LSE offering targets supported housing ventures

A new offering on the London Stock Exchange (LSE) is targeting £250 million (CAD $435 million) for supported housing ventures in the United Kingdom. Responsible Housing REIT has launched the initial public offering (IPO) with plans to acquire and develop a portfolio that will both generate sustainable investment returns and pioneer an alternative model for financing and delivering affordable, assisted housing.

“Responsible Housing REIT offers the opportunity to invest in a much-needed social resource where demand is on an upward trajectory,” says the REIT’s chair, Robin Minter Kemp. “This will be an impact-led strategy with a peer leading ESG framework that also offers an attractive dividend underpinned by inflation-linked income supported by sustainable rents.”

Three arms of BMO Asset Management will act as the investment, asset and property managers for the REIT. They promise a “fit-for-purpose” portfolio to accommodate a wide range of potential tenants including: adults and youth with learning disabilities, mental health issues, physical disabilities or addictions; the elderly; and other vulnerable individuals requiring long-term support or temporary housing.

Guy Glover, lead manager with BMO, describes the new REIT as “a new and compelling proposition for investors” that will help UK local governments fulfill their statutory obligation to provide housing for tenants in need.

“We have been engaging extensively with stakeholders in the supported housing community,” he reports. “The UK faces a shortage of suitable accommodation, underpinning our conviction in a strategy delivering a balance between all stakeholders to create a truly sustainable model.”

Reserve funds ignore climate target impacts

Canada signed into the Paris climate accord that sets targets for greenhouse gas emissions being 30 per cent lower than 2005 levels by 2030 and net-zero by 2050. Many of us believe this is a high-level statement that has no bearing on how condominiums are managed today. After all, 2030 and 2050 are a long way off and we have to tend to our day-to-day obligations, never mind those far into the future. Right?

Here’s the hard truth that many of us have not faced yet: our reserve fund studies with 30-, 45- and 60-year projections for expenses take us past the 2030 targets (just nine years from now) and smack dab into the 2050 net-zero emissions targets. How does this affect condominiums? Good question.

The condominium industry is not taking steps to prepare condo corporations for the inevitable effects of the targets. Buildings are one of the top sources of greenhouse gas emissions in Canada, so there’s no way condominiums will escape scrutiny. In 2019, buildings accounted for 12 per cent of emissions— more than the heavy industrial sector.

Net-zero is defined as our economy either emitting no greenhouse gas emissions or offsetting emissions. For condos, we only have to look at heating boilers and domestic hot water heating boilers, or any other gas burning appliance to find large emissions contributors. Did I mention the emergency generators?

Recently, we saw carbon taxes applied to natural gas and gasoline and we can only predict that these carbon taxes will increase as we get closer to 2030 and then again as we near 2050, making gas far too expensive for condominiums.

No longer is it reasonable to disregard the post-climate-target economy by choosing to ignore the foreseeable reality that natural gas will simply be too expensive for condominium owners to use as fuel. Today’s reserve fund expenses contain “like-for-like” costs that account for end-of-life replacement of various boilers. But looking forward, we can’t afford to simply accrue funds for replacing the current heating systems with newer gas-burning appliances. This means that our current projected replacement costs for gas-burning appliances is dreadfully underfunded.

Will it be electric boilers supported by geothermal heat storage? Deep water supply for cooling and heating? Renewable energy sources? It’s simply too soon to predict what we will replace our gas-burning, greenhouse-gas-producing appliances with. The question we should be asking is, “Is it too early to start accruing funds for the 2030 and 2050 new net-zero world?”

With just 29 years to accrue funds and search out new lower emission appliances and building systems, we should be having these conversations now. I will also bet that not a single reserve fund study in place today has taken the position to accrue funds for what will surely be an expensive change to alternate heating systems.

We should be asking our reserve fund planners to look at the Paris accord target dates and compare the end-of-life replacement of our gas-burning appliances against the target dates. As we near 2030, and again in 2050, we need to ensure that we are accruing funds that will leave us in a good financial position to look at alternate heating sources without placing the full burden on future residents.

Make no mistake, there is large international momentum around reducing greenhouse gas emissions. Close to 200 countries have committed to fighting climate change. Further, economic damage from the COVID pandemic has motivated governments to look at this as an opportunity to create high-value jobs in high-tech, engineering, and construction sectors. In the fall of 2020, the Canada Infrastructure bank announced a $2-billion initiative as one component of a $10-billion strategy to stimulate green economic growth to help meet Canada’s commitment to reduce emissions.

The choices are clear: do nothing and see the devastating effects on condominiums when they are forced to pay large sums of money (not accrued) to switch out gas-burning and greenhouse gas-emitting appliances or live with exorbitant carbon taxes, placing the cost of living in a condominium out of reach for most people. Or, prudent boards of directors can start accruing for the inevitable now so that funds are available when needed, thereby keeping the cost of living and the cost of purchasing a condominium affordable relative to neighbouring buildings today and in the future.

Let’s start by asking our reserve fund planners to address the 2030 and 2050 targets in the next reserve fund study update. We all better hurry; time is running out.

Murray Johnson is vice president of client operations at Crossbridge Condominium Services Ltd and the president of CCI Toronto.

Realtors scrutinize proposed blind bidding ban

Home buyers looking for a perfect home in markets with slim pickings are facing a deluge of election proposals that promise more affordable choices. One of the more contentious policies to surface over the past week is a subscribed end to blind bidding.

Last week, the Liberal government committed to criminalizing the process that blocks bidders from officially knowing specific details of other competing offers, but associations representing realtors disagree with the move.

