ipment; proce du res; a nd communications within a real estate organizational structure. It is predicated on the understanding that in any and every incident, simple or complex, there are certain crisis management functions that must be carried out regardless of the number of people who are available or involved in the emergency response. In a simple incident, all of these hats could be worn by the same person. However, with more complex events — such as the COVID-19 pandemic — which may persist for months over a wide geographic area, coordination of vast resources from within the organization and external to it may be required. IMS offers an internal structure that integrates the activities of people involved in three areas: 1. those

who manage the corporate functional areas that are generally centralized such as human resources, finance and legal: 2. those who are responsible for facilitating and setting policies for continuity of service lines to clients, such as facility management, engineering, health and safety, and procurement; and 3. the “boots on the ground” property and facility managers. A well-oiled IMS will inform the business continuity plans and result in seamless and harmonized playbooks for each functional area, service line and building. The result is that everyone should be clear about their role, their designated communication pathways and accountability. Because it is a standardized, modular approach, this makes it flexible and adaptable so that the response can be quickly expanded or contracted according to changing circumstances and needs. It

also provides harmonized protocols for serving clients and occupants, and for working together with responders from different jurisdictions and disciplines. Those are both internal and external, including local first responders, mayors, provincial operations centres, and federal agencies including army units. Because it is a simple approach, it can be adopted relatively easily. The fundamental crisis management tasks in the Incident Management System are: Command (1 person and an alternate) Command Support (1 person and an alternate for each area as needed to advise Command, for example: • Emergency information such as news, weather, industry information etc. • Human resources • Health & Safety:

Maintains HSSE Emergency procedures for all accounts/ sites for reference and inclusion in property/site Emergency Response Plans • Communications: Manage internal and external communications • Legal: Provide documentation for client pre-authorizations and vendor preapprovals, and monitor government regulations • Finance: Manage the processes for emergency spending, personnel expenses, client reimbursable costs, and emergency response revenue generated • Business information: Provide data for people and sites including location and contact information • GIS: Map people and site locations • P r o c u r e m e n t : M a n a ge ve n d o r partnerships and emergency readiness Separate from Incident Command, the key roles of planning, operations, logistics and finance/administration must be covered. Depending on the complexity of the incident, the tasks within each of these

critical areas may be few and simple, requiring the engagement of just one or two people to do all the tasks, or they may be complex and involve many people. UNIFIED INCIDENT COMMAND In some emergencies, multiple organizations must work together and/or coordinate their responses. For example, in some situations, firefighters and police may each have their roles. This requires proper channels of communication between the commander of each organization in order to effectively share the management of the incident. In this case, the incident may require decision-making to come from more than one organization or jurisdiction. A unified command is an authority structure in which the role of incident command is shared by two or more individuals, each already having authority in a different responding organization or agency. Once joint decisions have been made, generally one member is identified to speak for the unified command team. Once each organization has received directives from their respective Incident Commander, then they may need to collaborate with their counterparts in order to operationalize the directives. This may require significant interaction on the ground — for example, to finesse their plans (plans), mobilize material (logistics), deploy (operations), and make financial arrangements (finance and administration). Although each organization is unique, the IMS approach can be adapted to address most types of emergencies thanks to its simplicity, scalability and ease of implementation. zz Simone Skopek is a sustainability and facilities management consultant, and author of two books about the green workplace.

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riskmanagement

FIRESMART THINKING Low-cost/No-cost Measures Support Non-combustible Zones

CANADIANS ARE URGED to be mindful of both the advantages and risks of living in a country of such vast natural splendour. Notably, about 11 million people currently reside in what’s known as the wildland-urban interface (WUI), enjoying the benefits of proximity to forests and other natural features, but perhaps overlooking the perils. “Nearly 30% of the population is potentially exposed to wildfire risk,” observes Natalia Moudrak, Director of Climate Resilience with the University of Waterloo’s Intact Centre on Climate Adaptation. “The average wildfire we’ve seen recently grows to be half the size of Nova Scotia, and that’s twice the size as [the average] in the 1970s.” The Intact Centre is one of more than 100 Canadian organizations that have joined the FireSmart Canada network to promote principles and best practices to avoid fueling wildfire spread. Similar to the Intact Centre’s promotion of no-cost/low-cost measures to mitigate flood risk, FireSmart measures encompass easily implemented maintenance, low-cost upgrades and recommendations for more complicated improvements that building owners/ managers could undertake as part of their longer-term capital plans. That comes with an app — similar to the Intact Centre’s home flood protection check-up — to help property managers or homeowners assess risks and a provide a follow-up checklist of simple safety enhancements. Moudrak emphasizes that some of the most effective strategies should already be incorporated into regular maintenance routines. That includes: ensuring evergreen needles, leaves and other debris do not collect in eaves troughs, gutters, decks or roof surfaces; pruning trees to create at least a two-metre clearance between the lowest branches and the ground; trimming grass to a height of no more than 10 centimetres; locating firewood stockpiles at least 10 30 October 2020 | Canadian Property Management

“The average wildfire we’ve seen recently grows to be half the size of Nova Scotia, and that’s twice the size as [the average] in the 1970s.” metres from homes and garages; and removing combustible ground cover, such as mulch and plants, in a 1.5-metre perimeter around all buildings. “If you are very conscious about maintaining that non-combustible zone, that’s the number one thing you have to be aware of,” she advises. “There are so many practical ways that are low-cost and no-cost to meaningfully reduce your exposure.” Low-cost investments, estimated at $300 to $3,000, to reinforce maintenance measures include; replacing wood fences with a chain link, fibre, cement or stone alternative; installing non-combustible surfaces such as mineral soil, rock, concrete or stone in a 1.5-metre perimeter a r ou nd houses; i n st a l l i ng noncombustible three-millimetre screens on all external vents except dryer vents: and installing 15 centimetres of cement board or metal skirting on the surface of building siding where it meets the ground. Beyond individual vigilance, FireSmart stresses the importance of community and inter-jurisdictional collaboration, including emergency responders, planners, builders, service and product providers and the drafters of local, provincial and federal regulations. Expanded inter-agency training is considered critical so that multiple fire departments are prepared to work together and respond to wildfire dynamics that differ from typical urban blazes. Perhaps even more importantly, all contributors to the

development of the built environment need to understand where and how to build safely. Big-ticket items to consider in the context of retrofits, renovations or new construction include fire-resistant cement fibre, metal or asphalt shingle roof coverings, and non-combustible stucco, metal, cement fibre or stone siding. Firerated components and solid rather than wood-slat surfaces are recommended when it’s time for a deck rebuild. “In high wildfire risk areas, we can’t a fford to continue building new homes without these considerations,” Moudrak asserts. Recent extreme wildfires in Australia, California and other regions of western United States illustrate her concerns. Lightning ignites about half of all forest f i r e s , wh i le t h e l i kel i h o o d of thunderstorms increases by 10 to 12% with each degree of heat — presenting an increasingly risky scenario for future summers. “This is not an issue that is going to go away,” she says. “Really, the time to act is now. Let’s at least start with the simple steps.” zz For more information about FireSmart Canada, see the website at https:// firesmartcanada.ca. For more information about the Intact Centre on Climate Adaptation see the website at www.intactcentreclimateadaptation.ca

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