Some business better off staying closed

May 22nd, 2020

This crisis isn?t over for BC businesses

Western Investor

Some Metro Vancouver businesses could be better off staying closed than risk re-opening during the second phase of the B.C.’s government’s plan to safely and gradually re-open the economy.

“This crisis isn’t over for BC businesses. You can go out of business much faster with a partial or failed reopen than you can a temporary closure,” said Val Litwin, president  and CEO, BC Chamber of Commerce. “Policy-makers must appreciate that business models will be very fragile during this early stage of the recovery cycle and that ongoing supports will be essential.”

Only 26 per cent of businesses impacted by COVID-19 feel able to restart and operate profitably with the gradual easing of restrictions, according to a survey of 1,343 member-businesses of the BC Chamber of Commerce, Greater Vancouver Board of Trade, Business Council of British Columbia, and other partners. 

The survey, conducted with the Mustel Group, was released May 22.

Given the challenges to restarting operations, over half of the members surveyed (55 per cent) expect it will take at least two months to restart. The survey also found that 43 per cent of  businesses expect that they will still require significant and additional financial support or incentives from the provincial and federal government in order to continue operating. 

One of the challenges for business tenants is paying the rent.

The survey found that 26 per cent of commercial tenants were unable to pay their rent in full in April. The primary reason is that they were shut down and had no revenue (75 per cent). Others had no access to the federal Commercial Rental Assistance ( 30 per cent), while 19 per cent said they could not come to terms with their landlord.

In terms of businesses that have closed temporarily, the level is slightly higher in urban markets (50 per cent) than in rural (42 per cent), with the incidence highest in healthcare and social assistance; arts and entertainment; and accommodation and food services, all above 68 per cent.

Among retail establishments, 58 per cent will remain closed, at least temporarily. 

“The survey data shows virtually all respondents continue to experience lost revenue as a result of COVID-19 and restart efforts will be hampered by an inability to attract new and returning customers. We are facing the worst year for B.C.’s economy and job market in a century,” said Greg D’Avignon, president & CEO of the Business Council of British Columbia. He called on governments to “expedite economic activity and address competitiveness barriers in the form of tax, regulatory and process costs that stand in the way of businesses re-hiring the nearly 400,000 employees who’ve lost their jobs.”

Copyright © Western Investor

With many courthouses shut due to COVID-19, federal government looks to extend legal deadlines

May 21st, 2020

Minister could extend deadlines for court actions in pandemic

Ryan Tumilty
The Vancouver Sun

With many courthouses closed for COVID-19, Canadians are facing ticking deadlines that can force people into divorce deals they don’t want or bankruptcies they could have avoided, but the Liberal government is promising new legislation to stop the clock.

Justice Minister David Lametti sent a letter to critics in all of the opposition parties Wednesday with a proposal for a new piece of legislation that would put some of these timelines on hold until September.

“Deadlines that have not been extended risk forcing people to choose between ignoring public health advice and protecting their legal interests by preparing for or attending court,” said Lametti in the letter.

The proposed legislation would extend timelines for nearly two dozen sets of federal rules, but Lametti cited the divorce act as one particular issue. Under existing legislation someone going through a divorce has 30 days to appeal if they disagree with a judgment, but with many courts largely closed, Lametti said that could be a real challenge.

Federal bankruptcy legislation also gives businesses a set timeline to file a restructuring proposal and if they miss that deadline they are forced into bankruptcy even when a viable business may have remained.

The proposed bill would also extend other deadlines in federal legislation. The government would get a longer period to review foreign investments in Canadian companies. Gun owners would have their expiring licenses extended and several government pension plans would have longer appeal periods for settling disputes.

Lametti said people representing themselves in court are facing the biggest challenges, because they don’t have the information to deal with these changes. He said the issues has to be addressed.

“Canadians and Canadian businesses may also simply lose their right to sue because of the impediments caused by COVID-19.”

Lametti’s proposed legislation includes a sunset clause that would reimpose all the deadlines by no later than September 30.

Tom Laughlin, a lawyer and board member with the Canadian Bar Association, said this is a change that needs to happen because of the closures that courts are dealing with.

He said some courts in the country are open, but there are restrictions in place and even if courts are functioning it may be harder for people see lawyers or get the documents they need to fight a case.

