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Pandemic, oil downturn hitting Calgary's office real estate with one-two punch – BNN

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Sharlene Massie, founder of Calgary-based employment agency About Staffing, made great time on her commute from a nearby suburb earlier this week, reaching the city’s empty downtown core in only 15 minutes. The trip in non-pandemic times would take 45 minutes out of her day – but this shortened commute came at a cost. 

“Where it used to be booming and bustling downtown, it really is empty,” Massie said, adding that March 2020 marked a stark turning point for the city. “That’s when really everything shut down almost permanently. It got colder and drier and emptier, and just stayed there.”

The 2015 downturn in the energy sector sparked the growth in office vacancies, which has continued climbing steadily in Calgary’s downtown area over the past few years.

Then, things got worse. Once the pandemic sent many people to work from their homes early last year and crashed the price of oil into negative territory, the city’s commercial real estate sector was struck by the dual threat. Calgary’s office vacancy rate has nearly doubled since 2015, hitting an all-time high of 28.7 per cent in the third quarter of 2020, according to a report by CBRE.  

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Greg Kwong, CBRE’s regional managing director in Alberta, said it’s too soon to sound the death knell on Calgary office space, but he expects vacancies to worsen under these conditions before they improve.

“Close to 80 per cent of our office space in the downtown core is occupied by energy companies,” Kwong said. “Their top lines are getting killed right now, so they’re scrutinizing every expense line item right now, and two big ones are employees and office space.”

Meanwhile, consolidation in the energy industry is expected to be a larger trend moving forward, according to Jeffrey Craig, an energy analyst at Veritas Research. He said the layoffs stemming from these mergers will lead to more office vacancies down the road, pointing to the cost-cutting measures following Cenovus Energy Inc.’s takeover of Husky Energy Inc.

“They say synergies are $600 million, and $500 million of that will be … largely in salaries and probably leasing that’s coming out of the business and is unlikely to come back,” Craig said.

He added that a low oil demand environment is not where large-scale, job-creating energy projects are launched.

“Building an oil sands mine, building a project creates a ton of economic activity. You need a lot less people to maintain [these projects].”

While the downturn in oil hit Alberta’s corporate sector harder than other provinces, COVID-19 was a wild card that shook up office buildings in every major city in Canada – including Calgary.

The future of the work from home trend may still be up for debate, though companies are re-evaluating how much space they will need to lease moving forward. Massie said she expects more Calgary firms will continue downsizing to smaller offices.

The trend is changing the landscape of the city. “You can’t leave, cannot walk past one building and see that it’s even got tenants in it,” Massie said. “You have to go inside to see that people are still operating.”

Still, Massie said she had been hearing from employees who were finding it difficult working from home full time, looking forward to returning to the office at least part time. She adds that the province has had its eye on a few sectors like tech, transportation and restorative construction that could see more hiring – and more people – in Calgary’s downtown offices. 

“I know that there are lots of other things that are happening in Alberta. We’re not dead yet.”

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15 Biggest Real Estate Companies in the World – Yahoo Finance

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In this article, we are going to list the 15 biggest real estate companies in the world. Click to skip ahead and jump to the 5 biggest real estate companies in the world. The real estate industry is a big business that generates hundreds of billions of dollars of revenue annually, and there are plenty of opportunities for investors to make a profit. The real estate industry includes many aspects of a property, including all the development, valuation, marketing, sale, leasing, and management of commercial, industrial, residential, and agricultural properties.

If we come to think of it, real estate is a cyclical industry that responds to macroeconomic trends such as interest rates, population growth, and economic strength. Today, the real estate industry is one of the most highly profitable sectors of the U.S. economy and remains to provide opportunities for interested and motivated investors. But before that, the industry experienced a rollercoaster of events that marked the history of real estate in the country. Real estate rose in the post-World War II economic boom of the 1950s, plunged in the inflation-ridden 1970s, soared again in the early 1980s until the depression at the end of that decade, and became prosperous again by the end of the century.

