A recruitment strategy for commercial cleaners

The cleaning industry is no stranger to the challenges of labour shortages and employee turnover, and recruitment remains a top priority for many commercial cleaning companies. As the landscape continues to change, attracting and recruiting quality cleaners is one way you can stand out from your competition. Not only that but hiring and re-training, along with work stoppage caused by missing employees can cost your business significant time and money.

Create a recruitment strategy to simplify your efforts, attract great candidates, and hire the best talent.

Branding

Three-quarters of candidates are now researching companies before they apply, looking for employers that appeal to them and whose values match theirs. If you are posting about positions or adding listings to job boards, make sure your branding is clear, so people know what they are getting. More than just emphasizing pay and benefits, approach your recruitment strategy with the intent to stand out from the crowd and appeal to a mass number of applicants.

Try and get your brand across on by promoting perks, adding current employee testimonials, and speaking about your mission and work ethic to attract cleaners that will add value to your team.

Technology

If you are not using technology tools to streamline your practices and get real-time data, you are missing an opportunity. Today’s innovation makes it easier to stay on top of positions to fill, turnover rates, advertising initiatives and results, performance, and more. There is even AI that can help you sift through applications, picking out the most relevant candidates and sorting them into a priority list.

Investing in these types of technology means that you can use your time to train and manage your people, so they are happy and performing at their best.

Flexibility

The job market has changed, and many candidates are looking for better balance and a more flexible schedule. It is estimated that 32 per cent of workers are part-time or on contract, and this number is expected to increase to about 60 per cent by 2027. While many employees prefer a full-time, steady arrangement, consider offering flexibility as an option to make your company more appealing to applicants.

Offering flexibility may allow you to attract and retain quality candidates who would otherwise not be able or interested in working for your company.

Retention

Recruitment is key to attracting those excellent candidates, but it doesn’t mean much if you can’t keep them. Employee retention needs to be part of your recruitment strategy, so think about training and development, getting feedback from your current employees, and providing a warm and welcoming environment where employees want to stay. The idea is to develop loyalty and long-term relationships with your employees to keep those great cleaners and save the time and money it takes to rehire and retrain.

B.C. moves to mandate cooling in new housing

A proposed amendment to British Columbia’s building code would mandate cooling capability to maintain indoor temperature at no greater than 26⁰ Celsius in all new residential construction. If adopted, the new measure would be more stringent than the requirements of the 2020 model national building code.

The proposed change is part of a newly released package of code updates now open for public comment until June 16. Other amendments relate to accessibility, mass timber construction, earth quake design and radon safety, with the majority intended to align with the 2020 national code.

An accompanying code change document advises that B.C. is seeking to exceed national code standards largely in response to the 2021 heat wave, which brought temperatures in excess of 40⁰ C and was determined to be the cause of 619 deaths in a six-day period. More than two-thirds of the deceased were 70 or older, while sufferers of certain chronic diseases were particularly vulnerable. However, a subsequent report to B.C.’s chief coroner concluded that prolonged exposure to temperatures above 26⁰ C was a contributing factor in almost all cases.

The proposed new requirement calls for cooling capability to keep the temperature below that threshold within at least one living space in every dwelling unit. This could be accomplished with cooling appliances alone or in combination with other good engineering practices. Despite the code’s concurrent energy performance standards, the proposed new measure is meant as a contingency for extreme circumstances.

“Passive cooling measures should be explored at the design stage and, where necessary, mechanical cooling systems installed to provide a safe and healthy living space,” the proposed code change states. “Some living spaces in a dwelling unit may be more challenging than others to control indoor temperature, so it is the designer’s choice which living space (minimum of one) is capable of maintaining the design temperature.”

The benefits of recurring revenue during a recession

In the midst of ongoing reports of layoffs, bank failures, and surging inflation, commercial cleaning businesses are finding solace in the stability of recurring revenue to withstand the turbulence affecting the economy.

Understanding recurring revenue

Recurring revenue is the predictable and regular income a business generates from ongoing customer subscriptions, contracts, or repeat sales. It gives businesses a more stable and predictable cash flow and reduces reliance on one-time sales or sporadic transactions. It establishes a foundation of consistent income for the business.

It costs a company more to acquire new customers than to sell to their existing clients, so recurring revenue saves you time and money. In fact, companies are 60 to 70 per cent more likely to sell to an existing customer than a new client, and existing customers are more likely to try new products and services.

The bulk of the cleaning industry’s business model is built on generating regular repeat business. Providing comprehensive cleanings, protection against germs and bacteria, and improved air quality to your clients will encourage them to come back. Combining professional service with a responsive, personalized approach creates a relationship based on customer loyalty and repeat business.

Establishing lasting relationships with your clients creates a compound effect. If 70 to 80 per cent of business is generated by recurring revenue, it means keeping teams employed, the business running fluidly, and continuing to drive growth.

