It was just minutes after a new listing for a $1.15-million home in Canmore, Alta., went online when real estate agent Jill Law’s phone started buzzing.
Three days and 31 showings later, she had received 11 offers for the property, including one from a family who wrote a personal letter to the seller and included a family photo.
It appears to be the winning “bid” in a soaring real estate market that is seeing more multiple offers and properties selling above the asking price.
Real estate professionals, market watchers and long-time residents say there’s a combination of factors at play, including the pandemic and low interest rates. But the sales surge and rising prices are raising concerns in the community — which still considers itself a place where families can raise their children rather than an exclusive playground for the privileged.
The average house price in Canmore is closing in on $1.1 million, according to the Alberta Real Estate Association’s benchmark price.
“Sales are up, the inventory is down,” said Dan Sparks, one of Canmore’s busiest real estate agents, who has been selling homes in the Bow Valley for 20 years.
But there are fewer homes to sell. There are approximately 100 homes on the market right now. When you factor in the number of sales, it works out to a one-month supply, down sharply from the usual five- to six-month supply at this time of year.
What does all of that mean? To put it mildly, it’s a sellers’ market.
“We’ve had exceptional sales throughout the Canmore area, but the listings and the supply haven’t kept pace,” said Ann-Marie Lurie, the chief economist with the Alberta Real Estate Association.
“And that’s what’s causing some of the price gains that we’re seeing in that market.”
And some of those price gains have been astronomical.
Kelly MacMillan with ReMax Alpine Realty says she just sold a hotel condominium unit for $50,000 above the asking price.
The two-bedroom, two-bathroom condo — which has the potential to generate nightly hotel revenue — was listed for $600,000. The sellers purchased the property four years ago for $350,000.
“There was an opportunity to cash out of the marketplace,” said MacMillan.
“They’re very happy,” she said of her clients.
Pandemic pushes demand
Sparks calls it COVID fatigue. Although he has been taking calls from people in Toronto and Montreal — and even a family in Germany — a good portion of buyers are people from Calgary and Edmonton who have been stuck at home for over a year and are looking for a change of scenery, he says.
“They’ve been working from home for a while, and they can continue to do so. And if they can do that, then they’ll do it where they want to be,” he said.
“Canmore, especially recreational markets, where people are discovering that they don’t have to be where they work. They have that work-from-home flexibility.”
As the inventory dwindles, so do the opportuniites to find a traditional, single family, detached home. Sparks says last week there were just two homes listed for under $1 million — and only five were on the market for under $1.5 million.
Sparks spent several years on the board of directors of Canmore Community Housing, a town-owned corporation tasked with creating affordable housing options for people and families.
A 10-unit townhouse project is under construction and is expected to open in early 2022.
Already there are 150 people on the waiting list to either buy or rent a property.
“It’s basically just fingers in the dam,” said Sparks.
“Housing affordability in Canmore is always going to be a problem. We’re just going to constantly be working on that problem.”
The average condominium price in Canmore is now $500,000.
New development, more affordable housing?
Canmore town council recently approved a series of amendments to the latest development plan for the Three Sisters Mountain Village (TSMV) on the east side of the community.
One of the changes is a proposed requirement that the developer include 20 per cent affordable or subsidized housing — double the amount proposed by TSMV. A spokesperson for the developer says the company is still assessing the impact of the amendments and is withholding comment until the plan goes back to council on May 11.
The mayor says that while it will take years for those units to become available, council had to act now.
John Borrowman says young families have been leaving the community for years because they can’t afford to stay.
“We’ve been bleeding the next generation like that for years,” he said.
“If we don’t do something to ensure affordable housing is a big part of our future, the town will become … it will only be a place for the very wealthy.”
New housing options, slow uptake
The town recently said it would consider secondary suites to be built or legalized in existing neighbourhoods. Financial incentives are being offered to homeowners to add what it calls “accessory dwelling units.”
So far, only three homeowners have applied for the $20,000 grants.
Dale Hildebrand is a local real estate agent and builder. He recently sold two duplexes that were listed for $1.2 million and $1.4 million. One of them includes a separate, one-bedroom suite.
Hildebrand’s next project is in the early stages, but he’s hoping to redevelop several residential lots near downtown into 16 to 18 townhouses. Several will be purpose-built for employers to purchase for their employees.
“They can … rent them out to their employees at a subsidized rate,” said Hildebrand.
But as demand remains strong and prices climb, the market may be too hot for employers to consider employee housing.
It’s a problem for the community, which has had trouble attracting employees.
“It’s harder for young people to find affordable accommodation,” said Michel Dufresne, the director of the Job Resource Centre for Banff and Canmore.
“It also makes it harder for small businesses to provide that housing for their employees. It’s become a bigger play when you have to buy a house for a million dollars to house five people,” he said.
“It’s very costly.”
Bryan Labby is an enterprise reporter with CBC Calgary. If you have a good story idea or tip, you can reach him at firstname.lastname@example.org or on Twitter at @CBCBryan.
