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How Digital Transformation Will Impact The Commercial Real Estate Market In 2021 – Forbes

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The Biden administration has not outlined its plans for the environmental policy for commercial real estate yet, but the 46th president of the United States has pledged to reduce the carbon footprint of US buildings by 50% by 2035.

Carbon Lighthouse, a startup with $67 million in funding, uses artificial intelligence (AI) to lower building emissions in CRE. Their new Efficiency Production service allows building owners to monitor and measure carbon emissions, which they believe is crucial for outdated buildings falling behind in meeting new climate goals.

But in the 2021 Deloitte Commercial Real Estate Outlook report, the data shows that Covid-19 has made a systemic impact on the CRE industry for 2021.

John D’Angelo, U.S. Real Estate Leader at Deloitte Consulting, says the impact of the Covid-19 pandemic on commercial real estate (CRE) is rapidly accelerating the use of technology.

“As CRE companies work to understand and respond to emerging behavior patterns, create safe building spaces, improve operational efficiency and identify asset- and portfolio-level risks and opportunities,” said D’Angelo. “We see the rise of digital twins, direct digital engagement, data and analytics, robotic press automation and digital maturity to drive CRE in 2021 and beyond.”

DAngelo believes that data-driven decision making will continue to mature as demand and behavior patterns change rapidly and CRE companies work to sense and respond to the opportunities and risks that these changes present. 

“Trying to do this by instinct or gut simply doesn’t work effectively in this environment,” said D’Angelo. “Also, when you look at the adoption of robotic process automation, the CRE industry has been notoriously slow in leveraging technology. Because CRE companies are now working to improve operational efficiency and reduce costs, RPA will play a role in overall digital transformation efforts.”

Jim Berry, Vice Chairman and US Real Estate Leader at Deloitte, says the pandemic has created unique challenges for the real estate industry. 

“It is important to recognize that while the pandemic served as an accelerant, it did not change the trends that were already occurring,” said Berry. “In previous CRE Outlooks, we had pointed to a changing dynamic and need for the industry to seize better opportunities to utilize new and emerging technologies and data analytics to drive a different value proposition that focuses on tenant and end-user experience.

“Today, we continue to see – and what you can expect down the road – is a disruption in the value proposition of CRE,” said Berry. “As memorable as 2020 events have been, 2021 and beyond will be telling, as certain CRE companies begin to step into opportunities to better align their operations with those of the occupier and end-user.”

Berry believes that those actions will usher in a greater emphasis on CRE’s developing and implementing a structured digital transformation roadmap for business and tenant experience for a long term competitive edge.

“We will see CRE’s reevaluating the value proposition of properties by emphasizing experiential value and repositioning assets such as transforming the talent function – job roles, processes, and culture – to prepare for the future of work and balancing business recovery, seizing new opportunities and tenant and employee engagement,” said Berry. “This will likely require a combination of elements, including breaking down functional silos, enhancing leadership and organizational agility, increasing collaboration and engaging in transparent and ethical decision-making.”

Berry says that while the pandemic was an eye-opener, Deloitte sees it as an accelerant of existing trends.

“We see “purpose, location and analytics” as the continued evolution of the value proposition of CRE, said Berry. “It is telling that 56% of CRE respondents to our 2021 CRE Outlook survey said that the pandemic exposed shortcomings in their organizations’ digital capabilities, and only 40% of respondents said their company has a defined digital transformation roadmap.”

“Leaders will be required to walk the tightrope between managing costs and investing in the future,” added Berry. “The decisions made during 2021 will have impacts on those who begin to differentiate themselves and drive this different value proposition.”

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Greater Toronto home sales jump in October after Bank of Canada rate cuts: board

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TORONTO – The Toronto Regional Real Estate Board says home sales in October surged as buyers continued moving off the sidelines amid lower interest rates.

The board said 6,658 homes changed hands last month in the Greater Toronto Area, up 44.4 per cent compared with 4,611 in the same month last year. Sales were up 14 per cent from September on a seasonally adjusted basis.

The average selling price was up 1.1 per cent compared with a year earlier at $1,135,215. The composite benchmark price, meant to represent the typical home, was down 3.3 per cent year-over-year.

