MTE takes record industrial lease in Edmonton spec build

Western Investor Staff
Western Investor

Developed on speculation, Apex Business Park was fully leased before construction completed

Avison Young has closed Edmonton’s largest industrial lease of 2022 thus far, at 548,000 square feet in APEX Business Park. The transaction is also one of Edmonton’s top five largest-ever industrial leases in a speculative build.

Avison Young’s Thomas Ashcroft and Rob Iwaschuk represented MTE Logistix as a tenant in the facility. They also collaborated with Panattoni Development Canada and Manulife Financial as the developer/landlord.

In an already tight industrial market, this lease was completed before the building was ready for occupancy, demonstrating not only strong appetite for space but also the appeal of APEX Business Park. Prominently located in northwest Edmonton, on major transportation routes, it is minutes from the CN Intermodal Yard.

“Closing such a sizeable deal before a facility is even built sends a strong signal that growth is coming from within the Edmonton market as well as from groups outside,” said Rob Iwaschuk, principal, Avison Young. “As one of the last remaining large blocks of available space in the entire market, this puts added pressure on the greater Edmonton industrial sector and points to a need for further speculative developments.”

Avison Young, Panattoni and Manulife will soon launch the Fulton Creek Business Park in South Edmonton, with site work, site servicing and construction commencing this summer.

© 2022 Western Investor

Innisfail to sell 46 acres for industrial development

Johnnie Bachusky
Western Investor

Subdivision will create lots with prices starting at $160,000 per acre
Innisfail town council has approved a plan to put 46 acres of new industrial land south of 37th Street out to market, with an introductory price tag of $160,000 per acre. Photo courtesy of Elevate UAV
Continuing its unprecedented aggressive push for major industrial development, the Town of Innisfail has set the price for new parcels of industrial land totalling 46 acres at the new provincially approved industrial area south of 37th Street.
Council approved pricing and a marketing plan at its regular meeting on May 9 after considering a staff plan that proposed an introductory price of $160,000 per acre for potential purchasers.
The price would remain in effect until July 29. The rate will then increase later in the year, with servicing of the lands taking place in fall 2022 and purchasers taking possession in spring 2023.
A report by town administration to council said the proposed pricing also reflects the projected cost of servicing the property, which include water, wastewater, storm, FortisAlberta electricity, ATCO gas, paved roads, applicable offsite levies ($9,711 per acre) and remediation costs.
Council approved a motion to move ahead with the plan, along with a second motion for administration to submit a subdivision application for the creation of industrial parcels.
“I am expecting interest,” said mayor Jean Barclay. “It’s priced very well, comparable to other land in the Central Alberta region, and we also have very competitive non-residential tax rates in Innisfail. I am looking forward to seeing what comes from this.”
Innisfail hasn’t had any serious volume of industrial development since at least the 1990s.
“We haven’t had this type of development available for quite a long time,” she said.
However, Barclay still had questions about administration’s plan to put the new industrial land out to market.
The mayor wanted to know if July 29 would give potential purchasers enough time to consider the town’s offer, noting that discussions with potential land purchasers can be lengthy when significant sums of money are involved.
“It is a large investment,” said Barclay. “Are we committed to sticking to July 29? If we don’t and we say we’re extending it, that gives a little bit of an indication that maybe things are not going as well as we hoped potentially, so I worry about that.”
Barclay also wanted to know whether the town able to accept deposits on purchase agreements if it secures a contract with a purchaser before the subdivision application receives approval. She also questioned whether a lawyer would hold deposits in a trust account.
Meghan Jenkins, Innisfail’s director of community services, said land sales in the summer will create more certainty for the town this fall when it proceeds with servicing, “knowing that we have half a dozen lots that are already sold.”
She said all deposits received will be held in trust with the town lawyer until purchasers take possession of their property in spring 2023.
In the meantime, town administration will seek approval from the town’s planning commission for the creation of industrial parcels in the new industrial area. Tentative concept plans show eight lots between three and 13 acres in size, but this could change in the final subdivision application. The area currently consists of two titled parcels totalling 123.3 acres.
Council was told the proposed subdivision of the lands will result in 46.1 acres of saleable industrial land. Proceeds from land sales will help recover the cost of site servicing.
On April 25, council directed administration to tender the development of the southwest industrial park at a budgeted amount of $5.5 million, funded largely through the town’s new Borrowing Bylaw.
The majority of the lands, 77.2 acres, will accommodate public utility lots, the town yard and snow storage, a municipal/environmental reserve and almost six acres for roads.
Jenkins said the subdivision process takes about 60 days, with referrals sent out to adjacent property owners, as well as other stakeholders such as FortisAlberta, Telus and Alberta Transportation.
It would then go to the planning commission for approval, which is typically conditional upon various criteria being met prior to registration of the new, subdivided parcels at land titles.

