industrial

Sales and Leases

Saskatchewan commercial property taxes below average

I thought twice about writing this post!

Does it risk raising the question with the city administrators: are our Saskatoon and Regina commercial property taxes too low?

Or… does it showcase just one more of the many benefits of setting up shop in one of our two major Saskatchewan cities?

In an earlier post I referenced the 2018 Canadian Property Tax Rate Benchmark Report released by Altus Group, and supporting partner REALPAC with a focus on the commercial to residential tax ratio.

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Sales and Leases

What if the shoe doesn’t fit?

The rules are the rules, whether we like them or not.

Nowhere is this truer than as it applies to municipal zoning.

I find clients can easily get discouraged in property searches when they discover where their business is, and is not welcome, as determined by the local zoning bylaw.

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Real Estate industry

Differences between regional and national commercial real estate broker

If you’d have asked me a few years ago about the long-term fate of the independent commercial real estate broker, I would have honestly expressed some uncertainty (you may be thinking, “but Barry, you are an independent commercial real estate broker… that means you would have been questioning your own survival!).

Most of that uncertainty arose from questioning the independent broker’s ability to keep pace with potential investment required in metadata.

Let’s look at the current differences between a national and an independent regional commercial real estate broker.

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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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In the News

Does Saskatoon want or need Farmers’ Market six days a week?

The City of Saskatoon has officially put out a tender to lease the Farmers’ Market building in Riversdale.

At current, the facility is leased to and operated by the Saskatoon Farmers’ Market Co-operative Ltd.

In their original agreement to lease the property, they outlined their plans to expand the market hours over time.

That vision has only grown to three advertised full market days. The City is ready to let someone else take a run at it.

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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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Sales and Leases

What’s ideal amount to invest in Commercial Real Estate?

For the purpose of this conversation, let’s assume you are sitting on cash or liquid asset(s) and have decided to invest a portion of your available capital into commercial real estate.

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.

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ABC's of Leasing

1,000 lease changes later

Receiving that first response from a Tenant we’ve not encountered before, after waiting for their review of a lease, it is always interesting.

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?

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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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Sales and Leases

Communication Technology: Still Incapable of Replacing In-Person Meeting

Today’s communication tools include email, voicemail, social media, text and electronic messaging services, video and audio conference calls and more recently, telepresence robots.

All of these can be useful, however there are times when they just cannot replace a “belly to belly” meeting.

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Sales and Leases

Sometimes you’ve got spend a little to make a little (or a lot more)

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?

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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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ABC's of Leasing

Hard tenant truths

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.

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Sales and Leases

Time kills deals

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 →

Real Estate industry

Why you need to engage a Broker to lease your space

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.

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ABC's of Leasing

3 ways to tick off your landlord

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.

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Real Estate industry

A need for Real Estate regulation changes

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?

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In the News

City of Saskatoon acquires STC land and buildings

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?

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In the News

What’s wrong with SaskTel Centre?

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.

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ABC's of Leasing

ABC’s of Leasing: This isn’t going to work

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?

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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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ABC's of Leasing

Don’t get caught in a pinch

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?

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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

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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Sales and Leases

Why so shy? The undisclosed buyer

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?

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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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Sales and Leases

3 questions to ask yourself when leasing retail space

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.

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Slice of Life

My Personal Experience of “Unplugging”

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.

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Sales and Leases

3 questions to ask yourself when leasing industrial space

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.

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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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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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Sales and Leases

A solid case for going Green

Some holes are surfacing in the climate change stance as stated in this recent article. You may or may not believe the world is entering an irreversible period of global warming.

There is no question that air pollution within our world’s mega cities and the waste being deposited into our oceans are a result of increasing population density and our enormous human footprint. Can a business case be built for constructing and refurbishing buildings with environmentally friendly specifications that goes beyond supporting the global warming cause?

Let’s explore that question.

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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

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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Sales and Leases

A diligent dilemma

Regardless of whether you have entered into a commercial real estate lease or sale, there is a level of due diligence required by each party to complete the transaction.

Every deal is unique but I’ll provide a few examples that most commonly occur in the Saskatoon commercial real estate market.

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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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Sales and Leases

Four key benefits of contracting a Commercial Broker to find your space

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.

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In the News

What went wrong at the Oakland “Ghost Ship” warehouse?

What makes the Oakland “Ghost Ship” fire most tragic was the preventable nature of everything that occurred.

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.

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Sales and Leases

Former police headquarters gets new lease on life

130-4th-ave-north-r6

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.

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Sales and Leases

How to leverage your commercial real estate investment options

1899585_origI was chatting with a client over dinner at a charity event last night. One of the topics he spoke passionately about was the benefits of forming partnerships to invest in real estate.

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?

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Sales and Leases

Hack: Exposing the games CRE buyers play

chess-boardLet’s assume you or the listing broker representing you has properly qualified the purchaser who has your commercial real estate under contract.

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.

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Sales and Leases

A frank discussion about the open office concept

ambus-desk-0111There 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.

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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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ABC's of Leasing

ABC’s of Leasing: Pitfalls for first-timers

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.

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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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Company

Hello, I am… Accountable

accountability-businessAccountability 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.

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Real Estate industry

Salesman, saleswoman or salesperson?

Barry and KellyA 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.

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Company

How has the Employee Ownership Purchase Model worked for ICR?

businessSuccession

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.

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Sales and Leases

We’re on the hunt

big_picture_shutterstock_154425569

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:

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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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Sales and Leases

5 ways to get your commercial property leased

old_office_space_0

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.

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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

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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Sales and Leases

3 Essential investigations before buying CRE

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!

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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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