The Canadian Real Estate Association said a ban is no magic bullet for affordability and would take away liberties for homeowners to sell the way they want. A response from TREBB echoes the sentiment, stating: “Punishing home buyers and sellers for wanting to keep their financial decisions private for the largest transaction of their lives is a substantial overreach of the government.”

David Oikle, president of the Ontario Real Estate Association, rebutted that the current reality of bidding wars is ultimately an issue of supply and the plan would have the opposite effect — “negatively impacting Canada’s housing market and making home ownership even more unaffordable.”

Contrary to popular belief, a ban wouldn’t necessarily equate to a cooler market, adds John Lusink, president of  Right at Home Realty. As he says, blind binding doesn’t create or impact the housing demand that already exists.

“It is a function of supply-side shortage and an increased demand, which is fueled by low interest rates, higher degree of savings, the continuing influx of foreign capital, and the “pandemic effect,” he says. “A major trend we are observing is that consumers are looking to move, whether it be to upgrade, downsize or take advantage of the current price points.”

Christopher Alexander, the EVP and regional director at RE/MAX, agreed, in a statement, that rising prices attributed to low supply and high demand have given sellers the advantage.

“While RE/MAX has advocated for a fair bidding process for all, the proposal to ban blind bidding with an amendment to the criminal code is concerning,” he said. “It pits homebuyer against seller and may even intensify the housing supply shortage, by putting sellers at a disadvantage and discouraging them from listing their home, creating even more competition in the market.

“In order to improve the affordability crisis, a newly appointed federal government needs to lead a collaborative national housing strategy across all levels of government, to create more homes for Canadians.”

Canada has the lowest number of housing units per 1,000 residents of any G7 country, a recent report from Scotiabank finds. This number has been declining since 2016 as the population intensifies. Richard Lyall, president of the Residential Construction Council of Ontario, recently said a “dire shortage” like this needs immediate attention or else it will derail economic recovery.

“There is a lot that could be improved at the local municipal levels such as reducing the red tape and the costs to develop new builds,” says Lusink. “It takes years to go from land acquisition through to actual construction and it requires an increasingly larger upfront investment.

“In some areas, municipal services and infrastructure have not been maintained or upgraded to the point where development is at a standstill due to lack of capacity. York Region is a perfect example. “[It] needs more sewage capacity to handle the current growth trends and ensure developments can continue in the coming years.”

Other key issues said to rock the housing market are speculation and foreign capital money laundering. Lusink points out that the Canada Revenue Agency, Financial Transactions and Reports Analysis Centre and Real Estate Council of Ontario have legislation in place that could support action on the matter, but have been “woefully inactive” and are “a major reason” these issues are pervading.

On the blind bidding front, when it comes to large-scale actions like a ban, the industry flags urgent gaps. Alexander states that federal candidates should reach out to localized real estate experts to gather a deeper understanding of how to remedy the affordability crisis.

Lusink says the Real Estate and Business Brokers Act Code of ethics has several rules to help the buying process unfold in a more clear manner; they just need to be better enforced and adapted to require agents to be more transparent. He points to a section of the code on “conveying offers,” which gives direction on how that process is supposed to occur.

“There are many tools agents are now using to assist in this process, but the challenge is that the consumer is often unaware and uninformed as to how this is supposed to be handled according to law,” he says. “This is where RECO has fallen well short both in their education of realtors as well as providing clarity and/or forcing agents to provide their clients with a clear and comprehensive overview of the rules and process.”

One outcome that would occur with a ban are open auctions, or what would become “a three-ring circus on front lawns,” as OREA President David Oikle suggested in his statement. He added that open offers are the norm in Australia and New Zealand—where competition can be rife with rush decisions and prices are still rising despite the regulation.

In Canada, open auctions of properties are already available and real estate agents already have the means to conduct open bidding, says Lusink.

“The issues that make this challenging are the current rules requiring all buyers and the seller to agree to sharing the terms of their offers,” he says. “Another approach that many brokerages already take is to have a manager handle the offer process, especially if the listing salesperson has their own buyer for the property as well. Government could provide some extra guidance around how multiple offers are managed by adding to or amending the existing legislation to beef up these procedural rules.”

How would a ban affect buyers and sellers of condos?

Foreign investors are flocking back to the new condo market where ownership is rising again in cities like Toronto, and even more in Vancouver.

“Students are returning to school; employers are calling their staff back to the office and this means the condo market is rebounding fast,” says Lusink. “There are also many developers who offer “turnkey” condo investments. This means they sell the new condo to a foreign or local investor who has never physically seen the property and they manage the rental process for a fee.”

That said, he notes that changing the blind bidding process isn’t going to impact this segment of the condo market; rather, it will affect only existing inventory on MLS.

Ontario proposes new RPP price-setting regimen

Electricity prices could become more responsive to fluctuating commodity costs if proposed regulatory amendments are adopted in Ontario. However, affected residential and small business customers won’t necessarily see a significant change in the customary billing practices since distinct rate schedules for the warm and cold weather months would still be implemented on May 1 and November 1 every year.

As proposed, the Ontario Energy Board would assess market conditions, prepare forecasts and set electricity rates for the low-volume customers covered by the provincial regulated price plan (RPP) once annually rather than on the current semi-annual timetable. To prevent any large discrepancies between the OEB’s price and the actual cost of electricity accumulating over that longer 12-month period, the proposed amendments would also authorize new price-setting if or when the variance hits a designated threshold.

“This threshold would be determined in consultation with the OEB to avoid the rate volatility that could occur due to the clearing of large variance account balances,” the summary of the proposed amendments states.

The Ontario government is accepting comments on the proposed changes until October 2, 2021. If adopted, the annual RPP price-setting regimen would be in place for the next planned rate change.

