Any discussion on cap rates needs to be prefaced with a cautionary note.
That is, there are many factors that determine capitalization rates on a commercial real estate investment.
Those factors include but aren’t limited to age and condition of improvements, covenant of tenants, term of leases, location, asset class and the tenant mix.
Administration at Prairieland Park has disclosed they have endured ongoing losses at Marquis Downs over $500,000 annually during the last five years prior to the pandemic.
With no place to relocate, this will effectively end professional horse racing in Saskatchewan.
There seem to be a lot of mistruths circulating about whether or not Prairieland has the authority to discontinue the sport on their site.
You bet they can.
In many larger jurisdictions, commercial brokers focus on one asset class such as office, industrial or retail.
They do that because they know that to service their clients, it’s necessary to have a high degree of knowledge in one area.
In Saskatchewan we do not have that luxury.
Saskatchewan’s premier Scott Moe is optimistically eying reopening our province (again) to business despite some of our neighbouring provinces tightening down.
As much as I strongly believe safety is a high priority, I also believe salvaging our economy is just as important.
So what does Moe’s re-open plan mean for business?
Have you ever found yourself in a situation where you believed that it was in the best interest of someone you know to plan for change, but failed to convince them of your belief?
Sometimes thoughtfully framed stories can be more impactful than our best efforts to convince.
Let me explain.
Regina City Council was publicly criticized last week for a land sale they engaged in with an undisclosed buyer.
Some of the outcry is from adjacent property owners who may or may not have had use for the land themselves.
But any criticism from the general public about the cloak and dagger secrecy of the sale may not be fair.
While we saw quarter over quarter decreases throughout 2020, the drop in Saskatoon’s industrial vacancy for the last three months has exceeded my prediction for the entire current year.
The industrial sector has seen a net absorption of almost 150,000 square feet (SF).
In January, I forecasted we would be at 4.8 per cent by year end.
Our recently released Industrial Market Report recorded that rate had already dropped to 4.71 per cent. That represents over a 60-basis points reduction within one quarter.
My review of the market stats would indicate that is the largest quarterly drop we have seen in over 10 years.
The Last Blockbuster (2020)
“Do I rent missing renting from a physical store, no, absolutely not. I don’t think anybody does.”
86 minutes, streaming on Netflix (2020) Trailer
The giant of all video rental franchises has truly fallen, with one remaining store in Bend, Oregon.
I’m sure most of us are surprised to hear there would even be one left in the wake of home streaming.
Thankfully, filmmakers have documented Blockbuster’s rise to fame and the eventual aftermath called The Last Blockbuster which ironically is airing through Netflix.
Renewals in commercial leasing can be almost as important as securing a lease in the first place.
There is quite a bit of finesse to this process.
Cities are becoming increasingly aware of the need to densify.
The infrastructure costs of suburban sprawl are not recoverable.
No one is prepared to pay the real costs that are imposed upon most city services because of continued expansion of suburbia.