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Biggest Industries in America

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The global value of the real estate industry was rated at $6.9 trillion in 2018 and is expected to reach $8.7 trillion by 2026, with a compound annual growth rate (CAGR) of 2.8% from 2019 to 2026. COVID-19 pandemic has had a sudden impact on all aspects of people’s lives. The government-mandated lockdowns have directly impacted commercial real estate as offices and retail stores have closed down yet gave way to boost the tech and e-commerce industries during the pandemic. Check out the 15 best e-commerce stocks to buy now to include in your portfolio. Throughout the COVID-19 pandemic, the residential sector has established its position for resilience and stable operating cash flows.

Factors driving the growth of the real estate market include the growth of corporate outsourcing; rising capital investments to real estate; rapid urbanization and urban construction; the development of new technologies; and the need to build a more sustainable environment and to take immediate and effective measures to combat climate change. Our ‘new normal’ will take time to progress, yet promises a better future for the real estate industry.

The real estate industry transformed as the United States switched from an agricultural society to an industrial one. Check out the top 10 largest agricultural companies by revenue in the US for a detailed analysis of the agriculture market in the US. In 2019, the US was the largest market for real estate with market size of $3.41 trillion followed by Japan, the UK, and China. This explains why most of the real estate companies on our list are from the US. We created a list of the top real estate companies in the world and ranked them by their total revenue, market cap, assets, and the number of employees that we sourced from Forbes. Let’s check out the biggest real estate companies in the world starting at number 15:

15. Link REIT

Revenue: $1.3 billion

Market Cap: $18.5 billion

Assets: $29.6 billion

Number of Employees: 955

Headquarters: Hong Kong, HK

Link Real Estate Investment Trust operates a diversified portfolio of assets including shopping centers, parking spaces, offices, and retail real estate amounting to HK$195 billion. The company owns approximately 131 assets whereas 87% are in Hong Kong and 13% in four key Chinese first-tier cities. In 2020, Link REIT stepped its foot in the European market and announced its deal of purchase of 25 Cabot Square in London for $475 million. This deal was announced seven months after Link REIT’s first acquisition outside Hong Kong and Mainland China where the company purchased a 10-story A-grade office tower at 100 Market Street in Sydney, Australia for AU$683 million. The company will increase its exposure in Mainland China and the gateway cities of other major developed markets, such as Australia, Singapore, Japan, and the United Kingdom, due to their relative economic stability and liquidity, as well as transparent regulatory environments.

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investing, investment, real, risk, market, loan, banking, business, sale, home, crash, loss, danger, problems, despair, credit, falling, gamble, model, housing, economy,

Brian A Jackson/Shutterstock.com

14. Covivio

Revenue: $1.4 billion

Market Cap: $5.5 billion

Assets: $29 billion

Number of Employees: 937

Headquarters: Paris, France

Covivio SA, which used to be known as Fonciere des Régions SA, is a French real estate investment trust company with a diversified portfolio of office real estate assets. Covivio specializes in designing and developing attractive offices (3.3 million m² of office space in France, Italy, and Germany), multi-service hotels (350 hotels), and residentials (41,000 residences).

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13. Healthpeak Properties (NYSE: PEAK)

Revenue: $2 billion

Market Cap: $15.33 billion

Assets: $14 billion

Number of Employees: 204

Headquarters: Irvine, CA

Healthpeak Properties, Inc. is a real estate company that invests primarily in commercial property that serves the health care industry in the United States. The company acquires, develops, leases, sells, and manages healthcare real estate and provides mortgages and other financings to health care providers. Healthpeak’s consolidated investment portfolio consists of approximately 615 properties.

12. AvalonBay Communities (NYSE: AVB)

Revenue: $2.3 billion

Market Cap: $21.93 billion

Assets: $19.1 billion

Number of Employees: 3,122

Headquarters: Arlington, VA

AvalonBay Communities is one of the biggest real estate companies in the world engaged in the development, acquisition, ownership, and operation of multi-family communities. In 2020, AvalonBay Communities owned or held a direct or indirect ownership stake in 294 commercial properties with 86,676 apartment properties in 11 states, primarily New England, New York/New Jersey, Mid-Atlantic, Pacific Northwest, Northern and Southern California, and the District of Columbia.

