B.C.’s real estate regulation agencies have asked industry professionals to suspend holding open houses at properties slated for sale/rent due to the province’s sharp spike in COVID cases.
In a statement dated Nov. 5, the Real Estate Council of BC, the BC Real Estate Association and the Office of the Superintendent of Real Estate said the move is to limit face-to-face interactions in the home-buying process. Sales agents have been asked to conduct as much business virtually as possible in the meantime.
“Real estate professionals in B.C. have been very successful in using virtual tools to limit in-person interactions with clients, and we encourage them to continue those innovative practices to keep themselves, their clients, and community members safe,” said RECBC CEO Erin Seeley in the statement.
Last week, the B.C. Public Health Office issued an order to limit the number of people who can attend a private event at a residence to six. Given that fact, the real estate regulation agencies said agents should follow the same rules if they choose to hold in-person showings, adding that sales professionals should discuss the risks of such in-person meetings with their clients before proceeding.
“With transmission rates increasing, Realtors can continue to show leadership in their communities by reducing in-person interactions, wearing masks and adapting to new public health guidelines and orders,” said BCREA CEO Darlene Hyde in a statement.
B.C. is in the throes of a second COVID-19 wave, with daily new cases breaking the 400 mark for the first time on Thursday.
Downtown TO office sublease space quadruples in 2020 | RENX – Real Estate News EXchange
The amount of office sublease space on the market in downtown Toronto has quadrupled during 2020 to almost 2.5 million square feet, and there’s no short-term turnaround in sight.
Across the Greater Toronto Area (GTA), office sublease space on offer has more than doubled this year to over five million square feet.
Avison Young principal and Canadian research practice leader Bill Argeropoulos, who’s been closely monitoring sublease activity since COVID-19 started impacting the real estate market in March, doesn’t see available sublease space returning to previous lows until, perhaps, the end of 2023.
Argeropoulos wrote about the trend in a recent blog post and expanded on his analysis of the peaks and valleys from three past availability cycles in an interview with RENX.
“At the very beginning of the process, people were reluctant to put space on the sublease market because they didn’t know what the outlook was going to be like,” said Argeropoulos, who believes many companies were caught off guard by the length of the COVID-19 pandemic and the slow return of employees to offices.
Sublease space may appeal to some tenants because they can often get shorter and more flexible lease terms. Also, if they can take over space that’s already built out, they’ll save on related capital costs.
Companies have realized if some or all of their employees can work from home until the COVID-19 crisis clears up, they might as well try to relieve themselves of excess space and earn revenue through subleasing. However, lease-up of these spaces has been slow.
Rate of sublease space availability increases
Since last writing about the topic in August, Argeropoulos said available sublease space across the GTA office market increased from 3.7 million square feet to 5.1 million square feet. That’s up from 2.4 million square feet at the end of 2019.
Downtown Toronto sublease availability has risen from 1.7 million square feet to nearly 2.5 million square feet, which is about four times the 652,000 square feet available at the end of last year.
“Deals done with sublease spaces are usually at lower rates than direct landlord space, but we haven’t seen that sort of softening in the rents yet,” said Argeropoulos. “They’re basically on par with direct landlord space for now.
“However, I think the scales will likely tip in the tenants’ favour as more larger blocks hit the market, forcing some landlords to adjust their pricing.
“I think that will come, but given that the majority of the real estate in downtown Toronto is held by well-financed institutions, they’re willing to weather the storm a little bit and not necessarily give up on the rates yet.”
Where sublease space is coming from
Fifty-six per cent of the office sublease availability in downtown Toronto so far is for spaces of less than 5,000 square feet, according to Argeropoulos. Forty-six per cent is in class-A, 32 per cent is in class-B and 22 per cent is in class-C buildings.
“The piece of the pie that we’re closely watching right now is in that greater-than-20,000-square-feet range,” said Argeropoulos. “That number, which we’ve been following over several months, is in the five per cent category.
“Once we see that number rising, then I think there will be pressure on landlords to perhaps come off because they’re going to be competing with larger blocks of space, which can then be used as leverage to drive down rents.”
Argeropoulos said sublease space on the market now is coming from a range of business types, including technology, financial services, telecommunications and professional service firms.
“Even within the technology sector, it’s not just startups. It’s also established blue-chip technology companies that have decided to reduce their footprint — some on a temporary basis and some on a more permanent basis.”
Looking to the past for possible answers
Argeropoulos said there was no relationship between the rate of sublease availability take-up in the last three peak-to-valley cycles, spanning 20 years, in either downtown Toronto or the GTA as a whole.
For the current GTA office sublease market to return to its previous valley by the end of 2023, 256,000 square feet of take-up per quarter would be needed. That wouldn’t be far beyond the fastest take-up rate seen in the last 20 years.
Downtown, however, the necessary figure would be 159,000 square feet per quarter. That would be double the fastest rate recorded in any peak-to-valley period during the last 20 years.
Significant pent-up demand would be required, especially given the amount of new office space which will be delivered downtown between now and 2024.
In its just-released Canada 2021 Forecast report, Avison Young notes about seven million square feet of new office space is being delivered in 2020 and 2021 in the GTA. That report predicts a slightly higher 7.2 per cent overall vacancy rate for GTA office space in 2021 (it was 6.6 per cent at the end of Q3 2020).
Sources of future sublease space
Much of that new space is already pre-leased, but companies that have made those commitments may realize they don’t need all of it and look to the sublease market to take them off the hook.
