Tag: commercial real estate investing

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The Future of Canadian Commercial Real Estate: Key Trends and Growth Projections for the Next Decade

The Commercial Real Estate (CRE) industry in Canada is about to undergo a radical shift driven by rapidly changing macroeconomic patterns, rapid technological development, and a growing emphasis on sustainability. The market is anticipated to reach a volume of US$2.09 trillion by 2029, with a projected Compound Annual Growth Rate (CAGR) of 1.82% from 2024 to 2029 (Source: Statista Market Insights). Demand is also being supported by a rise in foreign investment as international investors look to Canada’s CRE market for reliable and lucrative options.

CAGR Growth and Market Potential

The Canadian CRE market is expected to increase at a CAGR of 1.82% through 2029, indicating a stable growth trajectory. Numerous factors, such as growing urbanization, the post-pandemic economic recovery, and government initiatives to promote infrastructure and development projects, are driving this expansion.

The e-commerce boom is predicted to drive demand for industrial real estate, including storage and logistics spaces, while office, retail, and other key sectors are expected to witness varying degrees of expansion. Furthermore, it is anticipated that mixed-use projects in metropolitan areas would be crucial in propelling market expansion overall and offering developers and investors a variety of revenue sources.

Foreign Investment Surge

An important development influencing the Canadian commercial real estate market is the increase in foreign investment. Global investors seeking safe, long-term assets find Canada to be a very desirable location due to its stable political climate, strong legal system, and favorable economic prospects.

Canada’s commercial real estate market is attracting more and more foreign investors, especially from Asia and Europe, because of the country’s reputation for legal protection, openness, and relative immunity from global economic shocks. This capital inflow is particularly noteworthy in large cities like Toronto, Vancouver, and Montreal, where there is still a substantial demand for premium industrial and office space. Increased interest in the market has resulted from the Canadian dollar’s recent rise in value, which has also increased the appeal of investments to overseas investors.

E-commerce Boom and Industrial Real Estate Demand

Unprecedented demand for industrial real estate is being driven by the growth of e-commerce, which is still a major factor in the Canadian real estate market. Retailers looking to streamline their supply chains and satisfy the rising demand for speedy deliveries are becoming more and more interested in logistics and warehouse spaces.

Industrial real estate is likely to have steady expansion as the trend toward online shopping is predicted to last far into the next ten years. Investor attention is currently focused on assets in strategic locations that offer convenient access to transportation networks, ensuring effective distribution capabilities. In order to meet the changing needs of e-commerce companies, last-mile delivery centers and smart warehouses with automated technologies are therefore expected to grow more quickly.

The Future of Office Spaces in a Hybrid Work World

With the COVID-19 pandemic sweeping the world, hybrid work models have become the norm for companies. As a result, traditional office spaces are becoming more flexible. Rather than large, static offices, businesses are opting for flexible, dynamic spaces that support collaboration and adaptability.

The demand for office space in metropolitan cores is anticipated to level off in the upcoming years, while suburban hubs will see an increase as more companies adopt decentralized work patterns. Additionally, tenants will find it difficult to resist tech-enabled workspaces with improved connection and health-conscious features like touchless technologies and better air filtration systems.

In the office sector, co-working spaces and shared office settings are predicted to become increasingly important as businesses look for flexible leases and space arrangements that make scaling and downsizing easier. For CRE investors, this change may mean a consistent flow of revenue, particularly in areas that support startups and small enterprises.

Sustainability and the Green Building Revolution

Environmental sustainability is becoming essential in today’s commercial real estate market, and it is not merely a trend. Green building approaches are becoming more popular as a result of pressure from regulators, investors, and tenants for improved environmental requirements. Corporate social responsibility (CSR) efforts and government legislation are driving Canada’s shift toward sustainability.