“It’s really a fairness issue to allow them a bit more time to access what they need to, in order to seek the justice that they’re looking for,” he said. “All justice systems should be fair and the concern here is that those individuals who should have access to the system, we’re not able to or are not able to access the system in a timely manner.”

Courts across the country have made significant changes to procedures to adjust to the pandemic, including holding some hearings via video conference and accepting submissions online.

Despite those interventions, Laughlin said the courts are feeling the impact of coronavirus.

“There are different approaches being taken in different parts of the country, but it’s certainly impacting the ability to carry out functions as usual.”

Lawyer Kamleh Nicola, who practices intellectual property law in the federal court, said all things considered, the federal court is adapting pretty well to the crisis and cases are still moving along with virtual sittings.

“They want to move ahead with hearings as much as they can, because if they don’t it is going to create a backlog of cases.”

She said one area the government is missing in its draft legislation is patent law. One of Nicola’s areas of practice has to do with drug patents and she said there are tight timelines for defending a patent, something she would like to see relaxed during the crisis.

NDP MP Randall Garrison said he has heard several concerns about divorce applications and is hopeful the government’s bill will solve the problem.

“Any of these court delays, in provincial courts or federal courts, have a differential impact on women, who often have to use the courts to assert their rights,” he said. “There are a lot of women not receiving alimony or child support payments.”

The government has given a 10-day comment period before the bill can be introduced, Garrison said he is still reviewing it, but hopes it will be brought in swiftly.

“It is urgent and we just don’t have a time frame at this point about when we are going to deal with the bill.”

© 2020 National Post, a division of Postmedia Network Inc.

5 Ways Real Estate Agents Should Change Their Messaging During COVID-19

May 21st, 2020

It’s not business as usual, but here’s how real estate agents can adapt

Justin Kerby
REW

The impact of COVID-19 is being felt on all levels. No part of the economy has remained the same as it was in February, and as a result businesses in all industries have had to adjust their messaging strategy.

Real estate is no exception. 

Agents should be adjusting their messaging during the pandemic and continually reevaluating their success. This is a moving target, but with care and attention, real estate agents can come up with a plan to inspire confidence and retain clients throughout these difficult times. Here are 5 ways agents should change their messaging during COVID-19. 

 

1. Soften Your Tone Amidst the Uncertainty

If there’s one word you’ll want to focus your change in messaging around, “gentle” is a good place to start. Speak gently, and don’t assume that all of your potential and existing clients are having the same experience right now. People are facing health problems, family issues, job losses, quarantine fatigue, and everything in between right now. Just because the tides have begun to turn for some does not mean that they’re improving for all. 

You can sense the uncertainty in the market. Sellers have pulled listings from the market or are holding off on listing until they feel more comfortable, and many on the buyer-side have put their home search efforts on pause. To account for the uncertainty, we’d recommend staying positive, following up softly, and demonstrating your effectiveness as an agent without a hard sell. Ultimately, it comes down to doing what you’ve always done: focusing on what’s best for your clients. 

It’s extremely important that you consider your tone in every situation, be it digitally, on the phone, over video chat, or in-person when social distancing rules are eventually relaxed.  

 

2. Shift Towards Educational Content 

The best antidote for fear is education, and it’s for this reason that we’d recommend shifting your content marketing strategy towards educating with transparency. 

Typically, content marketing focuses on one of four themes: education, entertainment, inspiration, or engagement. During the COVID-19 pandemic, education should make up the bulk of your messaging. If you’ve sold a property during the pandemic, share the details of the sale with your social media followers, newsletter subscribers, and client list. Buyers and sellers are uncertain about even some of the most ordinary happenings right now, and they’ll welcome the transparency. 

Being direct and addressing the new normal is the best way to keep your audience optimistic about buying and selling. Sometimes it’s the small, unaddressed fears like how to conduct a home inspection or how to see a notary during the pandemic that can keep people on the sidelines. Layout the process for things that you would normally not have to address, and if things haven’t changed for a particular process, be transparent about that as well.   

