Interest rates subdue multifamily developers

Fallout from higher interest rates may continue to subdue multifamily developers, but lenders express more confidence in prospects for new purpose-built rental and high-rise condominium projects next year. Results from CBRE Canada’s recent annual survey finds the 34 respondents — which collectively hold more than $200 billion in real estate loans — ranking purpose-built rental as their preferred asset type and registering an improved outlook on high-rise condos since 2022.

For 2024, 74 per cent of survey respondents aim to increase budgets for conventional loans on purpose-built rental; 64 per cent plan to increase budgets for CMHC-insured loans; and no lenders will be cutting back from what they budgeted in 2023. Intentions for high-rise condos are more muted with 47 per cent of lenders looking to increase their loan books over 2023 levels and 7 per cent opting to reduce them. However, fewer than 15 per cent of survey respondents now view high-rise condos as an asset class exhibiting cause for concern compared to upwards of 30 per cent when surveyed in the fall of 2022.

Even so, lenders’ willingness is just one of the factors involved in getting more housing built. Speaking in conjunction with the online release of the lenders’ survey results, Carmin Di Fiore, CBRE Canada’s executive vice president, debt and structured finance, commended recent government moves to remove the harmonized sales tax (HST) on purpose-built rental construction and provide more financing, but maintained the business case is still far from alluring in an environment where expected returns on new development are only modestly higher than the 5-year and 10-year Canada bond rates.

“With bond yields where they are, the question now becomes whether lenders’ growth desires will translate into deals that make it from the spreadsheets to construction,” Di Fiore mused. “There is a potential for a super-cycle in purpose-built rental construction if politicians enact the game-changing incentives that the private sector needs. Politicians have to accept that investors who take on the risk of development, ownership and repayment of all capital over a 30-year period will need to earn an appropriate return given the risk of such investment.”

Di Fiore’s colleague, Krissy Fry, vice president, debt and structured finance, noted that September’s HST announcement has helped reactivate some proposed projects that were mothballed after interest rates started trending upwards in 2022. Lenders predict the most notable pickup in development activity in Toronto, Vancouver, Montreal, Halifax and Ottawa, with 85 per cent of survey respondents foreseeing either a “significant” or “moderate” increase in Toronto. Meanwhile, acquisitions from the earlier low cap rate era could exert pressure on multifamily landlords, and many of the qualifications that lenders imposed on condo developments last year remain in place.

“Looking forward over the next 12 months, renewals or refinancing for purpose-built rentals could be limited as loans mature at substantially higher interest rates and potentially higher cap rates,” Fry said. “Expect to see further tightening of lending conditions for the residential condo sector with a focus on higher upfront equity, greater deposits and the potential of the size of projects to be scaled back.”

Land deal slowdown expected to ripple through to housing starts

A slowdown in land deals is also identified as an upstream obstacle to new housing supply. Peter Senst, president, Canadian capital markets, with CBRE’s national investment team, reported a five-year low in transaction volume in 2023 for lands zoned for high-density development. Speaking earlier this fall during Altus Group’s online overview of 2023 real estate trends and projections for 2024, Raymond Wong, the firm’s head of research and data, fingered lenders in that trend, while his colleague, Peter Norman, head of economic consulting, projected a ripple effect on housing starts in 24 to 36 months.

“For land transactions, both residential and commercial, the biggest challenge there is capital sources for financing,” Wong said.

“Through this higher interest rate period, we have seen residential land transactions decline quite dramatically on average. This represents projects that would have typically been launched in 2024-25 with starts for 2026-27,” Norman advised. “So this fairly dramatic decline in land sales probably will be a kind of harbinger for weaker construction activity as we go through and beyond the current horizon.”

For next year, CBRE’s lenders’ survey shows that 19 per cent of respondents plan to increase development land budgets above 2023 levels, while 15 per cent intend to trim back. Two-thirds see “significantly elevated” or “elevated” credit risk attached to loan renewals or refinancing.

“Interest rates right now are having the biggest impact on the land market. When you don’t have income (from a building), the idea of land and carrying it with a higher and higher cost basis as interest rates roll, it’s becoming tougher,” Senst concurred. “Some deals are getting done. There is capital coming in, and some of it is new capital coming into the country, but land becomes a tougher and tougher sector to move through.”

In other trends affecting the multifamily sector, Norman linked the 30 to 40 per cent year-over-year decline in condo unit sales across major Canadian markets in large part to investor-owners pulling back. “We’re also starting to see more investor product coming into supply on the resale market,” he added.

Senst highlighted Canada’s low residential vacancy rates, climbing rents and population growth projections. “There are not many numbers like that around the world. This is the type of data that helps draw global capital to Canada when they see these kind of levels,” he said.

A slim majority of surveyed lenders (51 per cent) predict that inflation will ease back down to the targeted 2 per cent rate by the first half of 2025 — in advance of the Bank of Canada’s presumed schedule of year-end 2025 — with 30 per cent suggesting that could occur next year. Nearly half (48 per cent) predict the Bank of Canada’s overnight rate will fall by year-end 2024, but 18 per cent foresee it will stick at 5 per cent, and 15 per cent of respondents expect the rate to rise higher. (The remainder of participants did not express an opinion.)

