Market

Market

A solution to YXE downtown office vacancy

As reported in our first quarter Saskatoon office survey, we currently have over 400,000 SF or 16.7 per cent vacancy in our Saskatoon downtown competitive office market.

Those numbers do include the vacancy within River Landing’s 185,000 SF East Tower which is nearing completion.

The numbers do not however reflect 40 per cent of the space yet to be leased within the 300,000 SF Nutrien Tower which has just recently started construction.

Once that additional vacancy is accounted for, we will be reporting core area vacancy in excess of 20 per cent.

Saskatoon’s office market is in transition.

The demand for new Class “A” inventory is coming from users already present.

There are not enough new tenants entering the market and the “flight to quality” is projected to continue.

Let’s talk solution.

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Market

Disruption to retail, not death

It’s easy to see the bad news stories about brick and mortar stores shuttering from the overwhelming move of consumers to e-commerce.

But I don’t think retail will ever die completely.

Rather, there is a disruption to the way we’ve known it to be and commercial real estate landlords will have to navigate their way through this new landscape.

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Market

Long term stability for Saskatoon & Regina’s CRE retail sector

While both the industrial and office sectors have displayed somewhat volatile vacancy rates over the past five years, the retail sector has consistently performed well.

Aside from Regina straying slightly over 4 per cent in 2017, both cities have otherwise achieved a number below 4 per cent since 2013.

Let’s take a closer look at each city.

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Market

Positive yet mixed signals in Saskatchewan industrial

There are three significant numbers I’m looking at to determine the sentiment of the industrial real estate market.

One of those numbers is positive, and two illustrate we have yet a way to go before we’ve fully recovered.

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Market

Was I on the Mark in my 2018 Industrial Vacancy Forecast?

I promised you that I’d hold myself accountable in this Jan 2018 post and report back to you. 

So, how did I do? At that time, I predicted a decline in the overall Saskatoon Industrial vacancy rate from 7.7 per cent to 6.2 per cent.

That was after a significant 2 per cent decline in the previous 12-month period.

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Market

Retail is king for 2018

There were substantial changes to the commercial real estate landscape in Saskatoon as we close out 2018.

I think it’s is a story of renewal and growth, would you agree?

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Market

Saskatoon industrial vacancy drops

Our quarterly market reports have just been released and we’re pleased to report that the overall industrial vacancy rate is heading in the right direction!

The increase in absorption over the last quarter has resulted in just over a 50-basis point decrease in vacancy from 7.5 per cent to 6.9 per cent.

We have, however, seen the average asking net rental rate decrease from $10.61 PSF to $10.20 PSF.

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Market

What is the Relationship Between Cap Rates & Interest Rates?

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.

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Market

Prime retail space elusive in Saskatoon

One of my biggest challenges is being unable to find the right fit for tenants. In a commercial landscape that remains under-serviced for retail it’s not exactly my fault.

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?

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Market

Saskatoon industrial market in recovery mode

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!

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Market

Saskatoon Office Market Facts You Need to Know

Many are surprised to learn there is in fact a void in a sector of the Saskatoon downtown office market.

Before I speak to that, it’s interesting to note that our 4Q17 report recorded an extremely wide range of vacancy, ranging from 0 per cent to 28 per cent.

We see not only those vast differences in suburban markets but also between various downtown “A” to “C” offices classes.

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Market

Stonebridge full to the brim

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.

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Market

Suburban Growth vs Urban Densification

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.

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Market

2017 closes with big decline in industrial vacancy

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.

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Market

Saskatoon still shining

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.

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Market

Sears is out but the possibilities are endless

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!

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Market

There’s a pattern here, cyclical vacancy in Saskatoon industrial

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.

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Market

Facts about Saskatoon’s Retail Sector

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.

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Market

No cure for the summertime office blues

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.

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Market

An argument for municipal controls on architecture

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.

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Market

Are craft breweries the next big thing?

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?

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Market

YXE Marquis Industrial facts you didn’t know

Up to and including June 13th, only five building permits have been issued since January 1st, 2017 within the Marquis Industrial Area.

