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Hungerford sells Icon Business Park in Calgary – Real Estate News EXchange

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The Icon Business Park in Calgary. (Courtesy Hungerford Properties)

Hungerford Properties has sold the 46-acre Icon Business Park in Calgary, which it bought in 2013 and repositioned from a vacant single-use property to multi-tenant facility that is 98 per cent occupied.

Michael Hungerford, partner in Hungerford Properties, confirmed the sale of the property to RENX late Wednesday. Due to confidentiality articles in the transaction, he did not reveal the buyer of the business park nor the sale price.

The Icon Business Park includes a 762,000-square-foot industrial facility in southeast Calgary that has about 11.5 per cent of its total space reserved for office use.

“Today as I look back, the plan that we had to execute on, we’ve completed. So the time had come for us to hand it off to another owner with a different plan. The value creation that we undertook is complete and that led us to the decision to sell,” said Hungerford. 

“I’m reluctant to talk about the particulars of the deal because there’s confidentiality.

“Out of respect for confidentiality with the purchaser, I’m not at liberty to talk about it. It’s a well-respected institutional buyer.”

In a release Thursday morning, Equium Group announced it will be the new property manager of Icon. Calgary-based Equium’s services include property management, development, construction, marketing, leasing and property investment. It specializes in commercial, condominium and residential real estate services.

Equium Group’s portfolio under management is valued in excess of $1.1 billion.

History of Icon Business Park

Hungerford Properties bought the site and building from manufacturer Haworth. The building was originally built in 1999 by Calgary entrepreneur Mogans Smed.

The facility consists of about 85,000 square feet of office space. The warehouse portion is another 676,000 square feet.

The Haworth building was originally put on the Calgary market for sale in the spring of 2010. The Haworth manufacturing facility was listed for sale as the U.S.-based company wound down production in the city.

Although the original list price was not revealed, the property was assessed for $60 million at the time and was being marketed internationally.

Smed International operated in Calgary from 1982 to 2000, at which time the facility was purchased by Haworth.

Haworth, which designs and manufactures office furniture and workspaces, is headquartered in Holland, Mich.

In August 2009, the manufacturer announced it was cutting about 600 jobs in Calgary as it was consolidating its Calgary manufacturing operations to west Michigan.

Hungerford’s redevelopment

IMAGE: Michael Hungerford, a partner in Hungerford Properties. (Courtesy Hungerford Properties)

Michael Hungerford, a partner in Hungerford Properties. (Courtesy Hungerford Properties)

When Hungerford bought the property, it undertook a redevelopment that included new building systems, new exterior access points, improved landscaping, more than 60 new loading doors, new fitness amenities, new office storefronts and interior tenant improvements.

“The plan was to buy the property, invest in it and reposition it and bring in business. Stabilize it with good long-term tenants,” said Hungerford. “As we looked at where we sit now, we achieved all that and we said it makes sense for another, in this case, institution to take ownership of it.

“Our vision was to transform this underutilized industrial space in Calgary into a bustling industrial park and we are thrilled to see this vision come of life.”

Today, Icon has national and international tenants including:

* CHEP, a global supply-chain logistics services group;

* Robert Thibert Inc., an international automotive parts distributor;

* ABB Inc., a Fortune Global 500 robotics, power, heavy electrical equipment and automation technology provider;

* Rolf C. Hagen Inc, the world’s largest privately owned pet products manufacturer and distributor;

* and The Data Group, one of Alberta’s largest single graphics communications companies.

Most recently, Icon leased 42,700 square feet of office space to Energy Safety Canada, Canada’s oil and gas safety association.

That tenancy brought the building to 98 per cent occupancy and represented one of the top-10 suburban relocation deals in the Calgary office market since 2015, according to Colliers International.

“Hungerford brought their expertise, creativity, commitment and vision to Icon and as a result, it has performed well,” said Paul Marsden, executive VP and partner at Colliers.

“Icon is a quality asset in a great location and, in addition to providing quality service to its tenants, Hungerford has brought new life to the area through these additional businesses, their employees and clients.”

Calgary industrial attractive

Hungerford said the company sees Calgary as an attractive centre for a diversified portfolio as part of its Canadian strategy – particularly its industrial strategy.

“That’s what we’ve certainly invested in, in the Calgary market. We continue to hold that view,” he told RENX.

“So, while we might be a seller at this particular asset, we’re also a buyer in others and have bought and have been active buying in the last couple of years in Calgary. It’s a long-term view in the market.

“As we look ahead, we like the regional story of Calgary industrial and the value for tenants in the market. We expect to be participating in the industrial market going forward.”

Beside the Icon Business Park, the company currently is completing construction of the Icon Retail Centre which has about half of its space committed to leases. Construction will be complete in 2021.

The Icon Retail Centre includes two strip buildings on four acres of land comprising about 14,000 square feet. It is anchored by a Petro-Canada gas station.

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Real eState

What Is the Canada Mortgage and Housing Corporation (CMHC)

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The Canada Mortgage and Housing Corporation (CMHC) is a Canadian Crown Corporation that serves as the national housing agency of Canada and provides mortgage loans to prospective buyers, particularly those in need.

Understanding the Canada Mortgage and Housing Corporation (CMHC)

The Canada Mortgage and Housing Corporation (CMHC) serves as the national housing agency of Canada. CMHC is a state-owned enterprise, or a Crown corporation, that provides a range of services for home buyers, the government, and the housing industry.

