Canadian Real Estate

The latest news from the Canada Real Estate Club Team

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Institutional Investors Raise Their Targets for Real Estate Allocation
 
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Street Smart REI   October 18, 2017   0   0   0   0   0   0
A new report[1] put together by Cornell University’s Baker Program in Real Estate and Hodes Weill & Associates, a global real estate advisory firm, found that institutional investors continue to increase their targets for real estate investments, in spite of facing some challenges. Institutions’ target allocations to real estate averaged 10.1 percent this year, up from 9.9 percent in 2016, the report’s authors found. In 2018, target allocations will likely rise to 10.3 percent, survey respondents indicated. Thirty percent of survey participants increased their target allocations to real estate in 2017[2], while 18 percent decreased their allocations.   Most of the decreases could be attributed to the endowments and foundations space, perhaps due to the difficulty of achieving the necessary yields, which average 9.5 percent, the report’s authors speculate. Public pension plans have kept their target allocations largely flat with last year’s levels, while private pension plans, insurance companies and sovereign wealth funds have increased allocations[3]. Public and private pensions and insurance companies target real estate returns of under 8.00 percent.   However, actual allocations have trailed set targets by about 100 basis points, with 60 percent of surveyed institutions reporting they were underinvested compared to targets. Last year, the figure was 50 percent. Overall view of the opportunities present in the real estate sector has reached a five-year low in 2017, according to the survey’s “conviction index.” The index measures investors’ view of opportunities from a risk/return perspective on a one-to-10 scale. In this...
Value-Add Investors Weigh Capital Options Estate Investor
 
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Street Smart REI   October 18, 2017   1   0   0   0   0   0
The search for yield in a slowing market has investors shifting their focus to more lucrative value-add and opportunistic projects. And, so far, there appears to be plenty of capital to back those strategies. Buying stabilized assets at this stage of the market is a bit like buying a bond, notes Joe Franzetti, a senior vice president at Berkadia Commercial Mortgage. “So for buyers that are looking for out-sized returns, they are going to look at value-add situations where there is an opportunity to increase cash flow and increase value,” he says. Projects run the gamut from assets that need a facelift or expansion to a complete redevelopment or adaptive reuse. Debt funds are often taking the lead on providing capital for these value-add deals[1]. “There is a tremendous amount of debt funds and mortgage REITs who are really focused on value-add situations,” notes Franzetti. He estimates that there are nearly 80 different entities that are willing to lend on this type of product, and many are aggressively trying to find deals that work or fit their specific business model. Multifamily investors have the advantage[2] of being able to access capital through Fannie Mae and Freddie Mac. Both agencies have value-add programs with fixed-rate and floating-rate debt that provide pretty attractive financing, notes Jeff Erxleben, an executive vice president and regional managing director at debt and equity provider NorthMarq in Dallas. Commercial value-add projects are a slightly different story, because they don’t have Fannie and Freddie as a backstop providing additional...
What Sets Seattle’s Apartment Market Apart? Estate Investor
 
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Street Smart REI   October 18, 2017   1   0   0   0   0   0
Multifamily developers have been very busy in Seattle, especially in the core sub-markets around downtown. But thanks to affordability and strong job growth—including in the city’s core—few new apartments are sitting vacant and rents continue to rise. “Performance remains terrific, despite all the new product that has been added to the stock,” says Greg Willett, chief economist with RealPage, which provides property management software and solutions for commercial and multifamily properties. “Lots of places register very solid expansion of downtown jobs, but Seattle’s urban core growth rate is in a whole different category.” Vacancies shrink in Seattle Despite all the new construction, the percentage of vacant apartments has fallen on average. Currently, vacancy is at 4.6 percent, down from 4.9 percent at the end of 2016, according to New York City-based research firm Reis Inc. “Seattle has seen a lot of construction, but demand has stayed even with construction, so Seattle has not seen any vacancy rate increase,” says Barbara Byrne Denham, senior economist with Reis. Seattle’s economy is strong—but not strong enough to account for how well the apartment sector is doing there. The number of jobs in the Seattle area has grown steadily, increasing by 2.5 percent since last year. That puts Seattle at number 20 out of the 82 metro areas tracked by Reis. Seattle is doing better than the U.S. overall, where the number of jobs is now just 1.6 percent higher than it was the year before. Seattle is also...
Wanda Partner Exits $1.2 Billion Beverly Hills Condo Project | National Real Estate Investor
 