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.

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Market

What you need to know before investing in commercial real estate

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.

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In the News

Did you notice Sears no longer has a catalogue?

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?

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Market

Saskatchewan #CRE retail trends you need to know

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.

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Market

Saskatoon office trends you need to know

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?

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Market

Stability emerging in Saskatoon industrial sector

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.

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Market

Kindersley still a hot spot for SK drilling activity

Despite a rough patch for oil in 2016 activity actually increased in one of Saskatchewan’s growing secondary markets.

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.

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Market

Slower but sustained growth in Saskatoon

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.

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Market

What’s really going on in the Saskatoon Office Market

Just as it is not possible to generalize about the state of any commercial real estate market, we need to provide some detail to accurately illustrate what’s going on in the Saskatoon office market.

It’s easy to say that the downtown vacancy rate is 16.5 per cent and the suburban vacancy rate is 17.6 cent. The challenge is to find opportunity in the numbers.

As a Broker, we know it is strategy, based on deep market knowledge that differentiates us from the rest. We are fully aware, every day we go to work it is necessary to leverage market knowledge and creativity to add value to our client relationships.

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Market

Ode to the Mall

My little sister Jenni and I in West Ed Mall, circa 1984. West Ed opened in 1981 and was the world’s largest mall (5.3 million SF) until 2004.

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.

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Market

Turn a negative into a positive

Mainstream media is quick to report the bad news in our world. We can’t ignore the negative but the creativity to turn these opportunities into a positive is available to us.

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Market

Steady as she goes, in Saskatoon CRE

ICR has collected the fourth quarter results for 2016 and though commercial vacancy remains higher than average in some sectors, overall the numbers have not changed drastically over the past year.

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Market

Fall brings cool weather, but Saskatoon still warm for retail

shopping-bags1The 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.

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Market

Deeper issues surround YXE property tax increase

city-logo-2_1With a civic election around the corner there is much discussion surrounding our current administration’s property tax track record.

We have seen annual property tax increases average 5.43 per cent over the current council’s four-year term. During this same period the consumer price index indicates inflation has risen by an annual average of 1.9 per cent.

Anyone seeking civic office who is riding on the representation that they’ll keep increases under the rate of inflation without revealing a road map simply lacks credibility.

There is lots to talk about surrounding this issue.

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Market

Interesting facts about Saskatoon and Regina downtown parking rates

Parking meter

We hear much discussion about the lack of downtown parking options. Fueling that discussion in both Saskatoon and Regina are the varied opinions on the pros and cons of bike lanes and their impact when parking stalls are eliminated to create those bike corridors.

Many times mid-week, on an evening in the dead of winter, I’ve found it necessary to drive around the block more than once to find a parking spot in downtown Saskatoon. It doesn’t seem to matter if it’s -30C, prairie people are hardy souls who keep on going no matter what the weather throws at them!  Here’s a synopsis of the stats from our recently released Parking Survey.

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Market

Saskatoon CRE market snapshot

DSCN1001With 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.

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Market

The sky is not falling

optimism

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.

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Market

What you need to know about the City of Saskatoon’s proposed Office Bylaw

Saskatoon is the envy of many other cities. As a result of our city administration’s proper long term planning and successful execution of those plans, we have a vibrant and healthy core area.

There are many times I’ve had to circle the block during the week, in the middle of the evening, in the dead of winter looking for a parking spot. It’s somewhat understandable that there is a desire to entrench that success. In an earlier post, Saskatoon approves Growth Plan to Half a Million, we explored the city’s goal for the next 30 years.

Here we’ll explore the administration’s proposed office bylaw that would restrict suburban office development to under 21,000 square feet.

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Market

Millennials influence commercial real estate developments

 

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.

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Market

Quality YXE commercial real estate investment assets scarce

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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.

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Market

Saskatoon approves Growth Plan to Half a Million

City image

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.