“If rates are going back down, if bond yields are back to 2.95 by the end of 2025, it starts to bring a little more balance to the market,” Senst observed. “It sets up things that are better.”

First phase of Mayfair West project revealed

Grosvenor has submitted a development permit application to the City of Vancouver to redevelop the first phase of Mayfair West, which is the new name of the redevelopment project for Oakridge Transit Centre.

Mayfair West is located on one of the largest undeveloped sites in Vancouver at 41st and Oak and follows the 2020-approved master plan designed by Vancouver architect, James Cheng. Hariri Pontarini Architects (HPA) has been engaged to move the project forward and will join forces with Arcadis (formerly IBI), as the architect of record for the project.

“We are excited to be one step closer to bringing this significant development forward,” said Marc Josephson, senior vice president, development with Grosvenor. “This area of the city is rapidly transforming, and this is one of those rare, blank-canvas sites where we can create a special community from scratch.”

Situated on the southwest corner of the site, the first phase includes two of the master plan’s tallest towers, at 23 and 20 storeys. It includes a mix of condominium, market and affordable rental housing, totalling more than 460 residential units. Envisioned as the social hub of the development and designed to foster interactions between residents and visitors, phase 1 will also deliver a large pedestrian thoroughfare with boutique retail and an entry plaza that opens the site up to the street.

Overall, the master plan aims to transform the currently vacant, 14-acre site into a new 1.5 million square foot mixed-use community. Mayfair West will consist of approximately 17 buildings, ranging in size from four to 26 storeys, to be built out in phases over approximately 10 years.

The master plan will also feature a new 69-space childcare facility, a two-acre public park and improvements to local pedestrian and cycling infrastructure.

New multifamily asset management department launches in US

US Housing Consultants has launched a new asset management department that will offer services such as capital needs assessments, energy audits, requisitions for reserve fund drawdowns and inspections for Section 504 Compliance. The new department is helmed by John Broderick, a veteran in the affordable housing industry.

“US Housing Consultants has provided Capital Needs Assessments for nearly twenty years now,” says Scott Precourt, Founding Partner. “With this new expansion, we will be able to help clients better implement plans based on the needs assessments, particularly as it relates to energy efficiency.”

Critically, these services all focus on the long-term health and viability of affordable housing properties. This includes both ensuring the resiliency of the physical plant of the properties, as well as the funding and policies that support the operations.

“Multifamily owners and managers are often driven by a crisis, or a pending requirement,” Broderick says. “US Housing’s Asset Management Team works with clients to develop a long-term comprehensive strategy for individual properties and entire portfolios. Our clients have greater peace of mind knowing they have a comprehensive asset management plan, reviewed by outside professionals, and assistance with implementation and monitoring.”

The asset management department will also offer several services for Public Housing Authorities. This includes rent reasonableness studies, utility allowance studies, annual plans, and ACOP and Administrative Plan revisions. This continues the expansion of services for PHAs after US Housing Consultants’ acquisition of Management Resources Group (MRG), a long-time provider of services for PHAs.

“Public Housing is undergoing many challenges currently. With the onset of NSPIRE, HOTMA, and RAD, the demand on PHAs to redefine long-term planning increasing every year,” says Broderick. “Our team works with them to develop long-term plans, policies, and reports.”

Report: high demand for construction in 2024

Canada’s construction industry will face strong demand, modest cost growth, stable prices and continued labour shortages in 2024, according to a report from global real estate company JLL.

The “U.S. and Canada Construction Trends 2024” report details a positive outlook for the industry in both countries. According to JLL’s findings, firms will see greater success after a year of stabilization, thanks to strong demand and the continuing normalization of supply chains and material prices. Further, the forecast explores the opportunities and challenges facing the construction industry in the year to come.

Supply chains improved in 2023, with the Global Supply Chain Pressure Index hitting a historical low in October, and almost all material divisions seeing stable or improving lead times. In 2024, slowing private-sector construction starts should keep supply chain pressure manageable, but the current pipeline and increase in publicly funded construction is anticipated to prevent price reductions.

In Canada, construction activity will likely continue to slow for the next few quarters. However, if inflation continues to slow and debt markets stabilize, increased builder confidence could lead to a rebound in launches beginning in spring 2024. Material costs are expected to increase by three to five per cent, employee wages are expected to increase by four to six per cent, with total costs expected to rise by three to six per cent.

“With cost pressures easing on the materials side, most of the current cost inflation can be attributed to rising wages,” said Scott Figler, national research director for Canada at JLL. “Canada’s construction wages were generally up by five per cent to seven per cent from 2022 to 2023, and we expect high wage growth to continue well into 2024 at around four per cent to six per cent.”

In the U.S. and Canada, as the industry faces skilled labour shortages and falling productivity, competency and efficiency will be increasingly valuable among the workforce. Retention, upskilling, and trust building are critical for the next year and beyond.

“Looking forward, success requires building durable partnerships with those who have not only the required technical ability, but also the soft skills necessary for problem-solving and innovation in the face of uncertainty,” said Rob Ramsay, executive vice president and national lead, project and development services, JLL Canada.