 

3. Focus on Your Experience

This is a great time to demonstrate your expertise and offer your insights, especially if you can draw from past experiences. If you’ve worked through past market downturns or recessions, offer your take on the similarities and differences between then and now. If you’re an experienced agent you’re already likely fielding plenty of speculative questions about where things are headed, don’t be afraid to offer your thoughts to your client base. 

If you’re a new agent and don’t have much experience to draw on, there are other ways to show off your expertise. One of the best ways to gain credibility is to get featured on publications that your potential clients are already familiar with. Make a list of notable digital publications, find the contact information for their Editors which is typically listed in a company masthead, and ask if you can become a contributor. Offer your take on the current market conditions and when you get published, share your column with your potential clients. Being featured in an online publication will help you start building a positive reputation as a qualified real estate expert. 

 

4. Build New Retention Strategies With Social Media

Maintaining relationships with clients is always of the utmost importance, and solidifying your retention strategies during the COVID-19 pandemic is absolutely crucial. Keep retention top of mind when formulating your messaging. 

One of the ways that you can stay in touch with your clients is on social media platforms like Facebook, Instagram, and LinkedIn. REW’s most recent Market Report indicates that agents value social media activity as the second-best strategy for surviving the crisis, so be sure to brush up on your social media skills. Now is a great time to start and learn how to use a proper Facebook Business account for your brand. A Facebook Business account gives you the opportunity to take advantage of Facebook’s powerful advertising platform, deeper audience insights, and more customizations than a regular Facebook page. When you get used to the platform you’ll be able to stay in touch with clients via live videos, targeted ads, and Facebook Messenger. 

Use your social channels as a soft touchpoint to stay in touch with your clients. This way when things open back up your name will be top of mind. 

5. Increase Your Video Content 

Canada is at home right now, and video content is arguably the best way to stay in touch. Whether you’re using videos to update your clients on market conditions or as a means of direct communication in the form of video calls, it’s important to use video to stay connected with your clients. 

On top of video content being useful for staying connected with potential clients, it’s also a great way for agents to market their properties to prospective buyers during times when strict social distancing rules are in place. If you haven’t been using video or virtual tours to promote your properties in the past, now is a great time to get started. Virtual tours improve your potential buyer’s online experience, and during COVID-19 they’re the best way to evaluate a property. 

© 2020 REW. A Division of Glacier Media

CMHC might trim mortgage underwriting arm – Siddall

May 21st, 2020

Pandemic has CMHC guessing what to do next

Ephraim Vecina
Mortgage Broker News

Canada Mortgage and Housing Corporation’s top official said that the agency might downsize its mortgage underwriting business to stem the accelerating growth of borrowing.

Among other benefits, this step will buttress the organization against the worst effects of mounting unemployment, elevated debt levels, and dipping home prices, CMHC CEO Evan Siddall said.

“If there is an insurance claim, CMHC will be called upon to cover these losses,” Siddall said earlier this week. “We are therefore evaluating whether we should change our underwriting policies in light of these market conditions.”

CMHC predicted that if the national economy does not recover soon, approximately 20% of all mortgages could fall into arrears.

The COVID-19 pandemic has already led to a 42% annual decline in the economy during the second quarter, along with 3 million jobs lost since March, Bloomberg reported.

Average home prices could drop by 9% to 18% over the next 12 months, which might lead to “amplified losses” for young homeowners, Siddall said.

Market weakness will be especially apparent in the coming months, with TD Economics forecasting that the number of new mortgages nationwide will decrease by 35% to 40% in Q2-Q3.

The Canadian mortgage sector will encounter significant difficulties “over the near-term as employment trends weaken, credit loss provisioning moves higher, and housing / mortgage activity pulls back materially,” TD said in a recent study. “Collapsing equity markets have eroded an important source of down-payments. This is particularly true for first-time homebuyers, who disproportionately rely on personal savings to fund their payments.”

Copyright © 2020 Key Media

Allied Properties REIT buys Gastown’s Landing

May 21st, 2020

Water Street landmark office and retail building latest acquisition by Allied in Vancouver

Frank O’Brien
Western Investor

Toronto-based Allied Properties Real Estate Investment Trust (REIT) has bought the 115-year-old Landing, a mixed-use commercial landmark in Vancouver’s Gastown area.