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Market

The Saskatoon Commercial Real Estate Shining Star

new-rendering-site-edited

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!

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Market

Office options abound

crop-banner

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.

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Market

Industrial land remains a hot commodity in Saskatoon

Construction-Medium-Image

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.

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Market

What are the odds?

0d7055b437da51678e4ca2b28590fe7ef03bfeffI’m not much of a gambler, but I’m game to make a few wagers on the immediate future of commercial real estate in Saskatoon. I still thinking putting money in our market is a safe bet but there are some important items to consider.

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Market

Is there an economic disconnect between Commercial & Residential Real Estate?

0fc30b0There is no simple yes or no to that question. It can be common to see strength in one sector and not the other. Let’s explore some of the factors that come to play between these two distinct markets.

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Market

Strong Demand for Commercial Investment Real Estate

Grocery strip mall

In a couple of my earlier blog posts: “Five key benefits of commercial real estate investing” and “Mainstream media’s obsession with the equities market” I discussed why commercial real estate is a viable investment vehicle. It is surprising to some that in spite of the current tepid economy, our demand exceeds available product and is causing compression of some cap rates. There are a few reasons for this…let me explain.

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Market

Does my site work?

IMG_4713When developers and investors are considering commercial real estate purchases, their broker is often called upon to render an opinion on site feasibility. As Barry and I would both tell you, we are not engineers or architects but we do have a pretty good idea of what is most commonly requested in our market.

Sharing some of our market insight can be important to the development of a site when it comes to tenants’ current expectations and achieving an expedient lease process on the property.
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Market

Saskatchewan Secondary Market Outlook

Swift Current

Swift Current

Traditionally the general economic activity affecting Saskatchewan’s commercial real estate industry is impacted by three main outputs: agriculture, energy and potash. The Conference Board of Canada’s forecast of 2% GDP growth in 2016 is based on a resumption of typical agricultural production and somewhat lessening declines in the energy sector.

I’m not sure that I agree with the assumption that we will see recovery in the energy sector next year. Certainly however a lower loonie contributes to a stronger export market with the U.S., by far our largest customer. We believe 2016 will see some growth; two percent may be a bit optimistic.

The Royal Bank of Canada forecasts 3.2% retail growth for this province. An achievable number if we continue to grow our population.

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Market

How can downtown Saskatoon up their game?

of CFL football action in Regina, Sask., Sunday, September 01, 2013. The Riders defeat the bombers 48-25.THE CANADIAN PRESS/Liam Richards

The City of Saskatoon is currently enjoying a vibrant downtown. Evening action rivals the daytime foot traffic moving in and around businesses. Much to the chagrin of drivers, finding a parking spot can be just as difficult at 7pm as it is at noon.

But what do developers and policy makers need to do to take us to the next level? How do we encourage people to start moving downtown?

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Market

Impact of 570 new Saskatoon hotel rooms in 2015

main

That’s a 14% increase over the 2014 room count of 4,076. The new properties are Hampton Inn & Suites and Mainstay Suites in the Airport area, Best Western Plus on 8th St, Home Inn & Suites on Preston and a Hampton Inn & Suites in Stonebridge.

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Market

Exciting stuff on Saskatoon’s CRE horizon

Cornerstone CommonsWith all the economic doom and gloom, it’s time someone looked at what’s going right in Saskatoon. National tenants continue to look at our market and there are brave developers out there with the belief that if they build it, they will come.

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Market

Saskatoon’s office, industrial remains competitive

Third quarter market highlights for Saskatoon

 

Retail rendering

 

ICR Commercial Real Estate has released their third quarter musings regarding the office, industrial and retail markets in Saskatoon. Oversupply and slow absorption lowered expectations over the previous quarter, but where does that leave us?

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Market

YXE core neighbourhood loses grocery store

man-grocery-store-cart

Saskatoon core neighbourhood residents are up in arms regarding the recent announcement of a City Park grocery store closure. The media picked up the story quickly soliciting the shocked reactions of people living nearby the Loblaw-owned Shop Easy Foods on 7th Ave.

