Tag Archives: Commercial Real Estate

Winnipeg commercial real estate sales activity poised for banner 2011 as buyers flock to city in search of higher yields

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Drawn by the city’s quality commercial properties and stable income streams, real estate investors from across Canada and abroad are expected to take their search for higher yields to Winnipeg in 2011. Leasing activity has also been very steady with some market segments commanding premium rates.

These are some of the key trends noted in the 2010 Annual Review / 2011 Forecast for Winnipeg’s commercial real estate market, released today by Avison Young, New West Enterprise Property Group (NewWest EPG) and Clarus Real Estate Advisors.

“Winnipeg is on solid ground and remains one of Western Canada’s most stable and proven commercial real estate markets. Both investors and landlords are very satisfied with our market,” comments Wes Schollenberg, Avison Young Principal and Managing Director of the Winnipeg office.

“A shortage of development land has driven land prices 10% higher in each of the last few years and this is propping up lease rates in every segment of the market,” he says.

Commercial sales in Winnipeg also enjoyed a banner year in 2010 as buyers turned their attention to Winnipeg’s commercial real estate market in search of higher yields.

Sales in 2010 surpassed $500 million, second only to 2007. Volumes in that record-breaking year exceeded three-quarters of a billion dollars.

Institutional buyers such as Artis REIT and Timbercreek Asset Management made headlines in 2010, acquiring prime properties in Winnipeg.

Doug McDonald, President and CEO of the NewWest Group of Companies, says last year’s heightened investment activity was just the tip of the iceberg.

“Institutional buyers are hungry for quality properties that produce solid, steady income streams. While Winnipeg’s supply may be limited, there’s no shortage of interest from potential buyers,” he says.

Clarus Real Estate Advisors’ President David van der Vis concurs: “Winnipeg continues to be a promising market, seeing better returns on investment real estate than the city’s counterparts throughout Canada.”

http://www.newswire.ca/en/releases/archive/February2011/23/c5211.html

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Manitoba’s market performance in the early quarter of 2010

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As is typical each year in most commercial real estate circles, the past three months have generally been characterized by the conclusion of 2009 business while preparing for 2010 initiatives. The latter part of January and most of February are often called “white board weeks” as landlords, tenants, property managers, brokers and investor plan for 2010 acquisitions, dispositions, new stores, upcoming renewals, and the like. But before doing that look at  some of the  market observations in the early quarter of 2010.

  • Several larger investors have suggested they are back in “buy” mode and are sitting on uncommitted capital. This signifies that the current supply of good-quality offerings is unlikely to keep pace with overall demand moving forward into 2010, which should intensify competition and pricing even further in Manitoba and across Canada.
  • Apartments remain the most sought-after asset class in Winnipeg, as overall vacancy rates remain near one per cent and condominium conversion opportunities are being capitalized on by local specialists. A combination of TIF announcements by both local and provincial governments as well as a move by Canada Mortgage and Housing Corporation (CMHC) to increase minimum down payment on new home and condo purchases would influence this sector in 2010.
  • Moving into 2010 it is expected that new investors and existing landlords will step up their focus on the “quality” of a property’s rental income as opposed to the “quantity” of same.
  • Buying respectable investment real estate remains a very competitive business in Winnipeg, suggesting buyers should work diligently to understand the fundamentals of the property they are considering by using professional advisors and high-quality underwriting information.
  • With the yield in 10 year government of Canada bonds hovering around 3.4 per cent, the allure to real estate is obvious after the impact of taxes and inflation on fixed income investments. Typical investments in commercial real estate can comfortably generate levered yields of upwards of nine per cent.
  • Leasing fundamentals in Winnipeg appear to be holding across the office, retail and industrial sectors, but the market will be monitoring potential tenant failures to ascertain those business that have exhausted all sources of case waiting for the economy to rebound. While economic growth in Winnipeg was among the strongest in the country last year, this market is by no means immune to the global impact of the 2008 and 2009 recession.

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Bank of Canada Levels of Overnight Key Interest Rates Levels Reassurance

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Moves by the Bank of Canada to lower its trend setting rate  has well been boosting as well as sustaining the Canadian housing market currently in the spring of 2009 experts notes.  It has been stated and remarked on  that the Bank of Canada has done its best to signal that interest rates will continue to be on the low side of the sliding scale into the early 2010 year period.  It can be stated indeed that with interest rates at what might be well considered very low if not at historical low levels that housing affordability in Canada will remain most attractive for the current as well as near future time periods.

Bank of Canada warns of rising household debt | Money | Winnipeg Sun – The Royal predicts growth will return next year as the U.S. and Canadian economies benefit from low interest rates, firmer credit markets and government stimulus programs. It also predicts the national jobless rate will hit 9%, …

Bank Of Canada Keeps Interest Rates On Hold At 0.25% – Forex … – Bank Of Canada Keeps Interest Rates On Hold At 0.25% The Bank of Canada today maintained the overnight target rate at 0.25% and reiterated its conditional commitment to hold current policy rate until the end of the second quarter of …

The Bank of Canada has continually , if not even regularly , in the current  and recent time periods has been lowering the benchmark “overnight lending rate”  and rates repeatedly.   The current round of rate cuts presents an excellent set of opportunities for those looking to purchase home or commercial real estate regardless.    In the economic recessions of the 1980′s as well as that of the 1990′s  , in the resale housing property markets overall activity “bottomed out”  long before the time periods when the overall Canadian economy and investment communities did.    Currently the Bank of Canada  has done its best to acknowledge that the current economic recession has somewhat intensified , especially in the more manufacturing reliant Eastern Canadian regions certainly since its economic forecasts of early 2009 .   The bank has been unusually explicit in its language about holding its key interest rates at this “rock bottom ” series of levels now that the inflation outlook has been downgraded as a major concern , at least at the bank’s estimate and privileged expert estimation and estimations.   Lastly by saying that the target overnight interest rates can be expected to be maintained at the current levels until the end of the second quarter time periods of 2010 , in order to achieve the inflation targets , the Bank of Canada has removed any guesswork for financial as well as economic projections on the time periods that it can be expected to resume any upward trends.

Bank of Canada Interest Rate to stay at $.25 – “The bank retains considerable flexibility in the conduct of monetary policy at low interest rates,” the statement said. The Bank of Canada said April 23 it’s ready to purchase debt if the outlook for th

Bank of Canada warns of rising household debt | Money | Winnipeg Sun – The Royal predicts growth will return next year as the U.S. and Canadian economies benefit from low interest rates, firmer credit markets and government stimulus programs. It also predicts the national jobless rate will hit 9%, … as the  deteriorates further, …

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