© 2022 Western Investor

Private mortgages – what’s next for Ontario agents?

Fergal McAlinden
other

Recent weeks have seen new measures aimed at raising standards for Ontario agents in the private space
The brokering of private mortgages by Ontario agents has been in the spotlight of late, with the province’s regulatory body overseeing broker conduct having recently introduced new educational requirements for agents dealing in the private space.
Those regulations, set to take effect next April, will see the introduction of a new licensing class for mortgage professionals, with agents who have not reached that level designated as Level 1-classified agents and permitted only to arrange mortgages with “financial institution type lenders.”
Level 2 agents, meanwhile, will be allowed to arrange mortgages for lenders, including private individuals.
Speaking with Canadian Mortgage Professional last month, Financial Services Regulatory Authority of Ontario (FSRA) executive vice president Huston Loke pointed to the heightened risk factor for mortgage customers in the private space as the main reason behind the changes.
Having witnessed growth in private lending markets across the province, Loke said the body believed “private lending arrangements entail additional risks and the requirement for more information” to give consumers peace of mind when dealing in that arena.
Among agents and brokers operating in the private space, the issue of a product’s suitability for their client is one they should be bearing in mind above all, according to an Ontario-based mortgage veteran.
Read next: FSRA on new education requirements for Ontario agents
Graeme Moss (pictured top), founder and partner at Fair Mortgage Solutions, told CMP that the private market featured a number of “exceptionally good” lenders – but that agents and brokers should always be cognizant of whether a private mortgage is in a client’s best interest.
“I think the suitability factor is a really major thing. I would say everyone goes through life shocks – a person can have health issues, unemployment, divorce and more,” he said. “When they have those events, I think getting something suitable for them is reasonable for them and the lender. If both sides mitigate risk, you make it a win-win.
“The key question has got to be: Does it work well for both the lender and the client? The consequences from the mortgage agent or broker’s actions can have a massive impact on their client, either positive or negative.”
That view was also expressed by Loke, who said that while “private mortgages are not always problematic… they’ve got to be right for the borrower, and so we’re changing the regulations to match the need.”
Where agents do not take that suitability factor into consideration, the consequences for borrowers can be potentially seismic, Moss said – for instance, in a recent case that saw a mortgage agent allegedly arrange a large prepaid private second mortgage with liens on top for a pensioner that left that individual significantly indebted.
Read next: Private lending – Ontario brokers set to face higher education requirements
In that case, the individual signed papers but subsequently stated they did not understand the implications of what they were getting themselves in for. While they may have a case, the problem with litigating against the individuals behind the deal is likely to be a lengthy – and expensive – process, according to Moss.
“Often, borrowers don’t understand the legal and financial aspects that intimidate a lot of people, and they rely on the trust of the agent, broker or branch,” he said. “A lot of people don’t realize the implications – they won’t know so much about the loan to value or when it comes to financial and legal matters. That combination scares a lot of the public.”
A positive step might be for the Ontario government to change disclosure rules on liens, he said, with the current arrangement meaning that a client could theoretically agree to a monthly amount without realizing that they’ve actually signed up to pay that over a long period – such as 15 years.
While many lenders in the private space provide a “really unbelievable” level of service for their clients, Moss emphasized the importance of agents and brokers being particularly attentive to whether their clients’ interests are best served by specific private mortgages and keeping that suitability factor firmly in mind.
“You can keep busy and ensure that the lender and the client both do well – it’s a win-in,” he said. “Or you can say, ‘To hell with the client,’ and they’re at risk all the time – and it will be a nightmare. And it will be a nightmare for [the broker’s] reputation, too.”