Green building certifications, such as LEED (Leadership in Energy and Environmental Design), are becoming a crucial factor in attracting tenants, particularly in high-demand sectors like office and retail spaces. Over the next decade, properties that are energy-efficient, equipped with renewable energy sources, and designed to reduce carbon footprints will be more attractive to environmentally conscious businesses and investors.

Furthermore, it is anticipated that government incentives for green development and building retrofits would stimulate additional investments in sustainable CRE. Developers who give sustainability a top priority in their projects will be in a better position to satisfy renter requests and profit from the growing demand for environmentally friendly structures.

Mixed-Use Developments: The Future of Urbanization

In Canada’s metropolitan real estate markets, mixed-use developments—which incorporate residential, retail, and commercial spaces into one single property—are starting to take center stage. These initiatives address the need for walkable, live-work-play settings where people may live close to workplaces, entertainment venues, and necessary services.

There will be an increased need for integrated, mixed-use spaces in cities such as Toronto, Vancouver, and Montreal as urbanization intensifies. Due to their many revenue streams, mixed-use properties not only offer a higher return on investment but also improve the quality of life for their occupants by reducing the need for lengthy commutes. In the upcoming years, developers are anticipated to concentrate on producing sustainable, transit-oriented developments that provide accessibility and convenience, hence dominating the CRE landscape.

Technological Integration in Commercial Real Estate

The use of cutting-edge technology in commercial real estate is completely changing the way that properties are used and managed. Better energy efficiency, predictive maintenance, and improved tenant experiences are all made possible by smart buildings outfitted with Internet of Things (IoT) sensors, artificial intelligence (AI), and big data analytics. These advancements are revolutionizing the business of property management.

The use of 5G technology will further facilitate smart building capabilities in the upcoming ten years, resulting in more connected and effective commercial areas. AI-enabled sensors, for example, can modify HVAC (heating, ventilation, and air conditioning) systems according to building occupancy levels, and IoT devices can track building performance in real time to save energy.

Tenants’ desire for more convenient and flexible tech-enabled spaces is anticipated to fuel this trend toward the digital transformation of real estate management. Early adoption of these technologies will save operating expenses and increase tenant satisfaction for investors and property managers.

Changing Demographics and Their Impact on CRE Demand

In the upcoming years, Canada’s aging population and changing demographic patterns will have a big impact on the demand for commercial real estate. The nation’s population is expected to increase more slowly than in previous decades. Thus, developers will need to modify their plans to accommodate growing demographic groupings and older inhabitants.

It is anticipated that demand for senior housing, long-term care facilities, and medical office buildings will rise, particularly in the healthcare industry. Investors in healthcare-related real estate will have plenty of chances as the population ages and the need for senior-friendly amenities and easily accessible healthcare services increases.

Simultaneously, the surge of younger, urban-focused inhabitants will increase demand for retail establishments and multifamily complexes that accommodate convenience, technology, and sustainability as lifestyle preferences. Mixed-use developments, intended to meet the requirements of a more diversified and integrated population, are predicted to continue to rise in urban areas.

A Promising Future for Canadian CRE

A continuous expansion in commercial real estate is anticipated in Canada in the future due to factors such as shifting demographic trends, greater foreign investment, technological innovation, and sustainability measures. With a market value estimated to reach US$2.09 trillion by 2029, there are a tonne of chances in this area for both developers and investors.

Those who are flexible and welcome change will be in a good position to take advantage of the opportunities for expansion in Canada’s CRE industry as it develops. Future developments in the Canadian commercial real estate sector are expected to be exciting and fulfilling, whether the focus is on building smart and green buildings, investing in e-commerce-driven industrial spaces, or meeting the changing demands of an expanding population.

 

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Navigating the Green Shift | Commercial Real Estate’s Role in a Sustainable Future

In Commercial Real Estate (CRE), sustainability initiatives and eco-friendly properties are not simply trending – they represent an essential step toward future-proofing the industry. Moving away from conventional notions of larger and better properties towards properties with sustainable features marks an incredible shift within CRE ethos. It underscores our urgent need to combat climate change, reduce carbon emissions and optimize energy use to create more eco-friendly properties in order to sustain our world for longer.

