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Airdrie's business real estate sector experiencing growth pains – Airdrie Today



Airdrie’s business sector is experiencing some growing pains, with a general shortage of affordable commercial real estate spaces in the city, and some significant growth limitations in its industrial real estate sector capacity at the moment.

According to “Airdrie’s Growth Report: Tracking Development and Change,” Airdrie’s industrial properties are slightly more expensive to lease than similar lands in Calgary, at $161 per square foot versus $159 per square foot. However, the industrial real estate available in the city tends to be of smaller size than properties available in Calgary and Balzac, which creates a growth limitation for what types of businesses could actually establish themselves in Airdrie.

“With the Hamlet of Balzac to the south of Airdrie currently attracting several new distribution and logistics buildings,” the report reads, “Airdrie has become home to many industrial tenants that occupy the small-to-medium-sized warehousing that makes up nearly 75 per cent of Airdrie’s industrial inventory.” 

The report goes on to state these user groups “have been amongst the most affected by the pre-pandemic Alberta economic downturn, resulting in less demand for new space and inconsistent leasing activity, ranging from under 10,000 to 50,000 square feet per quarter.” 

On the other hand, there are also some positive signs that this might be turning around, as the Calgary region as a whole experiences a post-COVID boom.

“Alberta industrial markets continue to build momentum,” the report reads, “and municipalities within the Calgary Metropolitan Region, including Airdrie, are reaping the benefits.” 

The report cites recent announcements such as the Costco distribution centre expansion, whereby the existing northeast Airdrie facility will increase by 700,000 square feet over two phases, as an example of the investment that is occurring in Airdrie. 

“Future development and investment attraction are likely to be heavily concentrated in the Highland Park Industrial area, joining projects such as Highland Common, High North Business Centre, and larger tenants such as TransCanada Turbines, Belron and Costco,” it read. 

On the commercial real estate side of things, there is a strong demand for retail and commercial space in Airdrie.

Retail space crunch

According to the same growth report, there has been a strong post-COVID demand for retail and commercial space in the city. During the pandemic, demand dropped off to a point where there was only 2,500 square feet per quarter being leased. Recent quarters have shown an upswing to about 4,500 to 6,000 square feet of leased space per quarter. 

That strong demand for commercial retail space in Airdrie has led to increased lease prices and a bit of a space crunch, acknowledged Tara Levick, an economic development officer with the City of Airdrie.

For smaller businesses just getting started or those wishing to expand, she said cost challenges in the lease market may represent a disincentive to taking that next step to procure a storefront property.

“We definitely heard in our (2022 Airdrie Economic Development) Business Survey that costs and availability of office, commercial and industrial space and land is top priority,” Levick said. “It is definitely something that is affecting the majority of our businesses. 

“What we (as a City) are doing is a deeper dive into the survey results to see if that is industry-specific, but we are definitely seeing low vacancy rates in Airdrie.”

There are some new developments coming soon which may eventually help alleviate some of that space crunch, she added.

“We are definitely seeing more (commercial) areas come on line,” she explained. “Down by Walmart in Sierra Springs, there is a new community coming online that will have a commercial retail focus. We are seeing growth opportunities in the downtown with the launch of a new downtown plan (by city council). And then in the booming areas like Kingsview Market and Gateway north of Superstore…We are seeing land that has been vacant for a while being built on – so that’s always very exciting to see.”

But Levick acknowledged there is not a lot of smaller scale, affordable commercial real estate available in Airdrie at the moment to help incubate newer start-ups.

Downtown revitalization

She said the City’s long-term plan to revitalize downtown – passed by City council in September – would likely help encourage some property owners in the area to think about converting existing spaces to help foster more local retail openings in Airdrie. However, she also feels many of those who own older commercial buildings in the city were already moving in that direction on their own even before those incentives were brought in.

“What we are seeing is that this is happening organically through business owners,” she said. “We are seeing an increase in business owners that are opening more like a coworking space. They are taking on the full lease themselves, but the intent is for it to be multiple businesses operating in that location. And that is something we haven’t seen in Airdrie before very often.”

The next step for Airdrie Economic Development and the City of Airdrie, Levick said, is to intensify efforts to attract new commercial and industrial investment in the city. The municipal government has recently created a new staff position that will be solely dedicated to attracting investors under the economic development portfolio. 