REMI Network up for business reporting awards

The REMI Network is a finalist for the 2023 Canadian Online Publishing Awards (COPAs) in two business reporting categories. This year marks a decade since MediaEdge Communications launched its online news and information site in 2013, and the REMI Network has garnered a COPA nomination every year since then for its coverage of the Canadian commercial real estate, facilities management, construction and building design sectors.

“The world is becoming increasingly complex, while reliable, professionally driven news sources are becoming increasingly scarcer. The REMI Network has a mandate to uncover and highlight industry-specific issues, and provide context about how they affect both our readers and the broader economy,” says Sean Foley, group publisher for the REMI Network. “Commercial real estate is a major economic contributor with an important role to play in an evolving Canadian society. We are proud to hammer home that message and invigorated by the ongoing challenge of keeping pace with rapidly changing times.”

Aligning with that mission, this year the REMI Network has received COPA nominations in: the Products category for a piece about the Canadian government’s proposed phase-out of fluorescent and metal halide lighting; and the Multicultural/diversity category for a piece about accessible public bathroom facilities.

COPA winners for 2023 will be announced in February 2024.

Report forecasts busier housing market in 2024

A new housing market report is expecting more sales activity next year across Canada with prices increasing by 0.5 per cent. According to the RE/MAX 2024 Housing Market Outlook Report, the majority of Canadians remain confident about jumping into home ownership despite higher interest rates and a housing shortage. Further rate hikes in 2024 still remain a concern, one that could impact the decision-making process

“It’s been a challenging year for Canadian homebuyers and sellers, who have been feeling the effects of a severe housing shortage and the high cost of living, but much like Canada’s housing market, Canadians have stayed resilient, Christopher Alexander, president of RE/MAX Canada, stated in the report. “Historically, real estate has given owners excellent returns and strong financial security – and that hasn’t changed.”

Housing market conditions will likely vary from region to region with 42 per cent balancing out. The average residential sale price in most regions is expected to increase between two and 7.5 per cent in 2024. Eighteen per cent of markets are expecting a decrease between two to five per cent.

Home-buying trends in 2024 point to climate change as key factor impacting more than four in 10 Canadians when it comes to where they purchase. About 21 per cent are looking to move between provinces so they can afford a home in a favourable neighbourhood. Those findings come from a Leger survey commissioned by RE/MAX Canada as part of the report.

Regional outlook

Brokers and agents for the firm find many homebuyers will continue looking for primary residential properties with rental potential to offset mortgage payments and the rising cost of living. In areas of Ontario, buyers also desire greater access to public transportation, green space and preferred schools.

In B.C., the average residential prices are anticipated to rise by two per cent in Metro Vancouver and Nanaimo. The same applies for Saskatoon, Sask. Edmonton will likely see a four per cent increase.

Regions such as Victoria, B.C., and Regina, Sask. are anticipating a modest two-per-cent decrease in sale prices. Saskatoon and Edmonton are expected to favour sellers next year, while Victoria will shift to a buyer’s market.

The market will likely feel ongoing pressure from interest rates and low supply, especially among first-time buyers in Edmonton, Saskatoon and Nanaimo. Many first-time homebuyers are looking for rental income on primary residences to afford a dwelling.

Ontario

Prices are anticipated to remain unchanged in Mississauga, Brampton, North Bay, and Kenora in 2024. Peterborough and the Kawartha’s and the Greater Toronto Area (GTA) are both anticipating a slight decline of three per cent in average residential prices, while Durham Region and Grand Bend are anticipating a decline of five per cent. Kitchener-Waterloo is anticipating a decrease of eight per cent in average residential sale prices.

Prices are anticipated to rise by two per cent in Thunder Bay and Ottawa; three per cent in London; 3.5 per cent in Hamilton, Niagara and York Region; four per cent in Sudbury and Burlington; 4.5 per cent in Kingston; five per cent in Muskoka and Haliburton; seven per cent in Oakville and Simcoe County; and 7.5 per cent in Windsor and Sault Ste. Marie.

Atlantic Canada

Modest sale price increases are in the forecast for the majority of regions across Atlantic Canada. In Halifax, the sale price in unlikely to change. All markets are expected to continue on as sellers’ markets in 2024, except St. John’s, N.L. area, which could regain balance.

The cost of living is one of the largest trends in the Moncton, St. John’s, Fredericton, Saint John and Halifax markets. Current economic conditions and ongoing affordability challenges have led first-time homebuyers to also look for semi-detached homes or properties with rental income potential.

Rentsync announces merger with software creator, Building Stack

Toronto-based marketing solutions provider, Rentsync, has merged with Montreal-based software creator, Building Stack. Rentsync owns and operates the online network, Rentals.ca, in addition to serving the rental housing industry through a broad range of products and services. According to the company, the integration of Building Stack into its portfolio marks a significant step towards offering an “all-encompassing list-to-lease solution” for rental housing industry professionals; it also enters Rentsync into the resident life cycle technology market with Building Stack’s “best-in-class” resident portal, which includes rental payments.

“This merger extends our product offerings beyond marketing,” said Max Steinman, CEO of Rentsync. “With a comprehensive suite ranging from an online leasing CRM to a resident portal with rent payments, we eagerly anticipate the integration of the talented Building Stack team into our family and are excited to embark on this journey of growth together.”

