Edmonton Vacancy Rates at Historical Lows for Industrial CRE

As we know, COVID-19 pandemic impacted all verticals. However, one of the most substantial impacts it made is perhaps that in the industrial warehouse sector. Supply has been leased and bought up but there is still a strong demand for more space. Fear and worry seems to be driving that demand as business owners are worried that future events involving the pandemic might disrupt their supply lines. When fear of lack of supply is a factor, the demand for more industrial warehouse space increases.

While the pandemic may have caused disruptions at the start in Edmonton, Alberta, huge warehouse demand continues to boost commercial real estate. The vacant offices in downtown, along with the 3.9 million square feet of warehousing space under construction, Edmonton offers attractive investment opportunities. Learn more about investment opportunities in the Edmonton area and see why so many are considering it.



Industrial, Multifamily, Office, Retail – Canadian CRE market

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The year 2020 brought a lot of uncertainty to the Canadian CRE market, especially in urban centers like Edmonton, Toronto, Victoria, and Regina. Several sectors have experienced heavy losses during the COVID-19 lockdowns, but many more have proven to be exceptionally resilient.

Industrial and multi-residential markets across Canada fared surprisingly well, while office and retail sectors are only now starting to show signs of life after a challenging year.

To gauge what is to come in Canadian CRE markets, four panellists met up to discuss current and future trends in the industrial, multifamily, office, and retail sectors. Take a look at their expert insights.

Industrial Sector the Top Performer 

The pandemic has pushed businesses to embrace e-commerce and turn to online orders and deliveries to make ends meet. Unsurprisingly, this paradigm shift has resulted in a significantly increased interest in industrial solutions like warehousing.

Throughout 2020, the industrial sector has proven to be the most resilient one, making it the safest income-producing investment. The demand for industrial CRE is far outweighing the supply, forcing rents to go up for all quality solutions. The trend is expected to continue, driven in part by the rising shift to e-commerce and Amazon’s aggressive Canadian expansion plans.

Office Sector Recuperating 

The office sector has fared slightly worse at the start of the pandemic, but it has quickly recuperated. Allied Properties REIT had virtually no tenant failures in 2020, performing an astonishing 258 lease transactions last year, almost half of which were with new tenants to their portfolio.

While early spring in 2020 disrupted the office sector, things started returning to normal by late fall. It is expected that 2021 will bring no new disruptions as businesses slowly return to offices, so the future is looking bright.

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Canadian CRE Investor Portfolios Strengthen with Multifamily Real Estate

The Canadian Commercial Real Estate (CRE) market seems stronger than ever, despite all the ongoing pandemic challenges.

New opportunities to strengthen investment portfolios continues to be available for Canadian CRE investors. Multifamily real estate properties are some of them.

Canada’s Housing Market Is Hot!

When COVID hit, many experts predicted a decline in home prices across Canada, some saying they would decrease by up to 18%. But it seems, Canada’s housing market is going as strong as ever.

Canada’s housing prices have already been high, but no one expected them to reach new record highs during the pandemic; Increasing by 13.5% in the past year and reaching a $676,600 benchmark in January. Interest rates have jumped lower though, which is excellent news for people looking to borrow funds to buy a home or invest in commercial real estate.


Supply and Demand for High-Rise Multifamily Properties Stays High

Multifamily properties have always been considered a smart and profitable investment. These days, a growing number of Canadians are looking for well-located, high-rise multifamily properties to live in, especially those with energy-efficient programs.

That’s why many CRE investors are currently focusing on those properties to meet the high demand with an even higher supply.


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The Future of Offices and Malls in Canada

No other sector was quite as affected by the COVID-19 pandemic as office and retail. Imposed business closures, shorter working hours, requirements for working from home, and social distancing restrictions disrupted the two sectors and completely altered their daily processes.

While many are skeptical about just how soon things will return to normal, some industry leaders share a positive outlook about people returning to work in offices and shopping at the mall.

Canadian businessman and CEO of Brookfield Asset Management, Bruce Flatt, shares his views on what the future holds for office and retail.

The Combined Power of Online Trading and Physical Store Presence 

Although many businesses struggled and are still struggling, the e-commerce sector underwent massive growth during the pandemic. With most Canadians turning to online shopping in the face of business closures, e-commerce in the country took off.

But the future of retail doesn’t lie solely in the digital world. According to Flatt, shopping malls and retailers need to focus on creating a balance between online trading and physical store presence.

We’ve already seen several examples of just how beneficial the combination of online and offline presence can be. Shopping malls and retailers across Canada showed great ingenuity during the pandemic by offering online orders with curbside pick-ups. Several stores began offering local deliveries to loyal customers or partnering with Uber Eats and similar services to connect with their shoppers.

Other industry leaders and Canadian retail CRE investors believe diversification is the key to success in the post-COVID world. Mixed-use spaces are increasingly on the rise, proving to be some of the most lucrative investments in the long run.



