The Petro West office building in Calgary is one of several Strategic Group properties which is on the judicial sale market. (Courtesy Ernst and Young)
Segments of Alberta’s commercial real estate market, particularly office, have been hit hard by the ongoing slump in oil prices and the pandemic, but that hasn’t yet translated yet into a spike in judicial property sales.
Research by The Network shows only 22 judicial sales had taken place in the province through September.
In 2015, when the economic downturn began, there were 23 judicial sales followed by 27 in 2016, 35 in 2017, 41 in 2018 and 46 in 2019.
“What we are hearing and seeing as it pertains to the foreclosure market in Alberta is that the people/companies with cash in hand are waiting on the sidelines for these properties to hit the courts. It’s just a matter of time until the government bailouts and rent reliefs catch up to current property owners that are treading water from the effects of COVID-19,” said Nathan Gettel, president of The Network, which researches real estate data.
“From the perspective of the investors, they would rather wait for the courts to get ahold of these properties than to deal with the current owners holding them. (That) leaves the negotiation much simpler, rather than haggling price with someone that might have sentimental value to the property.
“As for values, we are expecting once these properties get picked up on court order, we will see dips in values across the board in each sector of the market. While sales volumes might increase due to the timing of these, time will tell when these property owners can’t carry them anymore. But our projections are to see more judicial sales in the spring in 2021.”
Strategic Group properties
Part of the current judicial market is a portfolio of buildings Calgary-based Strategic Group had owned but sought creditor protection for about a year ago. A court in December put those properties into receivership.
At that time, Strategic Group posted a statement on its website: “On December 20, 2019, the court granted an order to appoint a receiver to the 56 properties that had originally sought CCAA protection.
“This development is consistent with our end goal: to have an orderly disposition of some of our real estate assets to maximize recovery for our stakeholders and ensure our company is stronger moving forward. We will work closely and collaboratively with the receiver to ensure a smooth transition and minimize impact to our tenants and residents . . .”
Ernst & Young has been appointed as receiver for certain of the properties.
When asked by RENX for an update, Strategic Group issued this statement: “Over the last year we have reduced our real estate in Alberta by over 1 billion dollars. We have reduced our debt by the same amount. The majority of these dispositions were in Alberta and occurred prior to COVID (through) a court supervised process in conjunction with our lenders.
“This process continues and the E&Y dispositions are a part of the process we commenced last year. We anticipate further dispositions including those that E&Y is doing under the court process. We anticipate a further reduction of our office portfolio and debt over the next number of months.”
Recently, Ernst & Young sought proposals for the purchase of some or all of the assets, including two Calgary office buildings – Willow Park Centre and Paramount Building – and one retail property, Wesley Church. The deadline for the Letter of Intent is Nov. 23 with a binding bid deadline of Dec. 14 and targeted closing date of Jan. 11, 2021, subject to court approval.
EY has also sought proposals for an office property in Calgary called Petro West. The Letter of Intent deadline was Nov. 16, the binding bid deadline Dec. 7 and the targeted closing date Jan. 4, 2021.
Peter Chisholm, senior vice-president with Ernst & Young Inc., based in Calgary. (Courtesy Ernst & Young)
“It’s a challenging market in Calgary for office space,” said Peter Chisholm, a senior vice-president with Ernst & Young Inc., based in Calgary. “We’re not seeing as much commercial . . . retail or industrial space from an insolvency perspective.
“There’s been a number of office properties but these were really properties that were, I think, distressed prior to the downturn and prior to the COVID pandemic.
“It’s not really a result of the pandemic that is driving them into insolvency proceedings.”
Secured lenders initiated process
He said Willow Park Centre, Paramount Building and Wesley Church had Connect First Credit Union as the secured lender. Connect First applied to the courts to have Ernst & Young Inc. appointed as receiver in May, with the goal of running a sales process to monetize the properties.
The buildings were in various stages of occupation. For example, Willow Park is 96 per cent occupied, with a provincial government department as the primary tenant. Wesley Church is fully occupied by the Calgary Opera and Paramount has several tenants.
Chisholm said Royal Bank of Canada is the lender on the Petro West building and it, too, applied to the courts to have Ernst & Young Inc. as the receiver and manager of that building.
