Canadian CRE Still A Strong Investment Play, Report Finds - Bisnow | Canada News Media
Connect with us

Investment

Canadian CRE Still A Strong Investment Play, Report Finds – Bisnow

Published

 on



Canadian commercial real estate is well-positioned to survive and even thrive beyond a lengthy pandemic, says a new brokerage report.

“While the coronavirus will weigh on the Canadian economy through the second quarter, a recession is not imminent,” according to a a new Canadian coronavirus outbreak assessment from Marcus & Millichap.

“Expectations of weaker exports, reduced tourism and supply chain-related shortfalls will moderate the pace of economic growth, but low unemployment and comparatively strong consumption levels should offset the headwinds.”

Bisnow/Ian Johnston

Even during a pandemic, Canadian CRE remains a good long-term investment — unless things get worse.

Marcus & Millichap was quick to point out that the spread of the coronavirus, both globally and in Canada, could render any earlier expectations moot if it is not contained.

“Unless the outbreak amplifies significantly or confidence levels drop dramatically,” is the report’s major caveat.

“Things have changed so much in just a couple of days,” Marcus & Millichap Vice President Mark Paterson said. “We should have these [reports] weekly, not monthly, given the speed of change.”

Paterson said he does see a lot of CRE investment activity despite the volatile times, adding that bigger players like REITs are actually the cautious ones in these volatile times.

“We’re still doing trades. People are buying and selling. Everything is worth less today. But it’s more about fear and caution than reality. There’s still buyers out there, and there’s opportunity,” he said. “[REITs] are a little more reserved in this type of market. It’s the private clients who are taking the opportunity to buy. They’re still looking for a deal right now.”

The report said commercial real estate offers buyers stability, especially now. Apartments, office and industrial space are expected to receive little long-term impact from the pandemic.

“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,” the brokerage reports.

The retail and (especially) the hospitality sector remain riskier investments.

“The volatility of equity markets reiterates the stability of commercial real estate and the compelling 4-7% yields,” the report continues.

“Strong capital market liquidity and sound underlying real estate space demand remain pillars of support for commercial real estate.”

Bisnow/Ian Johnston

Nathan Phillips Square remains deserted as Toronto citizens self-isolate.

Still, Paterson said he is cautious about things remaining in flux. One big unknown comes April 1, when rents are due everywhere. While the federal and provincial governments have moved to help out renters, including a temporary moratorium on evictions, how the landlords will react is still not known.

“Are [the landlords] going to be forgiving when it comes to rents?” Paterson said. “April 1 should be interesting. We’ll see at that point if people are getting out.”

Let’s block ads! (Why?)



Source link

Continue Reading

Investment

Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

Published

 on

 

NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

The Canadian Press. All rights reserved.

Source link

Continue Reading

Investment

S&P/TSX composite up more than 100 points, U.S. stock markets mixed

Published

 on

 

TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

Source link

Continue Reading

Economy

S&P/TSX up more than 200 points, U.S. markets also higher

Published

 on

 

TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

Source link

Continue Reading

Trending

Exit mobile version