The impact to people who utilized and depended on the retailer is significant.

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Market

Land on Free Parking? Not in Saskatoon or Regina

Free_parking_shot

Much like Monopoly, it is especially satisfying when you hit the holy grail: “free parking” in downtown Saskatoon and Regina. It is not easy to find in most large urban centres. Recent statistics released by ICR Commercial Real Estate prove the demand is not slowing down.

Though rates remained relatively stable in the Saskatoon downtown core, rising only 3 per cent over 2014, Regina was not so lucky. Parking rates in Regina’s downtown rose 7.4 per cent over last year.

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Market

Quick facts you need to know about the Saskatoon office market

 

Saskatoon 2015 Office Vacancy

There has been a continuation of the vacancy trend that began in the majority of office markets in Canada in 2014.   That average national statistic which exceeded 10% at the time has continued to increase in 2015.

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Market

Only creative developers need apply

Timber Pointe

Saskatoon has a reputation, literally within North America, of raising up creative leaders with a strong work ethic. We have a healthy arts community. There have been a number of recent examples of innovative new and infill residential developments however the number of innovative commercial examples are few. Why do you think we are lacking in this area?

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Market

How much does $5K a month get you in Saskatoon’s CRE market?

Retail photo

We are often tasked with researching space for tenants using a monthly budget. But when we use a price per square foot as an industry to compare properties against each other there are a few steps required.

Thinking like a tenant, ICR’s Research Analyst Alvaro Campos put the question to our office this week: how much does $5,000 a month get you in Saskatoon’s office, retail and industrial?

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Market

Saskatoon Q2 Industrial Market Update

Industrial

 

Vacancy continues to rise

Now sitting at 8.2 per cent, our industrial vacancy rate has increase by one percent since the beginning of 2015. It is important to note that 1.53 per cent of that number is made up between six properties which total just over 278,000 sq ft.

This is currently the highest industrial vacancy rate in Western Canada, just ahead of Calgary and Vancouver. Although we see a reasonable level of interest and listing activity, prospective tenants are slow to make decisions to contract.

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Market

Competition is good

hotel heaven sign board_2In a recent StarPhoenix article, Tourism Saskatoon declared a warning call for the local hotel industry with the introduction of new rooms to the market. They are concerned about whether the market can support additional new rooms and sustain viability of existing operations.

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Market

YXE double digit vacancy rates: what’s going on?

Office vacancyThere are a number of media sources reporting double digit vacancy rates in the Saskatoon office sector but it’s important to identify the qualifying factors that go into this data. Here is a brief analysis of how our Market Analyst Alvaro Campos is dissecting the information for ICR.

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Market

Farnam Block is down, now what?

Farnam

All the protesting and upset aside, the iconic Farnam Block on Saskatoon’s Broadway Avenue is no longer. Jordon Cooper from the Star Phoenix nailed it this week in his commentary regarding the reality of the building demolition.

What I’m most intrigued about is what the next use will be for the site now that the structure is gone. The owners of the property have repeatedly told media that they don’t have an immediate use for the property but that doesn’t mean we can’t speculate here.

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Market

Tech tools for all commercial real estate agents  

Drone_with_GoPro_digital_camera_mounted_underneath_-_22_April_2013Advances in technology have forced many industries to change their selling tactics and commercial real estate is no different. A throwback Thursday video tweet about the introduction of cell phones in Saskatoon made me pause and contemplate how far we’ve come. But where are we going?

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Market

2015 Saskatoon Commercial Real Estate Forecast

Larry Kent with Rubbing Crystal BallIt’s not possible to accurately predict where the commercial real estate market is going this year. In order to understand the factors that generate changes in the market, these causes must be first be identified and evaluated.

A general market gap analysis, evaluating the difference between demand and supply of space involves four major market categories: investment, office, industrial and retail. Even though a region’s economic prosperity tends to move in one direction, it is not uncommon to see these different sectors trending in opposite directions.

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Market

How big is big enough?