In addition to helping drive profits, recurring revenue has numerous benefits to cleaning industry brands. It can positively impact a business by reducing employee turnover, boosting marketing efforts, and guaranteeing an impressive portfolio for future buyers when the time comes to retire.

Boosts customer lifetime value

Customer lifetime value is a vital metric that gauges the revenue a business anticipates from a customer. By focusing on retention strategies, you can enhance the lifetime value of your customers, which translates to increased repeat sales and consistent profits.

Customers are the building blocks of any successful small business. It’s important to continue to enhance your services and products to stay relevant as commercial cleaning demands evolve.

Improves employee retention

One of the hurdles any business faces is building a competent roster of employees. Having consistent staff is especially important in the commercial cleaning industry, and there are about 335,500 openings for janitors and building cleaners each year, according to the U.S. Bureau of Labor Statistics. Employee retention is a factor in building revenue and retaining customers; companies want reliable cleaners, and providing consistent service creates trust.

Having recurring revenue enables your employees to establish relationships with customers and provides them with the steady paychecks needed to meet their financial targets. Their familiarity with a business can help them provide more thoughtful service. If your workers are happy, your business will thrive.

Facilitates growth

Recurring revenue allows business owners to generate a stable cash flow and predict future earnings. Having a solid picture of your cash flow enables you to scale a business with less risk so you can plan for a more stable and profitable future.

Enhances resale value

Investing in a cleaning business helps diversify your portfolio and is a valuable resource for retirement. Having an exit strategy will ensure you maximize your profit potential, and regular revenue boosts the value of your business to potential buyers. With a lineup of existing clients, new owners have an established roster and guaranteed income to get started, which may serve as a motivator if the time comes when you want to sell your business.

Reduces marketing expenditures

Recurring revenue also enables you to identify your target demographic and build customer loyalty, along with helping to streamline services by revealing customer preferences. Having established clients allows your marketing budget to remain steady at 10 to 15 per cent of your revenue target.

In addition, one of your best advertising tools is customer referrals. Word-of-mouth advertising helps grow your business. You may even want to offer a token of appreciation to your clients who provide referrals, as a thank you, and as an incentive to spread the word about your superior service.

Once you establish regular customers, raising prices can be challenging. Providing transparency and superior service will help offset customer concerns when such raises are necessary. The benefits of loyal business accounts make them an invaluable resource for the commercial cleaning industry during a rocky economic season.

Jessica Ruenz, vice president of Maid Right, has over 11 years of experience in the franchise industry as a brand leader and training professional. Her franchise coaching skills and ability to build manufacturing relationships make her an asset to the Premium Service Brands team.

First phase of Canary Landing launches

Dream Unlimited Corp., Kilmer Group, and Tricon Residential Inc. have officially launched Maple House, the first phase of Canary Landing in downtown Toronto. The 12-acre community is comprised of 2,300 rental units – of which 30 per cent will be dedicated as affordable housing and 25 per cent will be barrier-free, creating a model for inclusive, mixed-income communities.

Canary Landing is located in Toronto’s Canary District community, an award-winning urban village adjacent to the Distillery District. Canary Landing includes eight mixed-use buildings spanning four city blocks along Cherry Street. In addition to significant market and affordable rental housing, Canary Landing will also include 30,000 square feet of retail and a future 5,000 square foot community space.

The project represents an innovative public-private partnership between the DKT Partnership, the Province of Ontario, the City of Toronto, the Government of Canada, and the Canada Mortgage and Housing Corporation (CMHC).

“We are grateful for the collaboration with our municipal, provincial, and federal partners as we work towards our shared vision for Canary Landing, which will target ambitious LEED Gold sustainability outcomes, and provide long-term market rental and affordable housing,” said Andrew Joyner, Managing Director at Tricon Residential on behalf of the DKT Partnership. “Maple House is the start of fulfilling our promise to create beautiful, sustainable, and affordable housing, and we look forward to seeing residents thrive in this vibrant new community very soon.”

Bringing much-needed affordable housing to the city, the development team is delivering 126 rental homes that will be filled in partnership with seven non-profit agencies, including WoodGreen Community Services, Artscape, COSTI, Wigwamen, Performing Arts Lodge, March of Dimes and Interval House. These affordable rental homes will be offered at 40 to 80 per cent below the average market rent. An additional 105 affordable rental homes will be available to the public through a soon-to-be-released open market call. All 231 of the affordable homes have been financially supported by the City of Toronto’s Open Door Program.

“We have all watched as Toronto’s affordable housing crisis has grown during the past several years,” said Anne Babcock, CEO of WoodGreen Community Services. “WoodGreen Community Services is thrilled to be working with other not-for-profit agencies and the DKT Partnership to deliver real and permanent housing solutions to a diverse range of Toronto residents. The Canary Landing initiative is a testament to what we can all do by working together for the common good.”