CMHC’s stated mission is to “promote housing affordability and choice; to facilitate access to, and competition and efficiency in the provision of, housing finance; to protect the availability of adequate funding for housing, and generally to contribute to the well-being of the housing sector.”1

A primary focus of CMHC is to provide federal funding for Canadian housing programs, particularly to buyers with demonstrated needs. CMHC, headquartered in Ottawa, provides many additional services to renters and home buyers, including mortgage insurance and financial assistance programs. CMHC acts as an information hub for consumers, providing information on renting, financial planning, home buying, and mortgage management.

CMHC also provides mortgage loan insurance for public and private housing organizations and facilitates affordable, accessible, and adaptable housing in Canada.2 Additionally, CMHC provides financial assistance and housing programs to First Nations and Indigenous communities in Canada.3

Professionals and Consumers

CMHC provides services to both professionals and consumers. For professionals, CMHC aims to work in collaboration with different groups to provide affordable housing. Services include project funding and mortgage financing, providing information to understand Canada’s housing market, innovation and leadership networks to access funding and talent to spur housing innovation and increase supply, and providing speakers and hosting events for the industry.4

For consumers, CMHC seeks to provide all the tools an individual would need to either buy a home or rent a home and a variety of information and assistance for current homeowners, such as managing a mortgage, services for seniors to age in place, and financial hardship assistance.56

For financial hardship and mortgage assistance, CMHC provides tools that include payment deferrals, extending the repayment period, adding missed payments to the mortgage balance, moving from a variable-rate to a fixed-rate mortgage, and other special payment arrangements.7

Canada Mortgage and Housing Corporation (CMHC) and the National Housing Strategy

In November 2017, the Canadian government announced the National Housing Strategy.8 Rooted in the idea that housing is a human right, this 10-year, $70 billion project will largely be administered by CMHC, although some services and deliverables will be provided by third-party contractors and other Canadian federal agencies.9

Strategic initiatives of the National Housing Strategy include:

  • Building new affordable housing and renewing existing affordable housing stock
  • Providing technical assistance, tools, and resources to build capacity in the community housing sector and funds to support local organizations
  • Supporting research, capacity-building, excellence, and innovation in housing research10

History of the Canada Mortgage and Housing Corporation (CMHC)

CMHC was established in 1946 as the Central Mortgage and Housing Corporation by the federal government in Canada with the primary mission of administering the National Housing Act and the Home Improvement Loans Guarantee Act and facilitating discounts to mortgage companies. Initially, CMHC began by providing housing to returning Canadian war veterans, and toward the end of the 1940s, CMHC began to administer a program providing low-income housing across Canada.11

In 1947, CMHC was responsible for opening Regent Park, a large low-income housing project, and Toronto’s first urban renewal project. By the 1960s, CMHC introduced co-op housing and multi-unit apartment buildings throughout Canada.11

In 1979, the Central Mortgage and Housing Corporation changed its name to the Canada Mortgage and Housing Corporation

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Real eState

Canadian home price gains accelerate again in May

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Canadian home prices accelerated again in May from the previous month, posting the largest monthly rise in the history of the Teranet-National Bank Composite House Price Index, data showed on Thursday.

The index, which tracks repeat sales of single-family homes in 11 major Canadian markets, rose 2.8% on the month in May, led by strong month-over-month gains in the Ottawa-Gatineau capital region, in Halifax, Nova Scotia, and in Hamilton, Ontario.

“It was a third consecutive month in which all 11 markets of the composite index were up from the month before,” said Daren King, an economist at National Bank of Canada, in a note.

On an annual basis, the Teranet index was up 13.7% from a year earlier, the 10th consecutive acceleration and the strongest 12-month gain since July 2017.

Halifax led the year-over-year gains, up 29.9%, followed by Hamilton at 25.5% and Ottawa-Gatineau at 22.8%.

Housing price gains in smaller cities outside Toronto and its immediate suburbs again outpaced the major urban centers, with Barrie, Ontario leading the pack, up 31.4%.

On a month-over-month basis, prices rose 4.9% in Ottawa-Gatineau, 4.3% in Halifax and 3.7% in Hamilton.

The Teranet index measures price gains based on the change between the two most recent sales of properties that have been sold at least twice.

Canada‘s average home selling price, meanwhile, fell 1.1% in May from April, Canadian Real Estate Association data showed on Tuesday, but jumped 38.4% from May 2020.

 

(Reporting by Julie Gordon in Ottawa; Editing by Christopher Cushing)

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Economy

Bank of Canada seeing signs of cooling in hot housing market

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The Bank of Canada is starting to see signs that the country’s red hot housing market is cooling down, although a return to a normality will take time, Governor Tiff Macklem said on Wednesday.

The sector surged in late 2020 and early 2021, with home prices escalating sharply amid investor activity and fear of missing out. The national average selling price fell 1.1% in May from April but was still up 38.4% from May 2020.

“You are starting to see some early signs of some slowing in the housing market. We are expecting supply to improve and demand to slow down, so we are expecting the housing market to come into better balance,” Macklem said.

“But we do think it is going to take some time and it is something that we are watching closely,” he told the Canadian Senate’s banking committee.

Macklem reiterated that the central bank saw evidence people were buying houses with a view to selling them for a profit and said recent price jumps were not sustainable.

“Interest rates are unusually low, which means eventually there’s more scope for them to go up,” he said.

Last year, the central bank slashed its key interest rate to a record-low 0.25% and Macklem reiterated it would stay there at least until economic slack had been fully absorbed, which should be some time in the second half of 2022.

“The economic recovery is making good progress … (but) a complete recovery will still take some time. The third wave of the virus has been a setback,” he said.

The bank has seen some choppiness in growth in the second quarter of 2021 following a sharp economic recovery from the COVID-19 pandemic at the start of the year, he added.

(Reporting by David Ljunggren and Julie Gordon; Editing by Peter Cooney and Richard Pullin)

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