“New RPP rates would take effect each November 1st, beginning on November 1, 2021,” the amendment summary confirms. “Seasonal (i.e., summer and winter) time-of-use (TOU) hours, as well as the monthly consumption threshold that applies to residential RPP customers paying tiered prices, would continue to change each May 1st and November 1st.”

B.C. awards Highway 99 improvement contracts

Contracts for work on Highway 99 improvement projects on either side of the George Massey Tunnel in B.C. have been awarded. Work will begin later this year.

M2K Construction Ltd. of Coquitlam has been awarded a $12.8-million contract for construction of bus-on-shoulder transit lanes on Highway 99, south of the tunnel. The project includes the creation of southbound bus-on-shoulder transit lanes between Highway 17A and the Ladner Trunk Road off-ramp, and northbound from Ladner Trunk Road to the existing start of the high-occupancy vehicle lane on Highway 99.

The new bus-on-shoulder lanes will tie into dedicated transit lanes through the new tunnel to bring free-flowing transit across the river, improving the quality and reliability of public transit in the region.

A $5.28-million contract has been awarded to Lafarge Canada Inc. of Port Coquitlam for construction of the Bridgeport Road bus connection and improvements to the Highway 99/17A interchange. This new bus-only access will be created from Bridgeport Road to Highway 99 southbound. This will improve access to the highway for transit and make for a faster commute from Bridgeport Station and the Canada Line.

This contract also includes the creation of a new multi-use pathway from the Oak Street Bridge into the Richmond cycling and pedestrian network, improvements to the bicycle shuttle pullout on Highway 17A and improvements to cycling facilities along Highway 17A, including new ramp crossings and better connection into the existing network.

“Giving people options for commuting by improving transit and active transportation choices is a priority for the region,” said Minister of Transportation and Infrastructure Rob Fleming. “Combined with the new crossing to replace the George Massey Tunnel, we’ll improve traffic flow, manage traffic congestion and make travel by transit, walking and cycling more convenient and attractive along this section of Highway 99.”

The project to replace the Steveston Interchange is in the request for qualifications stage, with a request for proposals planned for early fall 2021. With a successful contract award, construction on the Steveston Interchange is anticipated to begin in 2022 and be complete in 2025. The new interchange will improve connections for vehicles, pedestrians and cyclists, while addressing the current bottleneck.

Canadian leader appointed to ISSA Residential Cleaning Council

ISSA, the worldwide cleaning association, has announced that it has appointed new members to the 2021-22 ISSA Residential Cleaning Council.

The Council represents the residential cleaning industry through the Association of Residential Cleaning Services International (ARCSI), a Division of ISSA.

This year’s nominees include one Canadian-based industry leader: Jill Barclay, owner of Goldstar Cleaning Services, based in Fernie, B.C.

Barclay founded Goldstar in 2003 as a housekeeping service provider to a group of property management companies, and the company has since grown to become a full-service cleaning company offering residential and commercial cleaning services.

“Over the last year and a half, professional house cleaning operations have faced new challenges related to cleaning and disinfecting against COVID-19, building trust among customers, protecting their staff members, and more,” said ARCSI Program Manager Erin Lasch.

“We are excited to welcome new faces to the Residential Cleaning Council. They will be instrumental in delivering value to ARCSI members, expanding membership, and changing the way the world views cleaning.”

Joining Barclay as 2021-22 members are:

Jarelle Flibotte, Cleaning by JMF LLC, Barre, Vt.
Pete Glavas, Maid Brigade of Alexandria, Alexandria, Va.
Jeannie Henderson, Jeannie Cleaning, Portage, Mich.
Katherine Lill, Tidewater Cleaning Service, Easton, Md.
Bruce Vance, Town & Country Services, Pittsboro, N.C.

“In addition to welcoming our new council members, we would like to thank our outgoing council members for their continued dedication to the residential cleaning industry at a time when programming, services, and education were needed most to help business owners and employees through the pandemic,” said ISSA Executive Director John Barrett.

Four global design trends impacting tile industry

Tile manufacturer Crossville has released its annual Design Trends Look Book. The digital publication showcases four macro trends that are presently influencing interior design, including accompanying tile collections that answer these trends in interior environments.

Looking at ongoing events in tandem with modern fashion, four notable focus areas are present in contemporary design: 1970s-inspired Bright and Bold, 1970s-inspired Bohemian Spirit, Bio-Feel-‘Ya, and Touch Points.

Bright and Bold – that 70s Show providing not only nostalgia and comfort but also creativity and play with lots of glossy, bold, and bright hues. Style goes prismatic—optimistic in colour, eclectic in pattern, liberal in mix of materials.

Bohemian Spirit – the “other side” of the 70s style, more earth-inspired with natural elements. This style is fluent, unconventional, and comfortable—an idyllic answer to work-from-anywhere sensibilities.

Bio-Feel-‘Ya – much more than just bringing the outdoors in; truly embracing a love for all things natural. Grounded in natural elements, this style converges interiors with the outside environment, creating spaces that are sensory and sincere.

Touch Points – all about texture and tactile experiences. Dimensional handcrafting and the character of touch are key components of experiential spaces.

These macro trends are researched and compiled by Crossville’s vice president of marketing Lindsey Waldrep. In developing the list, Waldrep employed a holistic perspective that considered broad societal and fashion influences that are guiding current aesthetics for both commercial and residential design.

She first presented her findings as part of a global trends presentation at the Coverings Expo in Orlando, Florida, on behalf of the Tile Council of North America.

Concerns as new mortgages jump to record high

New mortgage volumes climbed to more than 410,000 during Q2, the highest volume ever recorded in a single quarter. This is a 60.2 per cent increase compared to the same period in 2020, according to Equifax Canada’s most recent consumer credit trends and insights report.