In terms of architecture, the design team, which includes Danish firm COBE and Canadian firms Alliance and CCxA, focused on creating a “design-forward” and environmentally responsible community that respects the local heritage. Maple House has already garnered several accolades, including the Canadian Architect Award of Excellence and the 2021 BILD Award for Best New Community.

“We are incredibly proud to be delivering this truly mixed-income community that is the first of its kind in Canada and a model for city-building,” Joyner said. “This type of housing will strengthen our city’s social fabric and meet the diverse needs of all Torontonians.”

To learn more about Canary Landing, visit: www.liveatcanarylanding.com

GTA new home market rebounds in April

The new home market in the Greater Toronto Area began to normalize in April with sales starting to return to more traditional levels, the Building Industry and Land Development Association (BILD) announced.

There were 2,391 new home sales, which was down 35 per cent from April 2022 and 30 per cent below the 10-year average, according to Altus Group, BILD’s official source for new home market intelligence.

Condominium apartments, including units in low, medium and high-rise buildings, stacked townhouses and loft units, accounted for 1,327 units sold in April, down 57 per cent from April 2022 and 39 per cent below the 10-year average.

GTA homebuyers returned to the market driving new home sales higher,” said Edward Jegg, research manager with Altus Group. “The fundamentals had pointed to a rebound in April and that strength is expected to continue through the spring market.”

Single-family home sales recorded 1,064 sales in April, up 81 per cent from April 2022 and 16 per cent below the 10-year average. These include detached, linked, and semi-detached houses and townhouses (excluding stacked townhouses).

Total new home remaining inventory was 14,928 units, slightly more than March 2023. It included 13,588 condominium apartment units and 1,340 single-family units, representing about 12 months and 4 months of inventory respectively, based on average sales for the last 12 months.

Remaining inventory includes units in pre-construction projects, those currently under construction, and in completed buildings. BILD states it is too early to suggest inventory levels have led to a sustained balanced market.

As of April, condo units average $1,102,904, down from March and also 7.3 per cent over the past 12 months. Single-family homes dipped, as well, to an average $1,768,456.

“In the short term, the impact of sales on new home inventory will be balanced by new project openings with numerous projects in the pipeline,” said BILD President and CEO Dave Wilkes. “However, longer term we cannot take our eye off what needs to be the singular focus of every municipality in the GTA—consistently adding sufficient housing supply. Failure to do so will simply result in inflationary pressures to the cost of new homes returning.”

Photo by Nextvoyage

Toronto’s legacy of inclusive city-building

As the city of Toronto accelerates efforts to address housing affordability, inclusivity and the barriers inhibiting rapid housing development were top of mind at the Urban Land Institute’s Spring Meeting in mid-May.

Toronto urgently needs more housing, of all sizes and tenures. With flagship government initiatives like Housing Now failing to gain traction since it launched in 2019 — despite the City’s $1.3 billion commitment — any attempts to expedite the delivery of purpose-built rental housing have stalled. This failure to get shovels in the ground comes at a time when the need for more purpose-built rental housing has never been greater. Toronto’s vacancy rate currently sits at 1.7 per cent, and home ownership rates have dropped to the lowest level on record. Meanwhile, there is increased pressure to expand rental housing supply to support the anticipated population and economic growth through unprecedented immigration.

Although the Housing Now program suffered largely from pandemic-driven challenges, including lockdowns, supply chain issues, labour shortages and rising construction costs, the fact remains Toronto has been short on housing for years.

“We have only recently begun to get some really good data that demonstrates the magnitude of the supply challenge,” said Jennifer Keesmaat of Markee Developments/The Keesmaat Group and moderator of the session entitled, Housing Affordability: Success is in the Mix. “This data puts a fine point on what’s been happening over the course of the past five to ten years — that we have a complete mismatch between the amount of growth we are seeing and the amount of supply we are delivering across the city. Anyone who looks around and sees the cranes in the sky is shocked by this because there is so much being built. But the truth is we are growing at an astronomical rate, and we have not seen our housing stats increase substantially after 2016.”

According to Keesmaat, the current supply deficit and the myth that the market will just “take care of affordability” have led to interventions by the government to ensure lower-income residents aren’t edged out of coveted neighbourhoods. But Frank Lewinberg, Partner Emeritus at Urban Strategies Inc., said a comparable conversation was happening back in the 1970s.

“It was a similar time,” he said. “We were talking about the fast-rising housing prices, the difficulty of young people with families getting housing, and the fact that lower income people had no hope at all.”

Hence why the federal government decided to invest in projects like the St. Lawrence Neighbourhood, Canada’s first attempt to develop a deliberately mixed-use, mixed-income community. As an architect on the project, Lewinberg said the mix of market-priced housing with public, non-profit and co-op residences became a catalyst for the neighbourhood at large, which was supported by necessary services like schools, supermarkets, restaurants and retail shops.