“We have a plan on how to attract business here, and we have done some marketing concepts on what makes us competitive and unique that they would choose us over other locations,” she said. “That is something our department is very excited to roll out, knowing we have six quarter sections up in East Points that are ready to go at any time.”

According to Levick, Airdrie has many natural advantages that will hopefully make the community a fairly easy sell to potential developers and investors.

“We are competitive with property taxes (to other nearby jurisdictions), but we are also competitive through location, right along the QEII [highway],” she explained. “We are competitive in (having) a young workforce, and we are competitive in quality of life. We see excellent numbers in people that live here who love living here.”

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Former B.C. Realtor has licence cancelled, $130K in penalties for role in mortgage fraud



The provincial regulator responsible for policing B.C.’s real estate industry has ordered a former Realtor to pay $130,000 and cancelled her licence after determining that she committed a variety of professional misconduct.

Rashin Rohani surrendered her licence in December 2023, but the BC Financial Services Authority’s chief hearing officer Andrew Pendray determined that it should nevertheless be cancelled as a signal to other licensees that “repetitive participation in deceptive schemes” will result in “significant” punishment.

He also ordered her to pay a $40,000 administrative penalty and $90,000 in enforcement expenses. Pendray explained his rationale for the penalties in a sanctions decision issued on May 17. The decision was published on the BCFSA website Wednesday.

Rohani’s misconduct occurred over a period of several years, and came in two distinct flavours, according to the decision.

Pendray found she had submitted mortgage applications for five different properties that she either owned or was purchasing, providing falsified income information on each one.

Each of these applications was submitted using a person referred to in the decision as “Individual 1” as a mortgage broker. Individual 1 was not a registered mortgage broker and – by the later applications – Rohani either knew or ought to have known this was the case, according to the decision.

All of that constituted “conduct unbecoming” under B.C.’s Real Estate Services Act, Pendray concluded.

Separately, Rohani also referred six clients to Individual 1 when she knew or ought to have known he wasn’t a registered mortgage broker, and she received or anticipated receiving a referral fee from Individual 1 for doing so, according to the decision. Rohani did not disclose this financial interest in the referrals to her clients.

Pendray found all of that to constitute professional misconduct under the act.

‘Deceptive’ scheme

The penalties the chief hearing officer chose to impose for this behaviour were less severe than those sought by the BCFSA in the case, but more significant than those Rohani argued she should face.

Rohani submitted that the appropriate penalty for her conduct would be a six-month licence suspension or a $15,000 discipline penalty, plus $20,000 in enforcement expenses.

For its part, the BCFSA asked Pendray to cancel Rohani’s licence and impose a $100,000 discipline penalty plus more than $116,000 in enforcement expenses.

Pendray’s ultimate decision to cancel the licence and impose penalties and expenses totalling $130,000 reflected his assessment of the severity of Rohani’s misconduct.

Unlike other cases referenced by the parties in their submissions, Rohani’s misconduct was not limited to a single transaction involving falsified documents or a series of such transactions during a brief period of time, according to the decision.

“Rather, in this case Ms. Rohani repetitively, over the course of a number of years, elected to personally participate in a deceptive mortgage application scheme for her own benefit, and subsequently, arranged for her clients to participate in the same deceptive mortgage application scheme,” the decision reads.

Pendray further noted that, although Rohani had been licensed for “a significant period of time,” she had only completed a small handful of transactions, according to records from her brokerage.

There were just six transactions on which her brokerage recorded earnings for her between December 2015 and February 2020, according to the decision. Of those six, four were transactions that were found to have involved misconduct or conduct unbecoming.

“In sum, Ms. Rohani’s minimal participation in the real estate industry as a licensee has, for the majority of that minimal participation, involved her engaging in conduct unbecoming involving deceptive practices and professional misconduct,” the decision reads.

According to the decision, Rohani must pay the $40,000 discipline penalty within 90 days of the date it was issued.



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Should you wait to buy or sell your home?



The Bank of Canada is expected to announce its key interest rate decision in less than two weeks. Last month, the bank lowered its key interest rate to 4.7 per cent, marking its first rate cut since March 2020.

CTV Morning Live asked Jason Pilon, broker of Record Pilon Group, whether now is the right time to buy or sell your home.

When it comes to the next interest rate announcement, Pilon says the bank might either lower it further, or just keep it as is.