“We are extremely motivated to redefine the landscape of real estate technology in Canada,” added Jonathan Margel, CEO of Building Stack. “This also gives us the firepower to enter the US market in a meaningful way in the next few years. Our combined experience and resources will offer unparalleled solutions, driving efficiency and success for our clients coast to coast.”

As a privately held Growth 500 company, Rentsync has more than 100 employees and is a recognized leading partner for rental housing marketers, leasing agents, and renters in Canada.

For more information, visit www.rentsync.com

Ontario Teachers’ name new real estate leader

Pierre Cherki will take leadership of global real estate investment for Ontario Teachers’ Pension Plan when its new in-house asset management group launches early next year. In the newly created position of executive managing director, real estate, he will head Ontario Teachers’ investment activity and portfolio management outside Canada, including the oversight of nearly 40 investment professionals located across four continents.

“For many years real estate has been an important component of our asset mix. Under Pierre’s leadership we plan to explore ways of effectively diversifying our portfolio by sector and stage internationally,” says Jo Taylor, president and chief executive officer of Ontario Teachers’.

Ontario Teachers’ earlier announced reorganization of its real estate activities takes effect January 1, creating a new entity for foreign asset management and scoping Cadillac Fairview’s functions to within Canada. Cherki has been a member of Cadillac Fairview’s board of directors since 2022, and has extensive experience in investment management and global real estate portfolios while holding senior management positions with DWS Group.

“I’m delighted to be joining Ontario Teachers’ and look forward to leading a strong team of global professionals in supporting further growth in the real estate portfolio,” Cherki says.

Simon Fraser Bridge reopening in Prince George

The Simon Fraser Bridge in Prince George will fully reopen this weekend, with the completion of upgrades that will extend the life of this key highway connection.

Ruskin Construction started work in January 2022. The The $20.5 million upgrades to the structure include a full deck replacement and strengthening of the truss for the southbound bridge. An increase in height clearance will match the adjacent northbound crossing, which will allow for the passage of taller transport vehicles on the Ferry Avenue underpass.

Other works included widening the shoulders and replacing the existing railings on both sides with crash-tested bridge barriers. The improvements make the structure more reliable for approximately 18,000 vehicles that cross daily.

“Making this passage safer and more reliable has a huge impact on the people that rely on this crossing to get to and from their work and families,” said Rob Fleming, minister of transportation and infrastructure. “It also means our northern industries have better options for transport. The Simon Fraser Bridge is a historic crossing, and modernizing this structure means all travellers in the North can count on this passage long into the future.”

The original Simon Fraser Bridge was built in 1963 as part of Highway 97. In 2009, the bridge was twinned with an adjacent two-lane bridge, which brought four-lane capacity to the crossing that serves north and south Prince George.

The bridge continues to act as a key link for the northern supply chain, including movement of commercial goods into and out of the North. The improvements will create an easier passage to better support the transportation, forestry, mining and oil and gas sectors.

FRPO announces 2023 MAC Awards winners

The Federation of Rental-Providers of Ontario (FRPO) hosted its 2023 MAC Awards on November 30th at the Metro Toronto Convention Centre, attracting more than 1,000 members and guests to the lively annual event. For two decades, the MAC Awards have recognized leadership, excellence, and innovation in Ontario’s rental housing industry. This year’s winners include:

Social Media Excellence

Tricon Residential Inc

Best Advertising Campaign

BGO – The Junction, On Us!

Best Property Management Website

Morguard – www.thebayclub.ca

Best Suite Renovation Under $40,000

Dream – 107 Redpath Avenue, Toronto

Suite Renovation Over $40,000

Quadreal Property Group – 57 Charles Street, Toronto

Best Lobby Renovation

Starlight Investments – 2233-2235 Hurontario Street, Mississauga

Best Curb Appeal

Starlight Investments – 7170-7280 Darcel Avenue, Mississauga

Best Amenities – Renovation

Rhapsody Property Management Services – Trilogy on King
1100 King Street West, Toronto

Best Amenities – New Development

Fitzrovia – The Parker
200 Redpath Avenue, Toronto

Rental Development 200 Units or Less

DBS Development – 2Fifteen
215 Lonsdale Road, Toronto

Rental Development Over 200 Units

BGO – The Campbell, 299 Campbell Avenue

Environmental Excellence

Dream

Property Manager of the Year

Ben Antwi – Signet Group

Leasing Manager of the Year

Diane Murray – Park Property Management

Resident Manager(s) of the Year

Anna Ciulli – Greenwin Corp.

Community Service Award of Excellence – Supplier Member

Wyse Meter Solutions Inc

Community Service Award of Excellence – Rental Housing Provider

Greenwin Corp

Impact Award

Hazelview Properties

Company Culture Award of Excellence

Hazelview Properties

Customer Service Award of Excellence

Fitzrovia

Lifetime Achievement

Clark McDaniel – Williams & McDaniel Property Management

For more info, visit: 2023 Award Winners | FRPO MAC Awards

Trio of new senior executives join Great Gulf

A trio of new senior executives are arriving into leadership roles at Great Gulf Group, including two C-suite positions and a division president. Corinne Pruzanski has been named chief legal officer; Kristopher Wojtecki becomes chief operating officer; and Jay Wong will serve as the inaugural president overseeing Great Gulf’s portfolio of resort developments.

