My favourites are old malls. Once so bustling and now so neglected.
But what if you were looking at a vacant mall that was brand new?
My favourites are old malls. Once so bustling and now so neglected.
But what if you were looking at a vacant mall that was brand new?
Earlier this week, I forwarded a client some historical data on Saskatoon commercial real estate capitalization rates. He came back to me with the comment, “Would be interesting how it (cap rate information) trends with interest rates.”
Sophisticated investors absorb data to make informed investment decisions. I asked our Market Analyst to gather the information. Here’s my observations because of that research.
What factors need to be considered to make a prudent investment decision?
I wrote about the advantages of partnerships, but let’s say the idea of a partnership does not interest you.
Have you noticed any changes in the convenience store staples in Saskatoon?
There are a few subtle changes happening worth mentioning.
We represent both Tenants and Landlords; this article has been written from the perspective that I am representing the Landlord.
At times the Tenant is prepared to execute the document “as is” and at times they will request hundreds or more of changes. We have seen request that number exceed 1,000 changes.
We know all commercial real estate leases are written with a bias towards the Landlord, but what are the main reasons that Tenants object to the document?
We did see some new construction of retail in 2018, so it’s probably time to revaluate where the inventory levels sit versus vacancy, midway to the end of the third quarter of 2018.
Looking at the numbers by area, who do you ask: landlords or tenants?
All of these can be useful, however there are times when they just cannot replace a “belly to belly” meeting.
I just got back from a hot but fun weekend in Las Vegas and of course my commercial real estate brain could not turn off the whole time I was there.
The immense size of the development and the energy it must take to run it all caused me to do a little research when taking a break from the distractions of the Strip.
When a tenant vacates a space it can be difficult to anticipate who might backfill them based on the uses the property is best suited for.
So how do landlords decide if they should and shouldn’t spend money on a vacancy in order to get it leased up?
Times when a story can be framed negatively or positively when viewed through the lens of reality.
Here’s the thing, the latest Marquis Industrial Building Permit Map issued by the City of Saskatoon on July 3, 2018 states there have been no industrial building permits issued in 2018 (within the Marquis Industrial area).
On the surface, that’s a hard pill to swallow!
Unlike a sale, where both sides part ways at the end of transaction, I think leasing is a lot about building a relationship.
However, much like in our personal lives, we all know some relationships are just not meant to be.
There is nothing worse than putting a transaction together that gets mired in a lengthy conditional period with no end in sight.
Whether it’s a court ordered sale or a deal that continually seems to get extended, time kills deals that take too long. Continue Reading
It certainly doesn’t seem like it’s been 3 ½ years since our current ownership group purchased the company. A great deal has happened. The growth and success we’ve experienced over that period of time is because of the great people we work with.
When we began this process we spent a lot of time thinking about: Why we do what we do?
The purpose of this story is to answer that question.
It seems like unlikely odds, Saskatchewan Liquor and Gaming Authority announced that all businesses awarded a cannabis retail permit were selected at random.
A University of Regina statistics professor told the Leader-Post that he’s calculated the odds of one company winning permits in four locations is a one in 1,319,760 chance.
I explain that our typical fee would be calculated based on five percent of the total net rental amount over first five years of the lease term and, if applicable, three percent on the balance (plus taxes).
In many cases the conversation ends there.
Every now and then however I get a new doozy worth sharing!
I’ve compiled a list of new and interesting ways that tenants have chosen to compromise their relationship with their landlord.
I had come to the realization after a period of overseas travel that we were incredibly fortunate to live in Canada.
Over a year ago, it was announced the Regina’s downtown Cornwall Centre was getting an H&M store.
The store opened this past weekend to a lineup of folks hoping to cash in on door crasher coupons between $10 and $300.
So why did it take so long to finally open the doors?
Unfortunately, we have encountered problems similar to this in the past.
My Business Manager received a call from an individual who is purchasing a multi-tenant commercial property. We are the Listing Broker and this Buyer is represented by an Agent from another brokerage firm.
The Buyer was very frustrated with their Agent and wanted to know how they could proceed without him.
So what’s this ongoing problem I’m referring to?
They are fervently shopping for locations which I feel like may be premature.
Is the province really prepared for this? I’m not sure any part of Canada is.
