An eight-storey office building being constructed at Ottawa/Gatineau’s highly sustainable Zibi development will have the federal government as its dominant tenant. (Courtesy Dream)
The ongoing pandemic, a quest to green its real estate footprint and a portfolio of buildings nearing the end of their useful lifespans will lead to a major transformation of the federal government’s real estate footprint during the next couple of decades.
While many of these changes had already started well before the pandemic, Dery said the effects of COVID-19 have accelerated some of the transformations, and the government’s owned-building portfolio isn’t getting any younger. Decisions on its future are becoming more pressing.
The feds do own a significant portion of the 75 million square feet of space they occupy. Of that portfolio, about 38 million square feet is in Ottawa, Gatineau and the National Capital Region (NCR), and 18 million square feet is leased from private owners.
Dery and PSPC work with 102 departments and agencies which employ about 240,000 people, just over half of them in the NCR.
Any shift in strategy will have wide-reaching implications for commercial real estate owners and operators, from those now leasing space to the feds, to companies wanting to sign government agencies as future tenants, and others hoping to buy aging assets for redevelopments.
“I think what you will see in the next few years is the Government of Canada disposing of large, old high-GHG-emission assets and replacing those assets by either new space that is leased, that is carbon neutral, or old space that is modernized and carbon neutral,” Dery told the CRE executives attending the online interview conducted by Nathan Smith, senior vice-president at the Cushman & Wakefield Ottawa office.
L’Esplanade Laurier could be sold
He offered the example of L’Esplanade Laurier, a complex including two 23-storey office towers connected by a podium, with three levels of underground parking in downtown Ottawa.
“I can see L’Esplanade Laurier in the next four, five or six years being on the market for the private sector either to redevelop it into apartments/condominiums, or redevelop it for office space, a hotel, whatever the private sector and the city will need at the time,” Dery said.
“These large assets that are at the end of their useful lives, we are going to be looking to dispose of them.”
The message was clear for firms looking to do business with the government, which has committed to reducing its greenhouse gas emissions by a minimum of 40 per cent by 2030. Real estate will be a major contributor.
“A lot of our inventory is old . . . it’s significant GHG emissions. So we are really looking for the next inventory, where we are going, to make these buildings, either leased or old, carbon neutral. It’s quite important to us,” Dery said.
“In 2030, 75 per cent of our lease(s) will have to be carbon neutral.”
As for how much space the government will occupy, Dery said current projections are to continue down the path to cut 30 per cent of its footprint.
Feds remain committed to smaller footprint
“Our portfolio plan says that over the next 25 years, we are thinking about reducing our footprint by 30 per cent or more depending on the outcome of COVID. It might be accelerated, but it’s not something that is going to be done overnight.”
Smith noted, however, if the government does shed aging real estate in favour of leasing newer, more environmentally friendly space, that could actually offer an opportunity for the CRE sector.
“When we talk about a 30 per cent reduction in your space over a 25-year horizon, people in the room would start to get nervous. Is public works going to significantly downsize their lease portfolio?” Smith asked.
“I would say it’s probably an opportunity for growth in your lease portfolio as you exit some of these Crown-owned assets.”
Dery left all options open, but reinforced his earlier comments about greening the portfolio. He wanted the message to be “quite clear” – this is where the opportunity will be.
“I know that really today, none of our lease would meet that (GHG) criteria in Gatineau, Ottawa and (the NCR). So we have an opportunity here.
“If you are a landlord, an owner, an investor, and you want to keep leasing space to the Government of Canada, just think about that. Seventy-five per cent of new leases or renewals in 2030 will have to be carbon neutral.”
The process has already started, with the disposal of several aging federal buildings in the NCR. In 2019, it was announced the feds will lease 158,000 square feet at a new eight-storey office building being constructed at the carbon-neutral Zibi development straddling Ottawa and Gatineau.
The government is also looking to develop a 1.6-million-square-foot office campus on land it owns at 599 Tremblay Rd. in East Ottawa, working with a developer on a land-lease basis.
