Office towers and nearby condominiums in downtown Toronto on Nov. 9, 2020.Fred Lum/The Globe and Mail
Blackstone Inc. BX-N is ramping up its Canadian real estate business and opening an office in Toronto as it expands from significant investments in warehouses into new sectors such as commercial and residential properties.
Blackstone, one of the world’s largest asset managers, announced Monday that it hired former Canada Pension Plan Investment Board executive Janice Lin as head of its real estate in Canada. For the past two years, Ms. Lin was chief investment officer at retirement home operator Revera Inc.
“I look forward to strengthening Blackstone’s strong presence in Canada and supporting businesses across a number of different sectors,” said Ms. Lin in a press release. “Canada’s population growth is the highest among G7 nations and is nearly double that of the U.S., and I believe that will continue to create exciting opportunities in the market.”
Blackstone currently owns about 450 properties in Canada, valued at $14-billion. The bulk of its portfolio is focused on logistics, such as warehouses. In 2018, Blackstone teamed up with Ivanhoé Cambridge Inc., a subsidiary of Caisse de dépôt et placement du Québec, to acquire Pure Industrial REIT for $3.8-billion, including debt. Last year, Pure acquired an additional 190 industrial properties as part of the Cominar REIT takeover.
More recently, Blackstone expanded its Canadian commercial and residential holdings. The fund assetmanager bought Vancouver’s Bentall Center in 2019 for $1-billion. In 2021, it acquired three office buildings in downtown Toronto, a tech-focusedproperty known as the Atlantic complex, for $240-million.
Last year, Blackstone and a partner also bought a 12-property chain of seniors homes in Quebec. In April, the asset manager purchased Montreal’s Air Canada-Altoria Tower, a building which combines offices and condominiums, for $230-million.
Nadeem Meghji, Blackstone’s New York-based head of real estate Americas, said the fund manager invests around major themes, which currently include owning industrial properties linkedto e-commerce, rental housing, life science offices, and film studios which are benefitting from surging production for streaming services.
“We are long-term believers in the strength of the Canadian economy,” Mr. Meghji, a native of Vancouver, said in a press release.
Blackstone is one of the world’s largest property investors, with US$298-billion of real estate and US$880-billion of assets under management. A number of its major competitors are Canadian, including Brookfield Asset Management Inc.
Blackstone is bulking up as its institutional investor clients increase the amount of capital they earmark for real estate. A survey of pension plans, insurers andendowments published in April by British-based investment data service Preqin found that 26 per cent of investors plan to allocate US$300-million or more to real estate this year; just 9 per cent were setting aside that much capital one year ago.
Globally, fund managers have about US$4.1-trillion invested in the sector, according to industry surveys.
Part of the appeal of property is its perceived value as a hedge against inflation. Commercial real estate services firm Avision Young recently released a study that said “the relationship between real estate and inflation is much more nuanced than conventional wisdom would suggest.”
Avision Young looked at major Canadian, U.S. and British markets and found that over the short term – less than five years – property markets don’t offer much protection from spikes in inflation. However, once investment horizons move to five years or more, the sector outperformed. The study found “real estate’s inflation-protecting capabilities are best suited to long-term owners who are prepared to ride the fluctuations of multiyear economic and real estate cycles.”
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
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.
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