“Jay, Corinne and Kris will play essential roles driving forward the founders’ multi asset class development,” says Bill Tresham, Great Gulf’s executive chairman and interim chief executive officer.

Pruzanski joins the company following more than a decade’s experience as general counsel for Canadian Apartment Properties REIT, and will be succeeding Tom Griffiths who is leaving Great Gulf at the end of 2023. She was previously a partner with law firm, Stikeman Elliott LLP, and brings expertise in mergers, acquisitions and capital markets transactions in the commercial, multifamily and hospitality sectors.

“I’m very excited to be joining a company with a remarkable track record and diversity of investments,” Pruzanski says.

Wojtecki was previously managing director, real estate investments, with the Public Sector Pension Investment Board (PSP Investments) where he was responsible for asset management, investment strategy and transactions for PSP’s portfolio in the Americas. In his new role, he will oversee Great Gulf’s growth strategy, encompassing capital formation, portfolio management and fostering the company’s culture and profile.

“I am eager to contribute to Great Gulf’s growth by harnessing the combined expertise of our team to focus on our pipeline of incredible projects and strategic partnerships and acquisitions in the United States and Canada,” he affirms.

Wong most recently was executive vice president, operations and member experience, for the members-only luxury travel club, Exclusive Resorts. He has also held decision-making roles with Four Seasons Hotels and Resorts and Starwood Hotels and Resorts. At Great Gulf, he’ll be responsible for a master-planned ski village and resort currently in development in Vermont, along with Great Gulf’s Ontario-based resorts on Lake Muskoka and in Collingwood.

“There are countless opportunities to elevate this segment through ambitious, mixed-use projects infused with creative, dynamic programming. I’m thrilled to be joining Great Gulf for this next era of growth,” Wong notes.

Commercial cleaning and the way forward

As the commercial cleaning industry continues to evolve, the roles of management, frontline workers, and everything in between are also changing. ISSA’s Hygieia Network has a mission to create an inclusive industry for women to succeed in the workplace, through education, mentoring, networking, and support programs. How has the industry progressed and what opportunities exist for women in commercial cleaning?

We asked four members of the Hygieia Network to weigh in on what the industry looks like today, what has helped them get where they are, and for their insight on the best tools for women looking to lead the commercial cleaning industry.

This article has been edited for length and clarity.

What are some of the industry challenges that women have had to overcome?

Judith Virag, Clean Club Calgary: Historically, cleaning roles have been associated with women, perpetuating the stereotype that cleaning is “women’s work.” This perception can and has led to biases and discrimination, making it harder for women to be taken seriously in leadership positions or higher-paying roles within the industry.

Shannon Hall, Dustbane Products Ltd.: Having faced several biases when starting in our industry, I was told that I didn’t belong here. The consensus was that I needed to spend 20 years cleaning to earn my place. When I’ve been the only woman at the boardroom table, I have been ignored and dismissed when bringing up ideas or concerns in meetings or undermined when people ask if someone else (higher up than me) will be joining the meeting. I have fought condescending attitudes throughout my career, referred to as “a pretty face” or called “kiddo.” I wish I could say that these were just my unique experiences, but unfortunately, I have heard the same stories from many other women in the industry.

Haley Pirie, GT French: One of the biggest challenges for women that I see is having to prove their knowledge in all the aspects of this industry such as products, equipment, innovative solutions, and more. It has been my experience that women are often perceived as less knowledgeable in these categories.

Armanda Sousa, Bee-Clean Building Maintenance: Sexism unfortunately still exists. In this day and age, women have proven our resilience to provide at home, as well as in the workplace. It’s important that we continue to educate the community and population at large about the ongoing issues women still face today. It is through communication we can start to address problems such as sexism, language barriers, lack of education qualification, and more.

What tools, skills, or resources have helped you along the way?

Hall: Having had some great male allies throughout my career has been helpful in male-dominated industries. I believe in the motto “always be learning” and have used LinkedIn Learning, CPSA courses, ISSA’s courses, and hands-on lessons in the field to make sure I am staying fresh and knowledgeable. The ISSA Hygieia Network has been a great resource, providing the opportunity to network with like-minded colleagues and helping to create a place where we can help women advance in the industry. Having a mentor and being a mentor, too, has been an amazing experience where each individual takes away so much from the relationship.

Virag: Resiliency and training are big ones for me. Building my confidence in knowing that when I step into a room, I am just as valuable as everyone else. Also, coaching is fundamental; my business coach has been instrumental in developing some of my skills. When the opportunity arises, I take advantage of all possible training.

Pirie: Learning and practicing empathy, positivity, and active listening are all vital skills to anyone looking to be in a leadership role. Curiosity is also very important – in my experience, if you can find the why, the solution can be found. I also recommend connecting with other women in the industry who can relate to you and/or mentor you. The Hygieia Network is a great community for anyone in the commercial cleaning industry.

How are women making their mark on the industry today?

Hall: I think women have always made a mark in this industry, but I do believe we are shining more of a light on our accomplishments and recognizing strong leaders and rising stars these days. I believe we are starting to see more diversity in senior roles within organizations and hope that one day we will see an even stronger balance. I believe women are helping to remove the unwritten rules and create awareness for opportunities for further inclusion.