Soaring home prices have also increased the average loan amount for new mortgages to more than $355,000, a 22.2 per cent increase from Q2 2020.

B.C. saw an exceptional increase in new mortgage volume during the second quarter with a year-over-year increase of 85.7 per cent. Apart from a strong housing market, seasonality and refinancing also played a big role. High mortgage growth and low interest rates have helped home equity lines of credit (HELOCs) rebound. New HELOC volume increased by 56.7 per cent when compared to Q2 2020 — the highest it has been in the last ten years.

Analysts are voicing their concerns about the variable rate of HELOCs and mortgages.

“The HELOC trend is worrisome as often the payments are tied to a variable interest rate,” said Rebecca Oakes, AVP of Advanced Analytics at Equifax Canada. “In 2018 when interest rates went up, we saw a drop in credit card payments, especially among consumers with a HELOC. It also led to higher bankruptcies among older consumers with HELOCs.”

Another concerning trend Oakes points to is the amount of mortgage debt being taken on by consumers with lower credit scores. These consumers form a small percentage of all new mortgages (10 per cent), but their average loan amount has increased at the same rate as consumers with higher credit scores.

With uncertain times due to the pandemic still ahead, these consumers could find themselves less equipped to manage future additional financial stress. Adding to the concern, according to Oakes, is the rate of inflation, up 3.7 per cent in the last 12 months, which is the highest annual increase since May 2011.

“Prices for consumer goods have risen and if the inflation trend continues, there is potential for an earlier-than-planned interest rate increase to curb this,” she said. “With many consumers now heavily leveraged and the potential for increases on variable rate mortgage and HELOCs, consumers may find themselves not in a position to pay back their debt obligations if interest rates rise. This can lead to higher insolvencies.”

Consumer debt stands at $2.15 trillion

Overall consumer debt now stands at $2.15 trillion, driven by considerable mortgage growth. This is up 3.0 per cent from last quarter and up 7.5 per cent from Q2 2020.

New credit card growth is also picking up pace, doubling the volume seen a year ago when demand was at its lowest.

Despite deferral programs ending, delinquency rates dropped from Q1 2021. Government support and increased disposable income are still helping consumers pay off their debts and improve their credit score. The average Equifax credit score for consumers increased by 12 points in the last two years.

“Lower delinquencies are a good thing, however, insolvency volumes are higher this quarter than the lows of last year,” said Oakes. “We may see surprise insolvencies occur where consumers with no delinquency history on file and a decent credit score end up filing without warning.”

What are the cost savings of efficiency retrofits?

Ask any condo owner in the GTA or in any major city across Canada and they’ll unanimously list astronomical monthly maintenance fees as among their biggest concerns with condo ownership. Add higher vacancy rates as a result of COVID-19 and these high fees also become a major issue for condo boards and building owners, all trying to find a way to reduce or optimize costs that will inevitably be passed down to tenants.

One of the greatest contributors to skyrocketing maintenance fees is inefficient or outdated infrastructure in aging buildings—a preventable expenditure when properly managed. From old boilers providing insufficient heating, to high prices for lighting and bulb replacements, energy inefficiency is a major—and expensive—problem for building owners, and ultimately tenants.

But fixing these issues isn’t always an easy task. Various studies have indicated three main reasons for condo boards/building owners not implementing these efficiency retrofits: lack of capital, certainty of return (risk), and capacity to implement these retrofits in a comprehensive way.

The first issue of capital availability is well known – capital is needed to maintain building assets and fund their repair or replacement – something older condo buildings often lack as they prioritize spending on more urgent repairs and immediate tenant needs, leading to a vicious cycle of disrepair and deferred maintenance. The cost to maintain this cycle is subsequently passed down to condo owners and tenants through increased maintenance costs to help raise the required funds.

The second issue of risk is specific to the category of efficiency retrofits. Every condo dweller and building owner can relate to at least one instance of how a retrofit never achieved the savings it was supposed to achieve. This is partly a function of overzealous (and very avoidable) selling and partly a function of a common baseline. Savings need to be measured properly and in comparison to savings generated in previous years – if this baseline is not measured correctly, there can be very different interpretations of savings.

The third major issue is capacity. Most condos and other buildings are managed by a property manager who has limited capacity to undertake comprehensive retrofits. While it is common practice to fix a broken equipment or replace a non-working bulb, very few buildings even think of undertaking comprehensive retrofits because of this issue.

One way to overcome these issues and prevent increases to maintenance fees—or even decrease these costs for tenants in some cases—is through energy efficiency retrofits. Condos can generate both immediate and long-term value in their buildings, leading to potential savings for everyone involved by partnering with a third-party company that invests, develops and maintains efficiency retrofit projects. This value generation happens because these companies invest all the capital needed for the retrofit, guarantee savings to the condo/building owner and complete a ready-to-go installation. There is a natural in-built check and balance mechanism in this arrangement because the company gets paid only when savings are generated.

When managed, implemented and measured appropriately, comprehensive efficiency retrofits can reduce operating expenses by anywhere between 15-40 per cent, using modern equipment and automation to optimize energy usage. This efficiency leads to lower utility costs through lower energy consumption, cleaner buildings and increased comfort for owners and tenants—all the while reducing greenhouse gas emissions by about 20 per cent or more to support the environment.

By replacing outdated equipment, these investments also reduce the heavy fees needed to increase capital reserves. Savings can then be passed on to unit owners through reduced fees and/or building capital can be reinvested into upgrading amenities and shared spaces.