A profitable business enterprise relies upon the successful sale of a product and/or service. How that transaction takes place is changing in many corporations. There are instances where it’s becoming increasingly easier to complete the necessary research, shop for the most favorable price and terms, and make the purchase on-line.
There will however always be a place in complex transactions for a professional salesperson.
The Saskatchewan provincial government expanded PST in the 2017 budget to include restaurant meals.
Has it made any impact on spending habits? Statistics so far indicate perhaps.
The timing is especially interesting as the City recently commissioned a report regarding the feasibility of a downtown arena.
Could this be part of a bigger plan?
A news story was published stating the Saskatchewan government was considering the sale of Innovation Place’s Saskatoon campus to the U of S and its Regina business park to the U of R.
Minister of Central Services Ken Cheveldayoff recently stated that he’s evaluating around 660 buildings across the province to see if they are still in proper use and if there is the possibility for them to be sold.
What are the questions that are not being asked?
Well, it depends on who you ask.
I didn’t live in Saskatoon when the facility was built in 1988 but from what I’ve read the location was as controversial a point then as it is now.
Saskatoon’s City Council recently commissioned a report to investigate the feasibility of a downtown arena development, researched by the group that helped Edmonton develop their Ice District.
To figure out why the discussion has come up, it may be prudent to take a look back.
Negotiations were tough but you were able to come to agreement with the landlord regarding the rate and term.
But the universe has thrown you a curveball. For whatever reason, you will not be able to complete the obligations of your lease agreement.
What do you do?
In the past few years, however, the “Saskaboom” economy attracted people so quickly to the city that neighbourhoods on both sides of the river filled up considerably faster than previous estimations.
We want what we want, but are not prepared to see the other side of our position. We align ourselves with special interest groups that agree with our view of the world.
According to 2016 census data, 53.6 per cent of Canadians live in single family homes. Saskatchewan, at 72.7 per cent is second only to Newfoundland and Labrador at 73.3 per cent.
The census reported that only 2.4 per cent of Saskatchewan’s population live in an apartment with 5 or more storeys compared with the Canadian average of 9.9 per cent.
After a two year period where we witnessed a steady increase of three percent, I am pleased to report that the research for 2017 illustrates a steady city wide average decline to 7.7 per cent.
I am a commercial real estate agent in Saskatoon. I’ve dealt with your companies on behalf of landlords and owners over the years.
Commercial hookups are different than residential services in that commercial clients will often require a number of people to be authorized to deal with the account.
This isn’t a new issue, I’m sure you’ve been dealing with it for years.
We know that a leader’s most important job is designing and implementing strategies so the organization flourishes in the long term.
There’s a quote from an unknown author I like to share, “Change has never happened this fast before, and it will never be this slow again”
So with change happening that rapidly, how does a leader prioritize those strategies?
The recent closure of the Moose Jaw daily Times-Herald marks the further demise of local print media in Saskatchewan.
The trend is not unique to our province; small newspapers have been on the decline for many years.
It’s just hitting closer to home lately.
They wouldn’t feel pressured to take space that isn’t quite right or doesn’t entirely suit their needs.
But it happens far too often in my world. Why?
I used to smirk a little every time former mayor Don Atchison found a way to work in the “Saskatoon Shines” message into public speeches.
But I’m drinking the koolaid and on board these days with repeating something he was fond of reminding people: Saskatoon is where it’s at.
On Friday our Saskatoon ICR crew travelled to Regina to experience the shiny new Mosaic Stadium and support our Rider’s 37 -12 defeat of the Alouettes.
Although not the point of this story, I have to say it’s an impressive facility, one that this province can be proud of.
On our way to the game we stopped in to hook up with our Regina group and tour their new offices.
Sears has finally pulled the plug. They were granted permission Oct. 13 by the courts to start liquidation of their remaining stores.
This includes a job loss for over 12,000 people who have helped served generations of Canadian shoppers.
So I posed the following question to my friends and social media followers this week: If Sears is out of Saskatoon’s Midtown Plaza, what should be in?
After a flurry of brainstorming I got some pretty good suggestions. So hopefully Kingsett Capital, the Midtown Plaza landlord, is listening!
I enjoy capturing a positive Saskatoon commercial real estate story when they surface. Our recently released 3Q17 retail survey provides me that opportunity. After two quarters of negative absorption, retail vacancy has decreased by 20 basis points to 4.1 per cent.
