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Lyft, Meta, Salesforce And Other Tech Companies Are Downsizing Their Real Estate—Why This Is Good News For Remote Workers

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Large tech companies, including Lyft, Meta, Salesforce and others, are downscaling their real estate holdings in response to market conditions. They are stalling construction, attempting to extricate themselves from exorbitant leases or trying to sublet space and unloading millions of square feet of office space in prime locations, including San Francisco, Silicon Valley, New York, Austin and other locations, the Wall Street Journal reported on Tuesday.

The new austere economy, caused by 40-year, record-high inflation rates and the Federal Reserve Bank aggressively hiking interest rates, has negatively impacted the bottom line for businesses.

Companies are cutting costs to reign in expenses. Unfortunately, one of the most substantial expenses is the high compensation paid to skilled, white-collar tech professionals, such as software engineers. With fewer workers, due to hiring freezes and the downsizing of human resources and recruiting professionals, there is less need for corporate leases in expensive cities and purchases made by tech companies over the pandemic.

One year ago at this time, there was a war for talent. Now, more than 120,000 tech workers have been laid off, according to Layoffs.fyi. The beneficiaries of this move will be the people who want to work remotely, or on a hybrid basis for one or two days a week.

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This new trend will gain momentum as tech and other companies scramble to tighten their budget and save money. The pandemic accelerated the move to conduct business online. The share prices of tech stocks skyrocketed. The “everything bubble” burst, and it’s been a brutal year for Silicon Valley.

Those Who Want To Work At Home Will Be Happy

In hindsight, the tech giants and venture capital-backed startups were too enthusiastic in their belief that the migration to a digital economy would last forever. The companies aggressively hired to win the battle for talent. As the economy contracts and the tech sector continues to lose its luster, the bets made by tech leadership to invest in real estate space were a mistake.

The winners will be those who want to work remotely. While many companies, such as Apple and Wall Street investment banks, pushed for people to return to the office, there was pushback from workers. They’d point to the fact that working from home was successful over the last two-plus years. People were more productive without commuting to and from the office for two to three hours round trip. They tended to put in more hours during the week, including weekends, as there was little else to do.

Money will be saved as companies let go of their office leases and employees work out of their homes or from wherever they desire. With inflation raging, remote workers will save on money by not having to purchase expensive bus or train tickets, or spend a small fortune on gas and the wear and tear of their vehicles to commute from the suburbs to New York or other major cities. With fewer people commuting long distances, it will help improve the environment. There won’t be a need to purchase new office attire and spend an exorbitant amount on breakfast and lunch in high-cost cities.

Working from home offers a better work-life balance. You won’t miss your children’s sports games, recitals and other special school events. There will be time to take care of elderly parents and no need to pay the exorbitant cost of child care.

The Stock Price Plunges And Layoffs Show Tech’s Pain

Salesforce confirmed last week that it has laid off under 1,000 of its workers. Up to 2,500 employees could eventually be affected by the job cuts, according to Protocol. Meta CEO Mark Zuckerberg laid off 11,000 people, representing around 13% of his workforce. Elon Musk summarily dispatched thousands of Twitter employees. Stripe, Snap, Apple, Microsoft, Intel, Lyft, Opendoor and an array of other tech companies have recently enacted layoffs or hiring freezes.

Apple’s share price dropped about 16%. This plunge represents one of the best-performing stocks. Meta, Amazon, Netflix and Alphabet performed worse, with Meta imploding around 66% this year. Microsoft, Nvidia and Tesla plunged between 25% and 45%. The Nasdaq composite, which is an index with a large representation of tech companies, fell about 30%, CNBC reported. As interest rates rise to combat inflation, tech and other sectors are in for a long, painful slog.

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More tall towers being proposed, approved and completed in Vancouver, Burnaby, Surrey and Coquitlam – Vancouver Sun

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There are 20 development projects with towers over 45 storeys that are selling condo units, under construction or near completion.

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Developers are seeking approval for two 50-storey towers in the same block where Surrey city council recently gave the greenlight for what will be its tallest building at 67 storeys.

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And there are several proposals for more tall towers like this in Surrey that haven’t been made public yet.

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“There are ones of similar heights that are moving forward,” said Chris Dikeakos of Vancouver-based Chris Dikeakos Architects Inc. “And it’s not just in Surrey. Burnaby is another municipality. Coquitlam is starting to get applications for some much taller towers.”

He added that with increased land and construction costs, developers are motivated to use all the density they can get and build taller towers. However, there is also a point where it stops making sense to push higher “because things like the cost of structural systems increase as you go higher.”