“When the economic downturn started is kind of when you start to slowly see that creep-up of judicial sales,” said Gettel. “In the early spring is when you’re going to start to see more. People are just kind of treading water, wondering how long this can last for and then eventually claiming bankruptcy.”
He said the impact could be felt more strongly by larger, institutional investors in coming months.
“In the first six months of 2020, I think it was reported it was the largest amount of retail bankruptcies. What you’re going to see happening is these Chapter 11 bankruptcies happening with your big-box retailers.
“And it’s going to affect the REITs. The REITs mostly own these big box stores and if their tenants can’t pay the rents anymore once these reliefs stop, you’re going to see them either offloading these properties or filing bankruptcy themselves. Once we start to get the big box stuff, it’s really hard to fill those up.”
EDITOR’S NOTE:This story was updated to clarify Ernst and Young’s role as receiver for certain of the properties involved in the creditor protection process.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
MONTREAL – The Quebec Professional Association of Real Estate Brokers says Montreal-area home sales rose 9.3 per cent in August compared with the same month last year, with levels slightly higher than the historical average for this time of year.
The association says home sales in the region totalled 2,991 for the month, up from 2,737 in August 2023.
The median price for all housing types was up year-over-year, led by a six per cent increase for the price of a plex at $763,000 last month.
The median price for a single-family home rose 5.2 per cent to $590,000 and the median price for a condominium rose 4.4 per cent to $407,100.
QPAREB market analysis director Charles Brant says the strength of the Montreal resale market contrasts with declines in many other Canadian cities struggling with higher levels of household debt, lower savings and diminishing purchasing power.
Active listings for August jumped 18 per cent compared with a year earlier to 17,200, while new listings rose 1.7 per cent to 4,840.
This report by The Canadian Press was first published Sept. 6, 2024.
In the quest to find cities where renters can enjoy the best of all worlds, a recent study analyzed 24 metrics across three key categories—Housing & Economy, Quality of Life, and Community. The study ranked the 100 largest cities in Canada to determine which ones offer the most to their renters.
Here are the top 10 cities that emerged as the best for renters in 2024:
St. John’s, NL
St. John’s, Newfoundland and Labrador, stand out as the top city for renters in Canada for 2024. Known for its vibrant cultural scene, stunning natural beauty, and welcoming community, St. John’s offers an exceptional quality of life. The city boasts affordable housing, a robust economy, and low unemployment rates, making it an attractive option for those seeking a balanced and enriching living experience. Its rich history, picturesque harbour, and dynamic arts scene further enhance its appeal, ensuring that renters can enjoy both comfort and excitement in this charming coastal city.
Sherbrooke, QC
Sherbrooke, Quebec, emerges as a leading city for renters in Canada for 2024, offering a blend of affordability and quality of life. Nestled in the heart of the Eastern Townships, Sherbrooke is known for its picturesque landscapes, vibrant cultural scene, and strong community spirit. The city provides affordable rental options, low living costs, and a thriving local economy, making it an ideal destination for those seeking both comfort and economic stability. With its rich history, numerous parks, and dynamic arts and education sectors, Sherbrooke presents an inviting environment for renters looking for a well-rounded lifestyle.
Québec City, QC
Québec City, the capital of Quebec, stands out as a premier destination for renters in Canada for 2024. Known for its rich history, stunning architecture, and vibrant cultural heritage, this city offers an exceptional quality of life. Renters benefit from affordable housing, excellent public services, and a robust economy. The city’s charming streets, historic sites, and diverse culinary scene provide a unique living experience. With top-notch education institutions, numerous parks, and a strong sense of community, Québec City is an ideal choice for those seeking a dynamic and fulfilling lifestyle.
Trois-Rivières, QC
Trois-Rivières, nestled between Montreal and Quebec City, emerges as a top choice for renters in Canada. This historic city, known for its picturesque riverside views and rich cultural scene, offers an appealing blend of affordability and quality of life. Renters in Trois-Rivières enjoy reasonable housing costs, a low unemployment rate, and a vibrant community atmosphere. The city’s well-preserved historic sites, bustling arts community, and excellent educational institutions make it an attractive destination for those seeking a balanced and enriching lifestyle.