How big

As agents we often get asked why certain national and international retailers have not set up shop in Saskatchewan’s commercial real estate market. We don’t have all the answers but there are some legitimate challenges for mega retailers considering our market.

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Market

Saskatoon CRE: calm waters create unpredictability in real estate market

The_calm_after_the_storm_-_Port_Lincoln_-_South_Australia_(Explored)
I think it’s fair to say that uncertainty in oil and other resources revenue streams do play a role in the work of decision makers in commercial real estate; their motivation to buy, sell and lease in the Saskatoon market. Given recent events, I’d like to explore the current mood in all sectors of our commercial real estate market.

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Market

Goodbye to 2014

ar126204051028313We said hello to many new restaurants and retailers in 2014 but we also had to say goodbye to a few in Saskatoon. A recent article about Toronto landmark real estate that has been closed or demolished, inspired me to think of the properties or businesses that gave way to growth and change taking place in our Saskatoon market in 2014.

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Market

Clients often ask: What is the busiest time of year?

too-busy

It seems to me that question has become more complex as the years go by. One would logically assume that the periods during holiday seasons would be quiet times of year. (Personal note: the only fact I can state with absolute confidence on this topic is that the volume of incoming business will always increase each day I get closer to vacation… without fail!)

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Market

What major Saskatoon retail corridor is this?

question-markSometimes the most obvious answers are right in front of us. I often get retail tenants looking for high exposure retail zoning. In Saskatoon’s under retailed landscape this can be a tough find.

There is one area that springs to mind that many people have underrated over the years. See if you can guess where I’m talking about.

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Market

Time to Sell Functionally Obsolescent CRE?

Obscelecent bldgIn an earlier blog post: “Have Saskatchewan commercial real estate values peaked?” I discussed the future of commercial real estate values in this province. Here we look more specifically at what I will refer to as the functionally obsolescent asset class.

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Market

Saskatoon retail starting to catch up to demand

Restaurant logosFor the past eight years, Saskatoon’s retail vacancy rate has stayed under three per cent leaving tenancies with little choice or few options to locate here. Recent construction surges have started to create more opportunities in the commercial real estate market for retailers looking to get their foothold into Saskatoon.

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Company

Two Scary but true Commercial Real Estate Stories

keep-out-danger-of-drowning-bob-orsillo

Scary commercial real estate stories to you could be finding out a deal has crashed on the day it’s supposed to close or going back to the days of 10% commercial mortgage rates!

Here are real life events that happened to me which I thought would be appropriate to share as we approach this spooky time of year. Two stories that sent chills down my spine!

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Market

Saskatoon vacancy rates hold steady

Timber Pointe

Saskatoon vacancy rates have held steadily throughout 2014, with only slight increases due to new construction and tenancies vacating outdated properties. We break our commercial real estate vacancies into three main areas: Industrial, Retail and Office. Here’s a snapshot on each as of October 2014.

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Company

3 Mistakes I’ve Made in Commercial Real Estate

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We have clients requesting commercial real estate advice on a daily basis. It is also necessary to make personal investment decisions to achieve our own long term financial goals. Here are three examples that come to mind where I was found to be “off the mark!”

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Market

12 secondary market hotspots in Saskatchewan

 

Saskatchewan’s largest urban centres are Regina and Saskatoon but did you know there are a dozen secondary markets attracting retailers and developers?

The Secondary Market Retail Outlook for 2014 was just recently released by ICR Commercial Real Estate. In house Research Analyst Alvaro Campos has been hard at work collecting information on these communities, which we’d like to summarize:

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Market

Do we or don’t we? Implications of preserving commercial buildings

6a00e554dac0858833014e6098b20e970c-800wiThere was a time when commercial real estate developers were happy to tear down the old and reconstruct new. But a change in thinking geared towards preserving the integrity of old buildings has property owners facing new challenges.

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Market

Is there a shift taking place in the Saskatoon retail sector?

homepageIn days gone by, when a new national retail merchant came searching for a spot for their first Saskatoon store we found they usually wanted to locate within the 8th Street, Broadway or Downtown retail corridors. Obviously there were many other available options however the majority of interest centered on those areas.