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Street Smart REI   October 18, 2017   1   0   0   0   0   0
(Bloomberg)—Dalian Wanda Group Co. plans to proceed with a $1.2 billion luxury condominium and hotel complex in Beverly Hills, California, after its development partner, Athens Group, said it exited the project early. Neither Wanda nor Athens would comment on the reasons for the separation, which happened earlier this year and leaves Wanda without a development partner just as condo sales are about to begin. “We are taking this project forward ourselves,” Rohan a’Beckett, deputy general manager of Wanda Beverly Hills Properties LLC, said in a telephone interview. “I can confirm that Athens is not involved in the project anymore.” Athens Group, based in Phoenix, specializes in luxury resorts, urban hotels and related residential properties. Its previous developments include Montage resorts and condos in Southern California and the Four Seasons Resort Hualalai in Hawaii. Jay Newman, chief operating officer of Athens, said the firm provided services to Wanda through May and originally planned to work on the project through its opening, scheduled for 2020. “We brought the One Beverly Hills project to Wanda as their development partner,” Newman said in a phone interview. The firm’s work was intended to include “the modification of the entitlements to include a Wanda hotel, its development and construction, its opening and the sale and marketing of the condos,” Newman said. Wanda got city permission on Sept. 14 to open a condo-sales showroom. Questions about investments by Beijing-based Wanda have arisen as China has cracked down on overseas acquisitions. The company, which was...
Workspace Property Trust Files for IPO to Raise $100 Million | National Real Estate Investor
 
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Street Smart REI   October 18, 2017   1   0   0   0   0   0
A year after acquiring a nearly $1 billion portfolio of suburban office properties, Horsham, PA-based Workspace Property Trust on Monday filed to raise up to $100 million through an initial public offering. Workspace Property, which first filed a confidential S-11 registration statement on June 30, plans to list on the New York Stock Exchange under the symbol WSPT, selling an undisclosed number of common shares in the IPO. View Original Article[1] References ^ View Original Article (www.costar.com)
Forever 21 Looks to the Beauty Segment with New Concept | National Real Estate Investor
 
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Street Smart REI   October 17, 2017   3   0   0   0   0   0
Take a quick scroll through the Instagram account of Riley Rose—the new beauty and lifestyle chain created by apparel retailer Forever 21—and you will be inundated by pink color, glitter and aesthetically pleasing photos of products to try and purchase. The account reflects what visitors will experience when they enter a Riley Rose store. The first of 13 to open in General Growth Properties’ (GGP) shopping centers around the country appeared recently at Glendale Galleria in Glendale, Calif.—which, from the looks of it, is as Instagram-ready as many of its products. In an age where apparel retailers are taking a hit from the rise of e-commerce shopping, it’s this connection to social media and experience that some experts are saying is a smart move for the retailer, which generally caters to young women. In fact, the chain already has a social following[1] and one physical store open, but it has yet to launch an online web shop. “As far as a growth vehicle, [Forever 21] needed something different,” says Michael Lushing, principal at Beverly Hills, Calif.-based Lushing Realty Advisors, which helps retailers figure out expansion strategies. The stores are opening at a time when mall developers are looking for alternative uses for their properties[2], amid higher mall vacancies. In the second quarter of this year, the vacancy rate for regional malls was 8.1 percent, up from 7.9 percent in the second quarter of 2016, according to real estate research firm Reis[3]. However, the peak vacancy rate for regional malls...
China shuts down billionaire Wang Jianlin's golf courses - Oct. 17, 2017
 