Virag: Women – like myself – are leading through entrepreneurship. I have seen so many cleaning companies start up that are 90 per cent women-owned, and that’s so great to see.

Pirie: Women are making their mark by supporting each other. I see more women in leadership roles now than I ever have. Having a community like The Hygieia Network that is focused on supporting and empowering women to develop their careers in this industry is making a difference every day.

How does the commercial cleaning industry benefit from having women in leadership roles?

Hall: I believe every organization can benefit from having a diverse leadership team, tending to be more creative, with different perspectives to offer, and this type of leadership has been shown to result in higher profits. The cleaning industry has traditionally been slower to change and adopt new technologies and strategies. The old adage ‘if it’s not broke, don’t fix it’ can maintain the status quo, but in these times of high turnover, advancement in technology, and market shifts, we need diverse ideas and perspectives more than ever.

Virag: Before I started my business, I worked as an executive assistant, and was surprised at the male-dominated sales teams I saw in many cleaning companies. In commercial cleaning, there needs to be opportunity for all, and the clarity, vision, and attention to detail that women possess are valuable assets to the industry.

Sousa: Women in the workplace help move the business and the industry forward by guiding, mentoring, and managing projects.

Pirie: Having women in leadership roles can offer variety, providing new inventive ideas, allowing shared team experiences, making stronger teams, gaining competitive advantages, and qualifying to manage a wider variety of clients. It’s important that there are women in leadership roles so that other women see that they can grow their careers in this industry, too. Having more women in leadership and executive positions can change the narrative in this industry.

What advice can you give to other women looking to get ahead and make a difference in commercial cleaning?

Pirie: My advice would be to connect with others who can help support you in reaching your goals, regardless of any adversity you may face. Continue to be curious and grow your knowledge base as it pertains to the industry and your ability to lead.

Hall: Take the opportunities! When an opportunity arises to participate in something new, contribute ideas to move forward. Don’t hesitate, jump in, and join networks like Hygieia, working to connect allies, and opportunities for growth. Meet and seek out individuals who have a spark or offer to help someone who might need a little coaching to help them grow in their role. Keep developing your skills – technology and change are happening faster than ever, so stay ahead of the curve by learning new skills.

Virag: Get educated, start networking, and know your worth.

Toronto’s vacant home tax deadline approaching

The deadline to declare a property’s occupancy status for the 2023 taxation year is set for February 29, 2024. As part of the vacant home tax program, the City of Toronto sent out a reminder that all residential owners are to submit a declaration, even if they live at the property.

A property is subject to the tax if it is not the principal residence of the owner or permitted residents, is unoccupied for more than six months and does not qualify for an exemption or is a property where no declaration is submitted.

This can be completed online or by submitting a paper declaration form available at property tax and utility customer service counters at Toronto City Hall and all civic centres, or by contacting 311.

For 2023, the tax is one per cent of the property’s current value assessment. A fee of $21.24 will be charged for failing to submit a declaration of occupancy status by the deadline.

In October, Toronto City Council approved an increase in the tax rate for vacant properties from one per cent to three per cent for the 2024 taxation year, which will become payable in 2025.

The following owners are not subject to the vacant home tax:

properties that are the principal residence of the owner
properties that are the principal residence of a permitted occupant or occupied by a tenant (including business tenants)
properties that qualify for an exemption

Funds acquired from tax program are expected to increase the supply of housing by discouraging owners from leaving their residential properties unoccupied – and instead making them available for rent or for sale.

Collected revenues will be allocated towards affordable housing initiatives including the Multi-Unit Residential Acquisition (MURA) program.

Five ingredients of a well-managed facility

Managing a facility requires a combination of skilled facility management personnel, efficient procedures, reliable process technology, and most importantly, a strong focus on the integration of people, place, process, and technology. All of these aspects should be covered in the FM decision-making process to put clients at the forefront.

A common goal among FMs is to work efficiently and effectively to improve the company’s operating costs and boost employee productivity. FMs have a vital role in making this happen by ensuring that the facilities are maintained in good condition and functioning to assure business continuity and success. Here are five key ingredients to keep a facility well-managed:

Teamwork

This is a vital ingredient to ensure a collaborative workplace environment. FMs manage a team, service providers, suppliers, contractors and customers, with the goal of keeping the facility well-managed. They must be able to design weekly schedules, delegate jobs and tasks. They also promote unity and possess the ability to mediate and resolve conflicts among staff members. A crucial component of an FM’s job is to aid in the growth of their staff and boost commitment and productivity.

The FM operations

Day-to-day operations include health and safety, finance/budgets, communications, and project management, as well as ensuring maintenance routines and preventative maintenance plans are being adhered to and that funding is available for operating and capital expenditures. Operations also include keeping the facility functioning and in good working condition. This includes regular reviews, audits, staff training and development, a willingness to adapt and innovate in response to needs or emergencies and compliance with the current legislation.

Best practices

Build on current operations to develop innovative ideas to make facilities operate better than the status quo. Commit to continual improvement and seek out the best options and opportunities so the facility is aligned for business growth and advancement. Networking, associations, and conferences are some options to gain best practices and align with a mentor to improve facility operations.