Today, the St. Lawrence Neighbourhood serves as a model for similar mixed-income projects, including Regent Park, Alexandra Park (pictured right), and Lawrence Heights. As these examples show, the pursuit of inclusivity by blurring the income lines of residents can be an effective strategy for strengthening the city’s communities. But as the massive surge in population growth fuels an unprecedented housing crisis in Toronto, is the mixed-income approach to city-building still the right way forward?

“We are welcoming 500,000 new Canadians on an annual basis, many of whom will be settling here in the GTA,” said Brad Bradford, City Councillor representing Beaches and East York, and candidate in the current Toronto mayoral race. “[This] puts a tremendous amount of challenge before us with respect to housing, coupled with 30 per cent increased cost of construction, 40 per cent increased cost in financing, and the shortage of labour and trades. We are facing historic headwinds.”

In addition to these challenges, there are rough political waters to navigate. As Bradford put it, “planning is politics” and politicians are not always known for getting things right.

“Some politicians have literally made their careers on the backs of opposing housing,” he said, citing examples of projects that were sidelined for having too many storeys or other unfavourable design features. “How do we create a culture of change? How do we move away from saying ‘no’ to saying ‘yes’ to housing opportunities?”

Bradford, like his fellow panelists, believe the answer still lies in the cross-subsidy model, calling it the “key to unlocking housing.” While the approach alleviates some of the financial burden given the market units cross-subsidize the affordable ones, the long-term benefits for the residents can include poverty alleviation, improved housing quality and services, better location and amenities — all of which contribute to healthier economic conditions and help break down barriers.

But to be truly feasible, the panelists agreed that large, mixed-income projects require additional financing from governments; less prohibitive fees and red tape; and a more outcome- vs. process-focused approach. According to Heela Omarkhail, VP, Social Impact at the Daniels Corporation, they also need strong partnerships.

“The ability for a private company to partner with government and bring our thinking, our experiences and really help shape the process, was critical,” she said, referring to the Regent Park redevelopment project that began in 2005. “We were able to leverage our networks, our relationships, and our capital to bring more to the table.”

Flexibility is also a key requirement. Since the five-phase, 25-year redevelopment began, the plan hasn’t been static. In fact, according to Omarkhail it’s been rezoned twice, with a third rezoning currently underway. Each time it’s been to capitalize on emerging opportunities.

But regardless of the income mix, or the scale of the housing project, one thing is certain: more housing across the entire housing continuum is needed in Toronto, from shelter space to affordable housing to market purpose-built rentals.

The time to build is now, and all hands on deck are required to make it happen.

Retrofit funds opened via banking aggregator

Canada Infrastructure Bank (CIB) is opening a new way for small and mid-sized landlords to tap into retrofit funds for decarbonization projects that can cut greenhouse gas (GHG) emissions by at least 30 per cent. BMO has signed on as the first banking aggregator for the Building Retrofit Initiative, promising low-cost financing and potential waiving of administrative fees for borrowers achieving a 50 per cent reduction in GHG emissions.

The bank joins other CIB aggregators, such as SOFIAC, Johnson Controls and EfficiencyCapital, which are facilitating building upgrades through the energy service company (ESCO) model. The new banking aggregator option would allow smaller proponents to work with other delivery agents, provided their upgrade projects meet the requirements of either the Canada Green Building Council’s investor-ready energy efficiency (IREE) certification or its zero carbon building standards.

Under the program parameters, the CIB only deals directly with borrowers that can take on loans of at least $25 million and bring 20 per cent equity to the agreement, leaving others to participate through a designated aggregator. Speaking during a webinar sponsored by REALPAC earlier this spring, Aaron Berg, the CIB’s director of energy efficiency investments, noted that banking participation agreements are considered an important “emerging product” to complement the nearly $400 million thus far deployed through ESCO-type aggregators.

“There will be lots of choice in the market, capitalized by CIB,” he said.

CIB’s $100 million contribution along with BMO’s equity share creates a $125-million fund for borrowers targeting emissions reductions. It’s expected that other Canadian banks and credit unions will follow suit.

“We’re proud to serve our clients at the leading edge of sustainable finance innovation in the real estate sector and to be the first financial institution in Canada to offer this unique financing program,” says Michael Beg, senior vice president and head of real estate finance at BMO Commercial Bank.

HCMA creates installation for Venice exhibition

Vancouver design firm HCMA is contributing Who Is This For to the Time Space Existence architecture exhibition (20 May-26 November) in Venice, Italy. The installation and microsite will focus on provoking the design industry to take responsibility for creating inclusive, accessible public spaces.

