EDITOR’S NOTE: This is the first of a two-part series that looks at our densifying suburban cities in Metro Vancouver and the GTA.
Canada’s big-city buildings are changing. We’re jamming in more uses, more amenities and more people into bigger, bolder buildings — and many of these projects are in the suburbs.
We are seeing taller buildings, decentralized commercial vitality and an increase in stacked mixed-use buildings sometimes combining residential, light industrial, office and retail all in one site or complex.
Despite strong growth in downtowns across the country, we were already seeing some jobs, commerce, homes and people dispersing into satellite cities or post-suburban city centres — especially in and around Toronto and Vancouver.
The pandemic and the new normal we’re experiencing is really just an acceleration of what was already taking place. Placemaking, or the process of developing quality spaces where people can live, work and spend their money, has evolved.
It’s no longer just the Liberty Villages, East Harbours and The Well.
So what does the future of high-density look like and can our communities handle this?
Buildings are moving up and moving out
Population growth, limited land availability and rising costs have led developers to make more efficient use of the lands they can get their hands on.
For projects to be cost-effective with limited space to build out, developers are building up. This is especially true in our largest cities where the number of developable sites sometimes feel like postage stamps.
As a result, we are starting to see bigger, bolder skyscrapers.
A great example of this is Sky Tower at Pinnacle One Yonge. The 95-storey behemoth is a mixed retail residential building currently under construction along the Gardiner Expressway in downtown Toronto.
Set to complete in 2024, Canada’s tallest tower will have 840 condos plus space for a hotel, community centre, offices and retail space.
This is a multi-use tower that will rival every other super-tall building in the city in height, except for the CN Tower.
Also in Toronto, One Delisle by Slate Asset Management and Studio Gang Architects will begin construction soon, eventually completing in 2026. The 44-storey tower will include condos, as well as office and retail uses.
Suburbs are starting to resemble cities
Interestingly, this trend of building up is also extending to the suburbs.
In the Vancouver context, most of this development is taking place in the suburbs. As housing prices continue to rise and young professionals begin to settle down, suburban neighbourhoods are becoming more popular and, as a result, more metropolitan.
Rezonings and redevelopments in the already dense downtown cores are also becoming more challenging.
People often want to live in the neighbourhoods they grew up in; however, the cost of housing has gone up dramatically and affordable single-family homes are in limited supply, making high-rise residential an attractive and sometimes the only option.
In order to accommodate the demand and make more efficient use of space, suburban areas such as Markham, Mississauga, Surrey, Coquitlam and Burnaby are seeing high-rise projects currently under proposal or construction.
The densification of suburban neighbourhoods is a trend that is expected to continue and potentially intensify with remote work and the limited supply of affordable single-family homes.
Companies now have the option to put non-client-facing employees in more affordable suburban space or let them work from home more regularly, further decentralizing economic activity.
Mixed-use buildings are becoming increasingly popular
Higher density requires more efficient use of infrastructure, which has led to more developers proposing, and municipalities approving, multi-stacked, mixed-use buildings.
Residents are now looking to live, work and play within the same neighbourhood, which has led to the development of new, ultra-high-rise buildings outside of downtown cores or in the suburbs.
For example, Slate Asset Management recently acquired an acre-sized parcel of land at 339 East First Ave. in the False Creek Flats in Vancouver.
The property is currently zoned for industrial uses. In light of anticipated policies in the coming Broadway Corridor Plan (Q1 2022), however, the firm is exploring opportunities to transform its site into a mixed-use destination that will include both jobs and homes.
Its plan for the site includes light industrial uses at grade and opportunities for significant increases in office and housing uses on upper floors — a true ecosystem.
Slate has been active in discussions with Vancouver Planning Staff and neighbouring landowners who share a similar vision for the area.
In Burnaby, M3 and Gatineau Place offer a mixture of residential and retail. 4444 Kingsway, currently under proposal, is looking to take mixed-use one step further by combining residential, hotel, office and retail all in one high-rise tower complex.
At Richmond Town Centre, Shape Properties and Cadillac Fairview are working on a joint venture to transform a shopping centre into a world-class master-planned destination with open spaces, boutique shopping and eventually the addition of 2,000 new homes in the community.
