In commercial real estate there can often be a variety of uses for a building depending on the zoning it sits on.
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?
These are rare times when what appears to be a negative economic indicator is actually a necessary painful step in the road to recovery.
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!
As a commercial real estate agent my job is to line up tenants with landlords, and sellers with buyers.
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.
From time to time we will receive a floor call from an individual asking one question: how do we charge brokerage fees to lease space.
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.
During my ten years in the commercial real estate industry, I’ve seen it all and very little surprises me anymore.
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 was 20 years old when I made my first serious attempt at selling myself.
I had come to the realization after a period of overseas travel that we were incredibly fortunate to live in Canada.
Photo: Courtesy Leader-Post
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?
We found ourselves in the middle of a difficult situation this week.
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?
We have been receiving a wave of phone calls from potential tenants looking to cash in on the upcoming legalized marijuana trade.
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.
Our latest retail report has just been released which reveals that despite a small increase in available space in 2017, we now show three consecutive quarters of stable vacancy.
It was made public last week that the City of Saskatoon has purchased one of the last properties of the now mothballed Saskatchewan Transportation Company (STC) in Saskatoon.
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?
The discussion regarding crown participation in the private sector surfaced again recently.
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.
The lease is signed, you’ve moved in and you’re open for business.
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?
I ask this question because I believe women bring great value to our profession.
It’s difficult to locate the current ratio of female/male licensed real estate agents in Canada.
A quick look at Saskatoon, SK as an example; of the 60 individuals who work full time in commercial real estate sales as licensed agents, 13 per cent are female.
Compare that to the 2017 NAR (U.S. based National Association of Realtors) Member Profile (which is made up primarily of residential agents) that states sixty-three per cent of members are female, that’s two thirds of all agents.
The City of Saskatoon used to plan their neighbourhoods with life expectancies of 10 to 15 years .
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.
Let’s put the cards on the table! We tend to support societal arguments that align with our own special interests.
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.
We have to go back to 2014 to find a drop in Saskatoon’s industrial real estate vacancy.
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.
As we begin 2018, it’s an opportune time to ponder our priorities for the coming year.
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.
In an ideal universe tenants could plan ahead and leave themselves enough time to complete a comprehensive commercial real estate search.
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!
Our latest 3Q17 market report shows a very slight increase of 10 basis points to 8.1 per cent in Saskatoon’s overall industrial vacancy rate.
This very marginal change does not alter our belief that this market has stabilized. Both Marquis and North Industrial areas which are by far the largest warehouse districts in the city did decline in vacancy to 9 per cent and 5.6 per cent respectively.
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.
A client will only benefit from a company that offers a full suite of services when each department provides an exceptional level of service.
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.
I’m about to really date myself here but as a kid do you remember going to the grocery store and watching the cashier type each item into a till?
Bar code scanning changed everything, none more significantly than grocery stores.
If the inset picture is a confusing one to you, let’s take a trip down memory lane and a quick look into what the future holds for the grocery retail experience.
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.
Most commercial real estate transactions are negotiated between parties with full disclosure as to who each party is.
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.
What do craft breweries and frozen yogurt have in common? They can’t be mixed together that’s for sure!
No, in fact, both retailers share a strong entry into our market and have made an impact in our commercial real estate landscape.
The question is: will craft breweries melt out as fast as the frozen yogurt competition did?
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.
The Buggles famously sang “video killed the radio star” but streaming hasn’t quite put the final nail in the bricks and mortar music business just yet.
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).
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.
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.
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.