Efficiency retrofits can also help condos become more competitive in an ever-shifting market. Upgraded equipment creates safer, cleaner and healthier spaces through improved ventilation, lighting and heating/cooling systems, making condos brighter overall for possible tenants and ultimately adding value to the space.

Reinventing savings into the building also brings a competitive advantage through a fresh, modern design upgrade, or the installation of new, coveted amenities. The idea of living in a “green” or environmentally-conscious building has become not only sought after but expected —should buildings forego energy efficiency as a priority, they risk losing out on environmentally-conscious consumers looking to rent or to invest in a new space.

Chandra Ramadurai is the CEO of Efficiency Capital. Chandra brings over two decades of experience in sustainable energy, banking and investment management in Canada, the U.S., Europe, the Middle East and India. He has led or been part of various investment deals worth billions of dollars. Previously, he was the CEO at IT Power, one of the world’s oldest clean energy companies based in the UK and has held senior-level positions at Suzlon Energy, a large wind energy company, Cemex, a Fortune 500 company, Standard Chartered Bank and PWC. Efficiency Capital is a performance-based investment solutions provider that upgrades the energy and environmental performance of buildings with no upfront cost to the owner.

The new architecture of schools

From improved indoor air quality and disease prevention to versatile and student-centred design, now more than ever, the architecture of schools is under scrutiny. Whether it’s early childhood to senior secondary facilities, how we build schools is rapidly evolving to meet the ever-changing needs of our fast-moving world. The school of the future is more flexible, versatile and adaptable to the wider community it serves. It supports hybrid learning models, equipping students to seamlessly access online and bricks-and-mortar resources. It reduces its carbon footprint using renewable materials, promotes health and well-being, inspires new ways of learning and teaches students environmental values and citizenship.

Unconventional school design

And for some B.C. schools, the future is already here. For the better part of a decade, innovative school designs have been cropping up across the province, characterized by an abundant use of wood, sustainable technologies and unconventional open floor plans flooded with sunlight. In some instances, they incorporate unusual features such as retractable garage doors, little to no traditional desks and minimal hallways. Such designs that once might have seemed ahead of their time—even quirky—are proving functional and timely in 2020, affording adjustable classroom configurations, fresh, natural ventilation and better indoor-outdoor connectivity.

Such is the case with the 480-student Lord Kitchener Elementary School located in Vancouver’s Point Grey neighbourhood. Completed by the IBI group in 2012, the project entailed a rehabilitation, seismic upgrade and adaptive reuse of an existing century-old wood structure along with the construction of a new building. The added facility, constructed of glulam timber post-and-beams, includes community-use facilities and does away with the traditional division between classrooms. Mechanical garage doors line one wall of each classroom, opening on to a shared common area.

The design accommodates collaborative teaching methods and gives teachers opportunities to work one-on-one in a designated quiet room with their students while their colleagues watch their classroom from the common area. The two-storey space features a grand staircase that links the two levels of learning studios. The main entrance area is spacious enough to accommodate student drop-offs, informal meetings and more formal concerts and performances. Extensive glazing draws in light while connecting students to outdoor learning areas. A community garden for the students reinforces a strong link with nature.

Top of the class

École Salish Secondary | Photo credit: Ed White Photographics courtesy KMBR Architects

The province’s high schools are also increasingly adopting more sustainable construction, natural materials, such as B.C.-sourced timber, along with less conventional, forward-thinking designs.

One of the newest to join the list is École Salish Secondary in Surrey, B.C.’s fastest-growing municipality. The 13,000-square-metre facility features immense collaborative spaces that can be partitioned off with sliding glass walls, an open-air rooftop yoga studio, and whiteboard desks, along with state-of-the-art technology, including a theatre, ubiquitous WiFi, and huge screens for students to project work onto.

Designed by KMBR, the firm set out to re-envision a new school from the ground up. This required a fresh perspective, according to the firm, starting with new names for traditional spaces. Music, arts and drama are “MAD Labs” and the metal and wood shops are “TED (Technology Engineering and Design) Labs”. Learning spaces incorporate discovery labs, break-out and multi-purpose gathering spaces, and a learning commons with creative areas called “Makerspaces”. The result is a design that accommodates “anytime-anywhere, collaborative, project, and inquiry-based learning,” according to the design team.

The energy-efficient facility features argon-filled windows and automated motorized shutters to reduce solar heat gain and loss. This in turn minimizes the use of HVAC systems. A double-height atrium features exposed glulam beams and interior wood finishes along with large operable overhead doors—a boon for improving natural ventilation and increasing outside airflow throughout the building.

Other high schools throughout the province are also demonstrating innovative and sustainable designs such as Southern Okanagan Secondary School and Abbotsford Senior Secondary School.

Learn more at info.naturallywood.com/schools

ESG benchmarking tallies growing global uptake

ESG benchmarking is continuing to gain momentum in the commercial real estate sector, as GRESB, the global assessment of environmental, social and governance performance for commercial real estate portfolios and infrastructure assets, recorded another impressive surge in participation for 2021. This year’s 26 per cent jump in reporting entities follows an 18 per cent increase in 2020.

“We are pleased to see such a high level of participation in this year’s GRESB benchmark coverage, particularly considering the business disruptions we have all experienced over the past year and a half,” says Sebastien Roussotte, chief executive officer of GRESB BV.

The 2021 real estate results, slated to be released later this fall, will draw from a database of 1,520 entities collectively reporting on 117,000 assets valued at USD $5.7 trillion. Participants include 1,187 non-listed property funds, 326 listed companies and REITs and seven governmental entities. A 24 per cent increase in respondents this year — up from 1,229 in 2020 — also boosts the numbers of assets in the database by nearly 22 per cent and the value of assets under of management by nearly 19 per cent compared to 2020.