Due to continued population growth and expansion of new neighborhoods, we see a healthy amount of new retail development for the Saskatoon metropolitan area in coming years.
I value a place of business that can offer me that exceptional one-stop shopping experience. I believe we at ICR have that to offer.
People often ask me if we have lulls or slower periods in commercial real estate sales and leasing.
My typical response is that we tend to be busy year round. But summer can sometimes slow down with clients taking holidays from the office.
So is this a reflection of the ICR signs you see around town? Probably not when it comes to our office market.
So why would do offers from buyers sometimes come in undisclosed?
We as professionals in the commercial real estate industry can be known to talk out of both sides of our mouth.
There is no question that almost every stage of real estate development has become more complex.
I often hear frustrated comments due to the increase in resources and knowledge required to navigate red tape from what can be numerous applicable authorities who have jurisdiction over development.
And yet, in some cases there are not enough controls in place.
With the pace of technological change now accelerating, it is not reasonably possible for businesses to plan farther than five years into the future.
We like to think we know, however, the change that is coming upon us is so rapid that no one has a clear picture of where we’ll be in ten years.
I see three evolving trends which will translate into opportunities for the savvy commercial real estate broker.
It looked like the end was near when HMV Canada announced they were closing all their stores but homegrown Sunrise Records has stepped up to fill the musical consumer gap.
I had the pleasure of moderating the office panel at the Saskatchewan Real Estate forum in April.
One of the topics that seemed to “gather legs” during our discussion was Regina’s current office development policy as it relates to Saskatoon’s proposed office development bylaw.
I discussed some of the issues surrounding this topic in an earlier post a year ago: Regina’s policy, implemented in July 2012 does not permit major office developments more than 43,000 square feet of floor space outside of the core area (except in limited and specific contexts; e.g. accessory to an institution).
There were four permits issued during the month of April however that number has remained unchanged since the end of April.
Spring is typically the season we see the greatest number of new industrial construction starts.
Leasing commercial retail space can vary by development but there are some fundamentals that most tenants in this sector should take into consideration while shopping around.
It’s not hard to find opposing opinions on the philosophy of disengaging from technology, nor is it possible for me to say what’s right for you. My wife and I have experimented for a month now with “technology free Sundays.”
Our definition of “technology free Sunday” is that our cell phones and computers are shut down from the time we retire Saturday night until Monday morning. The experiment has been positive for both of us.
They are recognizable by name alone. They are examples of commercial real estate known throughout the world whether you’ve physically seen them or not.
How significant is a name when it comes to commercial buildings?
Even the most seasoned tenant can miss some pretty vital points when investigating new space. It’s certainly more challenging for new businesses that have never occupied commercial real estate before.
Here’s a few tips to look out for that can save you money and hassle down the road when searching industrial spaces.
I had a client ask yesterday what I believe to be the long term risk associated with investing in retail commercial real estate. Let’s ponder that question as it relates to the four major asset classes.
In an earlier post, “Time to Sell Functionally Obsolescent CRE?” the discussion focussed on what could be considered owner occupant type assets. For the purpose of this overview, we’ll assume that the real estate is current and relevant.
My grandmother and I recently discussed the future of Sears Canada. Outside of heavy news coverage of the US Sears hardships, she identified something that dropped from all our radars: the absence of a Spring/Summer 2017 catalogue.
Amid no apparent fanfare, Sears Canada appears to have quietly shut down their catalogue service.
So what’s going on?
Retail continues to play a stabilizing role in Regina and Saskatoon commercial real estate. The office vacancy has hovered in the double digits for the last 3 – 4 years while the industrial sector witnessed a 3% increase in vacancy in 2015 in both cities.
Here’s a synopsis of the presentation by one of ICR’s partners, Linely Schaefer made as Moderator on the retail panel last week at the Saskatchewan Real Estate Forum.
In spite of a forecast for a slight increase in the unemployment rate and decrease in housing starts in Saskatchewan, RBC Provincial 2017 Outlooks is predicting a growth in GDP of 1.8 per cent.
That’s after two consecutive years of negative growth, due mostly to weakness in our energy and non-energy mining sectors. To say that the Saskatoon office market has been simply affected by these provincial economic factors is an understatement.