Meanwhile, Surrey City Centre represents one of the fastest-growing hubs in all of Canada and is enjoying attention and activity from top developers like Bosa Properties, Anthem, Concord, PCI and many others.
The lack of industrial space is leading developers to get creative when it comes to commercial spacing, mixing light industrial with office/retail.
Previously there was no desire to combine industrial with other uses; however, with industrial vacancy rates declining and the need for additional warehouse space increasing, mixed-used industrial is becoming more common.
The next phase in the evolution
As e-commerce continues to become a larger component of retail operations, we may start seeing logistics and retail merge on the ground floor of multi-use buildings.
For retailers to be able to hit the next milestone in growth, there could be the extension of storage space by moving the interior back wall forward to allow for more e-commerce orders to be fulfilled directly from the store.
There has already been a shift toward municipalities asking for retail at grade, and as density in the suburbs continues to build, it is likely that larger retail at ground level will follow.
As both lifestyle and consumer needs progress, the idea of placemaking and the future of high-density will continue to evolve.
Massillon area real estate transfers April 30-May 6 – Massillon Independent
Barr Maureen E from Lundquist Happy & Eric, parcel 1100194 Safari Trl, $8,100.
Dickey Jay E & Janice L from Yoder Esther & Stephen E Co Trustees of, parcel 1101262 Riverdale St SW, $99,136.
Dickey Jay E & Janice L Trustees from Stark Truss Co Inc, 9915 Sherman Church Rd, $142,851.
Kiko John D Jr & Danielle Ttees from Stacks Eric & Monique, parcel 1101109 Nairobi St, $30,000.
Ochsenbein Jamie from Graneto Adam J, parcel 1101081 Uganda Pkwy, $3,000.
Phillips Billy J & Brianna M from Umh Properties LLC, 6887 Hillside Dr SW Lot 284, $41,900.
Sterling Thomas C from Porrini Jeffrey M & Kimberly K, 128 A St Nav Vil, $81,000.
Flashhouse Cle South LLC from Kumarappan Subramanian & Chaudhuri Urmil, 321 Alissa LN, $280,000.
NVR Inc., A Virginia Corporation, DBA from Schalmo Properties Inc, 3033 Bonita Cir SE, $29,500.
NVR Inc., A Virginia Corporation, DBA from Schalmo Properties Inc, 3037 Bonita Cir SE, $29,500.
Bartlett Casey from Vukmanovich Gerald S & Lora A, 1215 Leecrest St NW, $202,000.
Corbit Laurie S & Ashby Michael D from Callisto Daniel, 2852 Sherwood Ave NW, $230,000.
Daniska Paul & Janis from Fox Carole S, 4340 Noble Loon St NW, $350,000.
Edmunds Michael & Amelia from Schuring Derrick J & Allison M, 7352 Montella Ave NW, $529,000.
Mcaleese Mary from Gales Robert R & Karen T, 7028 Knight St NW, $285,000.
RLS Properties LLC from Kitson Enterprises Ltd, 6577 Promway Ave NW, $320,000.
Ross Charlene & Jason from Ballas William T, 5530 Brookstone St NW, $340,000.
Seder Jeffrey L & Joy L from Carrington West LLC, 8800 Regency Dr NW, $190,000.
Sessor Janet from Soles Deborah K, 9030 Canal Place NW, $269,900.
Weston Robert from Weston Linda, 5920 Island Dr NW, $149,600.
Williams John from Halsey Dustin & Sarah, 5228 Konen Ave NW, $410,000.
Willowdale Country Club Gates Joshua from Willowdale Country Club Oblisk John Mic, 59 Willowdale Ave NW, $255,000.
Willowdale Country Club Inc from Willowdale Country Club Inc Kellogg Dan, 87 Cherry Dr NW, $435,000.
Zucal Jeffrey S from Schopp Robert Lee Ttee, 4182 Lochness Cir NW, $699,900.
Cooper Connie from Coffman Jeffrey R, 132 Thomas BLVD NW, $57,000.
Ammond Bonnie J from Ammond Bonnie J & Diloreto Miller Kara, 1839 Meadowbrook Rd SW, $81,850.
Bauman Blair P from Saleh Wasim, 615 Wellman Ave SE, $39,900.
Blackford James Allen from Wagner William A Jr, 522 Bebb Ave SW, $105,000.