AvalonBay Communities Inc (NYSE:AVB)AvalonBay Communities Inc (NYSE:AVB)
AvalonBay Communities Inc (NYSE:AVB)

11. Lundbergs

Revenue: $2.7 billion

Market Cap: $10.5 billion

Assets: $18.7 billion

Number of Employees: 3,259

Headquarters: Stockholm, Sweden

Stockholm-based real estate tycoon Lundbergs AB operates as a parent company and a contractor for other commercial enterprises, including real estate leasing. The company also offers equity and securities trading, as well as forestry and paper manufacturing. The real estate sector is consists of approximately one million square meters of the leasable area across 132 properties. The area consists of approximately 50% of the residential units and the rest of the premises are commercial premises which are mainly office and retail space, but also educational facilities, gyms, film theaters, warehouses, and industrial premises.

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Arkansas

STUDIO GRAND OUEST/Shutterstock.com

10. Public Storage (NYSE: PSA)

Revenue: $2.9 billion

Market Cap: $38.68 billion

Assets: $11.8 billion

Number of Employees: 5,900

Headquarters: Glendale, CA

Public storage is one of the world’s largest real estate companies engaged in the acquisition, development, ownership, and operation of self-storage facilities. The self-storage company started offering its facilities in 1972 and since then Public Storage has grown with thousands of locations in the US and Europe. The company also provides more than 170 million net, profitable square feet of real estate.

Public Storage (NYSE:PSA)Public Storage (NYSE:PSA)
Public Storage (NYSE:PSA)

9. Boston Properties (NYSE: BXP)

Revenue: $3 billion

Market Cap: $13.95 billion

Assets: $21.8 billion

Number of Employees: 760

Headquarters: Boston, MA

Boston Properties is one of the largest owners, managers, and investors of Class A office properties in the United States, with a major presence in five markets: Boston, Los Angeles, New York, San Francisco, and Washington, DC. The firm operates a diverse portfolio of primarily Class A office spaces totaling approximately 48.4 million square feet and consisting of 164 office properties, 5 retail properties, 5 residential properties, and a hotel. The Company has a record in developing premium Central Business District office buildings, new suburban centers, and construction projects for the U.S. government and a diverse array of highly leveraged tenants.

Boston Properties, Inc. (NYSE:BXP)Boston Properties, Inc. (NYSE:BXP)
Boston Properties, Inc. (NYSE:BXP)

8. Digital Realty Trust (NYSE: DLR)

Revenue: $3.2 billion

Market Cap: $36.78 billion

Assets: $23.1 billion

Number of Employees:

Headquarters: San Francisco, CA

Digital Realty Trust is the 8th largest data center provider in the world. Digital Realty Trust, Inc. works as a real estate investment trust engaged in the provision of the data center, placement, and interconnection solutions. Digital Realty supports the network infrastructure, configuration, and interconnection strategies of customers around the world, ranging from cloud and information technology services, communications and social networking, financial services, manufacturing, energy, healthcare, and consumer products. Digital Realty Trust owns over 280 data centers in over 20 countries around the world.

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DLR Most Expensive Computers In the World

Carol Gauthier/Shutterstock.com

7. Prologis (NYSE: PLD)

Revenue: $3.5 billion

Market Cap: $69.97 billion

Assets: $55 billion

Number of Employees: 1,712

Headquarters: Denver, CO

Prologis runs as an industrial real estate investment trust and operates and develops storage services as well as logistics facilities. The company is involved in the ownership and development of logistics properties and also includes rental income, recoveries, and expenses recognized from its consolidated properties. Prologis also operates a strategic capital segment, which represents the management of co-investment undertakings and other unconsolidated entities. The company owns 976 million square meters of modern logistics space and 4,679 facilities in 19 counties.

Prologis Inc (NYSE:PLD)Prologis Inc (NYSE:PLD)
Prologis Inc (NYSE:PLD)

6. Welltower (NYSE: WELL)

Revenue: $5.1 billion

Market Cap: $25.53 billion

Assets: $33.4 billion

Number of Employees: 443

Headquarters: Toledo, OH

Welltower, Inc. is committed to providing health care infrastructure and investing in senior housing operators, post-acute providers, and health systems. The company also offers assisted living facilities, independent living/continuing care retirement communities, care homes, self-supporting living facilities, nursing care homes in the United States, the United Kingdom, and Canada.