The Interconnection of Sustainable Solutions and CRE

Sustainable solutions and commercial real estate (CRE) share an intimate connection. According to the World Green Building Council, commercial properties account for an astounding 39% of global carbon emissions, underscoring CRE’s essential role in combatting climate change. No matter who invests or rents within large buildings – investor, tenant of such properties themselves or construction company leader- each person plays an essential part in creating sustainability solutions for future generations alike.

Advantages of Embracing Sustainability in CRE

Adopting sustainable practices in CRE can not only be ethically rewarding but can be financially strategic as well. By investing in energy-saving systems like LED lights, which lower electricity expenses while lengthening product lifespan and window tinting that lowers HVAC usage needs – sustainability truly has its rewards!

LED Lighting: A Bright Idea for Sustainability

LED lighting stands out as both cost-effective and eco-friendly, boasting long lifespans of over 70,000 hours compared to fluorescent tubes, which may only last 34,000. Plus, their lower energy use could result in major carbon emission reductions as well as energy cost savings.

Window Tinting: Cooling Costs Down

Window tinting in commercial properties is an efficient yet straightforward method of increasing energy efficiency. By reflecting sunlight away, window tinting reduces interior temperatures in buildings as well as air conditioning usage – cutting operational costs and carbon emissions simultaneously.

Tackling Climate Risk Through Energy-Efficient Infrastructure

Integrating energy-efficient systems into commercial properties has never been more critical, given climate change’s physical impacts and extreme weather events that drive operational costs up. By investing in resilient properties that use less energy than necessary to run efficiently and thereby help build sustainable futures for generations yet unborn, real estate firms can reduce risks while making contributions towards creating a lasting sustainability legacy for future generations.

Looking Ahead: The Future of Sustainable CRE

Over the coming decades, CRE will witness an increasing emphasis on sustainable development; meeting market demands greener properties while reporting carbon reductions transparently and adopting innovative technologies to further sustainability. Furthermore, as this sector evolves its attention will not solely focus on building sustainable properties but retrofitting existing buildings to comply with environmental standards as well.

Sustainability in commercial real estate (CRE) demands collaboration, innovation, and an unyielding dedication to change. By adopting sustainable practices, CRE can contribute significantly to climate change mitigation while simultaneously positioning themselves to thrive in an eco-conscious society. Now is the time for CRE industry players to recognize this imperative by taking small yet consistent actions towards making CRE more eco-friendly – creating positive impacts not just today but for generations yet to come!

Check out my video for more insight.

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Investment Portfolio: Protect What You Build

Building your investment portfolio takes an abundance of effort and time. Each investment, whether short-term or long-term poses significance to your overall portfolio and acts as a potential stream of income. Ergo, protecting your investment portfolio is just as important as building it. Most methods of protecting your portfolio are within reach and can be done internally. 

Here are a few key ways you can protect your investments and make the most out of them: 

Diversify your investments

Diversification of investments is imperative when it comes to protecting and building upon them. You’ve most likely heard the age-old phrase, don’t put all of your eggs in one basket. This holds merit when it comes to investing. While a stream may prove to be financially beneficial, should any disruption arise, you could risk losing everything you put in. Diversifying your investments allows you to gain from various streams. Should one fall through the cracks, you won’t lose everything and your other investments could make up for any loses. 

Invest in hard assets

The type of streams you invest in play a huge role in their protection. While liquid assets allow you to have access to cash, it can make it easier to spend. Hard assets lock your investment in place meaning the money put forth is in the form of said investment and requires a lot more work to take out.

Real estate is a prime example of a hard asset. The money is locked in into a tangible asset which will grow profit from there. Although the cash is not easily accessible, the asset still falls under your name and overall net worth. Hard assets are a great method of generating income without the temptation of overspending. 

