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Ontario Teachers’ Pension Plan restructures real estate division, announces next head of Cadillac Fairview

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The Ontario Teachers’ Pension Plan Board office in Toronto, Sept. 28, 2021.COLE BURSTON/The Canadian Press

Ontario Teachers’ Pension Plan is bringing its real estate investment operations in-house and naming Sal Iacono as the next chief executive of Cadillac Fairview Corp. Ltd., with the real estate company’s long-time head, John Sullivan, preparing to retire.

Mr. Sullivan will step down from Cadillac Fairview, which the Teachers pension plan owns, on Nov. 1 after 25 years at the company. Mr. Iacono, the current executive vice-president of operations, will take over, with Mr. Sullivan staying on as an adviser.

By January, Teachers aims to create an in-house real estate group that will take charge of its investing in the sector. Teachers will absorb the entire 37-person team of investment professionals from Cadillac Fairview and launch a search for a global head of real estate to lead it, the pension plan announced Monday.

Federal pension manager PSP Investments looks to private assets, braces for economic slowdown

Cadillac Fairview will continue to own, operate and develop real estate as Teachers takes over the investing activities.

Teachers framed the change as a way to create a more consistent approach to investing in real estate that better matches the model it uses for other asset classes such as infrastructure and private equity. Until now, investing in real estate has been managed by Cadillac Fairview as a subsidiary, but bringing it in-house is intended to allow for more information sharing and make it easier to co-source deals, according to a news release.

The real estate investment group will be “a strategic complement to our existing investment teams across other asset classes,” Ziad Hindo, Teachers’ chief investment officer, said in a prepared statement.

The change comes amid a dramatic shift in the investing climate for real estate, as the values of commercial real estate have declined and the volume of real estate deals has slowed. Evolving hybrid working habits are driving office vacancy rates higher and retail customers’ shopping preferences are changing.

In 2022, Teachers’ real estate portfolio – invested through Cadillac Fairview – lost 3.5 per cent, falling short of a benchmark portfolio it uses to measure its performance, which gained 6.7 per cent. Valuations on its Canadian retail and office portfolios, which make up a large proportion of Teachers’ real estate investments, fell as those properties underperformed.

Mr. Iacono has been at Cadillac Fairview since 2008, where he led the investments team and was a senior vice-president of development before he took over operations.

“I am confident that given his extensive experience, broad network, and strong leadership capabilities that he is well-placed to lead CF in the coming years,” Jeff Jacobson, chair of Cadillac Fairview’s board, said in a statement.

Mr. Sullivan has been CF’s CEO since 2011 and has guided the real estate company as it built its portfolio of retail, office and mixed-use properties, including major malls such as Toronto’s Eaton Centre. Teachers’ real estate portfolio is now worth $28-billion and makes up 12 per cent of its $247-billion in assets.

Mr. Sullivan was instrumental in helping land U.S. luxury retailer Nordstrom Inc. as an anchor tenant for some of its malls, and worked to build Cadillac Fairview’s brand into more of a household name. But with Nordstrom pulling out of Canada, some of Cadillac Fairview’s malls have been left scrambling to find new anchor tenants to fill the spaces it is leaving empty.

“Together we have built an unmatched portfolio, transformed cities across Canada and built exciting partnerships with some of the best companies in the world,” Mr. Sullivan said in a statement.

Editor’s note: An earlier version of this story incorrectly stated that Cadillac Fairview owns Yorkdale Shopping Centre. Yorkdale is owned by Oxford Properties Group.

 

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Greater Toronto home sales jump in October after Bank of Canada rate cuts: board

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TORONTO – The Toronto Regional Real Estate Board says home sales in October surged as buyers continued moving off the sidelines amid lower interest rates.

The board said 6,658 homes changed hands last month in the Greater Toronto Area, up 44.4 per cent compared with 4,611 in the same month last year. Sales were up 14 per cent from September on a seasonally adjusted basis.

The average selling price was up 1.1 per cent compared with a year earlier at $1,135,215. The composite benchmark price, meant to represent the typical home, was down 3.3 per cent year-over-year.