Across Metro Vancouver, there are more than 20 towers over 45 storeys that have been approved by municipal governments, according to data from Zonda Urban market analyst Justin Lee. More than half of these are in Burnaby. Five are in Coquitlam and Port Moody, while Downtown Vancouver, New Westminster and Surrey have one each.

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Some are under construction, like the first phase of Onni Development’s Gilmore Place in Burnaby with its 64-storey towers. Others are closer to completion like Westbank’s The Butterfly at 57 storeys in the West End.

After these, there are 40 more tall-tower projects that have been publicly presented to city councils and are in some stage of seeking approval. Most are in Burnaby and Surrey, followed by Downtown Vancouver and Coquitlam.

“We’ll see if economic conditions allow for them to be built,” said Dikeakos, whose firm is working on the new tall tower approved in Surrey and other projects.

In late 2019, Pinnacle International Development made a proposal for a site near the Lougheed SkyTrain Station. It had three towers including one that would be 80 storeys and 250 metres tall. They would be the tallest buildings in Western Canada. Some more details were presented to Burnaby city council in May 2022 for towers of 80, 76 and 73 storeys, but the project has not progressed further with the city.

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Bosa Properties initially proposed a project with two 70-storey towers on Kingsway near the Metrotown SkyTrain Station, but there haven’t been any further details since it was initially presented to Burnaby council in 2021. In December 2022, Bosa sold the site to Keltic Canada Development for more than $100 million.

Metro King by Anthem Properties is a proposal for a 66-storey tower between Kingsway and Hazel streets across from Metrotown that is nearing a final decision by the City of Burnaby.

This pipeline of potential projects is happening as cities have focused on adding density to sites near transit stations and town centres, according to Dikeakos.

“The taller buildings in these types of developments that you are going to be seeing tend to be real, mixed-use ones, meaning they have a commercial base with significant office or hotel use where the first 15 to 20 storeys are commercial even before you get to the residential portion,” he said.

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His firm in recent years completed Station Square at Metrotown, which has five towers with the tallest being 54 storeys.

“One of the interesting changes that we’re seeing is that because these developments are being done near transit sites, cities are requiring less parking,” said Dikeakos. “If we had to do the same amount of parking required a few years ago, the depth of these excavations would make them completely unfeasible. (When) we’re not required to do as much parking, it allows us to do these taller towers and still make some financial sense.”

Even though developers are motivated to deal with increasing land and construction costs by building higher, there is a turning point. It will obviously be different for each project, but Dikeakos said that for the Station Square project, it was somewhere at the 52- to 55-storey height.

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“That was the maximum we wanted to go in that particular case because things like the cost of structural systems increase as you go higher. The number of elevators potentially increases. Window-washing systems become more complex. There are all sorts of things that actually do add to the overall cost of these taller buildings.”

jlee-young@postmedia.com

  1. Starting in November 2020, companies, trusts, partnership and others who purchased property in B.C., where property ownership was not clear, had to file reports to reveal the true or beneficial owners.

    B.C. property ownership registry in full effect, but will take years to ‘mature’


  2. Deadline to declare your property under Vancouver’s empty homes tax is Feb. 2


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Through Parvis, Real Estate Investment Opportunities Abound – Storeys

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As we collectively ride the ongoing inflation rollercoaster, it’s only natural — and wise — to consider how you can make your financial foundation as stable as possible.

For many, investing is a preferred way to protect and grow wealth. And in the last several years, Canadian real estate has seen an unprecedented boom in interest from all angles, including the investment realm.

Today, investors are increasingly keen to stake claim on real estate assets as a means of diversifying their portfolio. Understandably so, considering the Canadian market’s demonstrated fundamentals of low supply and high demand lend themselves to steadily increasing value.

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Making the sourcing and securing of such assets easy, Parvis Invest – a Canadian marketplace for real estate investing – offers a portfolio of curated, high-quality real estate developments to its investors through a user-friendly platform.

READ: Money Matters: This Online Marketplace Makes Real Estate Investment Easy

Parvis’ selection of real estate products is strategically built via direct collaboration with developers and property owners, plus team insights, analytics, and industry data. Opportunities also undergo vetting by the company’s Investment Committee, which has insight and experience from the worlds of real estate development, private equity, tech, law, and finance.

Capturing the essence of Parvis’ curated offerings, a new 24-storey condo development called Centra invites investors to get in on the ground floor of something special in Surrey, BC. The building’s developer, Everest Group, boasts a team with more than 150 years of combined experience in international real estate and construction management, with more than 30 successfully completed projects and over 1,000 acres of land developed.

The project, five months into its 24-month building schedule, brings 164 residential condominiums — plus three townhomes and two levels of underground parking — to one of Canada’s fastest-growing cities (and the fastest-growing in BC; Surrey’s population is expected to more-than double in the next decade).