Sustainable practices

Sustainability is a fundamental part of how FMs look at the future. The role of facility management is central to delivering more sustainable buildings today and beyond. FMs play a pivotal role in supporting a more sustainable culture and introducing green innovations. They can cut down on overhead costs, reduce energy consumption and prolong the building life assets.

Technology integration

Facilities should have well-maintained computer applications to upkeep data and monitor the effectiveness and performance of the building systems. Many FMs have several systems and there is an opportunity to assess data for better informed decision-making.

FMs who are making a significant difference are empathetic, caring and committed to their professional development and career advancement to ensure their facilities are well-managed. It is vital to keep an eye on current trends and opportunities that may impact operations. Staying aligned with the company vision, mission, mandate, and culture will help maintain FM values and priorities and ensure maximum contributions today and in the future.

Marcia O’Connor is president of AM FM Consulting Group. She is a strategic-minded leader with more than 20-plus years of progressive experience in corporate real estate, asset management, and integrated facilities management. Marcia has a passion for mentoring young professionals and helping people, teams, and organizations see their potential. She is the lead instructor for the University of Toronto School of Continued Studies’ facilities management courses, including the FM Certification Program and many others.

Lenders set to curtail office exposure in 2024

Lenders generally expect to curtail office exposure while increasing overall allocations to Canadian real estate next year. Newly released findings from CBRE Canada’s annual survey reveal that prospective borrowers should see a 16 per cent influx of net new capital into the market in 2024.

Among the 34 survey respondents — which collectively hold more than $200 billion in real estate loans — 33 per cent are looking to expand the quotient of real estate loans within their portfolios and 61 per cent plan to maintain the existing share. That follows a year when 37 per cent of lenders did not fully hit their real estate targets and two-thirds report they tightened their underwriting methodologies.

“The conditions of real estate have been building up for some time and will likely continue,” Carmin Di Fiore, executive vice president, debt and structured finance, at CBRE Canada, observed during an online presentation last week. “As we saw last year, the continued isolation and cost of capital, valuation uncertainty and tightening credit impinged on the industry’s performance.”

That’s reflected in survey respondents’ top economic concerns, as they unanimously tap “elevated interest rates” as a major challenge for the coming year. As well, 73 per cent cite uncertainty around property valuations and 58 per cent identify restrictions on capital as pressing issues.

This fall finds them less focused on the spectre of a recession than in 2022 when all survey respondents predicted a recession was coming and 69 per cent foresaw a moderate to significant impact on their real estate loan portfolios. Now, fewer than 40 per cent rank fear of recession as a major influence on underwriting. Lenders also seem largely confident in real estate market fundamentals, with only 30 per cent flagging them as a concern.

Looking to the future, 42 per cent of surveyed lenders confirm they will actively bid on real estate deals, 48 per cent plan to take a cautious or conservative approach and 9 per cent expect to refrain from bidding in 2024. Toronto, Vancouver, Montreal and Ottawa are considered the most attractive markets.

Across all asset types, the majority of surveyed lenders are willing to offer recourse loans in the range of 61 to 75 per cent loan-to-value (LTV) for top-tier assets and non-recourse loans at 51 to 65 per cent LTV. A 25-basis-point (bps) premium typically applies on Class B assets and assets located in secondary markets.

Purpose-built rental housing and industrial again emerge as favoured asset types, with half to three quarters of lenders aiming to increase budgets for those categories. On the flipside, two-thirds plan to trim budgets for office. It also stands out among the 13 categories in registering a complete absence of lenders willing to increase their office loan books.

“In reviewing the history of our surveys, this is the first time we have recorded that level of sentiment for any segment of real estate,” Di Fiore reported. “Opinions have significantly reversed since 2021 when 70 per cent of lenders were content with their office exposure.”

Dropping confidence in Class A office inventory

Survey respondents again ranked suburban and downtown Class B office as the two most problematic property types in a list of 18 categories, while exhibiting an even greater year-over-year drop in confidence for Class A office inventory. Downtown Class A office rose to 5th on lenders’ index of concern (up from 7th in 2022) and suburban Class A office remained in fourth. Negative sentiment intensified over the course of 2023, whereas regional malls in secondary markets (ranked the third most problematic) improved in lenders’ perceptions.

As borrowers seek renewals or refinancing, 94 per cent of surveyed lenders are factoring elevated or significantly elevated credit risk for office assets. Notably, 45 per cent of respondents attach “significantly elevated” credit risk to office. Only two other asset types even trigger that level of caution, with 17 per cent of surveyed lenders perceiving significantly elevated risk for development land and 6 per cent for hotels. Meanwhile, upwards of 80 per cent of lenders foresee low-to-normal credit risk for renewals and refinancing of industrial and purpose-built rental assets.

Lenders’ tentativeness is linked to ongoing uncertainty about evolving workplace models and long-term demand for office. A slowdown in office transactions has also made it more difficult to corroborate values. However, Di Fiore maintains prospective deal-makers shouldn’t fear a liquidity crunch in Canada.

“That phenomenon may play out in U.S. markets where loose banking oversight now forces bank regulators to catch up and play hardball,” he noted.

