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CSA Publishes Proposed Amendments On Offering Memorandum Disclosure Requirements For Real Estate Activities – Real Estate and Construction – Canada – Mondaq News Alerts




CSA Publishes Proposed Amendments On Offering Memorandum Disclosure Requirements For Real Estate Activities

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On September 17, 2020, the Canadian Securities Administrators
(“CSA“) published proposed amendments
(“Proposed Amendments“) to National
Instrument 45-106 – Prospectus
 (“NI 45-106“),
which  investors who wish to rely on the Offering Memorandum
(“OM“) exemption set out in section 2.9
of NI-45-106 (“OM Exemption“).

In particular, the Proposed Amendments set out new disclosure
requirements for issuers engaged in “real estate
activities”, and those operating “collective investment
vehicles”. A discussion of the amendments relating to
“collective investment vehicles” is the subject of a
separate paper.

According to the CSA, the OM Exemption was originally designed
to be used by small, less sophisticated businesses, to raise early
stage capital from a large pool of investors without having to
comply with the costlier prospectus regime.

In practice, however, the CSA has found that the OM Exemption is
being used by large sophisticated issuers in specific industries,
such as real property ownership or development. In 2017, for
example, roughly 40% of the issuers relying on the OM Exemption had
assets of $100 million or more, with 17% of issuers being engaged
in “real estate activities” (as such term is defined

Issuers Engaged in Real Estate Activities

Real Estate Activities” is defined
in the Proposed Amendments as an undertaking, the purpose of which
is primarily to generate income for shareholders, or other gains
from the lease, sale or other disposition of real property, but
does not include, mining activities, oil and gas
activities, and in Quebec, certain contracts and rights relating to

Under the Proposed Amendments, an issuer engaged in Real Estate
Activities would be subject to new disclosure requirements,

  • providing an independent appraisal in
    circumstances where (i) the issuer has acquired or proposes to
    acquire an interest in real property from a Related Party (as such
    term is defined in NI-45-106); (ii) the OM discloses a value for an
    interest in real property (other than in its financial statements);
    or (iii) the issuer intends to spend a material amount of the
    proceeds of the offering to acquire an interest in real
  • providing a general description of
    the real property, including the nature of the interest held,
    whether there are any encumbrances on the property, any
    environmental liabilities, hazards or contamination, any tax
    arrears, how the property is serviced by utilities, the current and
    proposed use of the property and a statement why the issuer
    considers the real property to be suitable for its plans, and if
    there are any buildings on real property, the type of construction,
    age and condition, and a description of any units for sale or
    rental, and occupancy rates therein;
  • if the issuer will be developing the
    real property, it will be required to provide comprehensive
    disclosure on such development, including the estimated costs to
    complete the development, any significant assumptions that underlie
    the cost estimates, when the costs will be incurred, and the
    milestones and objectives of the project, including the expected
    timeline, the costs for completing each objective, and the
    consequences of failing to meet one or more objectives;
  • disclosure of penalties, sanctions,
    bankruptcy, insolvency and criminal or quasi-criminal convictions
    for parties other than the issuer, such as a developer or
  • disclosure of any historical
    transactions involving the issuer and any Related Party, so
    investors can better evaluate transactions involving Related
  • disclosure of any future cash calls
    required by the investors; and
  • disclosure of the terms and
    conditions of any Rental Poll or Rental Management Agreement.

These disclosure obligations would not apply to real property
that when taken together would not be significant to a reasonable
investor. This exception is intended to ensure that issuers are not
subject to an undue disclosure burden.

Compliance reviews conducted by the CSA on issuers engaging in
Real Estate Activities indicate that these issuers are often unsure
of the disclosure required in an OM.   The Proposed
Amendments appear to set out a clear disclosure framework for these
issuers, giving them greater certainty as to what they must
disclose.  Given the complexity of these entities, the
proposals appear reasonable in the circumstances, and will
hopefully lead to investors making more informed investment

Comment Period

The Comment Period for the Proposed Amendments will be open
until December 16, 2020. If you are interested in submitting
comments or for further information on navigating NI 45-106, please
contact: James
 at (416) 643-8819 or

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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Field LLP

The issue of asserting solicitor-client privilege in the condominium context is an interesting one, especially as between the condominium corporation and the individual unit owners

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Canadian pension funds hunt for pandemic real estate bargains –



By Maiya Keidan

TORONTO (Reuters) – Canadian pension funds are seeking to boost their real estate investments, betting the slumping property market will recover as the COVID-19 pandemic recedes and office workers and city dwellers return to downtown properties.

Canadian pension funds held $278.7 billion in property assets in 2019, up 4% from 2018, according to the Pension Investment Association of Canada, making them the country’s largest real estate owners.

In a world of slower economic growth, very low interest rates, volatility in equity markets, real estate offers an attractive opportunity for pension funds, which take a long-term investment horizon, say market participants.

“We’re looking for buying opportunities,” said Hilary Spann, Head of Americas, Real Estate at CPP Investments, which manages $456.7 billion. CPP’s real estate portfolio generated 5.1% return for the year ended March 2020.

CPP announced a U.S. joint venture with Greystar Real Estate Portfolio to build multiple separate housing units this month, a deal that was initiated pre-pandemic.

