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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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Worry, buyer's remorse high as real estate market slowdown materializes – Ottawa Business Journal

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A wave of buyer’s remorse is taking shape in several heated real estate markets, after housing prices started dropping and the number of sales slowed over the last two months.

Realtors and lawyers in Toronto and Vancouver say they have noticed buyers looking at what options they have to get out of a purchase and sellers hoping to ensure one goes through because conditions have shifted dramatically from the previous highs and frenzied pace.

The country experienced a 25.7 per cent drop in the number of homes sold over the last year and a 3.8 per cent slide in housing prices between March and April, the Canadian Real Estate Association said Monday. The average home price last month totalled $741,517.

Such numbers have prompted some sellers to explore lawsuits to ensure transactions move forward and other purchasers to worry about the value of pre-sale properties they bought years ago but have yet to take possession of.

“With today’s real estate prices, there’s really no option but to go all in and if you’re going all in, and then suddenly you’re realizing that perhaps you made a bad bet and there’s a way out of that bet, you’re going to do whatever you can to get out,” said Mark Morris, a Toronto real estate lawyer.

In recent weeks, he has seen nine cases where buyers want to back out of deals but on Monday alone was approached by three sellers keen to use legal channels to keep purchasers from walking away.

Morris doesn’t call the encounters a trend because it’s unclear how many other lawyers are seeing the same spate, but three queries in a day is his new record. He used to see one case of that nature every few months.

“Purchasers are looking at the existing crisis, and in the best of times, they feel they overpaid, but now they have objective proof that they’ve done so because markets have started to pummel and fall and really shows no signs of slowing down,” said Morris.

“Many of those buyers are faced with the option of moving forward or upping and walking.”

People get “spooked” every time the market turns and explore what they can do about deals they signed, but few end up walking away because it’s hard to get out of such transactions, said Phil Soper, CEO of Royal LePage.

He thinks the exception to this pattern came in 2020, when the COVID-19 pandemic broke out and people wanting out of transactions had so many unknowns on their side.

Most buyers trying to end a deal this year won’t be successful because there is no legal way out, but such cases are also impractical for sellers, Morris said.

“Is a seller really willing to pursue a buyer that has no assets? Is the seller really going to go through three years of courts only to find that they have a judgment that can’t be pursued?” he pondered. “Are they really ready to put up the amount of money that it will take to pursue this to the ends of the earth if they’re able to resell? Perhaps not.”

In cases where the buyer has put money into a seller’s trust account, that money can only be released with a court action, the closing of the deal or a mutual agreement not to pursue the sale, said Morris. He’s seen buyers agree to give the seller the money, if the seller mutually agrees to end the deal.

If a deal ends, brokers can sue for their lost commission but not many explore this avenue because it’s “not a good look” to take legal action against a client, who might still turn to you when they try to sell the home from the failed transaction again, said Morris.

While Tirajeh Mazaheri hasn’t seen legal action in Vancouver, the Coldwell Banker Prestige Realty agent has seen buyer’s remorse and worry crop up among investors who purchased pre-construction homes a few years ago but have yet to take possession of them.

“A lot of those people are thinking, ‘Is the market going to be able to justify this price or keep up with the price I paid and can I get this money back if I want to sell in a year?'” she said.

The people who purchased in early rounds of pre-construction sales for a building are already ahead of the curve, but those who bought later will have to wait longer to break even or make a profit, she said.

Even though worry is at a high, Mazaheri and Soper agree the markets do rebound and homes are still a valuable investment.

“Anyone who bought a home in 2021 in this country, if they bought anywhere near market price, their home is going to be worth more in 2021,” said Soper.

“Will it be worth more one year from now? That’s harder to predict ? but even a year from now the likelihood of that home being worth less than it is today is smaller.”

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Vancouver real estate: 'Plush' new build for $7.5M | CTV News – CTV News Vancouver

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It’s new, it’s near the beach and it costs millions more than the benchmark for the area.

A newly built home for sale in Vancouver is listed at $7.5 million.

The sellers of the house on West 12th Avenue are asking more than $5 million more than the current benchmark in its neighbourhood of Point Grey.

They say it’s somewhat of a rarity for the tony region of the city, but it’s priced higher than some of the neighbouring homes because it’s brand new, and because of its features.

According to those behind the listing, the four-bedroom home has a total floor space of 4,189 square feet over two storeys and a basement.

It has a 564-square-foot rooftop deck with city, water and mountain views, the listing from realtor Faith Wilson with Christie’s International Real Estate says.

The home has “luxurious, high-end finishes, including a spa ensuite richly appointed in calacatta stone.”

It has a “spa-inspired dry sauna” on the ground floor, and its recreation and media rooms each have wet bars.

The grounds are landscaped and there’s a three-car garage past its gated entry.

The kitchen is described as “gourmet,” and the family room “boasts coffered ceilings (and an) exquisite waterfall Caesar stone cooking centre.”

Its future buyer would find themselves in walking distance of Jericho and Spanish Banks beaches.

Its property taxes are not for the faint of heart at an estimated $13,962. That estimate, however, is from 2020, before the new house was built.

Recent reports suggest Vancouver’s luxury real estate market is seeing a decrease in sales, but prices continue to climb.

The price is far out of reach for many, including most of those who live in the area.

Still, according to census data for the area, more than one-quarter of Point Grey residents have a total household income in the highest category – $200,000 and over.

The median for households of two or more people is $135,680, much higher than in many Vancouver neighbourhoods.

A quarter of those who live in the area work in “professional, scientific and technical services,” and nearly a quarter are in educational services, the data from Statistics Canada suggests.

Three-quarters of adults have at least some level of university education, from a bachelor’s degree to a doctorate.

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Canmore real estate developments back on after tribunal ruling | CTV News – CTV News Calgary

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A contentious proposed real estate development in Canmore got new life Tuesday.

One year ago, Canmore town council rejected the Smith Creek development and decided the Three Sisters Village proposal needed significant changes.

Three Sisters Mountain Village Properties Ltd., the project developer, appealed the decision to a municipal tribunal, and Tuesday the town was ordered to allow the projects to proceed.

Conservation groups fought the proposal, saying it didn’t provide enough space for wildlife to travel through the valley.

“Unless overturned, this decision will cause harm to the lands, and wildlife movement and habitat of an important part of the Yellowstone to Yukon region,” said a statement issued by Yellowstone to Yukon Conservation Initiative on Twitter. “Keeping these lands connected and intact is in the best interest of Albertans now and into the future. Connectivity provides the best chance for some of our most cherished and threatened wildlife to thrive.”

There was no word from the Town of Canmore on whether it will appeal the decision.

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