Commercial Real Estate News Toronto through November 2010

GTA Downtown

THE MARKET
The gradual expansion of the Finance, Insurance and Real Estate (FIRE) sector has been one of the primary drivers of the downtown market over the past five quarters. Some mid-size companies have been active in the downtown market outside of the financial core, while smaller companies do not have a strong presence in this market. Renewals have been predominant in the marketplace and tenants have remained cautious, thus placing some downward pressure on rental rates in order to retain the competitiveness of available space.

TRENDS
GTA Downtown has been stabilizing in both vacancy and rent performance.The vacancy rate has been continuously increasing since Q4 2007, but its pace slowed in the past year to settle at 5.6 percent by Q3 2010. After a significant decline of 9.7 percent in Q3 2009, average asking net rents hovered at approximately $21 for the past year.

FORECAST
Rental rates are predicted to remain steady in the short term and eventually increase in the second half of 2011 as the market becomes more favorable to landlords. It is foreseeable that vacancy rates for Class A and AAA buildings will go up by the end of this year as some large tenants have decided to relocate outside of the financial core. Going into 2011, the return of strong activity is expected to turn into positive absorption.
Similar to the GTA market as a whole, the downtown vacancy rate is projected to experience a minimal increase followed by a decline in 2011. Average asking net rent is expected to increase steadily to $21.34 per square foot by the end of Q3 2011.

NEWS
Explore Toronto's neighbourhood boutiques

There's no doubt Toronto boasts an impressive selection of winter-friendly malls. But it's impossible to get any flavour of a city when exposed only to massive chain stores. In fact, Toronto's best retail asset is the entrepreneurial spirit driving people to open up shops that capture the zeitgeist of the world at large while distilling it down to a distinct and colourful sensibility.

Globe and Mail Mon Nov 15 2010

Is this giant tube just a pipe dream?

Picture a long, transparent worm with tentacles filled with cars, and you begin to get a sense of what architectural designer Peter Michno has in mind for the Gardiner Expressway. He envisions a vented, glass-covered tube that would run seven kilometers, end to end, of the elevated section, from Dufferin St. east to the Don Valley Parkway.

Toronto Star Mon Nov 15 2010

Investors should be thrilled with new RioCan CEO deal: analyst - Riocan REIT - REI.UN-T

RioCan REIT chief executive Edward Sonshine has a new five-year contract and RBC Capital Markets analyst Neil Downey says that's good news for investors. Since RioCan, Canada's largest REIT, announced this month the 63-year-old Mr. Sonshine was staying on, the analyst has been facing some inquiring calls from U.S. investors looking for terms of the deal.

Financial Post Wed Nov 17 2010

TD, RBC raise mortgage rates

If worries about the sickly U.S. economy and Ireland's rocky financial situation seemed remote a few days ago, they shouldn't anymore. Those global concerns are pushing up Canadians' borrowing costs when it comes to buying a home. TD Canada Trust and the Royal Bank of Canada said separately that they are increasing some of their fixed-term mortgage rates by as much as one-quarter of a percentage point.

Moneyville Wed Nov 17 2010

Environmental assessment okays tunnel to island airport

A controversial project to create a pedestrian tunnel to the island airport won't hurt the environment, according to an independent report commissioned by the Toronto Port Authority. The draft environmental assessment states there will be 'no permanent significant environmental effects' and 'minimal' construction impacts from digging a 123-metre tunnel from Eireann Quay at the bottom of Bathurst St. to the Billy Bishop island airport.

Toronto Star Wed Nov 17 2010

Build Toronto's first sale likely Front St. site - Build Toronto

The city has a buyer for the first property to sell after it set up an arms-length body 19 months ago to deal with lucrative sites it can no longer use. Build Toronto is in final negotiations with Cityzen Development over 154 Front St. E., the former Greyhound parcel office that went up for sale this spring.

Globe and Mail Fri Nov 19 2010

Retail and REITs Drive Canada's Commercial Market

Strong demand by investors for Canadian retail properties has pushed sales to record levels in the third quarter, according to a new study by Avison Young's Toronto headquarters. An active real estate investment trust sector also helped boost trading. Sales already have exceeded totals for all of 2009, Canada Newswire reports. By the end of the third quarter, over $12 billion in commercial real estate assets had changed hands - up 57% over the same nine-month period one year ago.

Real Estate Channel Thu Nov 18 2010 - Reuters

Ontario Government warn hydro rates to jump 46 per cent in five years

Ontarians will be zapped with a 46 per cent increase in home electricity costs over the next five years to pay for much-needed hydro system upgrades, warns the Liberal government. To offset that sticker shock, Premier Dalton McGuinty’s administration is offering a 10 per cent discount called the Ontario Clean Energy Benefit on hydro bills starting in January and lasting five years.

Toronto Star Fri Nov 19 2010

Aecon wins $279-million TTC subway deal - Aecon - ARE-T

Construction and infrastructure development company Aecon Group Inc. says it has been awarded a $279-million contract by Toronto Transit Commission to extend one of the city's main subway lines northward. The agreement will add two additional subway stops beyond Downsview station, which is current at one end of the U-shaped Yonge-University-Spadina line.

Globe and Mail Mon Nov 22 2010

Allied Properties REIT Bolsters Leadership Team - Allied Property REIT - AP.UN-T

Allied Properties REIT announced today that Thomas G. Burns has been appointed Executive Vice President, Operations and Leasing. He will formally commence his duties on January 17, 2011. Allied also announced that Wayne L. Jacobs has been appointed Executive Vice President, Acquisitions.

Market Wire Wed Nov 24 2010

Canadian office markets performed better than expected

Amid all the economic malaise over the past year, Canadian office-building markets fared better than was expected. “Whether it be Calgary, Vancouver, Toronto for sure – all markets have performed better than could have been, given the depth of the recession and the seriousness of the financial crisis in the United States,” Paul Morse, a senior vice-president with Cushman & Wakefield.

Daily Commercial News Fri Nov 26 2010

Commercial real estate investment properties in Canada exceed volumes for 2009 - Avison Young

A strong appetite for retail properties and an active real estate investment trust sector has resulted in commercial real estate investment sales in Canada to do better than in 2009, the latest figures show. Over US$12 billion in commercial real estate assets had changed hands by the end of the third quarter of 2010, up 57% compared with the same nine month period in 2009.

Property Wire Fri Nov 26 2010

Canada commercial property tax hit worlds highest

Canada is the world’s most expensive country to invest in commercial real estate, at least when it comes to how deeply taxes cut into potential profits. Taxes on commercial property rents in Canada are a “massive” 53 per cent of total income, according to a study by Luxemburg-based tax advisory firm Taxand. That’s 12 per cent higher than the United States, the next country on the list.

Globe and Mail Mon Nov 29 2010 - Bloomberg