Best Space Use Models for CRE Properties During & After COVID19

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Due to COVID-19 health concerns, many businesses across Canada are operating at a limited capacity. Some provinces in the country, just this month, closed non-essential stores to prevent the further spread of the virus.

That accelerated the growth of online shopping, takeout orders and the need for more delivery service. Now retailers and CRE property owners are facing a more significant challenge – what to do with their empty or limited retail space?

Here are some of the best space-use models retailers are using right now.

Industrial is the new Retail. Retail is now Office. Restaurants are kitchens-only.

Mixed-use properties have always included retail, but now retail spaces themselves are becoming more mixed-use.

Not only are retail mall spaces converting to warehouse use, but retail centres are also welcoming office workers to help businesses with high workplace density. Many are turning their retail space into medical offices, research centres, daycare centres, self-service grocery stores, and more.

When it comes to food, people now mostly rely on delivery services and takeouts. Thus this is causing restaurants to make the switch to the ghost-kitchen model, where they only use the kitchen space to make food and prep food for delivery.

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High Expectations for 2021 in the Canadian CRE Market

With 2020 in the rearview mirror, Canadian CRE investors and business leaders are looking forward to a possibly brighter future in 2021. The COVID-19 pandemic had an immeasurable impact on the global economies, affecting people and businesses of all types and narrowing profit margins for all.

However, with the introduction of the vaccine, we’re looking at CRE market stabilization and a slow return to normal. Lets take a look at the expert 2021 forecast by Avison Young of what this year may bring to the multi-family, office, industrial, and retail sectors and what this means for Canadian CRE investors.

Multi-Family Property Types Favored by Investors 

Canadian investors have long favored multi-family properties as they involve low risk and high reward. Despite the pandemic and the accompanying uncertainty associated with employment and the economy, multi-family property types have remained in good standing.

The demand for these properties remains high throughout Canada, and the expectations of this trend is expected to remain high well into 2021. With the support of the Bank of Canada and the imposed decision to keep interest rates at 0.23% by 2023, investments in multi-family properties are on the rise.

Offices Under a Question Mark 

The office sector was severely affected by the imposed measures to contain the COVID-19 pandemic. There was an increase in work-from-home (WFH) orders, and businesses with office expansion plans had to put them on hold.

Avison Young analysts forecast that we could see fewer employees choosing to return to office (RTO) everyday, even after the pandemic’s been dealt with. The idea that traditional workplace models returning is not likely for many businesses, as WFH has proven to bring unique benefits.

Furthermore, even with office supply being high right now, demand remains low. There are some tech companies making large space commitments in major hubs (Vancouver, Ottawa, Montreal and Toronto), while simultaneous issuing indefinite WFH plans and putting space up for sublease.

As of third quarter of 2020, the national vacancy for office was 10.9% and it is forecasted that that will rise in 2021 to 12.0% by year-end. The unknown continues to be if tenants will RTO or WFH post-COVID.

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Oxford Properties Newest $2.0 Billion Mixed-Use Complex Coming to Toronto

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The Canadian commercial real estate (CRE) market’s growth doesn’t seem to be slowing down. According to several sources, Canadian CRE executives are optimistic about 2021. A survey by PwC/ULI shows that 83% of the Canadian respondents believe that 2021 will be an excellent year for real estate investments, as oppose to 55% of the US respondents.

This is why one of the latest of the numerous CRE investments comes from Oxford Properties, a Canadian multinational corporation investing in real estate, development, and property management.

Oxford’s plan is to redevelop the Canada Square in midtown Toronto by enriching it with a massive mixed-use complex. The $2.0 billion Canada Square project started in 2017, but just recently got the green light and could begin construction in 2023 if everything goes to plan.

Meeting the Growing Demand for Multi-Family Housing

The corner of Yonge Street and Eglinton Avenue has become known as the “Young and Eligible,” thanks to a surge of young people flocking to the neighborhood in recent years. It’s one of the liveliest parts of midtown Toronto, where new residential and commercial units keep popping up.

The ongoing pandemic has lowered the demand for urban living a bit, but it’s bound to spike again once the pandemic is over. Oxford and its partners are confident it will, given their $2 billion bet on urban living.

Still, the demand for multi-family housing remains high, as most people are now working from home. The new mixed-use complex with four residential towers will successfully meet the demand for dense downtown living.

The community space will accommodate many useful amenities, such as a public plaza, a central courtyard, parking garages, and a bus depot. It will also accommodate many community services, including a recreation centre and a daycare centre.

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Canadian Commercial Real Estate Trends to expect in 2021

As 2020 draws to a close, Canadian CRE investors are anxiously awaiting to see what market conditions they could expect in the upcoming year. The COVID-19 pandemic has had an unprecedented impact on businesses across industries, and the resulting increase in vacancy rates has caused concern among Canadian retail CRE investors, landlords, and tenants. But these vacancies might only be temporary. With the introduction of the COVID-19 vaccine, the future of Canadian CRE is looking bright.