Blundell Shelley from Wickham Margueritte L, 1911 Amherst Rd NE, $189,250.
Cherry Real Estate LLC from Heinzer Joseph M II, 872 9th St NE, $80,000.
Coblentz Logan & Alberto Lauren from Coblentz Jacqueline K, 17 Rolling Park Dr S, $9,400.
Harlan Patrick T from Lincolnway-Terrace Homes LLC, 2606 Lincoln Way W #43, $3,800.
Harlan Timothy W from Lincolnway-Terrace Homes LLC, 2606 Lincoln Way W #58, $1,000.
Messaris Joyce from Eschman Kenneth W Trustee, 1460 Laurenbrook LN NE, $194,900.
Michel Zachary D & Stover Lauren G from Bennett Paul D & Michelle M, 1255 Woodforest St NW, $275,000.
Mortimer Donald from Lincolnway-Terrace Homes LLC, 2606 Lincoln Way W #10, $1,000.
Novak Alicia Loraine & Daniel Edward Tte from Baker Mark T TRUSTEE/MARK T Baker Trust, 403 Oak Manor Ave NE, $160,000.
Ontrack Properties LLC from Bauman Blair P, 615 Wellman Ave SE, $75,000.
Pilgrim Ventures LLC from 501 Strategies LLC, 22 Central CT SE, $60,000.
Rambaud Nathan & Marion from Carter Nancy J, 871 Campbell Cir NE, $175,000.
Riadi Ramzi & Kari Atalla & Sweis Ranny from Crescenze Michael J & Stephanie M, 39 26th St NW, $121,500.
Robinson Todd from Barkheimer Realty Ltd, 54 Chester Ave SE, $60,000.
Savage Carol L & Vincent Tonya M from Savage Carol L & Vincent Tonya M & Glenn, 828 Matthias Ave NE, $14,000.
Sierra Azricam Joacim from Black Hawk Investments LLC, 49 Woodland Ave SE, $83,000.
Smith Brandon from Gerber Rentals LLC, 1315 3rd St SE, $85,000.
Vega Enterprises Ltd from Gales Courtney J & Emily M, 1930 Cyprus Dr SE, $230,000.
Woodring Wendy R from Walters Samantha, 412 26th St NW, $150,100.
Barbera Joey M & Peggy J & Michael Victo from Edwards Dayna, 314 Manor Ave NW, $225,000.
Beadling Brett & Brianna from Rodriguez Robin Elaine, 6600 Highton St SW, $350,000.
Brown David A from Cooper Gary J, 300 Proudley Ave SW, $90,000.
Carlson Nathan M & Emily K from Carlson Maritza, 3220 Greenpark St NW, $100,000.
Dendinger Katie & Scott from Haynes Barbara, 5010 Barrie St NW, $220,000.
Geiser Ryan & Beverly from Hershberger Eli & Yoder Sam E, 4321 Warmont St SW, $425,000.
Gordish Daniel P from WM Real Estate Investors LLC, 3013 Hilton St NW, $148,900.
Greene Timothy II & Green Candice Lynn from Patterson Jewell M, 4722 Piccadilly Ave SW, $160,000.
Hudgens Carlee Renee & Jason Duane from Early Janis & Matthew, 4540 Aurora St NW, $260,000.
Kemp Charles R & Stephanie A from Balizet Robbie M & Andrea Denise, 7089 Crusader St SW, $315,000.
Kern Timothy from West Manor MHP LLC, 133 Roxbury Ave NW #15, $1,000.
Lombardi Vincent from Lombardi Anthony Jr & Ida Lee, 160 Victoria Ave NW, $130,000.
Manos Thomas J from Manos Thomas J & Kerry Laura L, 425 Ingall Ave NW, $38,700.
Mcbride Jason M from Deluxe Park Ohio LLC, 3454 Hilton St NW #4, $7,600.
Midfirst Bank from Iser Michael L & Staci L, 4722 Navarre Rd SW, $72,928.
Residential Solutions Inc from Keller Doris M, 1626 Dunkeith Dr NW, $131,000.
Roth Austin L & Ryann L from Dibell Beth A, 5885 Drenta Cir SW, $210,500.
Schleifer Gary M from Hail Holdings LLC, 4727 Surmay Ave SW, $35,750.
