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Top-10 CRE transactions in Toronto/GTA during 2019

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“Toronto continues to be the No. 1 place to invest or look for real estate in Canada from an investor standpoint, both domestic and foreign,” Altus Group’s vice-president of data operations Ray Wong said while discussing the Top-10 2019 CRE transactions in the GTA with RENX. “It was sort of a continuation of 2018.”

Topping the charts in 2019 were a development land transaction and a multiresidential portfolio sale.

First Gulf‘s $690-million sale of the East Harbour Lands to Cadillac Fairview was the largest single-property transaction. The 38-acre site is located three kilometres from the downtown core.

Toronto city council approved the East Harbour Master Plan in 2018. It provides for 10 million square feet of commercial development including office, hotel, retail, institutional, entertainment and cultural space.

“The urban landscape will continue to be in demand, as well as opportunities for expansion and growth, especially on the commercial side and residential side,” said Wong. “So, that created quite a buzz in the marketplace based on that acquisition.”

Late in December, Starlight Investments closed on a major portfolio deal, acquiring 44 multiresidential high-rise buildings from Continuum REIT for $1.735 billion. The majority of the sites are spread across the GTA, though some of the properties are also located in Hamilton and Ottawa.

In all, Starlight acquired 6,271 units in the buildings, which include towers at 2450 and 2460 Weston Rd., 125 Bamburgh Circle and 77 Roehampton Ave., among others.

Meanwhile, the Atrium on Bay acquisition ranked third. H&R REIT (HR-UN-T) sold the 1,079,870-square-foot office and retail complex to KingSett Capital & TD Greystone Asset Management for $640 million.

“It’s such a good asset to have,” said Wong. “It’s always been a well-performing asset.”

Investment activity declined in 2019

Speaking of performance, though final numbers are not yet available the overall volume of investment activity decreased across Canada during 2019. The Toronto region also saw lower investment, but not for lack of interest from investors.

“It’s not because Toronto capital wasn’t available,” Wong said. A combination of factors contributed to the lower numbers, including a “limited number of opportunities” available to purchasers and the scale of properties on the market.

There was also more caution from potential buyers.

“What we were finding with some of the investors is that they were a little bit more selective . . . on the assets and the properties that they bid on.”

Wong contrasted the current environment to 2017 when “we saw a number of bidders in the marketplace.” At that time, he said, there was “a lineup of buyers” for assets coming onto the market.

“You still have a few buyers, but not the same amount of buyers,” Wong said.

Toronto industrial remains hot sector

Industrial properties continued to be prized assets in 2019, with two transactions on the Top-10 list.

“The GTA industrial vacancy rate is less than one per cent,” Wong said, noting for Q3 it was at 0.8 per cent.

With escalating rents and continuing demand for e-commerce space, the industrial sector “continues to do well from both the tenant perspective/investor standpoint, as well as the owner-users.” As a result, there is record buyer interest.

“It’s the first time, third-quarter 2019, that industrial has hit over a billion dollars of transactions. So, it shows you the amount of demand there is for industrial assets in the GTA.”

It’s also an asset class that is consistent across the country.

“You’re also seeing that in Vancouver,” he said, adding the West Coast city’s industrial vacancy rate is hovering in the two per cent range.

“So, industrial has performed well across the board, just because of the growth of e-commerce and the demand for warehouse distribution space.”

Here are the rest of the Top-10 GTA transactions, according to Altus data:

4. Dynamic Funds Tower

Oxford Properties Group and the Canada Pension Plan Investment Board (CPPIB) sold Dynamic Funds Tower for $473 million. The 650,000-square-foot downtown Toronto complex was acquired by GWL Realty Advisors (50 per cent), Investors Group (25 per cent) and OPTrust (25 per cent).

“That’s a core downtown asset,” said Wong, noting there are “very low office vacancy rates downtown.”

The Dynamic Funds Tower complex includes: Dynamic Funds Tower at 1 Adelaide St. E., a 30-storey LEED Gold-certified office tower; 20 Victoria St., a nine-storey boutique office building; and 85 Yonge St., a three-storey retail building.

5. 1150 Eglinton Ave. E.

Sixty-one acres of residential land was sold to Aspen Ridge Homes by Celestica for $348 million.

“That’s the old IBM Celestica site,” said Wong. He called the redevelopment site a “fantastic parcel” due to the Metrolinx Crosstown LRT expansion along Eglinton and Don Mills.

Aspen Ridge Homes’ Crosstown plan encompasses 18 condo buildings and 30 townhome buildings housing more than 10,000.

It’ll also boast 300,000 square feet of office space, restaurants and cafes, more than five acres of parks and playgrounds, and a large community centre.