Click to continue reading and see the 5 biggest real estate companies in the world.

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Disclosure: No position. 15 biggest real estate companies in the world is originally published at Insider Monkey.

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Calgary real estate showing shift to seller's market – Calgary Herald

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Article content

A recent survey of major real estate resale markets across Canada has found Calgary is now a sellers’ market.

Zoocasa, an online realty firm, ranked the nation’s most competitive markets, and it found Alberta’s major markets were much more competitive than a year ago.

“Going into 2020, much of Canada was in a sellers’ market, but Calgary and Edmonton were not,” says Lauren Haw, CEO of Zoocasa. “They were balanced, so if you were buying in Canada, they were the place to be.”

But now both are in sellers’ markets, with Calgary being the hotter of the two.

The measure Zoocasa used, however, only offers a rough picture of actual conditions, Haw admits. The realty firm used the sales-to-new-listings ratio, dividing sales by new listings.

“As a rule of thumb, anything over 60 per cent means it’s a sellers’ market,” she says.

Haw notes Calgary’s ratio was 87 per cent in November (the period used for the survey) compared with 60 per cent for the same month in 2019. Edmonton’s was 76 per cent in November.

As she further explains, a ratio below 40 per cent is considered a buyers’ market, while one between 40 and 60 per cent is balanced.

The caveat, she adds, is Calgary’s low- to mid-range single-family detached home segment is driving sales while experiencing low supply. At the same time, the condominium and higher-price segments still mostly favour buyers.

By comparison, the most competitive market in Canada was Sudbury, with a ratio of 117 per cent. Greater Vancouver and Greater Toronto had ratios of 76 and 75 per cent respectively.

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Short supply, GTA migration boosts Hamilton real estate market 15 per cent – TheSpec.com

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More real estate news

Hamilton’s housing and rental market continued its hot streak even as a second wave of COVID-19 hit the city in December.

The price of a home in Hamilton increased 15.3 per cent year over year to $659,409 in the fourth quarter of 2020, according to a survey released Friday from Royal LePage.

That’s higher than the national aggregate price of a home in Canada, which increased 9.7 per cent to $708,842 year over year.

The median price of a two-storey home increased 17.1 per cent to $698,511, while the median price of a bungalow increased 11.8 per cent to $604,827. The price of a condominium increased 0.7 per cent to $381,008.

Overall, Hamilton’s real estate market saw double-digit gains in home prices in 2020.

Joe Ferrante, broker of record with Royal LePage State Realty, said he expects this trend to continue well into 2021.

“Multiple-offer scenarios have become commonplace and buyers are offering tens of thousands of dollars above the asking price to secure deals,” Ferrante said in a statement.

“With inventory at an all-time low, some sellers held off on listing their properties in 2020 on account of having little or no purchase options.”

Ferrante attributes the rising prices to a “combination of two things — interest rates and a definite shortage of product.”

“It’s a simple supply and demand issue when you think about it,” he said. “People are just not putting their houses up for sale like they used to, while the amount of people into our market outside the Hamilton area and from around the GTA seem to be buying up whatever we have, thus driving the prices up.”

The rental market has become quite competitive as well, noted Ferrante, as many people who can’t find property to buy are renting in the meantime.

“The lack of inventory is causing first-time buyers, who want to take advantage of low borrowing rates, to be priced out of the market,” he said. “These buyer hopefuls now find themselves competing for rental properties instead.”

The pandemic has created an “untraditional” year for the real estate market. After slow sales in April, the ripple effect of the pandemic on consumer behaviour resulted in more residents working and schooling from home.

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According to a recent report from the Realtors Association of Hamilton-Burlington (RAHB), sales of single-family homes in the area increased in December by 38 per cent compared to December 2019, while the average price rose by 29 per cent to $829,226.

In comparison, Ancaster in 2019 was the local area with the highest average home sales price at $772,811.

Jacob Lorinc

Jacob Lorinc is a Hamilton-based reporter covering business for The Spectator. The funding allows him to report on stories about education.

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