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Canadian housing starts rose in April CMHC

Fergal McAlinden
other

The annual pace of new home construction in April surpassed analysts’ expectations

The annual pace of new home construction in Canada was up 8% in April compared with the previous month, the country’s national housing agency has revealed.
Canada Mortgage and Housing Corporation (CMHC) said the seasonally adjusted annual rate of April housing starts was 267,330 units, up from 248,389 in March, with the annual rate of urban starts increasing by 10% to 245,324 units.
Multi-unit urban starts registered a 14% annual rate increase to 178,092, and the pace of single-detached urban starts was also up – rising 1% to 67,232.
The six-month moving average of the monthly seasonally adjusted annual rate of housing starts, which came in at 253,226 units in March, rose to 257,846 units last month, while rural starts saw a seasonally adjusted annual rate of 22,006 units.
The overall seasonally adjusted annualized rate of housing starts surpassed analyst expectations, with forecasts having come in at 246,000 units ahead of the CMHC announcement.

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National home sales, prices fall in April

Fergal McAlinden
other

The news marks the latest stage in Canada’s housing market cooldown
National home sales and prices fell across Canada in April as the country’s housing market continued to cool following two years of record-breaking activity, according to the Canadian Real Estate Association (CREA).
Home resales were down 12.6% across the country from March to April, with the home price index also falling by 0.6% to $866,700. That marks the first time that measure, which accounts for pricing volatility, has declined since April 2020, just before the housing market began its unprecedented pandemic-era surge.
The actual national average home price was around $746,000 in April, CREA said, meaning that figure has now declined for two months in a row after peaking at over $816,000 in February. Still, prices remain around 7% higher than the same time last year.
CREA chair Jill Oudil said in a press release that many housing markets across the country had cooled off “pretty sharply” over the last two months, with the steady climb of interest rates and buyer fatigue two of the main reasons for the slowdown.
On a year-over-year basis, national home sales plummeted by 25.7% after setting a record for the month of April in 2021. The number of newly listed homes declined by 2.2%.

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Home sales drop in April as mortgage rates shoot higher

CREA Staff
other

 Ottawa, ON, May 16, 2022 – Statistics  released today by the Canadian Real Estate Association (CREA) show national home sales were down in April 2022.

Highlights:

• National home sales dropped by 12.6% on a month-over-month basis in April.
• Actual (not seasonally adjusted) monthly activity came in 25.7% below the monthly record set in 2021.
• The number of newly listed properties was down 2.2% month-over-month.
• The MLS^® Home Price Index (HPI) edged down 0.6% month-over-month but was still up 23.8% year-over-year.
• The actual (not seasonally adjusted) national average sale price posted a 7.4% year-over-year gain in April.

Home sales recorded over Canadian MLS^® Systems dropped by 12.6% between March and April 2022. The decline placed monthly activity at the lowest level since the summer of 2020.

While the national decline was led by the Greater Toronto Area (GTA) simply because of its size, sales were down in 80% of local markets, with most other large markets posting double-digit month-over-month declines in April. The exceptions were Victoria, Montreal and Halifax-Dartmouth where sales edged up slightly.

The actual (not seasonally adjusted) number of transactions in April 2022 came in 25.7% below the record for that month set last year. That said, as has been the case since last summer, it was still the third-highest April sales figure ever behind 2021 and 2016.

“Following a record-breaking couple of years, housing markets in many parts of Canada have cooled off pretty sharply over the last two months, in line with a jump in interest rates and buyer fatigue,” said Jill Oudil, Chair of CREA. “For buyers, this slowdown could mean more time to consider options in the market. For sellers, it could necessitate a return to more traditional marketing strategies. Of course, there are significant regional differences, so your best bet is to contact your local REALTOR^®. They have the information, guidance & negotiation skills to help you navigate this rapidly-changing market as it evolves,” continued Oudil.