Meanwhile, another 31 funds joined GRESB’s infrastructure fund assessment, lifting 2021 participation to 149, and 132 assets were added to the asset-level assessment. The latter exercise now encompasses 558 assets located in 69 countries and collectively valued at USD $738 billion.

GRESB’s investor membership now stands at 140 institutional and financial investors with more than USD $47 trillion in assets under management. They mine the data to monitor the performance of their holdings and to inform their investment decision-making.

“Increased engagement with a standardized benchmark demonstrates a strong industry commitment to ESG transparency and collaborative action,” Roussotte maintains.

BEIC Unveils Building Energy Innovation Report

The time to embrace clean building technologies is now, but it takes stakeholders across the real estate community to make the shift. This is the philosophy behind the Building Energy Innovators Council (BEIC) and the underlying message in its newest report.

“The relevance of the BEIC has never been greater, given the pivotal role the real estate sector can play in Canada’s COVID economic recovery,” writes Gordon Hicks, BEIC Chair & CEO of BGIS, in the report’s opening pages. “Ours is an industry-driven initiative established to accelerate the collaboration, innovation, and adoption of clean building technologies, including energy efficiency and renewable power solutions that will transform the built environment, while developing world-class cleantech companies, creating jobs, and enabling economic prosperity in a future low carbon era.”

The report, entitled Clearing a Space for Clean Building Technologies, turns a deserved spotlight on organizations that are using cleantech innovations to create greener, healthier, and more efficient homes, offices, and facilities. It also features insights from public and private sector leaders and a look at the innovations that are reshaping Canada’s built environment.

Articles include:

BEIC’s Mission Overview, outlining the Council’s origins and the many ways it promotes clean building technologies.
The Well: Toronto’s Building Innovation Showcase, spotlighting the GTA’s ambitious mixed-use project and how multiple innovations are being used to create an unparalleled occupant experience.
Taking Savings into Account, profiling TD Bank’s carbon-neutral strategy and recent energy-saving initiatives.
Inspiring Innovations at PSPC, detailing building energy innovations throughout Public Services and Procurement Canada’s headquarters.

BEIC’s report also includes an 8-page directory of BEIC members, each of which is playing a critical role in the design, production, and promotion of cleantech advancements.

Clearing a Space for Clean Building Technologies is available to read online at no cost. Organizations interested in joining BEIC are encouraged to visit Beic.ca or contact Brad Moore, BEIC National Manager, at bradm@beic.ca or 647-467-7708.

Canadian hotels await post-pandemic recovery

Canadian hotels still aren’t making the Dean’s list for investment performance, but market analysts appear confident that rallying conditions are pushing the sector in a positive direction. Colliers’ review of trends in the second quarter of 2021 gauges investor sentiment at a C+, while Avison Young’s mid-year Canada hotel market summary underscores expectations for improvement in Q3 and Q4.

Both reports examine the interplay of COVID-19-related depressants that will have to lift before occupancy levels, revenue per available room (RevPAR) and average daily rates (ADR) can recover to pre-pandemic levels, and acknowledge that will take some time to fully occur. However, the steady increase in Canada’s vaccination rates, rebounding domestic travel and prospects for the return of cross-border and international visitors are all cause for optimism. The United States also provides some indication of expected demand once pandemic-related restrictions ease.

“In the U.S., Memorial Day occupancy and RevPAR numbers were better than those posted during the 2019 Memorial Day holiday weekend, reaffirming that when it comes to travel, people are looking to make up for lost time,” Avison Young analysts observe. “This is a trend that will likely also take place in Canada, but several months behind the U.S.”

The firm’s proprietary analytics platform, which measures the weekly influx of people into downtown Toronto, Vancouver and Montreal shows that the three cores are becoming more active, suggesting an associated pickup in demand for hospitality services. Combined with national survey findings that 59 per cent of prospective vacationers intend to do so within Canada this year, the sector is considered well positioned to attract a restless population that’s still hesitant to go farther afield.

“The leisure segment of the hospitality industry will likely have the quickest recovery, while markets that rely on corporate bookings will struggle until organizations relax business travel restrictions,” the Avison Young report projects.

“We expect a nice rebound in drive-to leisure demand this summer, but we’ll be watching business travel trends in the fall,” Colliers Canada analysts concur. “We view international business travel and international convention/conference business at the most risk through the medium-term and this will be a drag to major urban markets and larger conference box hotels.”

Varying activity across markets and service brackets

Thus far, Vancouver is seeing more noticeable activity, while Toronto’s longer-lasting lockdown measures are considered a major factor in the city’s weaker numbers. Averaged across the six major markets Avison Young surveys — Vancouver, Calgary, Edmonton, Toronto, Ottawa and Montreal — it charts an occupancy rate of 36.5 per cent for June 2021, more than 50 per cent lower than in June 2019. Only Vancouver surpassed the national average, registering a 44.8 per cent occupancy rate. Toronto’s hotel rooms were approximately one-third full, at 33.4 per cent, while bookings were scarcest in Montreal, with an occupancy rate of 27.2 per cent.

Average RevPAR for the six markets remained below $50, or 66 per cent lower than it had been 24 months earlier. Again, Vancouver was the only market where RevPAR exceeded the average. Nevertheless, it was more than 72 per cent short of Vancouver’s June 2019 benchmark, which was then just shy of $250.

Economy, midscale and upper midscale accommodations are showing the best recovery. Occupancy levels are highest in this service bracket — at roughly 40 to 43 per cent — and the gap from June 2019 bookings and revenues is the narrowest. As of June 2021, economy and midscale hotels were about 38 per cent below June 2019 occupancy rates and lagged June 2019 RevPAR by about 49 per cent. Meanwhile, luxury hotels were still nearly 73 per cent below the occupancy rates they achieved in June 2019 and more than 78 per cent behind on RevPAR.