“While we are still early in the Bank of Canada’s rate cutting cycle, it definitely does appear that an increasing number of buyers moved off the sidelines and back into the marketplace in October,” said TRREB president Jennifer Pearce in a news release.

“The positive affordability picture brought about by lower borrowing costs and relatively flat home prices prompted this improvement in market activity.”

The Bank of Canada has slashed its key interest rate four times since June, including a half-percentage point cut on Oct. 23. The rate now stands at 3.75 per cent, down from the high of five per cent that deterred many would-be buyers from the housing market.

New listings last month totalled 15,328, up 4.3 per cent from a year earlier.

In the City of Toronto, there were 2,509 sales last month, a 37.6 per cent jump from October 2023. Throughout the rest of the GTA, home sales rose 48.9 per cent to 4,149.

The sales uptick is encouraging, said Cameron Forbes, general manager and broker for Re/Max Realtron Realty Inc., who added the figures for October were stronger than he anticipated.

“I thought they’d be up for sure, but not necessarily that much,” said Forbes.

“Obviously, the 50 basis points was certainly a great move in the right direction. I just thought it would take more to get things going.”

He said it shows confidence in the market is returning faster than expected, especially among existing homeowners looking for a new property.

“The average consumer who’s employed and may have been able to get some increases in their wages over the last little bit to make up some ground with inflation, I think they’re confident, so they’re looking in the market.

“The conditions are nice because you’ve got a little more time, you’ve got more choice, you’ve got fewer other buyers to compete against.”

All property types saw more sales in October compared with a year ago throughout the GTA.

Townhouses led the surge with 56.8 per cent more sales, followed by detached homes at 46.6 per cent and semi-detached homes at 44 per cent. There were 33.4 per cent more condos that changed hands year-over-year.

“Market conditions did tighten in October, but there is still a lot of inventory and therefore choice for homebuyers,” said TRREB chief market analyst Jason Mercer.

“This choice will keep home price growth moderate over the next few months. However, as inventory is absorbed and home construction continues to lag population growth, selling price growth will accelerate, likely as we move through the spring of 2025.”

This report by The Canadian Press was first published Nov. 6, 2024.

The Canadian Press. All rights reserved.

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Homelessness: Tiny home village to open next week in Halifax suburb

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HALIFAX – A village of tiny homes is set to open next month in a Halifax suburb, the latest project by the provincial government to address homelessness.

Located in Lower Sackville, N.S., the tiny home community will house up to 34 people when the first 26 units open Nov. 4.

Another 35 people are scheduled to move in when construction on another 29 units should be complete in December, under a partnership between the province, the Halifax Regional Municipality, United Way Halifax, The Shaw Group and Dexter Construction.

The province invested $9.4 million to build the village and will contribute $935,000 annually for operating costs.

Residents have been chosen from a list of people experiencing homelessness maintained by the Affordable Housing Association of Nova Scotia.

They will pay rent that is tied to their income for a unit that is fully furnished with a private bathroom, shower and a kitchen equipped with a cooktop, small fridge and microwave.

The Atlantic Community Shelters Society will also provide support to residents, ranging from counselling and mental health supports to employment and educational services.

This report by The Canadian Press was first published Oct. 24, 2024.

The Canadian Press. All rights reserved.

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Here are some facts about British Columbia’s housing market

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Housing affordability is a key issue in the provincial election campaign in British Columbia, particularly in major centres.

Here are some statistics about housing in B.C. from the Canada Mortgage and Housing Corporation’s 2024 Rental Market Report, issued in January, and the B.C. Real Estate Association’s August 2024 report.

Average residential home price in B.C.: $938,500

Average price in greater Vancouver (2024 year to date): $1,304,438

Average price in greater Victoria (2024 year to date): $979,103

Average price in the Okanagan (2024 year to date): $748,015

Average two-bedroom purpose-built rental in Vancouver: $2,181

Average two-bedroom purpose-built rental in Victoria: $1,839

Average two-bedroom purpose-built rental in Canada: $1,359

Rental vacancy rate in Vancouver: 0.9 per cent

How much more do new renters in Vancouver pay compared with renters who have occupied their home for at least a year: 27 per cent

This report by The Canadian Press was first published Oct. 17, 2024.

The Canadian Press. All rights reserved.

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