“While we are still early in the Bank of Canada’s rate cutting cycle, it definitely does appear that an increasing number of buyers moved off the sidelines and back into the marketplace in October,” said TRREB president Jennifer Pearce in a news release.

“The positive affordability picture brought about by lower borrowing costs and relatively flat home prices prompted this improvement in market activity.”

The Bank of Canada has slashed its key interest rate four times since June, including a half-percentage point cut on Oct. 23. The rate now stands at 3.75 per cent, down from the high of five per cent that deterred many would-be buyers from the housing market.

New listings last month totalled 15,328, up 4.3 per cent from a year earlier.

In the City of Toronto, there were 2,509 sales last month, a 37.6 per cent jump from October 2023. Throughout the rest of the GTA, home sales rose 48.9 per cent to 4,149.

The sales uptick is encouraging, said Cameron Forbes, general manager and broker for Re/Max Realtron Realty Inc., who added the figures for October were stronger than he anticipated.

“I thought they’d be up for sure, but not necessarily that much,” said Forbes.

“Obviously, the 50 basis points was certainly a great move in the right direction. I just thought it would take more to get things going.”

He said it shows confidence in the market is returning faster than expected, especially among existing homeowners looking for a new property.

“The average consumer who’s employed and may have been able to get some increases in their wages over the last little bit to make up some ground with inflation, I think they’re confident, so they’re looking in the market.

“The conditions are nice because you’ve got a little more time, you’ve got more choice, you’ve got fewer other buyers to compete against.”

All property types saw more sales in October compared with a year ago throughout the GTA.

Townhouses led the surge with 56.8 per cent more sales, followed by detached homes at 46.6 per cent and semi-detached homes at 44 per cent. There were 33.4 per cent more condos that changed hands year-over-year.

“Market conditions did tighten in October, but there is still a lot of inventory and therefore choice for homebuyers,” said TRREB chief market analyst Jason Mercer.

“This choice will keep home price growth moderate over the next few months. However, as inventory is absorbed and home construction continues to lag population growth, selling price growth will accelerate, likely as we move through the spring of 2025.”

This report by The Canadian Press was first published Nov. 6, 2024.

The Canadian Press. All rights reserved.

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Homelessness: Tiny home village to open next week in Halifax suburb

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HALIFAX – A village of tiny homes is set to open next month in a Halifax suburb, the latest project by the provincial government to address homelessness.

Located in Lower Sackville, N.S., the tiny home community will house up to 34 people when the first 26 units open Nov. 4.

Another 35 people are scheduled to move in when construction on another 29 units should be complete in December, under a partnership between the province, the Halifax Regional Municipality, United Way Halifax, The Shaw Group and Dexter Construction.

The province invested $9.4 million to build the village and will contribute $935,000 annually for operating costs.

Residents have been chosen from a list of people experiencing homelessness maintained by the Affordable Housing Association of Nova Scotia.

They will pay rent that is tied to their income for a unit that is fully furnished with a private bathroom, shower and a kitchen equipped with a cooktop, small fridge and microwave.

The Atlantic Community Shelters Society will also provide support to residents, ranging from counselling and mental health supports to employment and educational services.

This report by The Canadian Press was first published Oct. 24, 2024.

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Here are some facts about British Columbia’s housing market

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Housing affordability is a key issue in the provincial election campaign in British Columbia, particularly in major centres.

Here are some statistics about housing in B.C. from the Canada Mortgage and Housing Corporation’s 2024 Rental Market Report, issued in January, and the B.C. Real Estate Association’s August 2024 report.

Average residential home price in B.C.: $938,500

Average price in greater Vancouver (2024 year to date): $1,304,438

Average price in greater Victoria (2024 year to date): $979,103

Average price in the Okanagan (2024 year to date): $748,015

Average two-bedroom purpose-built rental in Vancouver: $2,181

Average two-bedroom purpose-built rental in Victoria: $1,839

Average two-bedroom purpose-built rental in Canada: $1,359

Rental vacancy rate in Vancouver: 0.9 per cent

How much more do new renters in Vancouver pay compared with renters who have occupied their home for at least a year: 27 per cent

This report by The Canadian Press was first published Oct. 17, 2024.

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