That said, hotels in the luxury, upper upscale and upscale bracket have slipped from a much greater original height and are still outdistancing their more affordable counterparts for RevPAR. For luxury hotels, RevPAR was at nearly $300 in June 2019, while upper upscale commanded about $200. Both segments enjoyed occupancy rates in excess of 80 per cent, whereas the pre-pandemic rate for economy hotels hovered around 60 per cent.

The looming expiry of pandemic relief programs is now causing some wariness across all hotel market segments. Currently, the Canada Emergency Rent Subsidy (CERS) and Canada Emergency Wage Subsidy (CEWS) are scheduled to end Oct. 23 — timing that overlaps with the off-season for leisure travel. The spectre of a fourth wave of COVID outbreaks, also a feared possibility for fall, would likely delay resumption of business travel.

“Hoteliers emphasize that they require 30 to 35 per cent occupancy for limited and select-service, and 40 to 45 per cent for full-service, to break even on their costs. With Vancouver the only market above 40 per cent occupancy in June 2021, and Toronto, Ottawa and Edmonton just above 30 per cent, the hospitality sector is trending toward that break-even point,” the Avison Young report surmises.

Purchasers focused on conversions in large urban centres

On the investment front, trades have picked up somewhat after the 2020 lull. Colliers Canada blames a paucity of debt financing for stifling transaction activity, but notes that equity capital is “generally bullish” and vendor-take-backs have facilitated some deals. Q2 saw $548 million in transactions, pushing the 2021 first half total to $748 million.

“The average deal size is under $8 million given most trading activity is smaller assets in secondary/tertiary markets,” Colliers analyst recount. “Assets that are selling in urban markets have principally been for conversion to an alternate use.”

In the latter category, 26 properties, largely located in Ontario and British Columbia, were sold for conversion to social housing, seniors housing or other residential uses. That includes the Best Western Plus Uptown Hotel in Vancouver, the Super 8 Downtown Toronto, the Lakeview Signature Inn Calgary Airport and the Carleton Suite Hotel in Ottawa. Representing a different, non-urban locale, two resort properties encompassing 250 suites in Ontario’s Lake Simcoe/Georgian Bay area also sold for conversion for a combined price of $60 million or approximately $240,000 per suite.

Notable traditional trades during the first half of 2021 include the Four Points Hotel and Conference Centre in Gatineau, Quebec; Irwin’s Mountain Inn in Banff, Alberta; the Ambassador Hotel and Conference Centre in Kingston, Ontario; and the Hilton Garden Inn Saskatoon Downtown.

“No significant discounts on pricing were evident among the notable transactions that did occur during the first half of 2021. For now, assets are unlikely to trade unless buyers are willing to pay close to pre-COVID-19 asset values, but this could change depending on the timing of the withdrawal of government support for the sector. The market could look completely different if owners aren’t able to service their debt,” Avison Young analysts contend. “Distressed-asset sales have not been a major factor to date, but will be something to keep an eye on in the second half of the year and into 2022.”

The outlook on Canadian hotels is generally in sync with international trends, as findings from JLL’s recently released global hotel investor sentiment survey mirror much of the optimism about vaccine rollout and rebounding business and leisure trends. The report tracks an increase in investment activity, with USD $30 billion deployed in the first half of 2021 and 71 per cent of survey respondents stating intentions to be net buyers this year.

Among the COVID-19-triggered obstacles, 43 per cent of respondents have encountered more difficulty obtaining debt financing than during the pre-COVID era. Meanwhile, 70 per cent foresee a three- to four-year timeline before RevPAR returns to 2019 levels.

10 ways the cleaning industry can fight climate change

The threat being posed by climate change just grows and grows, as do the warnings of the dire consequences it holds.

According to the August 2021 Intergovernmental Panel on Climate Change (IPCC) report, scientists have observed significant recent changes in the Earth’s climate in every region of the world. The report also indicated that many of these changes are happening far faster than anyone thought.

But what can the professional cleaning industry do about it?

“Here in the U.S., we see the ramifications of climate change from coast to coast,” says green cleaning expert and sustainability advocate Steve Ashkin of The Ashkin Group, an internationally recognized consulting firm working to help make the professional cleaning industry greener. “The recent rainstorms in Tennessee have been attributed to climate change, as have the fires and drought in the western half of the country.”

Not taking sufficient action can have the potential for catastrophic consequences.

So, what does Ashkin recommend?

Use only green-certified cleaning solutions as these protect natural resources, release fewer or no ozone-depleting volatile organic compounds (VOCs), and generate less waste.
Use disinfectants sparingly and only as needed to help reduce the number of VOCs entering the atmosphere.
Consider using disinfectant alternatives such as hydrogen peroxide.
Purchase cleaning solutions in concentrated, bulk sizes, stored in recyclable containers, with minimal packaging. “This reduces shipping and packaging needs, protects natural resources, reduces greenhouse gas emissions, and costs,” explains Ashkin.
Purchase paper products made from 100 per cent recycled materials. This reduces millions of tons of CO2 emissions.
Increase the use of cleaning equipment using engineered water. These systems use tap water that is activated, ozonated, electrolyzed, or treated, turning it into an effective cleaning method without chemicals.
Buy from green- and sustainability-focused distributors. “I am always impressed [with] how many distributors have become specialists when it comes to green cleaning and protecting the environment,” says Ashkin.
Replace auto fleets with electric or hybrid vehicles.
Keep learning. “With training and education, our ‘frontline’ custodial workers can have a major impact on reducing cleanings impact on our environment,” adds Ashkin.
Remember this famous quote incorrectly attributed to Winston Churchill: “A pessimist sees the difficulty in every opportunity. An optimist sees the opportunity in every difficulty.”