Companies moving into new offices will also make significant backfill space available. Much of that could come from major banks, especially CIBC, and Infrastructure Ontario, as it moves back into its former buildings which have been under renovation.
“Rumours are that that Infrastructure Ontario space could be as much as an additional million square feet of availability perhaps coming on the market,” said Argeropoulos.
The City of Toronto has also announced it will implement a workplace modernization program, which includes both leased and owned facilities. That could reduce its office space footprint and introduce up to another million square feet to the sublease market.
“Heading into this crisis, Toronto and the downtown market in general was very, very tight and we couldn’t wait to get some availability to come online so we could transact,” said Argeropoulos. “But no one saw this amount of space coming back.”
Argeropoulos is concerned office demand has dried up and the newly available space isn’t moving.
It’s not yet panic time, he added, but smaller landlords or those with near-term risk due to lease rollovers are in an unenviable position.
“Once there’s greater clarity, the pent-up demand that’s waiting will definitely start to eat up the space,” said Argeropoulos. “How quickly is another question.”
Record month for South Georgian Bay real estate pushing pricing out of reach for many – CTV Toronto
October was another record-breaking month for real estate sales in the region.
Statistics from the South Georgian Bay association of realtors show the number of sales increased 47 percent over October last year. The benchmark price of a single-family home Climbed 21.8 percent to 513 thousand dollars, vacancies are down, while rents are also seeing an increase.
“Rents have been a surprise to me how quickly they have escalated and how out of context they are with the local market, wage rates and labour force,” says community activist Marg Scheben-Edey.
A flood of buyers from the GTA is fuelling the hot housing market. Still, there’s mounting evidence that rising prices make the communities around Southern Georgian Bay unaffordable, especially for service industry workers and single-income families who spend more than half their income on housing.
Pamela Hillier, the Executive Director of Community Connection, says that’s not sustainable and adds calls for help to 211 are up 153 per cent.
“At the end of the month, there’s no money left to buy food, or prescription medicine, or things like that, so people call to see if there are other income sources or help out there to pay for other services that they need.”
Advocates for purpose-built housing, including Gail Michalenko, say a bad situation just got worse in Collingwood.
“Our current council is certainly more supportive and recognizes that there’s a huge issue with this,” says Michalenko, “so now it’s time for some action.”
“There’s a sense of urgency to start addressing the situation,” says Scheben-Edey. It’s not something we can take likely sometimes it’s life and death.”
Real Estate Brokerage Compass Taps Banks for IPO – BNN
(Bloomberg) — Compass, a SoftBank-backed company that’s among the largest real estate brokerages in the U.S., has selected underwriters for a potential initial public offering, according to a person with knowledge of the matter.
The New York-based startup is working with Goldman Sachs Group Inc. and Morgan Stanley ahead of a listing that’s slated for 2021, said the person, who requested anonymity because the information isn’t public.
Representatives for Compass and Goldman declined to comment. A spokesman for Morgan Stanley didn’t immediately have a comment.
Compass was founded in 2012 by Ori Allon and Robert Reffkin, a Goldman alum who was once Gary Cohn’s chief of staff at the bank. It positions itself as a real estate firm that uses technology to give its agents an advantage over rivals. The company has used capital from venture investors to expand by acquiring smaller brokerages across the U.S.
Low mortgage rates have fueled a housing rally in the U.S. as Americans seek more space to spread out in the pandemic. That’s boosted residential real estate companies, including Zillow Group Inc. and Opendoor, another SoftBank-backed company. Realogy Holdings Corp., which owns Compass competitor Corcoran Group, has seen its shares rally about 28% this year.
In addition to SoftBank, which participated in a $370 million funding round last year that valued Compass at $6.4 billion, investors include Goldman Sachs, Fidelity, Wellington Management, Founders Fund, Dragoneer Investment Group and Canada Pension Plan Investment Board, according to its website.
Former American Express Chief Executive Officer Ken Chenault and Salesforce.com CEO Marc Benioff are also investors.
©2020 Bloomberg L.P.
AstraZeneca manufacturing error raises questions about vaccine study results – CBC.ca
Israel’s Gaza blockade has devastated Hamas-ruled territory’s economy, UN agency says – Global News
This weekend is a perfect time to Hop into the Arts District – OrilliaMatters
Silver investment demand jumped 12% in 2019
Iran anticipates renewed protests amid social media shutdown
Galaxy M31 July 2020 security update brings Glance, a content-driven lockscreen wallpaper service
- Tech15 hours ago
Sony promises more PS5 stock for the holidays after ‘unprecedented’ demand – The Verge
- Business21 hours ago
How to tell if you're flying on a Boeing Max 737 – Boing Boing
- Tech22 hours ago
The Best Black Friday TV Deals 2020: Best Samsung, Sony & LG 4K TV Savings Rated by Consumer Walk – GlobeNewswire
- Tech12 hours ago
PlayStation Canada promises more PS5 stock by the end of the year – MobileSyrup
- Sports18 hours ago
Roller derby star Jean Porter was known for her speed and beauty – The Globe and Mail
- Science14 hours ago
Western student first to spot new asteroid – BlackburnNews.com
- Politics21 hours ago
Covid might mean fewer family political fights over Thanksgiving – CNN
- Tech16 hours ago
Samsung Galaxy S21 screen leak says it'll be remarkably different to the Galaxy S20 – TechRadar