In fact, as you can see by this historical vacancy graph, you have to go back to 2005 to find vacancy as high as we experienced last year. Is there a light?
It’s been a long hard road for the Saskatoon Industrial real estate market over the last few years. We’ve seen average vacancy skyrocket from under 4 per cent to over 10 per cent and significant softening of net rental rates.
The recent announcement of the ICR brokered Mitsubishi Hitachi Plant acquisition by Brandt Group injects some much need optimism into this sector.
With 208,000 square feet (SF) on over 22 acres, the wind turbine factory has the potential to employ 500 people.
The town of Kindersley has a total population of 5,628 people but trades as a hub for more than 40,000 surrounding residents. Their history in oil and gas goes back many decades and they are certainly not tapped out yet.
With a certain weaker economy currently in play, the City of Saskatoon has released their newest projections for growth in Saskatchewan’s largest urban municipality.
While the gain may come more gradually than it has in the past few years of Saskaboom, the City has high hopes we will continue to attract residents.
I have been a fan of the shopping mall experience for as long as I can remember. Maybe it’s my upbringing as a country girl, but I’ve always found interior malls to be an exciting place to visit.
Despite what appears to be dire times for the mall, market research indicates that some traditional shopping centres are doing very well. And in fact, aren’t down for the count at all.
Every deal is unique but I’ll provide a few examples that most commonly occur in the Saskatoon commercial real estate market.
I encourage those I meet to talk to as many people currently in our business as possible, including competing brokers and owners. Gaining a diversified perspective will provide greater clarity for those seeking guidance for their future.
Here’s the link to an earlier post which might be of interest to women considering our industry.
Most businesspeople make it common practice to hire a broker to list their space for sale and/or lease.
There are also many compelling reasons to seek formal representation when looking for a new home for your business although this may not be the best solution in all circumstances. Don’t sign a contract unless you believe you will benefit from representation and save money.
Let’s explore the advantages of contracting one commercial real estate company to partner with to meet your goals and ensure the most favorable outcome.
In the days that followed the fire, news trickled out regarding the tenancy and landlord situation in place. Could the loss of life have been avoided? Indeed it could have.
Saskatoon City Council has approved the sale of the former municipal police building on 4th Ave S and now the work will begin for us.
Originally built with a uniquely specific purpose, this property is going to get a new lease on life.
He has observed other cultures which have successfully embraced the partnership model more frequently than he sees in Canada.
Are Canadians simply more independent thinkers? Or does it speak to a lack of confidence in this form of ownership?
We have just completed a series of meetings which focussed on the review of our corporate vision and mission statements. One of the elements discussed which is absolutely central to our company vision is trust.
It is irrelevant how good we say, or believe we are, without a high level of trust embedded within our culture as well as the trust of our clients we simply cannot achieve our corporate mission(s).
Saskatoon residents spoke with their votes: they want change at City Hall. The city is abuzz with news we will now hand the mayoral seat to a new individual.
But what does this mean for our business community?
Let’s also assume you provided that purchaser a very comfortable six week conditional period to complete their due diligence and arrange financing so they don’t have to come back to you with a request for an extension.
I just experienced this exact situation as a listing broker working with a buyer’s agent from another brokerage.
There has been much written about the benefits of the “new” open office concept. On the other hand it’s not difficult to find articles which state the open office concept has been proven to not be effective.
The truth is it depends upon the dynamics of a company and personal preferences of the individual. It is important to tell you that I have my own bias on this issue. I will nonetheless do my best to present the pros and cons objectively.
The International Council of Shopping Centers (ICSC) held their annual Canadian Convention in Toronto from September 19-21. The event allows brokers, owners, developers, and retailers to meet up and form relationships at one central location.
With over 150 booths of various disciplines, attendees were able to mingle and cook deals in person. ICR sent a large contingency of brokers as usual and they came back with encouraging news.
It must be an organization that will allow me to provide a high level of service to my clients and provide a culture for me to thrive as a Broker. In keeping with that philosophy, we have recently announced a strategic partnership with one of the world’s largest commercial real estate brokers.
Who is JLL and why the change?
Leases are created by landlords to protect their investments. They identify the rights and responsibilities for both parties during the term of the relationship.