Two Possible Outcomes for the Office Sector

The office sector was perhaps the most heavily impacted by the health crisis. Social distancing measures have pushed businesses to adopt new technologies and enable work from home in order to continue their operations. The efficiency and cost-saving benefits of remote work have proven to be life-saving during these trying times.

As such, when it comes to the office sector predictions for 2021, expert opinions are divided. We have some experts who states that work from home is the new normal. The benefits of it are too great to overlook and businesses will stand to gain a lot from it, pandemic or not. However, on the other hand, we have those who believe that work from home is just a temporary trend, and we’ll go back to the way things were as soon as the COVID-19 vaccine is distributed. In all likelihood, the office sector in 2021 will have to accept a compromise. Work from home will continue, but not to such a great extent as in 2020. Businesses will be flexible, allowing for both remote and on-premise work.

Suburban Canadian CRE Market on the Rise

Major downtown markets in Canada have seen the biggest rise in vacancies, as was expected. Businesses with more space than needed had to downsize, while those with expansion plans had to put their expansion plans on hold. That has caused a paradigm shift that could prove beneficial to the Canadian CRE market, as many businesses have started expanding in suburban areas and provinces; such as, Alberta and Saskatchewan. More affordable, lower density locations are driving business growth outside Canada’s largest cities. These suburban locations are attracting business leaders and investors and creating new opportunities for local communities.

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2021 Looks Bright for the Canadian CRE Sector

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The Canadian CRE sector has been growing for years, managing to remain strong despite the ongoing pandemic. According to Andy Warren, a PwC real estate research director, Canada’s CRE executives are highly optimistic about 2021 as well.

In collaboration with Urban Land Institute (ULI), PwC conducted a survey on emerging real estate trends. Here are some of the most important findings from their report, which show that 2021 will be an excellent year for Canada’s CRE sector.


The Most Promising Commercial Real Estate Niche Assets

Canada’s most promising CRE niche assets include mixed-use commercial properties, single-family rentals, self-storage, life sciences, and production studios.

Mixed-use properties that combine retail with medical office, with traditional office or with housing will continue to thrive.

The single-family rental sector is expected to grow mostly because of the rise of remote work. People are looking for bigger properties to accommodate their home offices.

Many of those living in smaller multifamily and single-family homes are struggling with space, which is why the need for self-storage facilities is likely to grow in 2021.

Investing in life sciences will also remain strong next year, primarily due to the ongoing vaccine development for COVID-19.

Given the increasing demand for online streaming services, investing in production studios for TV and film will be quite profitable, too.


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New Real Estate Trends Are Coming; What to Watch Out for in 2021

Even with the COVID pandemic going on Canadian real estate market continues to develop and grow. Particularly the retail CRE (commercial real estate) sector has experienced significant growth during this year, many investors see a large potential for profit within Canada. 

It’s no secret the pandemic has impacted the market unexpectedly but this is a chance for room to be made for new trends focusing on resilience and specific strategies. According to the Urban Land Institute research and PwC Canada, these are the upcoming real estate trend for 2021 within Canada that everyone should watch out for.


15-Minute and 18-Hour Cities Being Built

More people are looking at remote work and more companies are opening up to the idea, and with this allows Canadians to live anywhere they like. People are looking at suburban and rural areas to move into affordable housing, now that commute time isn’t a factor, to get away from the densely populated cities.

This is helping to grow a trend of 18-hour cities, which are medium-sized cities that have higher than average population, jobs, wage growth, higher cap rates, along with a lower cost of living and doing business. 15-minute cities are also on the rise, the concept is that everything a person needs for daily life; work, grocery store, school, and more are fully accessible within 15 minutes, either by walking or biking.

These city types both pose excellent real estate opportunities, especially because they have massive growth potential.


Developing Suburban Offices

With the rise in remote work, suburban offices can potentially become the new normal for many in 2021. According to PwC Canada, 34% of employees prefer to be working from home, while 37% of employees prefer being in the office.

Everyone wants to work a bit closer to home, and this might be a wish come true. More Canadian companies that can afford remote working are reassessing their properties and looking more at the development of suburban office spaces.


Increasing Warehouse Space

With the pandemic going on and many stores closed online shopping has had a huge increase and many retailers are looking into investing in more warehouse opportunities.

Some investors and realtors seem to have found a potential solution; taking the excess space in shopping malls and repurposing it for distribution, warehousing, or other purposes. Many are even looking at grocery malls for this especially. 


Medical Office Space and Repurposing Shopping Malls

Telehealth in Canada has seen an increase during COVID, particularly within the senior population. But nevertheless, there is still a need for physical space. Plenty of healthcare centres while going digital are looking into repurposing their medical office space.

Countless shopping malls that had high foot traffic are also repurposing space and moving to bring in various healthcare functions, as hospitals struggle with space.



There have been some major shifts from the pandemic affecting how we use commercial real estate. Plenty of mixed-use and retail CRE opportunities will continue to be available in 2021. 

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