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Real Estate Roundup 5.1.20 – Real Estate Daily Beat

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(Credit: David Williams & Bloomberg)

Real Estate Roundup:

Politics 

  • A rent freeze for most rent-stabilized tenants is looking more likely after one of the two landlord representatives on the Rent Guidelines Board said Thursday that she can see the logic of no increase for one-year leases. Two-year leases are a different story. Board members questioned whether they could set the rent increases to zero for the first year of two-year leases and then a different percentage increase for the second. (TRD)
  • The DOB indicated that it audited construction work that purportedly supported essential businesses. At some sites, the agency found more than what was permitted by state rules enacted to curb coronavirus cases. Applicants can ask for a second chance but in the meantime must stop working. (TRD)
  • Federal Reserve Chair Jerome Powell has sketched out an altogether bumpier ride for the U.S. economy than many are predicting – one that sees business activity stop and start for months to come, until an effective treatment or vaccine for the novel coronavirus can be found. (Reuters)

Tech 

  • Ghost kitchen startup Kitopi cut 124 of its New York City staff just months after it expanded into the city. The Dubai-based company manages shared kitchens for delivery-only eateries. Although these types of startups should be well positioned to take advantage of the current environment, many lack the infrastructure and existing revenue to capitalize. (CO)

Retail 

  • Macy’s announced an ambitious plan on Thursday to reopen all of its 775 locations, including Bloomingdales and Bluemercury, in the next six to eight weeks. The reopening plan will start on Monday with 68 stores in Georgia, Oklahoma, South Carolina, Tennessee and Texas. Macy’s hopes to reopen another 50 locations on May 11. The company expects that its reopened stores will only bring in about 15 to 20 percent of their typical business at first and “slowly build” from there. Macy’s has been offering curbside pick up at about 20 stores for the past week. (NYTimes)
  • Hudson’s Bay Company (HBC), the parent company of Saks Fifth Avenue, will temporarily lay off 507 retail workers in the city. (CO)
  • Sycamore Partners is trying to back out of its $525 million deal to buy a majority of Victoria’s Secret from struggling L Brands – the deal was signed on February 20. By March 20, shares dropped from $23 per share to less than $10. The private equity firm isn’t the only buyer trying to get out of deals. (NYTimes)
  • Many Americans would return to Theaters if new protocols were in place… The combo of adhering by White House guidelines, sanitizing and staggered seating resulted in 53 percent of respondents saying they would likely to buy a movie ticket within the first month. (THR)

Office Leasing 

  • Digital marketing firm Jellyfish is leaving its WeWork location for 693 Fifth Avenue in Midtown. The company signed an eight-year lease for 9,508 SF on the entire 11th and 12th floors of the building, which is owned by Financière Marc de Lacharrière. Asking rent on the deal was $80 per SF. (CO)

Other news 

  • Barclays CEO Jes Staley said that headquarters built to house thousands of staff might be a “thing of the past” if social distancing means only two people can take an elevator at a time. Deutsche Bank AG’s Christian Sewing said the crisis highlighted how much the lender could save on office costs. He added that the last four weeks “have shown us opportunities to cut additional costs. If we look at our travel costs, if we look at our entertainment costs, if we look at the real estate costs, all this is underway.” (Bloomberg)
  • TPG Real Estate Finance Trust (TRTX) allegedly stopped funding some loan advances about a month and a half ago due to financial pressure and liquidity issues. Somera Road claims advances stopped in mid-March on the $60.2 million first mortgage loan it received from TRTX on January 8 last year because the lender was cash-strapped. (CO)

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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.

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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.

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