Return to office and potential vacancy
Dery touched on a number of other points during the wide-ranging, half-hour presentation.
On current lease renewals, he said the government is looking at shorter time frames for properties it renews, but so far it has not made significant space reductions.
“We know that space may be used differently, but we’ll need space. So over the last 18 months, the COVID period, we have approximately renewed 100 leases, totalling 3.2 million square feet in the National Capital Region,” Dery said.
“If it’s going to reduce, it’s going to reduce over time. It’s not something that you turn on a dime.”
On return-to-office, he said government data shows pre-pandemic most public service offices had in-person occupancy of about 60 per cent capacity on a daily basis due to a combination of many factors – hybrid work schedules, staggered working times or shift work, travel, time off, illness, etc.
Current in-person staffing remains well below that level and he said he foresees permanent on-person staffing levels dropping by another 10 per cent or so.
“I could definitely see an increase in that with the work from home, or hybrid model equal to 10 per cent . . . easily 10 per cent.”
Smith put that into perspective, noting vacancy in Ottawa had declined to the six per cent range pre-COVID and is sitting around 10 per cent now with some reabsorption occurring.
“On a market basis, is that three or four per cent? Somewhere in that range, and that is really delivering two or three new buildings into the market at once and letting the market absorb that space,” Smith offered.
“I would suspect the market will be resilient and be able to absorb that vacancy that obviously is coming to us post-COVID.”
Government co-working model
Dery also envisioned the possibility of a government network of workspaces allowing remote workers to access facilities closer to where they live.
Modelled on the co-working office format, he said it could involve a number of departments sharing workspaces.
“You may have a building in a remote location but it doesn’t serve only one department . . . it serves all of the federal public service and it’s that kind of co-working space,” he explained. “We see a take-up on that and interest from multiple departments.
“I think it is going to work well with the hybrid (work schedules): you need to go to the office, there is an office not too far from your house and you reduce the GHG emissions.”
(Bloomberg) — The U.S. Treasury Department will begin developing regulations that could expand reporting requirements for all-cash real estate purchases as part of the Biden administration’s efforts to cut down on global corruption, according to two senior administration officials.
The new rule could force title insurance companies to turn over information about cash purchases funneled through shell companies in additional metropolitan areas, or implement new disclosures for commercial purchases in addition to residential sales, according to the officials, who requested anonymity to detail the effort before it’s formally announced.
The rule-making process is an outgrowth of a new strategy to counter corruption that the administration is expected to unveil on Monday ahead of President Joe Biden’s democracy summit this week. Federal departments and agencies are expected to unveil additional steps as part of the strategy, including the creation of senior anti-corruption jobs across federal departments.
The Pentagon has committed to including risk analysis about possible corruption as it determines the distribution of security assistance to other nations, while other departments are expected to more heavily weigh the issue as they consider foreign humanitarian aide.
But the proposed real-estate rule may have the biggest domestic impact. Currently, title insurance companies are required to identify to the Treasury Department’s Financial Crimes Enforcement Network the persons behind shell companies used in all-cash purchases of residential real estate — but only on homes costing over $300,000, and only in a dozen metropolitan areas.
“Increasing transparency in the real estate sector will curb the ability of corrupt officials and criminals to launder the proceeds of their ill-gotten gains through the U.S. real estate market,” Himamauli Das, Acting Director of Treasury’s Financial Crimes Enforcement Network, said in a statement.
“Addressing this risk will strengthen U.S. national security and help protect the integrity of the U.S. financial system,” Das said.
Officials said the new rule could expand that reporting requirement beyond existing geographic areas — which include cities like New York, Boston, Chicago, Los Angeles and San Francisco — to cover the entire U.S. The regulation could also be written to demand information about those using shell companies to buy commercial real estate.
The goal, administration officials said, was to prevent those who obtained their money through corrupt or illicit acts from parking their gains in U.S. real estate, driving up prices for ordinary consumers. Still, the officials said, they want to develop the new regulations while minimizing the impact on the real estate sector as a whole.