6. York Mills Centre

Gazit Globe created a joint venture with Dori Segal’s Gazit TripLLLe Canada and a private investor to purchase this low-rise office and complex at Yonge Street and York Mills Road in December for about $240 million from Manulife Investment Management.

Sitting atop the York Mills subway station, the 570,000-square-foot complex includes about 35,000 square feet of retail.

It’s situated in a neighbourhood which is undergoing major redevelopment and intensification, with seven active multiresidential projects on the go and several more planned.

7. 160 Front St. W.

TD Bank Group purchased a 30 per cent stake in this 1.2 million-square-foot office tower, which remains under construction by Cadillac Fairview, for $229 million.

“We have it as ICI land, but that’s the new office building that Cadillac Fairview is building,” Wong said, noting TD will also be the anchor tenant in the building.

TD Bank Group will occupy 840,000 square feet over 33 floors of the downtown tower, which is now owned 50 per cent by Cadillac Fairview and 20 per cent by Investment Management Corporation of Ontario (IMCO).

The Ontario Teachers’ Pension Plan will occupy 340,000 square feet in the now fully leased, 46-storey building valued at approximately $760 million.

An aerial view of the Rossland Park community in Oshawa.

8. Rossland Park

The 911-unit Rossland Park property in Oshawa was sold to Q Residential by H. Kassinger Construction Limited for $220 million. The property  includes about three dozen townhome, low-rise and high-rise buildings in a 50-acre park-like setting bordering Rossland Road between Wilson Avenue and Ritson Road.

“That deal is just representative of the demand for multires in the market,” Wong said, adding “even in Oshawa, there’s sizable demand for that type of asset.”

9. 80 Via Renzo Dr.

AIMCo purchased this suburban Richmond Hill data centre property from a joint venture between Urbacon Properties Limited and Summit Industrial Income REIT for $215 million. It’s part of a larger development at the Barker business park site, which currently includes two data centres but is designed to contain as many as five of the facilities at full build-out.

The 118,135-square-foot property is located near Highway 404 and Elgin Mills Road East.

10. 2200 Yukon Court

Another major industrial transaction: DSV Solutions Inc. sold the 1.1 million-square-foot Milton property for $180 million to London Life Insurance Company (45 per cent), GWL Realty Advisors (25 per cent), Canada Life Insurance Company (20 per cent), and Canada Life Assurance Company (10 per cent).

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Vancouver real estate agent makes surprise guilty plea in murder trial – Vancouver Sun

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Tejwant Danjou startled his own lawyers when he admitted at the outset of what was to have been a three-week trial that he killed Rama Gauravarapu in a West Kelowna motel room


At the outset of what was to have been a three-week trial for second-degree murder, Tejwant Danjou pleaded guilty Tuesday to killing Rama Gauravarapu in a West Kelowna motel two years ago.


Kelowna Daily Courier

A surprise guilty plea was entered in a Kelowna courtroom Tuesday to a murder charge.

Tejwant Danjou startled his own lawyers when he admitted at the outset of what was to have been a three-week trial that he killed Rama Gauravarapu in a West Kelowna motel room.

“I’m guilty,” Danjou, a 70-year-old Vancouver real estate agent said when asked how he was pleading to the charge of second-degree murder.

Asked by Judge Allison Beames if he had consulted with his lawyer, Donna Turko, before entering the plea, Danjou responded: “I don’t need to speak to anybody. I’m guilty.”

Danjou said Crown counsel had offered him the mandatory minimum sentence for second-degree murder of 10 years before parole eligibility in exchange for a confession.

Beames asked Danjou if he fully understood the implications of the guilty plea. She also told him that, despite whatever deal the Crown might have offered him, it would be up to her to impose the sentence, which for second-degree murder means imprisonment for between 10 and 25 years before parole eligibility.

“I need to be sure that you know what you’re doing,” Beames told Danjou. “Do you understand that only I can make a determination as to what the appropriate sentence is?”

“Yes, m’lady,” responded Danjou, dressed in red prison clothes.

Given the surprising turn of events, a short recess was declared. 

After proceedings resumed, Turko said she’d spoken with Danjou and confirmed his desire to plead guilty to second-degree murder.

“He’s very clear about it,” Turko told the judge.

Crown counsel Simone McCallum was also surprised by Danjou’s guilty plea: “This has come on the sudden, a little bit,” she said.

Proceedings will resume at 10 a.m. today, when it’s expected there will be a joint submission from Crown and defence on a statement of facts, describing events surrounding the murder.

Sentencing is expected on March 13.

Police were called to the Best Western Hotel Plus on Carrington Road in West Kelowna on July 22, 2018.

Inside one of the hotel rooms, they found Gauravarapu’s body. Police said Gauravarapu and Danjou, both from the Lower Mainland, were known to one another.