“After 12 years of ‘higher interest rates are just around the corner’ here they are,” said Shaun Cathcart, CREA’s Senior Economist. “But it’s less about what the Bank of Canada has done so far. It’s about a pretty steep pace of continued tightening that markets expect to play out over the balance of the year, because that is already being factored into fixed mortgage rates. Of course, those have, for that very reason, been on the rise since the beginning of 2021, so why the big market reaction only now? It’s likely because typical discounted 5-year fixed rates have, in the space of a month, gone from the low 3% range to the low 4% range. The stress test is the higher of 5.25% or the contract rate plus 2%. For fixed borrowers, the stress test has just moved from 5.25% to the low 6% range – close to a 1% increase in a month! It won’t take much more movement by the Bank of Canada for this to start to affect the variable space as well.”

The number of newly listed homes edged back by 2.2% on a month-over-month basis in April. The small monthly decline was the result of a fairly even split between markets where listings rose and those where they fell. Notable declines were seen in the Lower Mainland and Calgary while listings jumped higher in Victoria and Edmonton.

With sales falling by quite a bit more than new listings in April, the sales-to-new listings ratio eased back to 66.5% — its lowest level since June 2020. This reading is right on the border between what would constitute a seller’s and a balanced market. The long-term average for the national sales-to-new listings ratio is 55.2%.

A little more than half of local markets were balanced markets based on the sales-to-new listings ratio being between one standard deviation above or below the long-term average in April 2022. A little less than half were in seller’s market territory.

There were 2.2 months of inventory on a national basis at the end of April 2022, still historically very low but up from slightly lower readings in the previous eight months. The long-term average for this measure is a little over 5 months.

The Aggregate Composite MLS^® Home Price Index (HPI) edged down 0.6% on a month-over-month basis in April 2022 – the first month-over-month decline since April 2020. Regionally, most of the monthly declines were seen in markets in Ontario, although many Ontario markets were also up, while some others were flat. Prices climbed modestly across the Prairies in April, while price growth remained robust in Eastern Canada. 

 

The non-seasonally adjusted Aggregate Composite MLS^® HPI was still up by 23.8% on a year-over-year basis in April, although this was a marked slowdown from the near30% record increase logged just two months earlier.

The actual (not seasonally adjusted) national average home price was a little over $746,000 in April 2022, up 7.4% from the same month last year. The national average price is heavily influenced by sales in Greater Vancouver and the GTA, two of Canada’s most active and expensive housing markets.

Excluding these two markets from the calculation in April 2022 cuts $138,000 from the national average price.

 

©THE CANADIAN REAL ESTATE ASSOCIATION

Entering A Balanced Market Spells Relief for Many Buyers: CREA

Patti Cosgarea
other

 While national home sales dropped by 12.6% on a month-over-month basis in April, it was still the third-highest April sales figure, trailing closely behind 2021 and 2016, according to the Canadian Real Estate Association’s (CREA) latest release. 

The decline in monthly activity was more apparent in the Greater Toronto Area (GTA), which is in part because of its size. Sales were down in 80% of these local markets, most notably in Mississauga and Hamilton-Burlington where sales dropped by 32.0% and 23.1% month-over-month respectively. There were some exceptions across the country including in Victoria, Montreal and Halifax-Dartmouth where sales did experience a small bump. 

• Read: March Housing Market Cooling Could Be a Good Signal for Home Buyers: CREA

We Are Inching Closer to a Balanced Market Across the Country 

The number of newly listed homes scaled back by 2.2% on a month-over-month basis in April. This small decline is in part due to the split between markets that saw the number of listings rise and those that saw a decrease in new listings. “For buyers, this slowdown could mean more time to consider options in the market. For sellers, it could necessitate a return to more traditional marketing strategies. Of course, there are significant regional differences, so your best bet is to contact your local REALTOR®. They have the information, guidance & negotiation skills to help you navigate this rapidly-changing market as it evolves,” said Jill Oudil, Chair of CREA.

• Read: Now is the Time to Sell: Durham Cities Currently Have the Shortest Average Property Days on Market 

The sales-to-new listings ratio (SNLR) hit the lowest level since June 2020 at 66.5%. This ratio is used to determine if the market favours buyers, sellers, or is balanced. This spring, we have been inching closer to a balanced market, which usually sits around 50%. The long term average for the national sale-to-new listings ratio is 55.2%. A little over half of local markets were balanced based on the SNLR, while a little less than half remained in seller’s market territory.  