Congress passed legislation this year requiring shell companies with 20 or fewer employees and less than $5 million in annual sales to report ownership information to the Treasury Department. The law has come under fire from small business advocates, who have said the expanded reporting requirements create additional legal costs. The law also includes carve-outs for larger corporations and certain charitable trusts.
The Biden administration is expected to formally unveil the beneficial ownership reporting requirements mandated under that legislation as part of a series of additional regulatory efforts and financial sanctions slated to be announced this week ahead of the democracy summit that begins on Thursday.
Real estate transactions are personal, emotional, and sometimes stressful experiences for many people—and what makes a great REALTOR® is their ability to competently guide clients through these momentous experiences.
REALTORS® are at their best when they’re out working with clients, not sorting through mountains of administrative tasks.
For agents who are driven to provide a truly great experience for their clients, the right brokerage can act as a launching pad for successful transactions. Home Group Realty is equipped with an administrative and marketing team that offers responsive and encompassing service, in-house coaching programs, and a truly collaborative culture among team members.
In an environment like this, skilled agents can thrive and constantly grow. Unburdened by administrative work, their businesses run much more smoothly and they are free to spend more time with their clients.
Home Group Realty, an independent brokerage in the Guelph Junction, is made up of 45 REALTORS® supported by six administrative staff. The tight-knit team are each specialized in their own departments—whether it be checking all the boxes for a last-minute listing, making sure deals are ready for closing day, or helping agents stay connected with their sphere, the team is poised to ensure a smooth experience from start to finish. Education is also a central part of the brokerage’s success—Broker of Record Paul Fitzpatrick provides 1-on-1 coaching to the team, as well as regular training sessions with industry experts and collaborative team meetings, which have proven to be crucial in the last several years, as we all faced both isolation and a rapidly-changing marketplace.
A specialized staff like this is key, as marketing, admin and lead generation tasks typically take up about 60 to 75 percent of an agent’s time and energy, leaving little resources to actually work with clients.
“The bulk of most agents’ time is spent trying to find business and stay on top of all of their paperwork,” explains Fitzpatrick. “The way we’ve set our brokerage up, our admin people do the bulk of that work. We really try to take as much off their plate as possible so that they focus their time on taking care of their clients.”
When the brokerage first opened ten years ago, Fitzpatrick made several strategic decisions. He decided it was going to be a very open concept office. “We don’t have any private agent offices.
That’s on purpose, to create a collaborative environment,” he says. It was also important to him that they offered coaching. There are currently three mentors on his team—senior, very productive agents; they take new and new-to-the-brokerage agents under their wing and guide them through industry best practices.
Particularly in a fast market like the one we’re currently in, real estate marketing can feel a bit like the wild west; the Home Group team maintains a high bar for marketing their listings, even when sellers are on tight timelines. Their team knows that going the extra mile is always worth it, even in a hot seller’s market. They also pride themselves on providing ongoing education and resources, in the form of a weekly blog covering the ever-changing market, exclusive partnerships with local businesses and tradespeople, and even family-friendly community events.
“We’re big on coaching our team to look at everything as a relationship versus transactional,” he says. “Historically, most agents out there are independent contractors. They essentially work for themselves, but they work under a brokerage, whether it’s one of the franchise brands or an independent brokerage like ours.”
In most brokerages, agents are responsible for everything they have to do, whether it’s getting coaching, marketing materials, or customer relationship management software. Home Group Realty provides a set standard for all of those components, so their agents don’t have to keep reinventing the wheel.
Because most agents have to spend so much of their time hunting for business, doing administration and marketing, they tend to become general practitioners—and they can lose sight of the importance of the interpersonal aspect of the work.
“We’ve been coaching our agents that if you’re doing business in a relationship manner, it’s easier to maintain those relationships and grow your business. Business will find you organically; your clients will want to refer the people in their lives to you, because they’ve had such a positive experience dealing with you. The referral business that comes to them is more consistent and allows them to be more productive,” he says. So rather than having agents focus on lead generation, instead they focus on staying in touch with past clients and contacts.