Podcast: Raising capital for commercial and industrial real estate | RENX – Real Estate News EXchange
The Industrial Real Estate Show with Chad Griffiths.
Can you raise outside capital to purchase commercial real estate? What if you don’t come from a business-minded family or have a circle of affluent friends?
In this episode Griffiths is joined by Whitney Sewell, founder and CEO of Life Bridge Capital, a private firm with over $125M in assets under management.
Sewell shares how he started with small projects and now raises upwards of $10 million per project in a few hours. He also offers a number of actionable steps investors can take right now to raise capital, and why he is working so diligently toward accomplishing his goals.
The Daily Chase: Toronto real estate broker laughs at housing pledges; Fed decision day – BNN
Toronto real estate broker John Pasalis laughed at Greg when asked about campaign housing pledges and whether any of them make sense for addressing affordability. Check out that refreshingly candid reaction, and why Pasalis (like many other guests we’ve spoken with) fears the Liberals’ strategy will backfire and actually drive up prices. Mattamy Homes Founder Peter Gilgan was even more blunt, telling us “we need to declare that we’re at war with affordability.” We’ll have plenty more insight in the days ahead about what to expect in Justin Trudeau’s third mandate, including this afternoon when CAPREIT CEO Mark Kenney joins Greg to discuss the Liberals’ targeting of real estate investment trusts. We’ll note here that the Prime Minister’s Office released a readout yesterday evening from Trudeau’s call with U.S. President Joe Biden; the two “committed to getting together in person soon.”
Markets will find out this afternoon if the U.S. Federal Reserve is prepared to fine-tune its language about taper timing. Last we heard from Chair Jerome Powell in his Jackson Hole speech, he confirmed that the central bank thinks it will be in a position to scale back asset purchases before the end of this year, but signaled “considerable” progress was still needed to attain maximum employment. Since then, we saw August non-farm payrolls that fell way short of expectations. The policy statement and updated forecasts land at 2 p.m.; followed by Powell’s news conference a half hour later.
The debt-laden Chinese property developer that’s captured the financial world’s attention amid concern (seemingly misplaced, at least for now) that it could be heading toward a Lehman moment has managed to assuage some immediate fear, while simultaneously stirring confusion. China Evergrande Group said in a regulatory filing that it “resolved” an interest payment coming due tomorrow, without providing many details. Meanwhile, less than 24 hours ago, Bloomberg Intelligence Analyst Damian Sassower told us the big question surrounding Evergrande was what the People’s Bank of China was prepared to do about it. Overnight, it pumped additional liquidity into the financial system in a reverse repo operation. That all added up to a steady session in Asia, where the Shanghai Composite closed flat after a two-day holiday.
OTHER NOTABLE STORIES
- FedEx had a rough fiscal first quarter as profit fell year-over-year amid supply chain woes and a US$450-million jump in costs due to what the company calls a “constrained labour market.” The parcel shipper cut its full-year profit forecast as a result. Shares have been down more than five per cent in pre-market trading.
- The U.S. House of Representatives cleared the SAFE Banking Act last night, meaning the U.S. cannabis industry is one step closer to freer access to banking services.
- Celestica announced last night that it’s paying US$306 million to acquire Singapore-based electronics manufacturer PCI Limited. Celestica, which also raised its profit forecast, said the deal will add more than 20 “blue-chip” customers to its business. CEO Rob Mionis is on The Open at 10:10 a.m.
- Telus International announced a secondary offering of 12 million shares after yesterday’s closing bell. None of the proceeds are flowing to the company. TIXT shares have surged almost 22 per cent since their first day of trading in February.
- Walt Disney Co. shares have steadied in pre-market trading after an abrupt five per cent plunge yesterday afternoon on the heels of a management warning about Disney+ subscriber additions this quarter.
- Reminder that Ontario’s COVID vaccine passport program takes effect today, forcing venues including restaurants, bars, and movie theatres to screen patrons for full vaccination.
- Notable data: Canadian manufacturing sales flash estimate, U.S. existing home sales
- Notable earnings: BlackBerry, General Mills
- 8:30: Wheaton Precious Metals investor day
- 9:10: Suncor Energy East Coast Vice-President Josee Tremblay addresses Newfoundland and Labrador Oil and Gas Industries Association conference
- 10:00: Ontario Superior Court resumes hearing Cineworld-Cineplex case
- 11:00: U.S. President Joe Biden convenes virtual COVID summit on sidelines of United Nations General Assembly
- 14:00: U.S. Federal Reserve releases interest rate decision and updated forecasts (plus 14:30 news conference)
- Canadian Council for Aboriginal Business hosts virtual conference on rebuilding the Indigenous economy. Speakers include Suncor Energy CEO Mark Little (12:45)
Artis REIT puts Calgary office portfolio up for sale | RENX – Real Estate News EXchange
Artis Real Estate Investment Trust is selling the remainder of its Calgary office portfolio which includes six buildings comprising close to 700,000 square feet.