The Landing was bought from Greg Kerfoot, owner of the Whitecaps FC, who had once proposed a soccer stadium on the site.

The eight-storey property at 375 Water Street, just east of the Waterfront SkyTrain station and at the northern foot of Richards Street, will be funded by the sale of 50 per cent of two properties in Allied’s Montreal portfolio.

Built in 1905, the Landing is valued in 2020 at $120.9 million by BC Assessments, with the land value of the 5.4-acre site pegged at $111 million.

The sale price was not released. The sale is set to close in June of 2020 as an all-cash deal, according to Allied informaion. Western Investor sources have pegged the sale price at “about $225 million.” 

The building contains 148,355 square feet of office space, 27,115 square feet of ground-level retail and 53 underground vehicle parking stalls. The property was extensively renovated in 1987 into modern office and retail space. The anchor retail tenant is the Steamworks Brewing Company.

The weighted average lease term at the property is 3.3 years, which should enable Allied to propel rent growth over the next five years, according to a company statement.

Allied Properties REIT is expanding its portfolio of buildings in Vancouver. With the Landing, it will own 12 properties with just over 643,000 square feet of gross leasable area. Upon completion of the nearly fully leased 400 West Georgia in early 2021, this will increase to 820,000 square feet of leasable space in the city.

Copyright © Western Investor

What if your staff isn’t comfortable working from home?

May 21st, 2020

Working from home can create new anxieties

Clayton Jarvis
Mortgage Broker News

Working from home isn’t for everybody. But with the country only gradually reopening and COVID-19 still a threat to both public health and the economy, mortgage companies will be forced to consider keeping their work-from-home structures in place for the foreseeable future.

For brokers used to working from a home office, the last two months have likely meant little change to their day-to-day routines – or those routines’ impact on their families’ lives. But for admin staff, managers, analysts and other employees used to working in an office environment, working from home can create new anxieties that take away from the purported increase in productivity some workers experience after relocating their laptops from the office to the ottoman.

“People have been asked to do more than they’re used to,” says Pivotal Consulting’s Heide Garrigan, referring to the increased burdens of child care, home schooling and even parental care COVID-19 has thrust on millions of Canadian families, “plus they’re working from home. And they’re trying to do it all.”

One of Garrigan’s neighbors in the Denver area provides a telling example. A mother of three, she has a job that allows her to work remotely regularly. But when COVID-19 meant her, her kids and her husband would need to work, study and live together 24 hours a day, it didn’t take long for the pressure to get to her.

“By Friday of that first week, I saw her outside and said, ‘How you doing?’ And she burst into tears,” Garrigan says.

MBN asked Garrigan what mortgage professionals who find working from home more stressful than the office can do to ensure they’re doing their best work for their clients. She identified four areas where small tweaks can reduce the tension.

The myth of being ‘always on’
With no meetings to take someone out of the office, there can be an impression among remote workers that working from home, since everyone at the company knows where you are, means always being available, 9-to-5 be damned.

“This whole expectation that you’re always available to answer calls or texts or IMs or anything like that, I think that’s a challenge for people,” Garrigan says.

She suggests setting office hours – including regular breaks – and actually sticking to them. A productive day in a space designated for work should allow people to be productive enough that they can avoid having to be available all the time.

But Garrigan says mortgage companies have a role to play in creating an environment where employees are trusted enough that they don’t feel as if there’s a potential to disappoint the boss every moment of the day. Such situations allow employees to step away from their instant messages/email/Skype/Slack for a few minutes without worrying that their work ethic may be called into question.

“In an environment where’s there’s trust, people are more likely to not have to be ‘on’ all the time,” Garrigan says. “If you’re always on because you’re trying to prove yourself, that’s stressful.”

Productivity up, positivity down
Humans, social animals that we are, often thrive in communal environments. Working from home may benefit a company by increasing productivity, but the forced seclusion causes many remote workers to feel isolated and disengaged.

“We’re producing, we’re doing great, we’re working, working, working, but the fun has been taken out of it. People aren’t seeing each other,” says Garrigan.

She says remote workers who no longer have commutes to slog through should take advantage of the time they’re saving. Rather than dedicating those minutes to doing more work – how many MBN readers have only worked 8-hour days since COVID-19 sent them home? – employees should be filling that time by doing something for themselves, like exercising or taking a class; activities that have the added benefit of a community component (when social distancing allows for it), which can alleviate those feelings of isolation.