Danjou has been in custody since July 2018. After he was arrested and charged with murder, his licence to sell real estate was suspended by the Real Estate Council of B.C.

Gauravarapu had worked as a financial planner for a Royal Bank branch in Surrey.

Read more Kelowna Daily Courier news here

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Montreal real estate: Luxury home prices spiked in 2019, and will continue to in 2020, Royal Lepage forecasts – CTV News

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MONTREAL —
Prices of luxury homes in the Montreal metropolitan area increased more than anywhere else in Canada over the past year, according to a survey by real estate firm Royal LePage.

During the 12 months that ended Jan. 31, the prices of luxury homes in Greater Montreal increased by 8.5 per cent, while those of high-end condominiums increased by 8.3 per cent.

Luxury properties of the Greater Montreal region are experiencing the same price momentum as in the more general residential real estate market, said Dominic St-Pierre, vice-president and general manager of Royal LePage for Quebec.

Demand for well-established high-end sectors, such as the city of Westmount and the Montreal borough of Outremont, remains stable,    Royal LePage noted.

There was also an increase in the price of luxury properties in other districts, such as Plateau-Mont-Royal and Griffintown. Luxurious West Island residences remain popular, especially because of the quality of the schools and views of the water, features that would be popular with wealthy newcomers, according to Royal LePage

The firm also observed that a lack of confidence among sellers is a factor that greatly contributes to the reduced supply of luxury properties in the Montreal region. Sellers are worried that they will not find what they are looking for after their current home is sold, and most are concerned about rapid price increases.

Royal LePage forecasts that over the next 12 months, the median price of a luxury home should increase by 5.5 per cent in the Montreal region to reach $1.955 million, while that of a high-end condominium is expected to rise 5 per cent to $1.48 million.

This report by The Canadian Press was first published Feb. 25, 2020.

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CBRE predicts record $50 billion investment for commercial real estate this year – Toronto Star

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TORONTO – Canada could see a record-breaking $50-billion worth of investment in commercial real estate this year as economic tailwinds and immigration policies support the booming sector, according to a report by CBRE, but it says the strong economy is also creating challenges of affordability and supply.

The commercial real estate services firm said Tuesday that total investment would be about $5 billion higher than 2019 and about a billion dollars higher than the record set in 2018.

Growth comes even amid low vacancies in major markets as tech companies in particular continue to prize downtown locations. Other strong areas include investments in rental apartments as home affordability gets out of reach for many Canadians, and industrial growth driven by e-commerce demand for logistics centres.

“Canada has so many advantages, and so many underlying fundamentals that are positives over the long-term, that we certainly think that growth in the Canadian commercial real estate market is going to continue,” said CBRE Canada vice-chairman Paul Morassutti.

Those trends, along with strong population growth and stable banking and governance, would help steer the sector if a recession hits, said Morassutti.

“The wild card is a recession. My feeling is we’re very well positioned to weather a recession, and I think we’ll continue to flourish after that because of those attributes.”

Heightened interest in the market is also creating challenges, including rising rents and limited office and industrial space, while climate change is creating its own issues.

CBRE says prime office rents jumped 20.9 per cent in Vancouver between 2018 and 2019, 14.2 per cent in Montreal, and 10.1 per cent in Toronto, while national industrial rents rose by 12.3 per cent between the two years for the largest increase on record.

Rents still form a small portion of company budgets and don’t seem to be a major constraint on growth yet, said Morassutti. He noted that in the industrial sector, costs savings in transportation from better locations more than offset costs from higher rents.

Rental rates for apartments are also climbing in major centres as home ownership becomes more expensive, which has helped drive investment in the multifamily. The sector could see about $11.9 billion in investment this year, up from $8.3 billion in 2018, to see the most of any commercial sector, CBRE expects.

The upward trend in residential rental rates is however putting pressure on income inequality, said Morassutti.

“Partially because of that lack of home affordability, you have all these people becoming renters, so on the one hand that’s a good thing. On the other hand, it’s not great for society that our two major cities are becoming unaffordable, it’s not great for the income divide, which is already a large social issue.”

Along with affordability, CBRE says the lack of investment in transit infrastructure, and increasing pressures of climate change on the construction sector and land values are also structural issues of concern for the year ahead.

More immediately, the impacts of the coronavirus outbreak also loom as a big unknown, but could be short-lived if it is contained, said Richard Barkham, global chief economist at CBRE said in a statement.

“If the coronavirus outbreak is relatively contained sometime in March, impacts on the Canadian economy and most commercial real estate sectors will be noticeable in the near term but less substantive over the year.”

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He noted that short-term impacts would largely hit the hotel and retail sectors. He said the global property market should be able to weather the effects of the virus as anticipated today, but that a clearer picture of the epidemic should materialize sometime in March.

This report by The Canadian Press was first published Feb. 25, 2020.

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