Saguenay, QC
Saguenay, located in the stunning Saguenay–Lac-Saint-Jean region of Quebec, is a prime destination for renters seeking affordable living amidst breathtaking natural beauty. Known for its picturesque fjords and vibrant cultural scene, Saguenay offers residents a high quality of life with lower housing costs compared to major urban centers. The city boasts a strong sense of community, excellent recreational opportunities, and a growing economy. For those looking to combine affordability with a rich cultural and natural environment, Saguenay stands out as an ideal choice.
Granby, QC
Granby, nestled in the heart of Quebec’s Eastern Townships, offers renters a delightful blend of small-town charm and ample opportunities. Known for its beautiful parks, vibrant cultural scene, and family-friendly environment, Granby provides an exceptional quality of life. The city’s affordable housing market and strong sense of community make it an attractive option for those seeking a peaceful yet dynamic place to live. With its renowned zoo, bustling downtown, and numerous outdoor activities, Granby is a hidden gem that caters to a diverse range of lifestyles.
Fredericton, NB
Fredericton, the capital city of New Brunswick, offers renters a harmonious blend of historical charm and modern amenities. Known for its vibrant arts scene, beautiful riverfront, and welcoming community, Fredericton provides an excellent quality of life. The city boasts affordable housing options, scenic parks, and a strong educational presence with institutions like the University of New Brunswick. Its rich cultural heritage, coupled with a thriving local economy, makes Fredericton an attractive destination for those seeking a balanced and fulfilling lifestyle.
Saint John, NB
Saint John, New Brunswick’s largest city, is a coastal gem known for its stunning waterfront and rich heritage. Nestled on the Bay of Fundy, it offers renters an affordable cost of living with a unique blend of historic architecture and modern conveniences. The city’s vibrant uptown area is bustling with shops, restaurants, and cultural attractions, while its scenic parks and outdoor spaces provide ample opportunities for recreation. Saint John’s strong sense of community and economic growth make it an inviting place for those looking to enjoy both urban and natural beauty.
Saint-Hyacinthe, QC
Saint-Hyacinthe, located in the Montérégie region of Quebec, is a vibrant city known for its strong agricultural roots and innovative spirit. Often referred to as the “Agricultural Technopolis,” it is home to numerous research centers and educational institutions. Renters in Saint-Hyacinthe benefit from a high quality of life with access to excellent local amenities, including parks, cultural events, and a thriving local food scene. The city’s affordable housing and close-knit community atmosphere make it an attractive option for those seeking a balanced and enriching lifestyle.
Lévis, QC
Lévis, located on the southern shore of the St. Lawrence River across from Quebec City, offers a unique blend of historical charm and modern conveniences. Known for its picturesque views and well-preserved heritage sites, Lévis is a city where history meets contemporary living. Residents enjoy a high quality of life with excellent public services, green spaces, and cultural activities. The city’s affordable housing options and strong sense of community make it a desirable place for renters looking for both tranquility and easy access to urban amenities.
This category looked at factors such as average rent, housing costs, rental availability, and unemployment rates. Québec stood out with 10 cities ranking at the top, demonstrating strong economic stability and affordable housing options, which are critical for renters looking for cost-effective living conditions.
Québec again led the pack in this category, with five cities in the top 10. Ontario followed closely with three cities. British Columbia excelled in walkability, with four cities achieving the highest walk scores, while Caledon topped the list for its extensive green spaces. These factors contribute significantly to the overall quality of life, making these cities attractive for renters.
Victoria, BC, emerged as the leader in this category due to its rich array of restaurants, museums, and educational institutions, offering a vibrant community life. St. John’s, NL, and Vancouver, BC, also ranked highly. Québec City, QC, and Lévis, QC, scored the highest in life satisfaction, reflecting a strong sense of community and well-being. Additionally, Saskatoon, SK, and Oshawa, ON, were noted for having residents with lower stress levels.
For a comprehensive view of the rankings and detailed interactive visuals, you can visit the full study by Point2Homes.
While no city can provide a perfect living experience for every renter, the cities highlighted in this study come remarkably close by excelling in key areas such as housing affordability, quality of life, and community engagement. These findings offer valuable insights for renters seeking the best places to live in Canada in 2024.
