Posts in Opinion

Tips Before Starting Your Next Commercial Real Estate Project

March 15th, 2017 Posted by Opinion No Comment yet

By Don Catalano | Mar 7, 2017 9:22:10 AM

Whether you’re searching for the first office space for your start-up, expanding your company with a second location or preparing to move to new office space, a new commercial real estate project can seem daunting. While finding the right office space or building to lease is a lengthy process, you can make the process simpler by doing some legwork in advance. Follow these tips to get your project off to a successful start:

  1.   Get a Clear Picture of Your Financials

Before you can begin considering office spaces and buildings, you need to know what you can afford. Have your accounting team crunch the numbers and come up with a budget. You’ll need to consider more than just rent. Commercial leases for office space also include common area maintenance fees, and you’ll be responsible for utilities. Having a clear picture of your financials will make it easier to focus your search on spaces that are within your means. (more…)

The IOT Future And Your Space

March 3rd, 2017 Posted by Opinion No Comment yet

Feb 20, 2017 3:53:31 PM By Don Catalano

 

The Internet of Things — now getting abbreviated to IOT — has been a buzzword for a few years now, but is really starting to change the way that tenants, landlords and buildings interact. New sensor technologies coupled with much more intelligent big data-driven software are enabling buildings to go well beyond saving energy and automatically dimming lights.

Before going into the future, the current applications of IOT — as described above — are real and valuable on their own right. Sensor laden buildings don’t need to have an entire floor’s worth of lights left on all night either for an empty floor that might have someone come in or for a single worker. Instead, they can sense who is there, who is not, and set lighting accordingly. The best systems can even modify the quantity and color of the light to better support employee health, productivity, or both. HVAC systems enabled with sensor technology can not only vary temperature to achieve the optimal blend of comfort and efficiency but also track indoor air quality to better ventilate. They can even measure the number of people in a space to proactively change airflow before air quality deteriorates. (more…)

Growing by Hops and Bounds

February 8th, 2017 Posted by Opinion No Comment yet

Ottawa’s Craft Beer Market brews itself into Canadian’s Hearts

By William Scott with contributions from Darryl Bilodeau, MDK Business Law

Every country has its stereotypes—for many they are just caricatures based on pop culture portrayals handed down throughout the decades. However, for Canada one steadfast stereotype exists that holds true—our love for beer.

If you have ever traveled the globe, you will see the stereotype in all its glory—from the pubs in the Untied Kingdom, to the beaches of the Mayan Riviera, to the quaint café-style restaurants of Europe, in all cases you’ll find Canadians doing what they love to do—drinking beer.

And it’s that love of beer that has woven itself into our social fabric, one that we laugh about, take pride in, and practice at almost every event in our lives. So it’s no surprise that the national capital of Canada has embraced one of our most beloved pastimes, making it a part of our landscape—the craft brewery is literally growing by hops and bounds in the National Capital and, in turn, taking Canada by storm.

It seems that in almost every neighbourhood there is another brew pub serving unique flavours of beer, all brewed with ingenuity, determination, and the love of the craft. For instance, the ClockTower Pub has been a staple in the Glebe neighbourhood of Ottawa for 20 years—and because of its popularity the booming business has since opened multiple locations across the city, including Elgin Street, New Edinburgh, the Byward Market, and Westboro. And in every instance, the restaurant and its in-house brew has won the hearts and minds of many in those neighbourhoods. (more…)

When Is It Safe To Waive Conditions?

January 26th, 2017 Posted by Opinion No Comment yet

By Eli M. Udell Real Estate Lawyer, Merovitz Potechin LLP

A key element of negotiating and finalizing a commercial Agreement of Purchase and Sale is determining necessary conditions and, by extension, a deadline for the waiver or fulfillment of those conditions.

Conditions in an Agreement may be drafted in favour of the Buyer, the Seller, or both parties, and may range from broad strokes, such as due diligence, to narrow issues, such as the repair of a deficiency identified during inspection. Regardless of the conditions included, a deadline is typically established in the Agreement to determine the date on which each party must decide whether to waive conditions or terminate the deal.

As legal counsel to real estate prospectors, investors and owners, I am often asked to highlight issues that must be considered during negotiations and during the conditional period itself. Common threads have emerged, especially in the context of Buyers and Sellers. The following is a list of recommendations from both perspectives.

If you are interested in purchasing commercial property, and you have future plans for the property beyond the existing structure or layout, consider consulting with a licensed planner before submitting an offer. A planner will review the existing property footprint with you, and will also report to you on zoning. This will help you determine if the Agreement will need to be conditional on the pre-approval of plans, on obtaining a building permit, or on confirmation of re-zoning or other planning issues.