In November, it signed an agreement with Hudson Pacific Properties to acquire an office tower in Seattle. Spann said a lot of buyers that would have been competitive in the Seattle deal were temporarily on the sidelines. “So we were able to step in and pick up that asset at yields that we thought were quite attractive.”


As the pandemic forced many staff to work from home, the office vacancy rate in Canada hit a 16-year high of 13.4% in 2020, according to data from broker CBRE. Downtown offices were hit harder.

“I think pension funds are very well aware that…there are times when values dip a bit and vacancies go up but overallreal estate assets are a great part of any pension fund portfolio,” Paul Morassutti, CBRE Canada Vice Chairman said.

CPP’s Spann said while both rental markets and office may suffer in the short-term, it was expected that both markets would return when the pandemic comes to an end.

“Office may fall in the short term but in the long term, as everybody does start coming back to the office, I think it’s fair to say you may see a reversal,” she said, adding that the things that made places like New York and San Francisco vibrant will remain.  

Kristopher Wojtecki, Managing Director, Real Estate at PSP Investments, told Reuters the fund had been increasing exposure in select sectors including single family rental and production studio real estate during the pandemic.

However, Canada’s second-largest pension fund, Caisse de depot et placement du Quebec, is taking a contrarian approach. A spokeswoman for Ivanhoé Cambridge, the real estate subsidiary of Caisse, said the fund is cutting exposure in traditional asset classes and prioritising opportunities in growth sectors which include logistics and residential office buildings among others.

Grant McGlaughlin, partner at law firm Fasken, said he did not see any drastic moves on pension funds getting rid of their real estate portfolios.

“I think that’s the right thesis that there is no point selling into a low,” he said.

(Reporting by Maiya Keidan; Editing by Denny Thomas and David Gregorio)

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Avison Young launches real estate and infrastructure offering –



Commercial real estate services firm Avison Young (AY) has launched a new real estate and infrastructure consulting offering in Canada. The offering will be led by new addition Scott Pickles, a seasoned real estate and infrastructure consultant who joins AY from Colliers.

Toronto-headquartered AY has continued to expand its professional services practice as the firm diversifies beyond its traditional domain of commercial real estate management and brokerage – which have been negatively impacted by the pandemic.

Since founding its Americas professional services practice in April 2020 under the leadership of former Deloitte partner Sheila Botting, AY has been working to bolster its capabilities in corporate real estate and workplace consulting, infrastructure consulting, valuation and advisory services, and project management.

“Through growing our distinct service offerings, we are able to deliver on increasingly complex business imperatives our occupier, owner, and investor clients have as they evaluate real estate for their service needs and identify their capital investment requirements,” Botting said.

To this end, the company strengthened its valuation advisory offering in Western Canada earlier this month with the hire of three valuation experts in Edmonton from rival firm Colliers.

AY has now added a new real estate and infrastructure consulting offering in Canada, peeling off another Alberta-based leader from Colliers to head it.

Avison Young launches real estate and infrastructure offeringScott Pickles brings 17+ years of experience providing strategic advisory and infrastructure consulting to the private, public, and not-for-profit sectors. The registered architect has worked as a strategic advisor, sustainable real estate developer, and in various roles within municipal government.

Pickles previously spent two years at Colliers as a senior manager of infrastructure advisory, supporting public and private sector clients across Canada. His consulting work included strategy development, best use analysis, project management, and service and capital planning for a broad range of services – including affordable housing, utilities, and recreation.

Before that, he spent 11 years in the Calgary municipal government, where he was latterly program lead for corporate investment strategy & infrastructure planning. He was also previously the leader of strategic planning for community services.

Before joining the municipal government, he was a development manager at Windmill Development Group, where he managed the development of several residential, retail, and mixed-use projects. Pickles started his career as a project architect at Busby Perkins + Will.

He holds an MBA from the University of Colorado at Denver, a master’s degree in architecture from the University of Calgary, and a BA from The University of Lethbridge.

“Scott’s broad experience and leadership as an architect, developer, and public servant have led him to become a trusted strategic advisor across Canada, and he’s a perfect fit as we grow our professional services consulting across the country,” Botting said.

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Canadian home prices rise again in December: Teranet



home prices

By Julie Gordon

OTTAWA (Reuters) – Canadian home prices rose 0.6% in December from November, the strongest increase for a December since 2009, led by gains in Victoria, Halifax and Ottawa-Gatineau, data showed on Wednesday.

The Teranet-National Bank Composite House Price Index, which tracks data collected from public land registries to measure changes for repeat sales of single-family homes, showed price gains in 10 of the 11 major metropolitan markets.

Prices rose 1.3% in Victoria, 1.2% in Halifax and 1.2% in the national capital region of Ottawa-Gatineau. The index was down 1.1% in Quebec City, the first major market to show a decline in four months.

On an annual basis, the index was up 9.4% in December, the fifth consecutive acceleration and the strongest 12-month gain since November 2017.

Ottawa-Gatineau led year-over-year gains, up 19.7% from December 2019, followed by Halifax at 16.3% and Hamilton at 15.1%. Calgary home prices are down 1.5% on the year.


(Reporting by Julie Gordon in Ottawa; Editing by Mark Heinrich)

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