Fatigued Buyers Should Remain Hopeful 

At the end of April, we had 2.2 months of inventory on a national basis. Although this is still a historically low figure, it is up from the past eight months. We continue to see a rise month-over-month which is a positive sign for apprehensive or fatigued buyers. 

• Read: The 5 Stages of Buying a Home

Prices are Down from March in Some Key Markets

Many markets in Ontario saw a decline in the Aggregate Composite MLS Home Price Index. Nationally, it decreased by 0.6% month-over-month in April 2022. This is the first month-over-month decline since April 2020. The actual (not seasonally adjusted) national average home price was a little over $746,000 in April 2022. This figure is heavily influenced by sales in Greater Vancouver and the GTA, two of Canada’s largest and most expensive markets. Excluding these markets cuts $138,000 from the national average price. 

 

 

 

 

 

 

Here are the Ontario markets that saw the biggest dip in home price:

Oakville-Milton

Great news for buyers looking to secure a home in the Oakville-Milton area; the month-over-month MLS Home Price Index Benchmark (MLS HPI) price was down by -5.6% in the region. Although the seasonally adjusted average price remains high at $1,583,000, the market is changing and allowing more buyers to make their move.  

London & St. Thomas

We’ve watched this market become more steady throughout 2022, and now the MLS HPI is down -4.0% month-over-month. This is great news for those looking to buy in this in-demand market, within commuting distance to Waterloo Region. The April 2022 MLS HPI benchmark price was at $716,800. 

Cambridge

Another in-demand market that saw a -3.9% decrease month-over-month. The MLS HPI benchmark price was at $903,400 in Cambridge in April, marking this the second consecutive month of MLS HPI price decreases in the city.

Sudbury

This is the first MLS HPI benchmark price decrease that the city of Sudbury has experienced this year, now down -3.0% from the month of March. Sudbury is one of the most affordable markets in Ontario, with the March MLS HPI benchmark price being $471,200.

 

© 2015 – 2022 Zoocasa Realty Inc., Brokerage

Canada’s average home price slides to $746,000, sales plummet amid rising rates

Stephanie Hughes
The Vancouver Sun

Sales fell across 80% of local markets.

 Home prices across Canada appear to be slipping under the weight of rising interest rates, with the nationwide average home price falling to $746,000 in April, down 6.3 per cent from March’s average of $796,000, according to data from the Canadian Real Estate Association.

The organization’s benchmark home price index — a metric designed to create an “apples-to-apples” comparison of typical home sales over time — also posted a decline of 0.6 per cent month-over-month, the first such decline since April 2020, CREA noted.

Sales volumes dropped precipitously as well, falling 12.6 per cent month-over-month and 25.7 per cent since a record April last year. While the decline was largely led by the Greater Toronto Area market, sales fell across 80 per cent of local markets. 

 

“Following a record-breaking couple of years, housing markets in many parts of Canada have cooled off pretty sharply over the last two months, in line with a jump in interest rates and buyer fatigue,” CREA chair Jill Oudil said in a press release.

While prices slipped from March to April, the association noted that the average price was still up more than seven per cent over the same month last year and the benchmark price was still up 23.8 per cent year-over-year.

CREA senior economist Shaun Cathcart said this month’s data was less a reflection on the moves the Bank of Canada has already made and more about the sentiment around how far the central bank is prepared to go to tamp down inflation.

“After 12 years of ‘higher interest rates are just around the corner’ here they are,” Cathcart said in a release. “But it’s less about what the Bank of Canada has done so far. It’s about a pretty steep pace of continued tightening that markets expect to play out over the balance of the year, because that is already being factored into fixed mortgage rates.”

Despite the drop in demand reflected in CREA’s numbers, a shortage of supply across the country is keeping some upward pressures on prices.

A second set of figures released Monday, however, suggests some relief on the supply front may be on the way, as the pace of homebuilding began to pick up in many of the country’s markets.

• Email: [email protected] | Twitter: StephHughes95

 

 

© 2022 Vancouver Sun

Edmonton 1.47-acre multi-family site trades at $4.2 million

Re/Max Excellence Commercial
Western Investor

The site in northwest Edmonton could be developed as mixed-use residential and retail, motel or multi-family property.