The art installation and online experience aims to create a sense of the discomfort, alienation and frustration felt by millions when they cannot access or fully participate in public spaces. It challenges designers to take responsibility for their work and be part of an inclusive solution to this global problem.

Time Space Existence is a biennial group exhibition presented by The European Cultural Centre (ECC). It features projects, innovative proposals and dreams of architectural expressions. The 2023 edition will draw attention to the emerging expressions of sustainability in its numerous forms, ranging from a focus on the environment and urban landscape to the unfolding conversations on innovation, reuse and community.

Visitors to Who Is This For will encounter a fictional city close-up and side-on: a scaled composite of 11 global city grids, including New York City, São Paulo, Lagos, London, Mumbai and Montréal. The grids are stitched together to form one urban space. It is at once both nowhere and everywhere. Each grid has been chosen for its specific manifestation of design inequalities in urban spaces. In a handful of cases, like Singapore’s Enabling Village and Toronto’s Regent Park, they show examples of inclusivity and therefore hope.

“‘Who is this for?’ is a question that all designers ask in their work—but often they answer far too narrowly or without much thought. It’s a question we need to ask better, to seek more and different perspectives, to consider and embrace more people, to become more inclusive, by design. From our own privileged position, we are mindful that we too have been part of the problem in the past. However, we want to be an active agent of change within the industry. We can’t change everything, but we can change something,” said Darryl Condon, HCMA managing principal.

The biennial exhibition runs from 20 May – 26 November, 2023 at Palazzo Bembo, Venice.

Federal heritage buildings listed for offloading

The Canadian government is preparing to offload 10 of its properties in the national capital region, including four registered federal heritage buildings. Public Services and Procurement Canada (PSPC) released the list of properties “in various stages of the disposal process” last week as part of an invitation to select stakeholders to bring forward plans to productively reposition the space.

Under the government’s directive for managing its real property, sites deemed surplus to the government’s needs are first to be offered to Crown corporations, provincial/territorial and municipal governments or their agencies and Indigenous peoples. PSPC’s communique notes that it welcomes proposals for affordable housing, redesigned community or commercial space and projects that would meaningfully involve Indigenous participation and promote reconciliation.

The disposal list includes office properties in downtown Ottawa, the nearby enclave known as Tunney’s Pasture and on some of the city’s major arterial roads, as well as a campus of low-rise buildings on the Quebec side of the Ottawa River. Current federal offices within the buildings are to be moved to other locations in Ottawa and/or Gatineau.

“The Government of Canada’s shift to a hybrid work model will enable us to relocate these employees into modern accommodations,” the PSPC communique advises. “We will continue to assess and optimize the performance of our office portfolio as our clients’ long-term office plans evolve. While our current list only identifies buildings in the national capital region, buildings in other regions may be added in the future.”

The four registered heritage buildings were built in the 1950s and 1960s and include:

The Brooke Claxton Building, a 19-storey office tower in the Modern International architecture style;
1500 Bronson Avenue, also known as the CBC Building, which is considered a leading Canadian example of the expressionist strain of modernism;
The Asticou Centre, which offers a blending of several architectural styles of the 1960s, with notable elements of the International style; and
The Sir Charles Tupper Building, which boasts International architectural style and a park-like hillside setting.

None of the properties are yet for sale on the open market.

Confidence among first-time homebuyers edges up

Rising interest rates and inflation have had a modest impact on the decisions of recent first-time homebuyers. In a survey from private residential mortgage insurer Sagen, 26 per cent said economic conditions have had no impact on their ability to afford their homes, while 52 per cent said despite challenges they wouldn’t have changed their home-buying decision.

Current conditions have led 43 per cent of future buyers to delay the timing of when they buy, while 35 per cent said conditions have not impacted when they will buy their homes.

Housing availability is lacking, though, as the majority of respondents are noticing the insufficiency. Only 13 per cent believe it’s a good time to buy.

Yet market confidence is far greater, with many purchasing or planning on buying a smaller home than expected or within a less expensive neighbourhood.

Fewer buyers in 2023 report not having to delay or suspend their mortgage payments compared to those in 2021. More than a third are buying with financial support from family and a quarter are receiving help with mortgage payments.

“These results show Canadian first-time buyers have been, and are entering the market eyes wide open, mindful of what they can afford, the trade-offs they need to make, and their own desire to achieve the dream of home ownership” says Stuart Levings, president and CEO of Sagen.

“Rising interest rates have cooled home prices in many regions of the country, leaving potential sellers waiting on the sidelines for conditions to return to normal. This has made it more difficult in the short-run for prospective buyers to find the homes they want, but longer term they remain confident in their decisions to become homeowners.”

Greater importance placed on work and home proximity

The impact of the hybrid work environment is also reflected in the survey results. First time homebuyers and intenders both place greater importance on the proximity of their homes to where they work than they did in 2021.

