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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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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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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Can we put a price on landmarks?

Our Lady of Paris, the literal translation for Notre-Dame de Paris, has received an outpouring of public sympathy following a devastating fire last week.

Having seen Notre-Dame in person I can tell you it’s something to marvel.

The full cost of the fire is still being tallied but I’m not sure you can put a price on something that is nearly irreplaceable.

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When not to buy commercial real estate

There are times when it is not wise to invest in commercial real estate.

Alternatively, many potential investors don’t take the plunge out of fear of the unknown and years later regret it.

Let’s look at some examples of when you’d be advised not to purchase.

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New Saskatoon arena given priority

The original Saskatoon downtown arena, nicknamed The Barn, opened in October 30, 1937 on a site overlooking the river. The building began to show its age in the 1970s but the last hockey game took place February 2, 1988 (a week before SaskPlace opened). Clinkskill Manor, a low income seniors highrise now sits on the former arena site.

In a city projecting another deficit year, it might seem strange that Mayor Charlie Clark has decided to lay down a mandate for a new downtown rink.

But Clark has recently declared that a site for the new arena will need to be chosen before the end of 2019.

What’s the big rush?

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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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Budgeting for success in Saskatchewan

Last week, Saskatchewan’s Minister of Finance Donna Harpauer released her second budget, which projects a $34.4-million surplus for 2019.

Thinking selfishly, I wondered: how does this budget impact commercial real estate sale investment in our province?

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High density spot zoning creates hardship

I purchased my second single family home in 1979. It was located at the end of a quiet cul-de-sac in a good neighborhood.

The downside was it backed onto a retail strip mall. That wasn’t a concern for me however because everything within that retail corridor was one storey.

Within a year of owning the home, it was announced that a five-storey office building would be constructed overlooking my rear yard.

I immediately sold the property.

Even though the project was public knowledge, I believed it would be easier to sell before it could be seen that the windows in that towering structure would have a full view of my yard.

From that early, first hand experience I can relate to homeowners that are suddenly faced with a project that significantly impacts the value of their home.

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Wasn’t there a Chili’s here yesterday?

The Regina Leader-Post published an article in 2008 with Stu Rathwell, a franchise partner in the new Regina’s Chili’s Grill and & Bar.

Stu shared that his Saskatoon location would be open by that year’s end.

His optimism about the Chili’s brand was hopeful; if things took off as he was hoping, he predicted people could expect to see several more open across the province.

Fast forward to 2019.

If you happened upon Saskatoon’s Preston Crossing the last week of February, you may have caught sight of Stu’s dream deflating right before your eyes.

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