Property type: Commercial land

Location:10410 Allendale Road NW, Edmonton

Land size in acres: 1.47 acres

Zoning: DCI

Sale price: $4.2 million

Date of sale going firm: April 22, 2022

Closing date: April 1, 2023

Brokerage: Re/Max Excellence Commercial, Edmonton

Brokers: Dale James & Humaira Naikyar

© 2022 Western Investor

As market cools, significant opportunity remains – leading broker

Fergal McAlinden
other

A less intense market could lead to favourable conditions for many buyers and brokers alike

Activity in Canada’s housing market has slowed noticeably compared with last year, if recently released April sales figures are anything to go by – but significant opportunity still exists in the current market.

Some of the country’s busiest cities on the housing front posted sizeable year-over-year decreases in home sales last month, with Toronto and Vancouver among those that moderated substantially.

Still, less intense bidding wars, the impending arrival of new housing supply and price moderation in recent months are all likely to spur a continuing healthy market even if it drops off from the heights of last year, according to a top Toronto-based mortgage broker.

“We’re still seeing good preapproval activity, because I do feel there is a lot of opportunity for buyers right now,” Matthew O’Neil (pictured top), broker at Connolly Capital Team, told Canadian Mortgage Professional. “The market appreciated from November, December between 15-20%, and I think those gains have pretty much wiped out.

“On the freehold side, we’re kind of back to where the pricing was in November of last year. I think that’s helped some buyers; if there’s ever been an opportunity to buy a house in the last couple of years, I’d say now would be a time for buyers because lots of inventory is coming up and not as much competition.”

The recent slowdown was “inevitable,” O’Neil said, with the market having set a blistering pace over the last two years before year-over-year sales plummeted in April amid a rising-interest-rate environment as both the Bank of Canada and institutional lenders hiked their borrowing costs. “Something had to give eventually, and I think the rates going up as rapidly as they did was kind of the tipping point,” he said.

Read next: Canadians worried over possible recession despite BoC reassurances

“Rates couldn’t stay at 1% forever. They had to go back up, so my opinion is this was bound to happen and it’s just returning to where the rates should be.”

That cooling-off has been evident with refinances as well as purchases, particularly since there’s little incentive to refi as rates continue to surge. While many clients refinanced to invest in 2021, capitalizing on lower interest rates, that’s no longer possible following those sizeable recent rate hikes.

“The stock market’s been going down concurrently,” O’Neil – recently named among the top 75 brokers in Canada by CMP – pointed out. “I think everybody’s really backed off on both sides of the coin, and a lot of people are having a wait-and-see approach to see what’s going to happen over the next six months.”

A shift away from the intense heat of Canada’s pandemic-era housing market could bring benefits for brokers and their clients alike – not least in the growing ability of homebuyers to attach conditions of finance to their offers as competition for properties begins to ease.

O’Neil said that many mortgage professionals will be breathing a “sigh of relief” at the increasing prevalence of offers with conditions in the current market, with a less frenetic bidding process affording clients greater flexibility, protection and a lower chance of having to overpay.

Read next: CIBC: Economy, rate hikes will have significant cooling impact on market activity

In fact, there’s a more significant cause for concern than rising rates for many brokers in the current market, according to O’Neil: appraisals, many of which are coming in significantly lower than the amount offered by the borrower.

“The biggest issue we’ve been running into in the last 30 to 45 days is the appraisal value coming in lower,” he explained. “Since January, it’s down somewhere between 10-15% in most freehold markets. That’s been our biggest battle – it’s not so much the interest rates, [which] are what they are. It’s more trying to manoeuvre a light appraisal when they come in.”

That struggle means it’s imperative for realtors and clients to realize that as soon as the offer is accepted, an appraisal should be ordered immediately, O’Neil said, instead of the buyer waiting for weeks or months before arranging the inspection.

That’s particularly important because appraisers use the data based on when they go out to the property, rather than when the client’s offer was accepted. “If the client bought in January and they don’t make the appointment until March, [the appraisers are] going to use March comparables,” he said.

“It’s an important thing for clients and realtors to know: As soon as that offer is accepted, get the appraisal ordered right away.”

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