They are also placing much greater importance on having space where they or their partners could work from home. Interest in energy efficient homes is also trending higher.

An estimated 24 per cent of both first-time and hopeful buyers are choosing condos more readily since before COVID-19, with fewer seeking detached homes.

“First-time homebuyers are expecting that the hybrid work model is here to stay” says Levings. “They are compromising on space so they can find an affordable home that is closer to work for when they need to be in-person, yet they also want room to work from home when they are able to.”

The findings suggest that property developers, notably condo builders, will need to take these new considerations into mind as they design homes that will adapt to current and future needs.

SFU opens new 383-bed student residence

Simon Fraser University (SFU) students now have access to more on-campus housing with the official opening of a new residence hall at the Burnaby campus.

The two building Courtyard Residence is providing an additional 383 beds for students on the Burnaby campus, bringing the number of on-campus student beds to more than 2,450.

The Courtyard residence primarily features single occupancy rooms intended for first-year students, private shared washrooms, a house lounge and kitchen, 24/7 front desk support, laundry room and multi-functional spaces. It also houses the new main administration office of SFU Residence and Housing.

The student housing project was built in two phases by Ledcor. Phase 1 included 482 single-room dormitory-style student beds, which opened in 2021. Phase 2 includes 383 student beds.

Government is providing $73 million toward the $108-million development. The building will include mostly single-room dormitory-style beds targeted at first-year students. The building will be designed to reflect Indigenous culture in the region, including the Musqueam, Squamish, and Tsleil-Waututh Nations. It will include a drumming circle and an outdoor space that connects to nature.

The opening of Courtyard Residence marks the completion of Phase 2 of SFU’s five-phase Residence and Housing Masterplan, which will see housing options at Burnaby campus continue to expand to accommodate a total of 3,250 students – about 10 per cent of the student population – by 2035.

“Affordable on-campus housing is a win-win for everyone because it decreases pressure on the rental housing market, while enriching the university experience of our students. We are excited to welcome nearly 400 additional students to Burnaby campus with the completion of this building, and many more in the years to come,” said Joy Johnson, president and vice-chancellor, Simon Fraser University.

Photos: Ledcor

U.S. REIT adds to Alberta casino holdings

VICI Properties Inc. is adding to its Alberta casino holdings through a $221.7-million sale-leaseback deal with Century Casinos Inc. for four properties in Edmonton and Calgary. This follows VICI’s $272-million acquisition of four gambling facilities in Edmonton, Calgary and Lethbridge earlier this year, which was the U.S. based real estate investment trust’s first cross-border foray.

John Payne, VICI Properties’ president and chief operating officer, says the latest transaction demonstrates “ongoing desire to expand internationally and confidence in the Canadian gaming market”. Century will continue as operator through a triple-net master lease.

“We are also pleased to continue growing our partnership with Century by supporting their asset monetization strategy, unlocking value that fuels their strategic growth initiatives,” Payne adds.

The properties include Century Edmonton, Century St. Albert and Century Mile in Edmonton, and Century Downs in Calgary. Collectively, they encompass two horse racetracks and nearly 80,000 square feet of gaming area featuring a total of 2,443 slots, 78 video lottery terminals and 43 gaming tables.

The deal is expected to close in the second half of this year. Century Casinos will join PURE Canadian Gaming Corp. as an Alberta-based triple-net tenant, representing a modest portion of VICI’s 49-facility portfolio. It also includes three major casinos on the Las Vegas strip, and, in total, 124 million square feet of gambling space, 60,100 hotel rooms and 450 restaurants, bars and nightclubs.

Increasing safety on the roof

As a maintenance manager, you need to become familiar with all the elements of your building, including your roof. Whether you need to access the roof as part of your seasonal maintenance, or you’re sending a contractor up there, there are some measures you can implement to boost safety for everyone who needs to access the roof.

Risk assessment

Start by assessing your current roof safety so you can put a plan in place to mitigate those risks. Identify locations on the roof where contractors may need easy access such as skylights, HVAC equipment, and roof penetrations. Identify potential risks, considering the proximity of equipment to the roof’s edge, frequency of required access, and the weather associated with the times of the year people might be up there. Look at risks associated with your roof’s access, too. Is there interior access? An exterior caged ladder? Is there a walkout? Each of these situations presents different potential risks, so it’s important to be specific in your assessment.

Once you have identified as many potential risks as you can, you can start to put a plan together to improve the safety on your roof.

Safety precautions

There are several precautions you can take to make access as safe as possible. Consider installing guardrails around the perimeter, personal fall-arrest systems like anchors that contractors tie into, warning lines drawing attention to the roof’s edge, and more.

Depending on where you are located, laws exist to protect people accessing your roof and, in many cases, the maintenance manager is responsible for making sure that these protocols are followed. For example, in Ontario, anyone accessing the roof is required to complete working from heights training. Consult bodies like Occupational Health and Safety (OHSA) to stay up to date on the rules and regulations for your area.