Lenders in Canada are turning to a range options for maturing office loans. The majority of survey respondents indicate that they are “occasionally” or “frequently” requiring equity paydowns as a condition of renewal, while 48 per cent record frequent or occasional switchovers from interest-only to amortized loans. Just 15 per cent report they frequently convey long-term renewals (52 per cent do so occasionally), while 17 per cent say they frequently request loan repayment. However, 86 per cent confirm they are open to short-term loans extensions if necessary.

“The Canadian market is relationship-oriented and it generally works to everyone’s advantage,” Di Fiore said. “While tough discussions may be taking place at the time of renewal, at least there are rational and pragmatic solutions being offered.”

Adding context to the survey findings, Peter Senst, president, Canadian capital markets, with CBRE’s national investment team, characterized current market dynamics as among the more difficult, but the not the worst of the past 35 years. He underscored Canada’s stronger performance relative to many other global markets and the prospects tied to projected population, GDP and employment growth.

“The ‘90s were much tougher to get through,” Senst asserted. Nevertheless, this downturn comes with some new trappings.

“For a few in the industry, mid-teen vacancy rates in office have been witnessed before. Trust me, they do improve…eventually,” Di Fiore recounted. “However, what no one has really witnessed before is the value of an office asset where some tenants require five days attendance, while other tenants effectively function on two, three or four days. Layer on retail and amenities that need to support such schedules, and equity has yet to figure it out. At some point, discounts to replacement costs will start to factor in the consideration and drive office transactions.”

Eight Surrey Langley SkyTrain stations named

The names of eight stations on the future Surrey Langley SkyTrain extension have been announced.

The Surrey Langley SkyTrain project is a 16-kilometre extension of the Expo Line that will run from King George Station to Langley City Centre, the first rapid transit expansion south of the Fraser River in 30 years. Once complete, commuters will be able to travel on transit from Langley city to downtown Vancouver in just over an hour.

The new station names are:

Green Timbers Station (140 Street and Fraser Highway)
152 Street Station (152 Street and Fraser Highway)
Fleetwood Station (160 Street and Fraser Highway)
Bakerview-166 Street Station (166 Street and Fraser Highway)
Hillcrest-184 Street Station (184 Street and Fraser Highway)
Clayton Station (190 Street and Fraser Highway)
Willowbrook Station (196 Street and Fraser Highway)
Langley City Centre Station (203 Street and Fraser Highway)

“This is another important step in moving this project forward from concept to reality,” said Rob Fleming, Minister of Transportation and Infrastructure. “The Surrey Langley SkyTrain is going to transform the way people live, work and travel both south of the Fraser and around the region. The stations we are naming today will become community landmarks and will be recognized for decades to come.”

The areas adjacent to new stations are key locations where the Province will support transit-oriented developments to create efficient, vibrant communities where people can rely on public transit to connect them to their work and social lives.

The project is being delivered through three separate contracts: the guideway; the stations; and the systems and trackwork. Earlier this year, the Province announced the firms that were selected to respond to the requests for proposals. It’s anticipated that contracts will be awarded in early 2024.

Advance work has been underway since 2020, including the now-complete widening of Fraser Highway between 140 and 148 streets, as well as utility relocations.

Construction on the Surrey Langley SkyTrain is expected to begin in 2024.

Nch’ḵay̓ appoints new executive vice president

Vancouver-based Nch’ḵay̓, the economic development arm of the Squamish Nation, is pleased to announce the appointment of Jennifer Podmore Russell as Executive Vice President, Real Estate and Development. Podmore Russell joins Nch’ḵay̓ after serving a short term as a director on the Nch’ḵay̓ Board.

“Jenn’s strategic visionary outlook, paired with her deep understanding of the real estate market and development through a creative mindset, will be an asset as we further refine Nch’ḵay̓’s strategy and approach to real estate development in the greater Vancouver area and Squamish Valley,” said Mindy Wight, CEO. “Jenn also demonstrates a keen understanding of our values as an organization, which is essential to our ability to grow our team and work collaboratively with the Squamish Nation and Hiy̓ám̓ to deliver on housing. We believe her appointment in this role only enhances Nch’ḵay̓’s success in delivering on our goals while adhering to Nation values, guiding principles, and expectations.”

Podmore Russell has nearly two decades of experience in real estate strategy, portfolio planning and development advisory. Most recently, she held a leadership role as Senior Vice President on the Advisory team at Rennie. Previously, she led the real estate division in BC for a top-four accounting and consultancy firm. She was the founder and managing partner of MPC Intelligence, a research and analytics solution for the new home development industry in Western Canada.

In addition to her contributions to strategic real estate growth, Podmore Russell is passionate about creating meaningful change in the community. She serves on the board of the Urban Development Institute as an executive board member of the Royal Colombian Foundation, as director of the Arrowleaf Board, and as past Vice-Chair of the Vancouver Economic Commission.

“Nch’ḵay̓ resonates deeply with my values, and I’m truly honoured to join this exceptional team, driven by a mission to transform Vancouver’s landscape,” she said. “My time on the Board highlighted a desire to channel more of my time and expertise in the real estate sector towards fostering wealth and economic prosperity for the Squamish Nation. I’m thrilled to embrace this new chapter and take on a more impactful role in advancing our shared vision.”

Land deal slowdown expected to ripple through to housing starts

Dropping confidence in Class A office inventory

BOMEX 2026

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