After you have decided to submit an offer to purchase, it is helpful to include a general due diligence condition in your favour. Ensure that the condition deadline will give you more than enough time to complete your due diligence, so that a future request for an extension is unlikely. Extension requests degrade leverage. Also, consider scheduling the title search deadline in the Agreement on the same date as the conditions deadline, so that your lawyer may submit his or her title requests while the deal is still conditional, thereby maintaining your leverage.

During the conditional period, consult with trusted experts such as an environmental engineer—it is always more cost-effective to spend a bit more during the conditional period in order to save a bundle after waiver or closing. (more…)

Investment Market – The Evolving Buyer

January 12th, 2017 Posted by Opinion No Comment yet

By Graeme Webster, Koble Commercial Real Estate & Brokerage.

Over the past 10 years, we have seen a transition in types of active buyers in the Ottawa commercial real estate market, most notably between $2 to $20 million. The most recent change has occurred over the past 36 months.

Up until 2007

It was only 10 years ago that we witnessed the subprime mortgage meltdown in the US and the ensuing financial crisis. Up until that time, we were in a seller’s market and most of the buyers in the $1 to $20 million range for commercial real estate were Real Estate Investment Trusts (REIT), institutions, developers and some professional syndicators, along with long-term real estate family investors.

Deals were plentiful and competition was everywhere. It didn’t matter if properties were fully leased, or had vacancy, there was always a buyer looking to place capital. During this time frame, the market relied on projected future growth, aggressive leasing assumptions and the competing low cost of capital. Today’s fundamentals seemed to be an afterthought for most deals. In August 2007, when the subprime crisis began to affect the lending market and Ottawa’s commercial real estate market, transactions in this size range essentially came to a standstill. Lenders weren’t lending and buyers paused, assuming that the prices of real estate would plummet.

(more…)

Is Now The Best Time For Business Owners To Buy And Occupy Their Commercial Real Estate?

December 8th, 2016 Posted by Opinion No Comment yet

By Marc Morin | Koble Commercial Real Estate & Brokerage.

It appears that there has never been a better time for business owners to invest in commercial real estate. It is like a perfect storm, a confluence of events that have led to unique investment opportunities in the Ottawa commercial real estate industry. Today, you can make a smart real estate investment that will help you meet your long-term investment goals, while finding the right location and space to house your growing company.

 

Top six reasons to consider buying versus leasing

  1. Record-low interest rates make it possible to purchase a building and pay less on your principal and monthly mortgage payments. The lower rate means you can apply more of your monthly payment to principal instead of just paying down your interest. In some instances, with the low interest rates you can purchase a building and the mortgage payments can be less than the rent you were paying.
  2. There are a number of active alternative financing solutions for Canadian mid-market businesses, enabling business owners to obtain a higher loan to value: 85 percent and up to 110 percent financing in some cases, providing that all criteria are met. This enables business owners to keep their cash invested in the business where returns are likely greater than the ~4 to 5 percent interest rates.
  3. Most business owners do not have a pension plan. Real estate enables them to pay down the mortgage with business cash flow, leaving them with a mortgage free property in ~20 years. Once the mortgage is paid off, there are numerous tax efficient ways to access this equity and fund retirement.
  4. Given the state of the Canadian economy, low interest rates will probably continue for another two or three years.
  5. With a lot of vacancy in downtown Ottawa properties, there has been tremendous downward pressure on rental rates, so companies are moving from cheaper C Class and B Class buildings to A Class buildings. The higher vacancy in B and C Class buildings is leading those owners to consider selling.
  6. Buying property that is larger than your current needs allows for long-term flexibility and scalability. Excess space can be leased to provide extra income now and enable growth in the future.

(more…)

Environmental Hurdles of Asset Management

November 30th, 2016 Posted by Opinion No Comment yet

By Ian Murdoch and Skyler Besley, Pinchin Ltd.

“Deal killers,” the animated term given to your local Environmental Consultants when they uncover those historical property issues and let the skeletons out of the closet. Albeit no one wants to uncover hidden secrets on a potential acquisition, it’s important to understand asset management and site assessments from the eyes of the consultants. Whether you represent the real estate, investment or site management team, understanding the basics of asset management and Environmental Site Assessments (ESAs) could help in closing deals faster, providing better leverage and competitive bid opportunities.