Staff training

Safety is everyone’s responsibility, so make sure that all staff and all visitors to your roof know the policies and laws required for access. Fall protection equipment is just the start! Post the rules and create due diligence practices to ensure that your team is aware of all updated requirements, knows how to use the safety measures properly, and is aware of emergency procedures, should an emergency occur.

By conducting a thorough risk assessment, implementing the appropriate safety measures, ensuring compliance with the relevant standards, and training your team, you will have taken the steps necessary to increase the roof access safety for your building.

Ventana wins top ICBA safety award

Best practices for stretching has won Ventana Construction ICBA’s prestigious Gord Stewart Health and Safety Innovation Award. The stretching program, which was developed and implemented across all Ventana job sites, aims to reduce musculoskeletal injuries (MSIs) by providing workers with information and guidance on stretching.

MSIs represent roughly 35 per cent of claimed injuries in British Columbia’s construction industry, making them a significant concern for workers and employers alike. To combat this issue, Ventana has implemented a stretching program that not only helps reduce the risk of MSIs but also promotes overall health and wellness for workers.

The stretching program is a full-cycle program that uses technological innovation. It includes a poster with multiple QR codes that enable access to ‘how-to’ videos on best practices for stretching. These videos are available to all workers on the job site, including subtrades, and can be accessed from any mobile device. The program access is also uploaded into the safety app so it’s accessible to all employees at all times.

The stretching program is part of the morning pre-job tasks to start the workday. Supervisors ensure that each morning, prior to commencing work, the team holds a morning meeting outlining tasks, priorities, and pertinent safety-related items. This is followed by a 10-minute stretching routine outlined in the Stretch & Flex poster. Workers are also required to complete their Job Hazard Analysis (JHA) before starting work.

The benefits of stretching programs are many. They help reduce injuries, increase awareness of body positioning and conditioning, improve communication and team building, and make workers more alert when they go out into the field. Select stretches can be done during the workday to help alleviate tightness.

The Gord Stewart Award is given out annually by the Independent Contractors and Businesses Association (ICBA) to recognize excellence in construction workplace health and safety in British Columbia. Ventana receives a trophy and $5,000 cash prize, partially funded by WorkSafeBC.

Ventana Construction’s stretching program is an innovative and effective way to promote workplace health and safety. By utilizing technology and making the program accessible to all workers on the job site, Ventana has taken a significant step in reducing the risk of MSIs and promoting overall health and wellness for workers.

Manitoba to convert forfeited houses into affordable dwellings

The Manitoba government, through the Criminal Property Forfeiture (CPF) unit, will donate six houses forfeited as proceeds of crime in Winnipeg’s Point Douglas neighbourhood for development by interested non-profit and Indigenous organizations to build affordable housing units for low-income families.

“Our government will be providing more affordable housing in the Point Douglas neighbourhood by allowing for the redevelopment of six single-family homes obtained through the CPF unit,” said , Justice Minister Kelvin Goertzen. “These properties were used to support illicit drug activity and crime in the area but will soon benefit the neighbourhood by being donated and converted into needed housing for families while contributing to community renewal.”

“Manitoba Housing has issued a negotiated request for proposals to identify a non-profit or Indigenous-housing organization to turn these properties into affordable housing units,” added Families Minister Rochelle Squires. “This will provide more opportunities for affordable home ownership and help strengthen families and communities.”

Manitoba Housing is managing the properties until the transfer is complete, with its department staff responsible for ongoing maintenance, inspections and security, the ministers noted, adding in the event that a successful proponent proposes demolition and rebuild on the home sites, the CPF unit will work with the proponent on demolition costs.

The successful non-profit or Indigenous-housing provider will be required to follow Manitoba Housing’s Affordable Housing Program income limits for Winnipeg, whereby eligible homebuyers must have a total household income of not more than $84,600.

Only non-profit or Indigenous organizations will be eligible to submit proposals. Manitoba Housing will use a competitive project selection process to ensure the most appropriate and viable project is selected. Further details on the proposal process can be found online at https://manitoba.ca/housing/progs/rfp.html.

Newmark appoints first Canadian president

Norm Taylor has joined Newmark Group to lead the real estate advisory firm’s operations in Canada. He comes to his new role from CMLS Financial, where he was vice president of national advisory and vice president and managing director of real estate finance for the British Columbia region.

In the newly created position as Newmark’s first Canadian president, Taylor will draw on nearly 30 years of experience in sales, leasing, finance and executive leaderships as he oversees day-to-day brokerage operations, including strategic direction, client services and in-house mentorship. He will be based in Vancouver and report to Newmark’s western region president, Kevin McCabe.