Stockton Gayle from Selby Keith L & Francine, 152 Mount Marie Ave NW, $160,000.
Storm’s Property Maintenance LLC from Petry Barbara L & Cross James B, 1800 Perry Dr SW, $102,000.
Tailwind Massillon MHP LLC from Gallentine John J, 3354 Hilton Ave NW #6, $5,000.
Wade Joyce & Matthew & Renicker Robert from Gertz James W Etal, 8544 Mapleford St SW, $47,000.
Williams Steven P & Lisa L from TWL Investments LLC, 4673 Stevie Ave SW, $57,500.
Turney Rebecca J & Kelly James from Pacula Taras P, 110 Main St W, $110,000.
Bleigh Amanda from Ketler Properties LLC, 1215 Cyril Ave SW, $175,000.
Greer David & Danielle from Greer Stephen D & Rebekah S, 10833 Graber St SW, $90,000.
Toronto suburbs boast the most overvalued real estate in all of Canada – blogTO
While people in and around Toronto have just had to accept (albeit begrudgingly) the region’s outrageous home prices for what they are, it’s downright maddening to look at what you could buy in other parts of the world for the amount it costs for even a tiny condo here.
It’s not just the downtown core, either, with peripheral markets in the province continuing to see prices skyrocket to unseen levels, and homes in even small-town Ontario now on par with L.A. and other larger and far more desirable cities.
Though it’s obvious the region’s real estate is not actually worth as much as it’s going for these days, the extent to which it is overvalued at this point is quite shocking.
Canadian real estate estimated as 38% overvalued on average. In some GTA regions, up to 60-70% overvalued. If you bought a house in the last year or two in Canada, you’re screwed.
— PattyCakesXRP (@PattyCakesXrp) May 24, 2022
New figures from BMO (via Better Dwelling) show that while Canadian homes in general are about 38 per cent overvalued, the issue is the worst in Ontario, where home prices are about 55.4 per cent overvalued as of the first few months of this year.
What’s most interesting is that in Toronto specifically, this number is lower than the province as a whole — at 41 per cent — while in the surrounding suburbs, it’s far higher.
Cottage country areas like Muskoka, the Kawarthas, and Haliburton are approximately 64 per cent overvalued, the bank says, while the suburbs just outside of the GTA have the highest levels of overvaluation.
Properties in “exurb” areas like London, Barrie, Niagara, Guelph and Kitchener-Waterloo — that is, not the suburbs directly around the city, but just beyond — are now around 74 per cent more expensive than what they’re worth.
Vancouver and Toronto housing so overvalued crash is coming https://t.co/qevtT43oDp
— Rocketred (@wildcat2013) May 8, 2022
Given how fast home prices have climbed in Toronto and, as a result, around the city, experts say we have been on the verge of bubble conditions for some time now; the city was actually just ranked the second-biggest housing bubble in the world at the end of last year due to its severe overvaluation.
This will, stakeholders seem to agree, eventually lead to a swift downtown and market correction, likely later this year due to a number of factors, even without the government intervention that so many have been demanding to quell out-of-control price acceleration.
I think a better title would have been “Here’s how unaffordable the house market is”
— TheHarshTruth (@TheHarshesTruth) May 24, 2022
While B.C., Quebec and Atlantic Canada all join Ontario in having substantially overvalued housing markets, prospective Canadian buyers can still get some bang for their buck if they’re willing to move to Alberta or Saskatchewan, which are considered undervalued.
Real Estate Has Bucked the Deglobalization Trend – MSCI
- Deglobalization has had profound implications for portfolio construction in listed assets. Conversely, with real estate, there are indications that the asset class has become more global in recent years.
- Return dispersion across national markets has decreased, while property type has become a more important return driver across all markets, suggesting stronger international alignment, as cross-border transaction volumes have remained stable.
- Institutional real estate investors could still face challenges from deglobalization, but a historical preference for more transparent and stable markets may help counterbalance some of them.
Real estate has historically exhibited a strong home bias, with investors favoring their local markets. Where investors have sought offshore exposure, they have typically favored markets that offer higher levels of transparency, better governance and stability. This is not to say that investors have not allocated to markets that are less transparent than their home markets. Nor that they have not pursued strategies higher up the risk curve when they invested in foreign markets. But in aggregate markets with higher transparency and government ESG scores have tended to attract more real estate capital.