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Street Smart REI   October 17, 2017   5   0   0   0   0   0
It's a double bogey for Chinese real-estate tycoon Wang Jianlin. Authorities have shut down two high-end golf courses at a resort in northeastern China operated by Wang's company, Dalian Wanda Group. The closures are the latest case of Chinese government officials cracking down[1] on golf, which has become a symbol of the political corruption[2] against which President Xi Jinping has been waging a massive, high-profile campaign. They also represent a fresh setback for Wanda, which has found parts of its businesses under pressure from authorities this year. The Fusong County government ordered Wanda to stop golf operations at a resort in Changbaishan last month, according to a brief notice posted on the government's website on Friday. It didn't give a reason for the closures or say if they're permanent. Wanda declined to comment on the matter. Its website says the Changbaishan resort has two "world-class" golf courses, an 18-hole course designed by Jack Nicklaus and a 36-hole course designed by Robert Jones. Related: Chinese billionaire battles talk of trouble at real estate empire[3] Golf has long suffered under China's ruling Communist Party, which banned the sport after taking power in 1949, describing it as a "game for millionaires." It later emerged from the shadows in the mid-1980s as China's economy opened up to the outside world, but remained at the mercy of politics. A new crackdown began in 2004 and intensified under Xi. Since 2011, the government...
Commercial real estate execs are wary of a possible bust | New York Post
 
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Street Smart REI   October 17, 2017   4   0   0   0   0   0
Slow but steady commercial sales have been dragged down by affordable housing regulations and an ongoing lack of trophy-building offerings. Building owners are reluctant to sell as they worry about reinvestment opportunities. The lack of specifics about President Donald Trump’s tax cut proposal, coupled with a long economic uptick and a booming stock market, has also made real estate executives wary of a possible bust ahead. In one of the year’s notable deals, the Vanbarton Group is in contract to buy Midtown South rental building 990 Sixth Ave. for $318.5 million.Cushman & Wakefield “People are mindful of the fact that we are late in the [boom-bust] cycle,” says Woody Heller, executive vice president and co-head of capital markets at Savills Studley. Multifamily properties are still selling at low capitalization rates — which translates into low returns for buyers compared to their purchase prices. Thankfully, there is still financing available. It’s also a tough time for such building owners as the rental housing market has been subjected to two years of rent freezes on stabilized apartments and the city has passed numerous laws to prevent tenant buyouts and harassment. The market for rental buildings “hasn’t been affected despite [Mayor Bill] de Blasio’s attempt to kill it,” says Peter Hauspurg, chairman of Eastern Consolidated. And there are completed transactions to prove it — as well as ones in the works. The Vanbarton Group is in contract to buy residential apartment tower The Vogue at 990...
New app aims to thwart crimes against real estate agents | New York Post
 
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Street Smart REI   October 17, 2017   5   0   0   0   0   0
Crimes against real estate agents are a growing problem, and mobile apps are cropping up to help them stay safe. The latest is called Forewarn, launching Monday, which allows an agent to enter a prospective client’s phone number ahead of a blind meeting and get an instant background check that looks a lot like a police report. Forewarn says its app can provide information on 80 percent of callers, ferreting out any criminal history, plus verifying car and home ownership, mortgage liens and whether a person has filed for bankruptcy. It can also pull up address histories and other phone numbers. The app is available only to licensed real estate agents, who increasingly are getting calls from clients who have found properties on open listing sites without a broker. “An unfortunate aspect of the profession requires members to meet strangers,” said Sara Wiskerchen, a spokeswoman for the National Association of Realtors. Forewarn, developed by data-analytics firm Cogint, estimates that agents are now scheduling 40 to 50 percent of their showings with people who have not been pre-vetted by another agent. Sitting in apartments and homes at publicly advertised open houses, agents can feel like sitting ducks, as they often wear expensive jewelry and drive luxury cars to meetings in secluded neighborhoods. Over the past few years, several real estate agents across the country have been murdered, raped and robbed. In September 2014, Arkansas real estate broker Beverly Carter was kidnapped and...
Keppel, KBS Forming New REIT to Acquire $800 Million U.S. Office Portf
 