Keep income growth in mind

Generating income is the bread and butter of investments. Whether you are looking to generate high profits in a shorter time frame or you’re looking for a long-term investment, it’s important to understand the potential profit associated with your investments. Some may invest for the sake of wanting a share in a certain realm, but may not consider any cost margins or profit gain. 

If you are unsure about which realms can help you produce the most income, do your due diligence when it comes to research. Set a target goal of how much income you want your investments to produce on a monthly, quarterly, yearly, or overall basis and align your portfolio with that. Typically, the riskier the investment, the more income can be generated in a shorter time frame, however, there are a plethora of long term investments that can bring you in a high profit. 

Protection is key when it comes to making the most out of your investments. The better protected they are, the higher the potential for gain. 

 

Learn even more ways to protect your investment portfolio here: https://www.redevgroup.com/news-article/6-simple-strategies-for-protecting-your-investment-portfolio

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What’s Behind The Rise of Luxury Shops In Canada?

Retail markets continue to thrive well into the year and there is no sign of them slowing down at any time. While certain niche markets may not be able to content, there are those that keep the industry afloat. One retail market in the retail sector is thriving despite the hardships it has faced in the last 12 months. 

The luxury retail market has been flourishing across Canada and consumers are receptive to this new wave. Take a walk in the downtown core of Vancouver or the hustle-and-bustle in the heart of Toronto and you will find a superfluous amount of luxury retailers. The luxury clothing sector, in particular, amasses for a large portion of success the retail markets are seeing. 

What is influencing this growth within the luxury retail market?

Canadians have proven to have an appreciation for European fashion which is most notably crafted by high-end designers. The appreciation accumulated from the fashion market overseas has seen vast success in Canadian markets. Canada boasts a high sense of trust when it comes to this market. While there are places scattered around the country to obtain counterfeit goods, law enforcement is working to eliminate them. The hefty price tags associated with luxury goods, the certificate of authenticity, and the overall atmosphere of a shop are key indicators that goods within are 100% authentic. 

Luxury goods are purchased for two reasons: high quality and social status. Certain luxury goods utilize materials of higher quality, increasing the longevity of the item, thus, being grounds for hiking up the price. Social status is also a major contributor to the growth of luxury good sales. Many believe boasting luxury goods entails and reiterates their wealth and status.

What areas are luxury retailers prevalent in?

Luxury retailers are strategic when it comes to their placement in order to optimize profit. Typically, luxury retailers will look at the jobs and average incomes in the surrounding neighbourhood where they are considering allocating their business. Luxury retailers are most prevalent in Affluent areas such as Bloor Street West, Yorkville Village, Yorkdale, and the downtown core of Vancouver City. 

Aside from affluent areas, luxury retail shops are also prominent in the downtown core of major cities. Because the downtown core of these popular cities (Toronto, Vancouver, Edmonton, Calgary, and Montreal) are hot spots for tourists, there is a greater probability to generate business with those foreign to the country. 

What does the future of luxury retailers in Canada look like?

Although the luxury market has had rough patches, it has continued to make an upward trajectory. As long as the demand remains high, luxury retailers will continue to dominate and make a substantial profit. With more luxury shops opening their doors all across Canada, it comes to no avail that there is certainly a high demand for these goods. This retail market speaks to, not only Canadian citizens but to tourists as well, who deem Canada as a safe and trustworthy place to purchase luxury goods. 

 

Want to learn more about the luxury retail market and real estate opportunities surrounding it? Read more here!

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Big Developments Pour Into Smaller Manitoba Cities, Towns

Cheaper land and lower business operating costs are fueling increased demand for commercial real estate and new economic opportunities in smaller Manitoba communities outside of Winnipeg.

Richard Crenian, president of ReDev Properties, noted the trend in a recent blog post. In it, he said many CRE investors “are taking advantage of lower prices in once considered sleeper towns in Manitoba. Investors’ interest has specifically been concentrated on the outskirts of Winnipeg’s Perimeter Highway.”