Globalized real estate drivers in a deglobalizing world
The demand for international real estate is driven by the world’s largest institutional investors, many of whom have explicit global real estate investment mandates. Surveys of investor intentions show continued strong demand for cross-border investments among this group.1 Despite this sentiment, the share of the volume of cross-border transactions, as tracked by MSCI Real Capital Analytics, has remained relatively stable over the last decade, ranging between 19% and 26% of total quarterly transaction volumes.2
Even with relatively stable flows across borders, there is evidence that real estate may have become more global based on return behavior. There has been a notable decline of total-return dispersion across national markets in the MSCI Global Annual Property Index since 2008. At the same time, the spread of returns across property types has increased across all markets as technology changes (like the rise of e-commerce) and the pandemic have disrupted real estate markets, causing headwinds for sectors like retail and office but boosting other sectors like industrial. These trends point to potentially stronger international alignment in the asset class: Unlike in much of the previous two decades, since 2019 there was a greater opportunity for outperformance from allocation decisions based on property type, rather than country.
Return dispersion decreased across national markets but increased across property types
Source: MSCI Global Annual Property Index
Could deglobalization affect real estate?
Political populism, the COVID-19 pandemic and increased geopolitical tensions have all contributed to concerns about deglobalization. Business cycles may become desynchronized, leading to wider variations in the performance of equity and bond markets across countries, lower correlations and higher volatilities. The investment impact of this trend emerged in recent years: In equities, correlations between countries and regional blocs have declined.
Going forward, global investors in bonds and equities may respond by taking a more nuanced approach to asset allocation — for example, by considering new, more focused country allocations for broad allocation decisions (geopolitical blocs, energy importers versus exporters or autocracies versus democracies) and placing greater emphasis on risk factors exposed by the war in Ukraine, such as sanctions risk, reputational considerations and currency convertibility. While it is possible that similar deglobalization headwinds may emerge for real estate investors, there are several factors that could mitigate this.
One example is that, as mentioned earlier, transparency, governance and stability have always been important considerations for global real estate investors, as it is an opaque and illiquid asset class, where asset-investment life cycles are typically measured in years (the median holding period for assets in the MSCI Global Annual Property Index has been six years). The result is that markets with higher transparency, better governance scores and stronger institutions represent the lion’s share of the opportunity set and transaction volumes.
Transparency, governance and stability have mattered in real estate
Where available, market-size estimates are sourced from MSCI’s Real Estate Market Size Report 20/21. For the remaining countries, market size is assumed to be 10% of GDP. Source: JLL, Our World in Data, MSCI
Institutional real estate investors may therefore have less exposure to countries significantly exposed to decoupling risk due to deglobalization. Of the approximately USD 2.3 trillion of assets that MSCI tracks in the MSCI Global Annual Property Index and MSCI Asia Annual Property Index, over 91% of the capital value was invested in liberal democracies with real estate markets rated as transparent or highly transparent by JLL.
Nevertheless, deglobalization could have knock-on effects that impact real estate. For instance, increased political polarization and pandemic-induced supply-chain disruption could drive “nearshoring” and changes to international trade patterns.3 These changes could in turn affect the volume, nature and location of real estate demand. For example, a move from just-in-time to just-in-case logistics could increase demand for industrial-warehouse space and see some of that demand shift away from markets that are further afield and more vulnerable to potential trade disruption.
While deglobalization could result in profound consequences in asset allocation and portfolio construction, different asset classes may be affected in different ways. The distinct features of the real estate investment process, as opposed to that for listed equities and bonds, as well as the nature of the opportunity set typically available to global real estate investors, may mean that real estate could be less directly exposed to the effects of this investment megatrend.
The authors thank Alexis Maltin for her contributions to this post.
1For example, see: “2021 Institutional Real Estate Allocations Monitor.” Hodes Weill & Associates and Cornell Baker Program in Real Estate, Nov. 10, 2021.
2It should be noted that purchases made by third-party managers on behalf of offshore investors will count toward domestic volumes rather than cross-border volumes and thus may underestimate total cross-border capital flows.
3Nearshoring is the practice of transferring a business operation to a nearby country, especially in preference to a more distant one.
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