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Market

Have Saskatchewan commercial real estate values peaked?

976850455Appetite for Saskatchewan property

It does not seem that long ago that my typical response to an inquiry from an investor was: “I have a list of potential purchasers as long as my arm with very little product to present.” Saskatchewan was becoming known for the bounty of its rich resource sector. Lease rates had increased thereby lifting property values to provide incentive for sellers. Many were reluctant to sell because of the potential for further appreciation however we did have buyers and some did decide to sell.

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Market

Another one bites the dust… or does it?

closed-businessRestaurants open and close every day around the world, and it’s no different in our Saskatoon commercial real estate market. There is always speculation and rumour as to why a venue has been shuttered but it can often boil down to the hard truths associated with commercial real estate.

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Market

Parking/land ratios crucial to commercial developments

parkinglotThe parking allocation provided for in a development requires proper planning. A very useable site can be rendered dysfunctional if not properly considered. It is also important to understand what the applicable zoning bylaw states for the intended use.

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Market

A solution to balanced commercial urban growth could predict the future

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When we refer to “balanced commercial urban growth”, the discussion differs depending upon the applicable Commercial real estate sector and city. For the purpose of this article I am going to focus on the Saskatoon industrial market. As a brokerage, we track existing and new developments in each commercial area and thereafter advise clients when and what to build.

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Market

Social media: fear it or embrace it

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In a world of technology where change can virtually occur overnight, it’s hard to determine what tools you need as a professional to keep up with market trends. It’s hard to comprehend doing business with a fax machine though I know a few guys out there desperately hanging onto it!

Social media platforms used on a personal level can be different from those used on a professional level. Without a proper presence, you can seem insignificant compared to those doing it very well.

As the Millennials and Gen X’ers become the decision makers in our world, social media presence will become even more important.

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Market

Mainstream media’s obsession with the equities market

Think of individuals you know who have what you would consider financial depth.  I’m speaking of individuals who achieved that financial depth on their own, rather than through inheritance or a lottery win.

Of those individuals where you have a reasonable insight into their history, how many amassed that wealth through investing in stocks, mutual funds, ETF’s, GIC’s, bonds etc?  How many people do you know through diligent saving and contributing to these various investment vehicles, either on their own or through an investment counsellor have been excited with the results?

The truth is I don’t know many who stand up and speak with enthusiasm about their investment results in this area.

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Market

Is our focus on commercial real estate cap rates too simplistic?

strip-mall Capitalization rates and mortgage interest rates are considered among the most underlying driving force of commercial real estate sale activity. However, our chatter when discussing Saskatchewan Commercial Real Estate values can tend to focus primarily on Capitalization Rates. As those cap rates continue to compress, it is important to consider the bigger picture.

Obviously we have to be careful when generalizing about cap rates and commercial mortgage lending rates because they can vary significantly depending upon the asset class, condition of the property, price range, depth of the borrower, etc.

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Market

Q1 2014 Investment Market Update

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Here’s a synopsis of our 2013 Commercial Investment Market as well as a forecast of where we’re headed in 2014.

I predicted capitalization rate reductions of ¼% to ¾ % in my 2013 forecast.  When we review the limited amount of investment sale data over the past year, we find that prediction to be accurate.  With the average cap rates on apartment sales dropping ¼%, retail & office ½% and industrial approximately ¾%.

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Company

2013 Saskatoon Market Wrap Up

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Vacancy rates are relatively stable and absorption continues to be positive in Saskatoon’s leasing markets. ICR has recently completed a yearend wrap which includes a forward look into 2014 for our office, retail and industrial sectors.

There has been a distinct move to suburban office demand with 126,100 sq.ft absorbed in 2013. Vacancy in downtown Class A increased dramatically as several larger tenants moved out of the core, leaving an overall downtown vacancy rate of 4.83% up from 3.53% at the end of 2012.

 

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