Quieting the chatter
Part of the challenge of providing an engaging remote working environment is when a potential solution to one problem becomes a problem in itself.

HR directors and office managers are doing their best to keep their workers connected. But ongoing Slack, Skype and other instant message chats can be highly distracting, particularly if an employee feels pressure to always be available.

“I have had a few people who said that at least when they’re in the office they can put their headphones on and people know not to bother that person,” Garrison says. “Or they can go to an empty conference room.” That’s less of an option when workers have to hear a “ding” every time one of their colleagues types “OMG! So cuuuuute!” into a Skype thread about dogs.

“Turn it off,” Garrigan says. “Does your boss know your cell phone number? Does your boss know your email? Believe me, your boss can reach you.”

She also urges companies to set up separate chats – one for relevant, work-related messages and one for random, non-work topics – which will allow employees the choice of following along with their co-workers’ chitchat at their leisure or ignoring it completely.

Lack of one-on-one feedback
“When you’re sitting in a meeting, you know if an idea came across well, or if your boss is happy or if you’re being heard,” Garrigan explains. “All of that is lost when it’s just phone or text or instant message or email.”

People thrive when they’re acknowledged, and they learn better when they can be guided through their mistakes with someone whose body language and tone they can read. Providing feedback through text, even when it’s positive, doesn’t carry the same weight. If you did a good job walking a client through a recent change to the loan application process, what would you rather receive: a smiley-face emoji or an actual smile?

Using video to provide feedback, even if it’s a brief “Way to go!” can work wonders. It’s more natural and allows workers to see the impact their efforts have had on their employers’ emotions, a nuance that is often lost when feedback is given in text.

Garrigan says companies need to consciously set aside time for providing feedback to their remote workers, whether it be a one-on-one conversation or a team chat. “It isn’t a status meeting,” she stresses, “it’s a feedback meeting.” For companies whose employees are stretched for time, feedback can also take up the first few or last few minutes of a regular status meeting.

Working from home may be the new normal, but it will take continued effort on the part of brokers, administrators and the companies they work for to ensure it feels that way.

Copyright © 2020 Key Media

Rental fraud spikes in wake of COVID-19

May 20th, 2020

According to Snappt fraud has become common in rentals

Ryan Smith
other

Rental fraud has spiked since the onset of the COVID-19 pandemic, according to a new study.

According to real estate tech firm Snappt’s 2020 Fraud in the Rental Industry Survey, fraud has become common in the residential rental industry, with two-thirds of property managers saying they had been victimized by fraudulent rental applications. Applicant fraud has seen a 9% month-over-month spike since the COVID-19 crisis – likely a response to both the current economic conditions and recent changes to state and local eviction moratoriums, Snappt said.

According to the report, the typical property manager reports that 15% of their online rental applications exhibit obvious fraud, and an additional 10% of fraudulent applications slip by unnoticed.

“There are a number of factors that are fueling the increase in fraudulent rental applications,” said Daniel Berlind, co-founder and CEO of Snappt. “The increasing number of self-employed applicants, a move to online rental application and the increasing availability of tools to fraudulently alter financial documentation all make the problem more common.”

Forty-one percent of property managers said that fraudulent rental applications were “somewhat to extremely common” and reported an annual eviction rate of 125. Thirty-four percent reported annual eviction rates of 20% or higher. With the average cost per eviction reaching $7,685, eviction rates that high can quickly become expensive for multifamily property owners.

“If someone understands the law, they can stop paying and live rent-free for six months while we work to evict them,” said Chad Vasquez, general manager of luxury apartment complex Circa LA. “That’s $150,000 for one of our penthouses.”

Copyright © 2020 Key Media Pty Ltd

Can rent relief soothe the commercial market’s woes?

May 20th, 2020

21% of Canadian commercial tenants requesting rent relief in April, according to Colliers Canada

Ephraim Vecina
Canadian Real Estate Wealth

The coronavirus pandemic has hit the commercial sector especially hard, with around 21% of Canadian commercial tenants requesting rent relief in April, according to Colliers Canada.