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Street Smart REI   October 16, 2017   7   0   0   0   0   0
Singapore-based Keppel Corp. has received approval to launch a new REIT on the Singapore Exchange and has reached a deal for that REIT to acquire 11 U.S. office properties from Newport Beach, CA-based KBS Strategic Opportunity REIT, a nontraded REIT. The properties have not been specifically identified nor has a final purchase price been set. However, KBS currently values the portfolio at $800 million with $400 million in outstanding debt. View Original Article[1] References ^ View Original Article (www.costar.com)
How effective is your resident screenign provider? A 5 minute audit
 
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Street Smart REI   October 16, 2017   6   0   0   0   0   0
Any decision is only as good as the data behind it. CoreLogic® Rental Property Solutions connects you with the most comprehensive and up-to-date resident screening information. We give property owners and managers access to vital data that makes leasing decisions easier, faster and more effective. Learn more by downloading our Resident Screening Provider white paper.  
Data Center REITs Will Continue to Deliver Outsized Returns | National Real Estate Investor
 
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Street Smart REI   October 16, 2017   6   0   0   0   0   0
In the REIT sector, data center REITs are looking more and more like all-star players as customers expand the playing field for cloud computing, e-commerce, connected devices, high-definition video, self-driving cars and other data-dependent innovations. “We characterize the data center REIT sector as being in the second or third inning, which implies there is significant future runway for growth in the sector—well above any other REIT product type,” says Diane Morefield, CFO at CyrusOne Inc., one of half a dozen publicly-traded data center REITs in the U.S. To underscore that outlook, Morefield points out that over the past 12 months, the stock price return for data center REITs has been 30 percent, compared with 6 percent for the stock index encompassing all U.S. REITs. CyrusOne’s stock price has more than tripled since the company went public in 2013, she says. As data center REITs like CyrusOne compete to meet the rising demand for space, they’re growing by way of buying and building[1]. Most notably, data center REIT Digital Realty Trust Inc. recently wrapped up its $7.8 billion purchase of DuPont Fabros Technology Inc., and data center REIT Equinix Inc. snagged 29 Verizon data centers for $3.6 billion. CyrusOne, for its part, is spending about $300 million a year on acquisitions; to fuel growth, the REIT has boosted its unsecured credit facility to $2 billion, up from over $1.5 billion. Meanwhile, data center REITs are sinking a pile of money into putting up new structures. At Digital Realty,...
Nordstrom Suspends Buyout After Struggling to Get Financing | National Real Estate Investor
 
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Street Smart REI   October 16, 2017   5   0   0   0   0   0
(Bloomberg)—Nordstrom Inc. is suspending efforts to take the company private after struggling to get financing with favorable terms, another sign that the department-store industry has lost favor with both customers and investors. The controlling members of the Nordstrom family will renew a review of its operations after the holiday season, the company announced on Monday. In scrubbing the deal for now, the chain cited “the difficulty of obtaining debt financing in the current retail environment.” The transaction was meant to help the company continue its turnaround efforts outside the glare of market scrutiny. But even Nordstrom’s prestige -- the upscale retailer is seen as a stronger business than the likes of Macy’s Inc., J.C. Penney Co. and Sears Holdings Corp. -- couldn’t sway enough potential lenders. “Nordstom is a high-quality retailer, but it is still an apparel retailer, and that becomes difficult to finance,” said Tom Shandell, chief executive officer of Marble Point Credit Management. The industry is being “painted with one brush,” he said. The announcement sent the shares down as much as 6.5 percent to $39.86 in New York trading. The stock was already down 11 percent this year through the end of last week. Nordstrom embarked on the buyout plan in June, sending the stock on its biggest rally in more than eight years. Family members formed a group to evaluate a possible deal, which would involve acquiring 100 percent of the outstanding shares. The board also created a special committee in connection with...
Kushner Plan for Fifth Avenue Tower Is Being Blocked by Partner
 