Located at 13868 101 Ave, the building is near a host of restaurants and shops, as well as Simon Fraser University, Memorial Hospital, and Skytrain access. Downtown Vancouver is just a short drive away, serving spots to tuck into for a bite, a live show, or an afternoon of shopping. And at the end of the day, residents can comfortably return to their lush, green, and calm family-friendly neighborhood.

For investors, Centra’s risk profile is classified as moderate to high level of risk, because it’s a new construction building. Two factors that help de-risk this project, relative to comparable new developments, are that over 80% of its units are pre-sold, and Parvis investors will receive a preferential equity return of 17.5% IRR. The Parvis equity return is in priority to the remaining equity invested.

Even further assurance is provided by way of a corporate guarantee by Everest, and personal guarantees by its directors. The condominium’s minimum investment is $20,000, with a total equity raise of $18,500,000.

By spring 2023, Parvis will also introduce its secondary market, which will give investors the chance to liquidate and sell their investment ahead of time, should they wish — big moves, for a traditionally illiquid asset class. For Centra, there are no transaction or management fees for investors to pay, and in the case one chooses to sell on Parvis’ secondary market, the seller only pays 1% commission.

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Centra (Parvis)

Also currently available for investment is a fully-tenanted residential building in Kitchener, Ontario, classified under the Parvis Core Plus Strategy, which typically features a longer investment horizon with a low to moderate risk profile for investors, and a targeted IRR of 9% to 16%. The building is located at 199 Ahrens Street, is home to 16 units ranging from one to three bedrooms, and was purchased by its developer below market value.

Renovations to the interiors by Mike Beer Investments, plus repositioning of the building and property, promise to increase its annual rental income by nearly double — and the financing for these upgrades is already in place.

This building’s minimum investment is $10,000, with a five-year investment term, and an average projected annual return of 16%. The product’s total equity offering is $1,700,000.

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Kitchener (Parvis)

Within walking distance of several parks, cafes, restaurants, and shops, the address is perfectly situated just north of downtown Kitchener’s main strip. And with GO Transit also only steps away, residents have day trips at their fingertips.

Like with Centra, there are no transaction or management fees related to this building for investors, and in the case one chooses to sell on Parvis’ secondary market when the option opens up, that 1% seller commission comes into play.

It’s no question that 2022 was filled with trials, and ended with uncertainty for many sectors. But through marked financial growth, multiple instances of professional recognition, and licensing approvals secured, Parvis came out of last year an anomaly: exceptionally grounded, stable, and strong.

If these are the attributes you want to see in your own investment portfolio, Parvis can help you get there.


This article was produced in partnership with STOREYS Custom Studio.

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Historic Muskoka Resort Hits the Market for $12M – Storeys

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Written By
Erin Nicole Davis

An iconic Muskoka resort has just hit cottage country’s real estate market. 

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For those looking for a new business venture in the summertime hot spot, Windermere House has just been listed for $12M.

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Windermere House

The sprawling, long-time landmark sits on Lake Rosseau — one of the “Big Three” Muskoka lakes — and is known for its quintessential Old Muskoka charm mixed with modern luxury and amenities. Beloved by both tourists and local cottagers, the picturesque resort has been synonymous with Muskoka tourism since 1870. 

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Windermere House

Known as ‘The Lady of The Lake,’ this 56-room resort hotel sits in a prime location in the Village of Windermere, overlooking the stunning lake. Offering a dose of timeless charm, its historic features include original stone architecture, a charming veranda, and classic Muskoka-style windows. The hotel features several food and beverage outlets, full-service spa capabilities, and a 3,200 sq. ft. of function space that ranges from a private boardroom to state-of-the-art conference facilities. 

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Windermere House

With quintessential cottage country recreation front and centre, the 6.62-acre resort features a heated outdoor swimming pool, tennis court, sand beach, marina, and golf course. 

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Windermere House

The new owner of the property will have the opportunity to take up residence in Windermere Cottage, the traditional four-bedroom private cottage with a separate entrance from Fife Avenue that can also be rented as an additional resort property. Or, as the listing highlights, there’s also the option to personalize a penthouse “cottage” suite within the hotel. 

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Windermere House

The Muskoka chair-filled property includes three detached staff houses, an older, staggered row-style 10-plex, and ample on-site parking. 

While its price tag isn’t within reach of everyone, considering that most of the sprawling cottages on the lake sell for upwards of $5M — coupled with its inevitable income-generating potential — the property may be considered a steal for someone in the market for a breezy new business venture.

Find the full listing here.

Written By
Erin Nicole Davis

Erin Nicole Davis is a born and raised Toronto writer with a passion for the city and its urban affairs and culture.

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