Covering 7,100 respondents in the retail, industrial, and office sectors, the Colliers survey also found that nearly half of these tenants would not be able to afford their rent payments.

“Now more than ever, tenants and property owners need to openly communicate and maintain strong working relationships to keep businesses on both sides operating,” said John Duda, president of real estate management services with Colliers Canada. “Property owners should do all they can to enable tenants to remain open or reopen safely, and they should actively participate in government and industry back-to-work committees to ensure that this transition occurs safely and efficiently.”

However, while ventures of all sizes have flocked to the Canada Emergency Commercial Rent Assistance (CECRA) program, some observers said that this would not be sufficient to address the problem.

The Colliers poll found that small -business tenants were 2.7 times more likely to request rent relief than regional, national, or international tenants.

Also, tenants whose businesses were completely shut down were 3.4 times more likely to request rent relief than tenants who remained open, whether fully, partially, or remotely.

“Landlords and tenants are facing pending rent deadlines with some uncertainty, as there are landlords who have indicated that they are still waiting for more program details before deciding to apply for CECRA,” Duda said. “More information is needed in a number of important areas, including how the program will treat landlords who have agreed to revised rental payment terms for April or May with their tenants, when the loan funds will be available, and how this program will be rolled out for each province.”

Copyright © 2020 Key Media Pty Ltd

Alberta housing markets may surprise investors post-recovery – report

May 20th, 2020

All major metropolitan economies are forecast to contract in 2020

Ephraim Vecina
Canadian Real Estate Wealth

Should COVID-19’s impact be moderated and the Albertan economy restarts in the next few quarters, the Calgary and Edmonton housing markets might see recovery sooner than expected.

“All major metropolitan economies are forecast to contract in 2020,” The Conference Board of Canada said in its latest economic forecast.

Calgary’s real GDP will likely shrink by 5.5%, while Edmonton will likely see a 5.6% decline, CTV News reported.

“However, assuming the virus’ spread is contained, and firms can return to normal operations over the summer months, a recovery should begin in the second half of the year, leading to sharp rebounds coast-to-coast in 2021,” the board said.

The organization is predicting GDP increases of 6% (Calgary) and 6.2% (Edmonton) by next year, which should bode well for the province’s long-burdened housing market.

According to figures from the Alberta Real Estate Association (AREA), the region’s average home price stood at $371,022 as of March, falling by 2.64% year over year. Sales activity weakened by 8.5% during the same time frame.

The number of new listings shrank by 14.54%, while the stock of homes available in the province declined by 5.76%.

“This is an unprecedented time with a significant amount of uncertainty. It is not a surprise to see these concerns also weigh on the housing market,” said Ann-Marie Lurie, AREA chief economist.

Copyright © 2020 Key Media Pty Ltd

Toronto affordability might improve after COVID-19 – economists

May 20th, 2020

Post pandemic Toronto real estate might be more welcoming

Ephraim Vecina
Canadian Real Estate Wealth

First-time homebuyers might actually find post-pandemic Toronto considerably more welcoming, according to market observers.

Royal LePage CEO Phil Soper said that any such bargains – with plenty of listings running for 2% to 5% lower than their March prices – would almost certainly be short-lived, however.

“The longer you wait, the less an opportunity there will be for a cheaper purchase,” Soper told The Toronto Star. “In any market correction, buyers are the earliest to react to a potential downturn and adjust their expectations lower as far as price goes. Sellers are the last in and the first out.”

Soper said that would-be buyers should remain wary of market volatility, which will likely prevail until at least next year.

“There is a risk premium for trading in any financial crisis, and frankly it’s justified because there are so many unknowns,” Soper said.

Some sectors might still find it difficult to take advantage of these lower prices, nevertheless. Chief among these high-risk cohorts are young adults 25 to 35 years old, according to David Macdonald of the Canadian Centre for Policy Alternatives.

“If you were in that age category and a third of your friends lost their jobs, you might be pretty reticent to take on a big mortgage because you might be next,” Macdonald said. “You’ve got to be lucky enough to keep your job, and we need to see big declines in house prices, which itself would be devastating to the economy because people would feel a lot poorer as a result of their houses being worth much less.”

Copyright © 2020 Key Media Pty Ltd