Phase I ESAs

environmental-hurdlesLet’s start with your friend the Phase I ESA specific to the Ottawa market. You’ve got three types of Phase I ESAs to understand:

1. The majority of the Phase I ESAs prepared in Canada are completed in general accordance with the Canadian Standards Association (CSA) document entitled “Phase I Environmental Site Assessment, CSA Standard Z768-01” dated November 2001 (reaffirmed 2012), which typically includes a review of readily available historical records, a review of readily accessible regulatory records, a Site reconnaissance, interviews, an evaluation of information and reporting. CSA Phase I ESAs are the most common, cost effective type of Phase I ESAs and are accepted by all financial institutions.

2. In Ontario, when you need to change land uses to a more sensitive use (e.g., from commercial to residential), you must file a Record of Site Condition (RSC) with the Ontario Ministry of the Environment and Climate Change (MOECC). As such, the Phase I ESA must be completed in accordance with Part VII and Schedule D of the Province of Ontario’s Environmental Protection Act R.S.O. 1990, c. E.19 and Ontario Regulation 153/04: Records of Site Condition – Part XV.1 of the Act, and last amended by Ontario Regulation 333/13 on December 13, 2013 (O. Reg. 153/04). O.Reg. 153.04 Phase I ESAs are much more in-depth than CSA Phase I ESAs and can become costly due to the filing of the RSC and the correspondence with the MOECC.

3. In Ottawa, specifically, as well as some other municipalities in Ontario, when filing for Site Plan Approval (SPA), the Phase I ESA must be completed in general accordance with O.Reg. 153.04; however, you do not have to file an RSC with the MOECC. SPA Phase I ESAs are typically twice the cost of CSA Phase I ESAs due to the different reporting structure and additional information that needs to be reviewed/summarized as part of an SPA Phase I ESA.

As you can see, the purpose (e.g., financing, SPA or change of land use) plays a large role in the cost, complexity and timeline of the reporting.

(more…)

How Has the U.S. Commercial Real Estate Market Changed During The Obama Years?

November 17th, 2016 Posted by Opinion No Comment yet
Article by JLL Staff Reporter

As President Obama’s time in the White House draws to a close, he hands over a very different economy to the one he inherited in the aftermath of the global financial crisis.

Lawrence, KS - January 22, 2015: President Obama speaks at the University of Kansas; Shutterstock ID 365313038; Departmental Cost Code : 162800; Project Code: GMKT_SUP_4.9.1E; PO Number: GBLMKT/2015-082

Image credit: Shutterstock

Despite the discord in Washington during the past eight years, the U.S. has seen significant economic improvement. GDP is at its highest rate in real terms ($18.5 trillion), while investment in numerous sectors, from advanced engineering to research and development, has reached record highs and is projected to grow rapidly ahead. Even indicators that haven’t fully rebounded, such as housing starts and wage appreciation, are improving.

It’s not been without its big challenges: Obama’s time in power has been filled with economic ups and downs. But in recent years, success has trounced challenges, says John Sikaitis, Managing Director – Research, Americas. And the U.S. real estate industry has changed significantly as a result.

He gives Real Views a rundown of eight years of Obama and explains priority areas for the incoming President.

(more…)

5 Ways The Internet Of Things Will Make Industrial Real Estate Smarter

October 31st, 2016 Posted by Opinion No Comment yet

 

BY ERIK DOLAN-DEL VECCHIO, OCTOBER 26, 2016.

The warehouses and factories that make up the industrial real estate sector are the backbone of the supply chain. And now, new technologies are giving developers and landlords new ways to make industrial real estate smarter. By embracing the Internet of Things (IoT), industrial buildings have the opportunity to become more efficient, safe and prsmart-industrialofitable.

What Is the IoT?

Simply put, IoT refers to any technology that connects different products to the internet, enabling them to share information with each other and trigger “smart” actions. It could be as simple as connecting your alarm clock to your coffee maker to ensure you wake up with a fresh pot of coffee, to as complicated as organizing all the moving parts of a warehouse supply chain through one integrated system. While fresh coffee in the morning is admittedly tempting, we’re going to focus on the latter. (more…)

Why Sustainability is Important in CRE

October 7th, 2016 Posted by Opinion No Comment yet

Aug 24, 2015 9:43:38 AM – By Jason Brucella.

Your company can benefit greatly by making sustainability a core part of its commercial real estate strategy. Greener buildings and spaces can help your company improve recruitment and retention, increase productivity, lower costs and even make it easier to find clients and re-tenant your spaces. Along the way, you will also be doing the right thing from both a public relations and a global perspective. (more…)