It is part of the REIT’s overall strategy of divesting Calgary office property, which began in late 2016, to concentrate on other real estate assets.
At its peak in mid to late 2016, just prior to its shift in its strategy, Artis (AX-UN-T) owned in excess of 2.5 million square feet of office property in Calgary across approximately 20 properties.
“Artis pursued a significant portfolio shift away from Calgary office to prioritize capital allocation to higher-growth strategies, particularly emphasizing the U.S.A. industrial development program,” said Corey Colville, head of strategy, real estate, at Artis.
The Calgary portfolio for sale includes:
– Canadian Centre, 156,772 square feet;
– 417 14th Street building, 17,517 square feet;
– Alex Building, 61,847 square feet;
– Campana Place, 49,123 square feet;
– Heritage Square, 315,152 square feet;
– and Hillhurst Building, 63,394 square feet.
Colville said the present occupancy of the Calgary office portfolio is about 70 per cent.
“Strategic decision” to exit Calgary office sector
“We still have a very robust portfolio of retail and industrial properties in Calgary, but we’ve made this strategic decision to market our remaining Calgary office buildings,” said Colville.
Artis has five retail properties in Calgary of over 343,000 square feet and six industrial properties with over 362,000 square feet.
“Over the past trailing few years, Artis has marketed and successfully transacted on much of their Calgary office portfolio. These remaining six assets, we’re of the view that there’s a terrific opportunity for the market to capitalize on a substantial discount (to) replacement cost and create significant value,” said Colville.
“We’ve had interest from owner/user investors, from repositioning and converter investors as well as office investors.
“With these properties, we think with the amount of potential there’s just fundamentally an opportunity in the market for local investors to capitalize on.”
Colville said Artis has held some of the Calgary office assets for more than a decade. On balance, they’ve been longer-tenured assets for Artis.
“At the peak, (Calgary office) was a really significant component of Artis’ total valuation. At this point of time, the remaining assets in relation to our gross book value is actually quite immaterial and the contributory cash flows from them,” he said.
“We’re looking to focus our efforts in a more strategic way. We think that we’ll be very dominant long-term and competitive landlords and we don’t feel that this is going to be the case now that we’ve reduced our position so much in the Calgary office market.”
Downtown vacancy about 30 per cent
Calgary’s office market has struggled for the past seven years since the collapse of oil prices in late 2014. That led to massive layoffs, particularly in the city core where many energy companies had their corporate head offices. Obviously, fewer people has meant less need for office space throughout the city.
The downtown Calgary office vacancy rate has hovered around the 30 per cent mark for some time.
“You know, we’re not quite as pessimistic as some of the news headlines would indicate. Naturally, and quite obviously, there’s been a struggle in the market, but we are confident that Calgary is one of the most important cities in Canada and that Canada is a phenomenal country to invest in,” said Colville.
“In time, we believe that Calgary will make a strong resurgence and comeback and we believe that Calgary will benefit from the wave of immigration to come and the rejuvenation to the energy markets over time.”
The Artis REIT property portfolio
In Q2 2016, Artis had 260 properties of about 26.6 million square feet overall; 191 properties in Canada with about 17.1 million square feet and 69 properties in the U.S.A. with about 9.5 million square feet.
At that time, it owned 73 properties in Alberta with about 6.7 million square feet. By the end of Q2 2021, that number had decreased to 40 properties with about 2.7 million square feet.
At the end of Q2 2021, Artis had 133 Canadian properties with about 10.4 million square feet and 70 U.S. properties with about 11.6 million square feet for an overall total of 203 properties and 22 million square feet.
The REIT’s portfolio at the end of the second quarter was 42.7 per cent office, 38.2 per cent industrial and 19.1 per cent retail.
Its overall occupancy was 92.3 per cent in Canada; 97.7 per cent for industrial, 83.3 per cent in office and 90.8 per cent in retail. In the U.S., its overall occupancy was 91.8 per cent comprising 94.3 per cent for industrial and 87.4 per cent for office.
Colville said the third quarter will feature a further and material shift of the portfolio following the sale of 27 of 28 of its Greater Toronto Area industrial properties. The 28th property is also for sale.
Other recent portfolio activity
– Acquired a parcel of industrial development land in Minnesota’s Twin Cities Area, for US$1.5 million.
– Disposed of an office property in Calgary, three retail properties in Regina and a portion of a retail property in Fort McMurray, Alta., for an aggregate price of $62 million.
– On June 30, Artis entered into an agreement to sell the GTA Industrial Portfolio, comprising 28 industrial properties located in the Greater Toronto Area. On July 15, the REIT closed on 26 of the 28 properties for $696.7 million. One of the remaining properties is expected to close in Q3 2021 and generate gross proceeds of $26.7 million. The remaining property will be actively marketed for sale.
– Subsequent to June 30, it also disposed of the King Edward industrial portfolio, comprised of two properties in Winnipeg, for $3.2 million.
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