Crenian also singled out other communities such as Steinbach, Brandon, and Portage la Prairie, which have all attracted the interest of big players.

Availability of land and costs are key driving factors in the interest, Crenian told RENX in an interview. The story is similar to what’s happening in other areas of the country such as Balzac just outside of Calgary, municipalities outside Edmonton and many outlying communities in the Greater Toronto Area.

“People are going to all of these small places because it’s about affordability,” said Crenian.

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Canada’s Retail Sector: What’s Maintaining it’s Strong Presence in the Market?

Amidst the rise of e-commerce and the ability to purchase nearly everything via your smartphone or computer, many have shown concern when it comes to the retail market. While e-commerce provides a convenient means of obtaining consumer needs, the physical retail market possesses a plethora of attributes that keep consumer traffic running steady. Marcus and Millichap reported that in 2018, transactions online increased by 20% however, only 4% of the Canadian retail activity took a hit. The unique traits physical retail markets encompass contribute highly to their authority within the consumer market.

 

Experience

A major factor contributing to the continued success of retail shops is the consumer experience. The ability to physically interact with tangible means and various services bodes well with consumers. Retail stores, such as clothing shops, continue to see a high amount of consumer traffic; this can be correlated to the desire for consumers to try-on clothing and browse various outlets.

Service-oriented businesses providing services such as fitness centres and restaurants thrive due to the desire for a memorable experience that cannot be obtained through digital means. The ability to create an experience and explore tangible elements continues to be a strong point for the Canadian retail market.

 

High-end markets

Canada’s retail real estate market continues to thrive when it comes to high-end sales. While luxury goods can be obtained online, many looking to spend copious amounts of money on a product or service would rather do so in person to ensure they are getting their moneys’ worth. The wave of tourism in Canada also contributes to the influx of luxury goods purchased in Canada. Marcus and Millichap reported a 2.4% rise in luxury expenditures in relation to tourism within Canada in the third quarter of 2018. For those in the high-end retail market, the sales continue to grow thanks to the boom of tourism and the demand for luxury products.

 

Moving into 2019, the forecast predicts favourable outcomes for retail real estate investors. Albeit, the growth of e-commerce is moving rapidly, the plethora of attributes retail shops provide to consumers can ensure their place within the realm of shopping remains at a high.

Learn more about Canada’s retail sector growth here: https://www.redevgroup.com/news-article/canadian-retail-sector-shows-strength

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Commercial Property Investments Show No Signs of Slowing Down in Canada

Canada is home to a multifarious of opportunities in the commercial property investment sector. From the suburban portions that boast significantly lower costs to the heart of major cities that boast convenience for consumers, there is something for everyone when it comes to commercial property investments.

 

Towards the end of 2018, commercial property investments were still running strong and 2019 is set to be a prime year for investors in the space. Despite the departure of a surfeit of massive brick-and-mortar chains, the demand for retail, industrial, and other commercial properties remains high. With the demand for these spaces remaining high, the supply is low; causing an uproar in competition and pricing.

 

Cities such as Toronto tend to be the safest for investment funds due to the diverse economy the city boasts, however with that being said, supply is especially low. Ergo, prices for commercial real estate are significantly higher in Toronto and cities alike and properties tend to stay on the market for very short periods of time, with many jumping at the opportunity to own property in such a diverse city.

 

On the other hand, places such as Alberta are seeing an intense increase in investments, mainly due to the affordability in the market when compared to larger, more dense areas such as Toronto. This back the motion that the commercial property market is not slowing down any time soon; people will continue to invest in prime real estate, whether it be in the big city or the reasonably priced outskirts.

 

What’s the forecast for retail investments in Canada?

 

As previously mentioned, the commercial real estate market is showing no signs of slowing down and growth is inevitable as we move further into 2019. The retail markets, in particular, are showing vast growth due to the possession of in-person customer experience that many individuals still look for when shopping. Tech sectors are also seeing continuous growth and account for a significant amount of commercial property investments.