Because in most cases the lease comes from the Landlord, he or she is going to be more aware of the clauses and ultimate implications. No one is trying to pull the wool over a tenant’s eyes, but there are items that are important to understand prior to entering into an agreement.
How brave are you? Are you willing to take risks?
Buying an old building to restore or spiff up can be a bold move but the reward can be so satisfying.
Research this topic and you’ll find many opinions and trending theories and on the most efficient and pleasing office environments. Contrary to what some of these theories may try and tell us, I don’t subscribe to the belief that one solution fits all.
There are some useful tips available that is worthwhile considering to help make informed business decisions.
Accountability is defined as the fact or condition of being accountable; therefore, responsible. I think it’s a word that is thrown around without much consideration for the consequence of the potential expectation created.
A few weeks ago, I was searching for a photo to accompany an earlier blog post. It didn’t surprise me, but it was a little disheartening to find that images of female real estate agents were hard to come by.
In an earlier, January 2015 blog post I discussed the Employee Purchase of ICR. Nineteen months have passed since that announcement; let’s try and take an objective look at the pros and cons of this method of selling a business.
I believe in both our personal and work lives, where change is involved, it is beneficial to stop and take note of what worked, and what kind of challenges we encountered along the way.
We field a number of questions regarding the type of sale or lease product that moves the quickest in our market. It’s hard to generalize because every commercial real estate property is different however there are certainly those that stand out from the rest.
We are always searching for new product to bring to our clients, so pay attention to our wish list:
With an abundance of industrial and office inventory, the story in Saskatoon’s commercial real estate market has not necessarily improved since the beginning of 2016 but it could be stated that things may be stabilizing.
I had a conversation with a small contractor this week whose view of the commercial real estate market was a little off to me. He indicated that landlords should be bowing to tenants and taking whatever offers they can, given our current vacancy.
I won’t disagree that we have a fair amount of inventory within our Saskatoon industrial and office markets. While deals and incentives are being offered I don’t think it’s a dire situation.
Location and demand stand out as the major leasing drivers of commercial real estate however they are not the only factors.
Here’s a few tips I share with landlords to help their properties shine above the competition.
There is no definitive start to when a generation begins, but millennials are loosely described as the next demographic following Generation X. They are defined as people born from the early 1980s up to around the year 2000.
Their needs and wants should be important to employers, because as a generality this group of workers will not necessarily just follow the money; they want a workplace that offers a lot more.
Not only the office set up but location and amenities will play huge roles in companies’ ability to attract millennial employees. We see examples of this already impacting our commercial real estate market.
Many people I speak with are surprised to learn that we have such a high demand for investment product in this province. I am quite often asked the question (possibly due to the high vacancy rate in the industrial and office sectors) whether we believe prices have “bottomed out.”
I will first need to qualify my definition of “quality,” however in the last number of years there has been absolutely no downward movement in the price of these assets. As a matter of fact there has been some minor cap rate compression in the past year.
After much consultation with the public and their own administration, the City of Saskatoon approved their official Growth Plan to Half a Million last week during a regularly scheduled Council meeting.
In a municipality that has traditionally accommodated modest growth, the City is identifying how they are going to service nearly double our population in the next 30 to 40 years. Change is imminent, they explain in this new report.
A common question asked in conversation is: “how’s the market?” It’s difficult to provide a one sentence response to that question!
We’ve already reported the rather dull current status of the Saskatoon office and industrial leasing markets. We do have a strong demand for good quality Saskatchewan commercial real estate investment property however our supply is limited.
Where the story gets better, where we have a good balance between supply and demand and where we are still seeing new construction on spec is… retail!
The Saskatoon office market is sitting with an abundance of inventory on the market at the end of the first quarter for 2016. While this isn’t good news for landlords, it creates a real opportunity for tenants to negotiate attractive terms on new leases.
There are three important due diligence items that should be on your to-do list when purchasing commercial real estate in any asset class. I have just resolved that when applicable, my Business Manager and I will do everything reasonably possible to ensure Buyers that we represent will be provided these documents prior to removal of their purchase agreement conditions. Let me explain why!
While building inventory in the industrial sector may be high, demand for industrial zoned lots continues. According to the ICR first quarter report for 2016, the industrial market is stabilizing but vacant inventory has risen slightly since the final months of 2015.