CNC opens new Vanderhoof campus for trades

A new Vanderhoof campus of the College of New Caledonia (CNC) has officially opened to meet the growing demand for trades training and post-secondary programs in the region.

Programs offered at the Vanderhoof campus include: trades training on a rotational basis, including millwright, piping, carpentry, welding and trades discovery; applied business technology – administrative assistant (certificate); and university studies, bookkeeping, human services and business courses.

“The College of New Caledonia is a leader in hands-on training and this new campus means more people can stay in their community,” said Andrew Mercier, parliamentary secretary for skills training. “A new campus is a vital investment in the future of Vanderhoof and the regional economy. It means students can train closer to home, so that employers have access to the skilled workforce needed to help British Columbia thrive.”

The new campus is a renovated building CNC purchased in 2017 with financial support from the province. Able to accommodate 136 student spaces, the facility has been converted to include classroom, shop and library areas with a focus on physical and digital accessibility.

Digital Delivery Instruction (DDI) will make it possible for students to join classroom instruction in Prince George, while completing coursework and projects in Vanderhoof.

“The opening of a new campus in Vanderhoof strikes at the core of CNC’s new strategic plan, lhulh whuts’odutel’eh – Learning Together,” said Dennis Johnson, president, CNC. “This campus reflects the responsive approach CNC takes to the diverse needs of the communities in our region. We look forward to working with students and partners to support training and educational goals in Vanderhoof and beyond.”

There are CNC campuses in Vanderhoof, Burns Lake, Fort St. James, Mackenzie, Prince George and Quesnel.

Facilities management market predicted to surge

The size of the international facilities management market is expected to grow by US$660.29 billion over the next four years, according to a new study from market research firm Technavio.

That growth would come in the form of a compounded annual growth rate (CAGR) of nearly 8.3 per cent.

The growth in the market is anticipated to be spurred by rising demand for smart facilities and increasing emphasis on outsourcing building management services, two trends that are thought to have been accelerated somewhat by the pandemic.

However, the report warns that a rise in budgetary constraints will limit the market growth during the next few years. Growth of the market is thought to have exceeded four per cent in 2021 as the facilities management industry – and others – have found their feet ahead after the initial shockwaves sent around the world by the pandemic.

According to Technavio, healthcare facilities will be responsible for more than two-fifths of the global revenue share of the facilities management market. Geographically, 43 per cent of the market’s growth will stem from the Asia-Pacific region, with North America forecasted to be a key revenue-generating economy for facilities management due to the increasing demand for cloud-based management solutions.

The report also notes that market vendors should make the most of the opportunities to help further recover from post-COVID-19 impact by focusing more on the growth prospects in the fast-growing segments while maintaining their positions in the slow-growing segments.

Bidding wars are back in the GTA

For the fourth consecutive month, rent is rising for residential dwellings in the Greater Toronto Area, and leasing agents have even begun to report bidding wars on prime rental suites. Barring a setback from the Delta variant, the GTA rental market should continue to see a steady rise in rents as Toronto and the rest of Canada continue to awaken from their COVID-19 hibernation.

According to the August Rent Report from Rentals.ca and Bullpen Research & Consulting, the average rent has increased month over month in most GTA municipalities, with Toronto experiencing the largest monthly increase at 4.7 per cent and Etobicoke close behind at 4.6 per cent. In Oshawa, average rent was up 4.3 per cent month over month.

Additionally, many of the largest units outside of downtown are being snapped up quickly on TorontoRentals.com, and bidding wars have been reported for units in prime locations and newer buildings. Meanwhile, some tenants are still looking for larger rentals outside downtown Toronto, signalling that they don’t expect to be going back to the office full-time in the immediate future.

“After the unprecedented rent declines experienced during the pandemic, the rental market is seeing renewed interest, with rents starting to increase more rapidly than they declined,” said Ben Myers, president of Bullpen Research & Consulting. “Toronto’s average rent jumped 4.7 per cent monthly, a huge increase in the face of increasing demand.”

The average rent in 2021 for condo rentals and apartments was highest for one-bedroom units in Oakville, while Toronto recorded the highest for two-bedroom units. For three-bedroom units, Vaughan took the top spot while Whitby recorded the lowest average rent for all unit sizes. Living in a two-bedroom unit in Whitby compared to Toronto saves a tenant about $900 per month.

Condo rentals

Looking at select neighbourhoods in Toronto using data from May to July in 2020 and 2021, the average rent per square foot for condo rentals in select neighbourhoods in Toronto was generally higher last year compared to this year, while the average unit size has stayed about the same.

One-bedroom units experienced the smallest increase from $1,763 to $1,773 in July, an increase of less than 1 per cent, demonstrating that tenants are still looking for more space than they were in the pre-pandemic period.

Other key takeaways:

In July, the average rent for a single-family home was $3,207 per month—a year-over-year increase of 13.2 per cent. Condo rentals and apartments have experienced small increases in average rental rate since January. In July, condo rentals had an average rent of $2,204 per month, a year-over-year decrease of 4.2 per cent, while apartments had an average rent of $2,103 per month, a year-over-year decrease of 2 per cent.
The average rent per square foot for condo rentals and apartments have increased from January to July with the exception of studios.
Looking at a sample of condo rentals and apartment developments in Etobicoke shows the average rents per square foot have generally decreased from 2020 to 2021.

See the complete report here: National Rent Report

Varying activity across markets and service brackets

Purchasers focused on conversions in large urban centres

Wellness Real Estate & Communities Symposium