My neighbor constantly reminds me my voice echoes with commercial real estate owners well above his pay grade.
It’s certainly not my intention, but I take any comments to my missives seriously and attempt to morph into a more meaningful messenger.
Regardless of the size of a commercial real estate portfolio — one multifamily property or global holdings of distribution boxes populated with Amazon-eque tenants — investments are simple! Why do we make them so hard?
You see, any investment of money seeks a return. Period. Sure. You’d like the return to be commensurate with the risk. But after all the fancy terms of capitalization rates, internal rates of return, replacement cost, source of capital, exit strategy, expense leakage, cash on cash, leverage, etc., it’s really about this. I shell out this much money and get this much back. Mic drop.
Commercial real estate brokerage is simple. Why do we make it so hard?
A real estate transaction – whether it’s a sale or lease – has two sides: the owner and occupant. Now, the occupant may seek to lease or own and the owner may want to sell or lease, but you get the idea. Inject our representation and you now understand what we do. We are matchmakers of sorts.
An owner engages us to locate a tenant or buyer to fill her vacant building or an occupant awards us the opportunity to source a location for their use. The former assignment is known as a listing and the latter an occupant representation.
If you ask me what I do and I respond, “I sell commercial real estate.” You might wonder, “What the heck is commercial real estate?” Many of our clients are family-owned and operated manufacturing companies experiencing a transition – such as a move. This might offer a better idea of what fills our days.
Networking is simple. Why do we make it so hard?
The true value of a commercial real estate professional is the depth of their network. Need a roofer? We’ve got you covered. How about a legal professional to draw a new LLC? Hold my beer, I have several. How about someone to install new warehouse racking? Yep. Got just the gal.
But all of these examples are “downstream” of the deal. By that I mean, the need is after or “downstream” of the sale or lease. But what about “upstream”? What classes of professionals see a transaction before it takes flight? The answer harkens back to what we do.
Remember, many of our clients are family-owned and operated manufacturing companies experiencing a transition like a move. If we focus on those professional service providers who complement not compete with our efforts – a treasure trove emerges.
Here’s an example: Let’s say a manufacturing concern experiences a record year but leases their building. During a periodic meeting with her accountant, they discuss revenue and leasing. If the CPA advises his client to buy a building, you get the idea.
Business is hard enough. Your commercial real adviser should make it easier for you.
Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104.
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.
