Analysts at two of Canada’s largest commercial real estate firms are split on how COVID-19 will affect the industrial real estate sector.
Marcus & Millichap, in its report Coronavirus outbreak: implications for real estate, noted that history has shown that pandemics, while very scary, are fairly brief.
“Pandemic outbreaks such as SARS, the H1N1 “swine flu,” and the “avian flu” or “bird flu” short-term market instability that moved toward stabilization over the following three to six months,” the report stated.
It continued: “While the flow of goods from China may taper over the short term due to the shutdown of several Chinese factories, this poses little risk to industrial space demand. Western Canada port markets’ industrial vacancy rates remain exceptionally low and face modest development risk. Some companies may postpone commitments for large space blocks at major warehouse facilities as they cautiously monitor the economic outlook and await additional information on the supply chain outlook.”
However, Colliers International, in its recent COVID-19: Implications for Canadian real estate, warned that Canada’s industrial sector is expected to be heavily impacted by disruption in international supply chains.
“With China being the largest global manufacturer of components, the ripple effect of plant closures in the automotive, electronic and pharmaceutical industries has caused a severe disruption,” the report stated.
The situation has resulted in Port of Vancouver reporting an 85 per cent decline in volume of Chinese container shipments with 50 per cent fewer sailings. Logistic companies in Toronto have reported 60 per cent fewer inbound containers, Colliers noted.
Colliers advised industrial occupiers to assess their risk tolerance to determine inventory levels required to handle a potentially huge increase in shipments once the virus threat ends.
Occupiers may be required to restructure financials to allow for more liquidity and seek larger spaces to accommodate the extra inventory, Colliers noted.
Doing so could be challenging, given the historically low industrial vacancy rates in Canada’s major markets, with 0.4 per cent vacancy in the Greater Toronto Area and 1.2 per cent in Metro Vancouver.
“As supply returns to the market, industrial occupiers should capitalize on the demand opportunities to regain their lost capital,” Colliers recommended.
Real estate pause could hit city budget hard – Toronto Sun
With the ongoing coronavirus outbreak hitting the pause button on Toronto real estate sales, there is concern the crisis may deal a serious blow to the city’s bottom line.
Approved earlier this year, Toronto’s $13.6-billion 2020 budget includes an expected $800 million in revenue from the Municipal Land Transfer Tax (MLTT) — accounting for 7% of the city’s operating funding.
The budget already included a $77-million hole expected to be filled by federal funding commitments to pay for the housing of refugees — commitments made long before coronavirus made worldwide headlines and paralyzed economies across the globe.
Relying on MLTT can be a risky venture for cities — in 2018 lower-than-expected real estate numbers produced a $84.5 million hole in the city’s budget, according to briefing notes.
With land sales in the city frozen due to COVID-19, MLTT revenue is expected to fall to levels far below that.
While requests to the city for year-to-date MLTT revenue numbers went unreturned, a statement from the Mayor’s office said the impact of the outbreak on city coffers won’t be known for some time.
“Mayor Tory and City of Toronto staff are working to make sure we do everything possible as a municipal government to help Toronto residents and businesses during the COVID-19 pandemic and after the crisis is over,” read an emailed statement.
“We know there will be an economic and financial impact on the City itself and our finance officials are working right now to understand how big that impact will be over the coming months.”
The TTC alone, said the statement, is losing about $20-million per week in revenue — one of many financial hits the emergency is dealing upon Toronto.
The TTC alone is losing revenue in the amount of roughly $20 million a week and that is just one of the financial hits the City is experiencing as a result of the ongoing emergency.
“Right now, our focus is on stopping the spread of COVID-19 while continuing to deliver essential and critical services and working with the other governments to rebuild the economy as quickly as possible.”
Video: Homeless man hosed down in front of Gastown commercial real estate office – Straight.com
Some Vancouver residents have expressed outrage over social media in connection with how a homeless person was treated in Gastown.
Video on social media shows a person spraying a garden hose to remove the man from the front door of 305 Gore Street.
The real estate office is part of an 11-storey mixed-use condo complex called The Edge, which was developed in 1999 at 289 Alexander Street.
One of those who tweeted about the incident was Harsha Walia, executive director of the B.C. Civil Liberties Association.
She described the use of the hose as “despicable anti-homeless violence”.
(Warning: the video includes swearing.)
It’s increasingly difficult for the homeless to find a place to rest in Vancouver as a result of the closure of libraries and most community centres, as well as the conversion of fast-food outlets and other restaurants to takeout joints.
For more on that, check out the tweets below by homeless resident and Straight contributor Stanley Q. Woodvine.
Real estate publisher lets 70 go, blames coronavirus impact – Toronto Star
Key Media, the Toronto-based publisher of trade magazines Canadian Mortgage Professional and Canadian Real Estate Wealth, has cut more than a third of its global workforce amidst the economic fallout from the COVID-19 pandemic.
This week, the publishing and conference company issued severance notices to 70 people, in offices as widespread as Canada, the U.S., U.K., Singapore and Australia.
Before the wave of cuts, the company employed almost 200 people in eight offices
One employee who received a severance notice said they’d been told by a Key executive that the biggest reason for the cuts was that the company’s conference business had dried up almost all at once, because of the global COVID-19 pandemic.
“The current economic climate has had a huge effect on the company’s revenues, and we have forecast a significant negative impact on the company’s bottom line for 2020. This means that unfortunately, we are no longer able to continue your employment,” the severance notice stated.
Email and Skype messages to company CEO Mike Shipley, who lives in Antigua, weren’t immediately returned.
Key Media publishes 130 trade magazines devoted to real estate, mortgages and insurance. It also runs 70 annual conferences and trade shows.
Earlier this week, Saltwire Media, Atlantic Canada’s largest newspaper chain, laid of 40 per cent of its staff and shut down all of its weekly papers for at least 12 weeks, citing a plunge in advertising in the wake of the COVID-19 pandemic.
Get more business in your inbox
Get the business news and analysis that matters most every morning, including the latest on what the coronavirus means for you, in our Star Business email newsletter.
OPH investigating 16 new confirmed COVID-19 cases in Ottawa, bringing total to 122 – OttawaMatters.com
NASA Scientists Find Secret in Decades-Old Voyager 2 Data About the Ice Giant Uranus – SciTechDaily
The strong economic enticements for the Edmonton Oilers to return to the ice post-COVID-19 as soon as humanly possible: 9 Things – Edmonton Journal
Iran anticipates renewed protests amid social media shutdown
Popular Richmond BBQ spot speaks out about coronavirus rumours after man collapses outside restaurant – Vancouver Is Awesome
Real Estate Board of Greater Vancouver reports January housing sales up 42.4 percent
- Tech19 hours ago
Details of the Galaxy Fold 2 leak on the internet; check image – Somag News
- Tech6 hours ago
Supplier worries might mean a delay to the iPhone 12 launch – TechRadar India
- Health17 hours ago
Alberta doctors scrambling to get cancer surgeries done before 'tidal wave' of COVID-19 patients – CBC.ca
- Sports22 hours ago
SIMMONS SAYS: Confrontations with angry season ticket holders ends in compromise for Leafs and Raptors – Toronto Sun
- Sports23 hours ago
column Oilers in playoff spot at season pause helped by meeting, GM says – NHL.com
- News4 hours ago
WHO expert's advice for Canada: don't just flatten the curve, curtail it – CTV News
- Economy13 hours ago
The Lockdown Is an Opportunity to Redefine What Our Economy Is For – Jacobin magazine
- Art19 hours ago
Life mimics art for actors in play about pandemic – Saanich News