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Street Smart REI   October 16, 2017   9   0   0   0   0   0
(Bloomberg)—An ambitious plan by Jared Kushner’s family to recast its indebted Fifth Avenue office building as a luxury architectural trophy is collapsing, setting off a chain of events that may imperil the Kushners’ ownership of a property central to their real estate empire. Their partner, Vornado Realty Trust, is telling brokers to plan for a much more mundane renovation that would leave the property as an office building, according to three people familiar with the matter. Vornado Chairman and Chief Executive Officer Steve Roth was never enthusiastic about the Kushner plan although until now he hadn’t stood in its way. Putting an end to the Kushner effort -- to salvage their overpriced investment by turning it into a Midtown jewel with expensive condos, a hotel and five-floor mall -- could have profound ramifications for the family. Vornado, which owns 49.5 percent of 666 Fifth Ave., is unlikely to invest further in the property without first being reassured of its future, said three people familiar with Roth’s thinking. That means returning to the negotiating table with lenders -- a battle that could result in Kushner Cos.’ losing control of the building, said the people, who asked not to be named discussing private deals. A Kushner Cos. spokesman said nothing has been decided. “As equal partners, Vornado and Kushner have been exploring a range of options for the future of 666 Fifth Avenue,” he said in an email. “All options are still being assessed, and no decision has been made about...
Weinstein Co. Enters Talks With Barrack's Colony Capital on Sale
 
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Street Smart REI   October 16, 2017   7   0   0   0   0   0
(Bloomberg)—Weinstein Co., reeling after firing its co-founder Harvey Weinstein amid sexual assault and harassment allegations, is in talks to potentially sell its movie and television rights to Colony Capital. Colony Capital, founded by Tom Barrack, has agreed to immediately provide cash to the film studio, according to a statement Monday. No other details of the talks were disclosed. A deal would give the investment firm a stake in shows such as “Project Runway” and award-winning films such as “The Artist.” “We believe that Colony’s investment and sponsorship will help stabilize the company’s current operations,” Weinstein board member Tarak Ben Ammar said in the statement. Harvey Weinstein was fired Oct. 8 after the New York Times published an investigation that detailed sexual harassment allegations against him over three decades. The company’s board has said it was unaware of the accusations and last week denied it was exploring a sale or shutdown. “We will help return the company to its rightful iconic position in the independent film and television industry,” said Barrack. Brothers Harvey and Bob Weinstein founded Miramax in 1979, then sold it to Walt Disney Co. in 1993. The Weinsteins eventually left, and Disney sold the business in 2010 for $660 million to a group that included a unit of the Qatar Investment Authority -- and Barrack’s Colony Capital. When Qatar-based broadcaster BeIN Media Group. agreed to acquire Miramax in 2016, Colony made 3.5 times its equity, according to a person with knowledge of the...
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An increasing number of locals are feeling...
 
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A New Era of Opportunity for Property and Asset Management
As I travel the country for the...
 
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The amount of commercial space leased in Toronto[1] in...
 
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Three Ways Trump’s Immigration Plan Could Affect the CRE Industry
President Donald Trump campaigned on the promise...
 
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Top SFR Owners Plan to Grow in 2017
Strong demand from tenants, new technology tools...
 
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An egregious case involving a landlord who not only...
 
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Rollback Ahead for Dodd-Frank? Not So Fast
Republicans are hoping that version 2.0 of...
 
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Real Estate Investment in Volatile Times
The lurching ups and down of global stock markets...
 
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ComFree Survey 5000 Canadian Homeowners - Would They Use A Realtor To Sell Their Home?
ComFree, part of the largest For Sale By Owner...
 
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Meanwhile, Toronto's hot real estate market is spreading out....
 
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