“The best case scenario we’re seeing is obviously a quarter point. I think more just because of the job numbers that just came out, I think more people are just leading on the fact that they probably just gonna do it in September,” he said. “Either way, what we saw in June, didn’t make a big difference.”

Here are the pros of buying/ selling now:

Pilon suggests locking in the rate right now, if you don’t want to take a risk with interest rates going up in the future.

He says the environment is more predictable right now, noting that the home values are transparent, which is one of the benefits for home sellers.

“Do you want to risk looking at what that looks like down the road? Or do you want to have the comfort in knowing what your house is worth right now?” Pilon said.

And when it comes to buyers, he notes, the competition is not so fierce right now, noting that there are options to choose from.

“You’re in the driver seat right now,” he said while noting the benefits for buyers.

Here are the cons of buying/ selling now:

He says one of the cons would be locking in the rate right now, then seeing a rate cut in the future.

The competition could potentially become fierce, if the bank decides to cut the rate further more, he explained.

He notes that if that happens, the housing crisis will become even worse, as Canada is still dealing with low housing inventory.

An increase in competition would increase the prices of houses, he adds.

Selling or buying too quickly isn’t the best practice, he notes, suggesting that you should take your time and put some thought into it.

Despite all the pros and cons, Pilon says, real estate remains a good investment.

According to the latest Royal LePage House Price Survey for the second quarter of this year, the average home price in Canada is $824,300. That’s up 1.9 per cent from the same time last year, and up 1.5 per cent from the first quarter of 2024.

In the Ottawa Housing Market Report for June 2024, the average price of a home was up 2.4 per cent from this time last year to $686,535, but down 0.6 per cent from May 2024.

Experts believe many potential buyers are still hesitant of jumping into the housing market and waiting for another interest rate cut of 50 to 100 basis points.

“I don’t think it’s going to be the rush that we see in the past, because people are used to more of a conservative approach right now,” said Curtis Fillier, president of the Ottawa Real Estate Board. “I think there’s still a bit of a hold back, but I definitely do think with another rate cut, we’ll probably see a very positive fall market.”

With files from CTV News Ottawa’s Kimberly Fowler



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Real estate stocks soar to best day of year on rate cut bets



(Bloomberg) — The stock market’s worst group notched its best day of the year as a cooler-than-expected inflation report stoked bets that the Federal Reserve will start cutting interest rates in September.

Shares of real estate companies jumped 2.7% Thursday for their biggest gain of 2024, climbing to their highest level since March as investors snapped up homebuilder, digital and commercial real estate stocks alike. Real estate also was the best-performing group in the S&P 500 Index Thursday, with volume that was around 30% higher than the 30-day average, according to data compiled by Bloomberg.

Arguably the most significant news to come from the latest consumer price index reading was a pullback in housing-related inflation. Shelter costs rose just 0.2% for the slowest monthly increase in three years. Homebuilders, which have risen 7.1% this year, were up 7.3% for the session, the most since 2022. Shares of D.R. Horton Inc., which is scheduled to report earnings next Thursday, gained 7.3%.

“Housing has really been the last shoe to drop in terms of winning the battle against high inflation,” Preston Caldwell, chief U.S. economist at Morningstar wrote in a note to clients Thursday. “Leading-edge data has strongly indicated for some time now that a fall in housing inflation was in the works.”

A rally in real estate stocks is bad news for short sellers who have been piling into the group, which is the worst performer in the S&P 500 this year. To start the week, short interest as a percentage of float hovered near 49% in the SPDR Homebuilders ETF, the highest level since February for the exchange-traded fund, according to data from S3 Partners.

Property owners are rallying as well. Real estate investment trusts, which were brutally penalized during the two-year run up in borrowing costs, advanced by as much as 3%. And the outlook for the group appears to have turned a corner, according Rich Hill, senior vice president and head of real estate strategy and research at Cohen & Steers Capital Management.

“We think this is a compelling backdrop for listed REITs especially as fundamental growth remains on solid footing,” he said, referencing the latest inflation data and rate outlook. “The rally that started in October of 2023 pushing returns more than 20% above their trough looks set to continue if inflation cools and interest rates continue to decline.”

Shares of industrial REIT Prologis Inc., which reports second-quarter results on Wednesday, rose 3.3% to hit their highest level since April. U.S. Treasury yields tumbled, with the 10-year bond falling to 4.2% and the policy-sensitive two-year note slipping to 4.5%.

(Updates indexes and stock prices for market close.)



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