Fitzpatrick would know. He has been in real estate for 35 years—25 of them with a franchise. The brokerage he’s built has a smaller group of agents that are more productive.
“That’s the approach we’ve taken. We don’t want to be the biggest brokerage in terms of headcount. Our goal is to have the most effective and service-oriented agents in the marketplace,” he says.
He worries about the commodification of real estate. Just because most people know at least one REALTOR®, it doesn’t mean they’re all the same and provide the same service.
“If there was one thing I could educate consumers about, it is that they have a responsibility to interview and find the agent that works best for them, because we’re not all the same. Agents offer different levels of service, experience, and qualifications. It’s the same with brokerages,” says Fitzpatrick. “We’re a full-service brokerage and we feel that we offer a consistently higher level of experience for the agents and the clients who choose to work with us.”
Most people move every five to seven years, and the market changes considerably in that timeframe. Even in today’s market, there’s a lot of education that needs to happen with clients before they begin the process of buying or selling. The Home Group team excel at this piece: educating clients on the market, what’s happening with it currently and where they see it going, as well as explaining how the whole process works.
A real estate transaction is ranked right up there in terms of the top five stressful life events. Says Fitzpatrick, “We make sure that we make a real estate purchase or sale not just frictionless, but actually enjoyable.”
TORONTO, Dec. 05, 2021 (GLOBE NEWSWIRE) — By thinking “Outside the Box”‘ SAVE MAX INTERNATIONAL has garnered Seven Billion ($7,000,000,000) Dollars in transaction volume during its 11-year history. The Save Max Brand is serviced by a team of 550+ Realtors® plus intricately joined through a Franchise network of over 50+ offices across Canada and India.
Our Investors have been looking to Save Max International management to actively strengthen their financial portfolios through investing in the Commercial Real Estate sector.
Save Max International has responded to this ‘Call to Action’ by establishing a dedicated Commercial Real Estate Division. This Division will be headed by Mr. Lawrence Taylor, an experienced Commercial Real Estate Broker with over 35-years of first-hand commercial real estate experience covering a wide array of commercial property situations such as Industrial; Office; Retail/ Store-Front Retail Franchise; Mixed-Use and Single-Use Office Buildings; Multi-residential Investment; Waterfront Properties; and Vacant Land.
Mr. Taylor said that he will be focusing on strengthening Save Max client’s investment portfolios by bringing ‘properties of interest’ that targets the strategic growth of the clients’ portfolio.
Mr. Raman Dua, the CEO, Save Max International said, “The time is right to launch the Save Max Commercial Division and segue into the Canadian commercial real estate market. What we’ve seen in the last seven years is incredible growth in the Residential Market and Investors would like to diversify their Real Estate Portfolios and add Commercial Properties and Businesses to strengthen their portfolios by having support from a team of professional and experienced commercial Realtors® who are backed by a Strong Real Estate Platform.”
Save Max Commercial as it is to be called, promises to be one of Canada’s largest dedicated commercial divisions servicing the potential investors and members of the business community wanting to seize the opportunity to Buy, Sell, and/or Invest in Commercial Real Estate using a Strong and Experienced Dedicated Team of commercial practitioners who service this specialized client base through the Save Max Franchisee network.
“We at Save Max are convinced that the positive turn in the economic cycle will be Supportive of our belief to capture significant market share in the under-serviced Canadian Commercial Real Estate industry,” mentioned Mr. Dua in his interview with the media.
About Save Max:
Save Max is one of the fastest growing companies and opened its first real estate office in Brampton in 2010. From making history in the field of real estate by achieving $100 million sales volume within 16 months of inception to achieving +$7 billion sales volume until today, Save Max has always strived to stay true to its beliefs to deliver an exceptional real estate experience to all its valued clients.
Save Max has had the opportunity to serve its clients and provide incomparable real estate services for past 11 years with a strong & Professional Team of 550+ Realtors® and will keep doing the same in the future.
MEDIA CONTACTS Loveleen Dhiman Director of Marketing, Save Max Real Estate 905.459.7900 Ext.122 | firstname.lastname@example.org
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