 

The trends for 2019 are looking up when it comes to commercial real estate as more and more people are seeing the opportunities arising from Canada.

 

Read more about commercial property investments and their place in the Canadian market here: https://www.redevgroup.com/news-article/investment-in-commercial-property-strengthens-in-canada-

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Commercial Real Estate Shows Little Fear with Talks of Recession Appearing

Towards the end of 2018, we saw a slow down in US GDP which has had its share of ramifications on a grandeur scale. These numbers could be an indication of a potential recession heading to Canada. For a surfeit of industries, a recession can vastly impact their market, causing significant loses. Ergo, key planning is vital.

 

Recessions impact every market differently. There are those that are swept away by the quick current of financial demise and there are those that are heavily insulated; showing little to no slow down. The tech sector and smart retailers are among the heavily insulated industries, boasting little impact in regards to the former great recession. What does this mean for commercial real estate investors and tech sectors alike?

 

Granting all of this, these industries are comprised of traits that can keep them afloat through a financial crisis. Well-positioned commercial property owners, specifically, can see little to fear yet again should another recession arise. A plethora of retailers are beating out analysts’ forecasts. Loblaws is a prime example of a commercial retailer thriving with increases in both revenue and net profit. The harmonious merge with a tech team has allowed them to grow without compromising their physical stature.

 

Another key component that commercial real estate possesses is physicality. Although consumers can purchase pretty much anything online nowadays, there is still an enticing aspect of taking a trip to the local shop. Service plays a major role in this, with a majority of shoppers returning to brick-and-mortar places for the personable service offered. In sum, despite growth in e-commerce, commercial real estate is still thriving and through a global financial crisis, they still reign as heavy-hitting contenders.

 

Read more about how Canadian Commercial Real Estate is withstanding the test of global and economic issues: https://www.redevgroup.com/news-article/technology-smart-retailers-insulating-canadian-commercial-property

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Retail Real Estate: A Worthwhile Investment Going Strong in 2019

When deciding where you want to invest, it’s imperative that you conduct a significant amount of research into various investment streams in order to ensure you are making the optimal choice for your needs. Some investments, such as stocks or opening your own storefront, come with some potentially high risk and can be vastly time-consuming. Albeit, these investments have proven successful for a plethora of individuals, however, some are still in search of opportunities to allocate their funds elsewhere.

 

Despite the rise of e-commerce businesses, shopping plazas are still going strong. Malls continue to be filled with eager shoppers, smaller plazas continue to see visitors coming for niche products they may not get elsewhere. Similar to any other investment, retail properties require a high-degree of time, research, and planning. Location, space, and size are amongst some of the factors one must keep in mind when considering a retail property and returns are often contingent on said factors. For example, a shopping plaza in Toronto’s downtown core will cost more than one further out from the city, however, due to a higher saturation of potential consumers in the downtown core, the ability to generate significant profit within a shorter time frame is plausible.

 

Aside from the aforementioned factors, there are many surfacing trends that are contributing to the continual success of retail shopping plazas. From the rise of cannabis post-legalization to massive retail giants pledging astronomical funds to aid the growth of retail real estate, there are several indicators that pose benefits for shopping plaza investors.

What is driving the retail world to success currently? Why is an investment in retail real estate beneficial? Read the full article here: https://www.redevgroup.com/news-article/it-pays-to-be-in-retail-5-great-signs-for-shopping-plaza-investors

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Canadian Commercial Real Estate is a Solid Investment – Richard Crenian

The commercial real estate has for decades been viewed as an alternative asset by investors, but no more as evidenced by positive results in this regard. Especially in Canada, the commercial real estate has recently caught the attention of potential investors as a safe bet. Richard Crenian, the CEO of ReDev Properties, believes that it’s the right time to invest in Canadian commercial real estate. Learn more

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