“Norm has distinguished himself amongst his peers, cultivating a well-deserved reputation as an influential market leader in Vancouver and across Canada,” McCabe says.

“His industry expertise solidifies our commitment to our presence in Canada and our goal of further increasing Newmark’s non-U.S. revenues,” affirms Newmark’s chief executive officer, Barry Gosin.

Office building values still trending downward

Appraisers generally expect office building values to keep slipping over the course of 2023. When Altus Group recently surveyed its Canadian valuation staff for their opinions, more than two-thirds of respondents projected a further 5 to 15 per cent decline, while just 1 per cent judged that values have hit bottom and will remain flat in the coming months.

Presenting those findings during a recent webinar, a panel of the firm’s analysts tallied a range of factors that are undermining cash flow, pushing up cap rates and making investors skittish. That’s evidenced in an 11 per cent decline in office values between the first quarters of 2022 and 2023 across 214 institutional-grade income properties contributing to the Altus benchmark.

“It’s more and more difficult all the time to see a situation where the appetite for office going forward matches what it was in the past,” said Jonas Locke, vice president of Altus business advisory services in Canada.

Challenges arise both from the COVID-19 pandemic’s destabilizing impact on user demand and financial dynamics that investors are now confronting for the first time in several years. The spread between cap rates and the Bank of Canada 10-year bond rate has narrowed to a range last seen during the global financial crisis in 2007-2008. Concurrently, the conventional five-year mortgage rate has climbed to nearly on par with cap rates.

“It has virtually eliminated leverage as a tool to enhance your yield,” Locke observed. “If you’re buying real estate today and paying those types of interest rates, the idea of a leveraged deal being in excess of a cap rate is not there.”

Looking at the past year, Mike Helm, Altus Group’s senior director of national portfolio management, parsed some of the details in the benchmark data, which is drawn from clients that have adopted the firm’s valuation management software and have agreed to contribute. That enables quarter-over-quarter and year-over-year comparisons of the valuations of 693 real estate assets located Canada-wide, of which about 31 per cent are office properties. (Industrial accounts for 39 per cent, retail makes up 16 per cent and multifamily represents 14 per cent.)

“Unsurprisingly, we’ve seen the largest value declines, quarter-over-quarter and year-over-year, in the office sector,” Helm noted. “The direction we all know, but the magnitude amongst the different markets is interesting.”

Toronto and Montreal experience steepest fallout with Vancouver yet to follow

The steepest drops typically occurred in Toronto and Montreal with less erosion registered in Vancouver and Calgary. In Calgary, that’s largely due to a lower starting point and less distance to slide, whereas Helm suggests Vancouver’s trajectory is still unclear. He attributes the fallout in Toronto and Montreal to a larger share of trophy assets.

“Our lowest yields and our highest values are typically in those major markets. For those large-scale, relatively low-yield assets, a 25-point move is going to be more significant in terms of impact to value, both dollar-wise and percentage-wise,” Helm affirmed. “Vancouver has been notably lagging in terms of the value declines witnessed in Toronto and Montreal. So we can potentially argue the strength or uniqueness of the Vancouver market or, alternatively, the possibility of a higher downside and more significant relative value declines moving forward.”

Trends in the United States may offer a hint.

“We’ve seen debt markets significantly impact U.S. valuations,” Helm reported. “We’ve seen larger value declines on U.S. office assets so I think it’s reasonable to suggest that value declines are likely to continue in the Canadian office market.”

The well-documented surge of the hybrid work model, which now sees many employees splitting their on-the-job hours between home and formal offices, increasingly causes strain for landlords as leases come up for renewal. As well, the tech sector, which emerged as an engine of jobs and office absorption in several Canadian markets in recent years, appears to be in a lull. While all property types in the Altus valuation benchmark experienced a year-over-year negative impact on yield in the 12 months between Q1 2022 and 2023, office was alone in also recording a downtrend in cash flow projections.

Locke drew parallels with upheaval in the retail sector, arguing that there will be continuing demand for both bricks-and-mortar shopping venues and office buildings, but that some “reinvention” will be needed. He cited the city of Calgary’s incentive program for office-to-residential conversions as one example. Climate risk and investors’ ESG imperatives are also expected to prompt some culling.

“With the goal of net zero and the amount of money that will have to be put into some of these office buildings, there’s a question of whether or not that is justifiable, especially with the softening of the rents with the high availability rates,” mused Raymond Wong, vice president of the Altus research and data division.

Drop in deal volume complicates valuation

Altus panellists listed rising interest rates, difficulties in securing financing and discordance in buyers’ and sellers’ expectations as key reasons for unusually low transaction volume across all property types. Colliers Canada’s recently released snapshot of Q1 capital markets reports a 49 per cent year-over-year drop in investment value between Q1 2022 and 2023, and webinar participants acknowledged that a slowdown in transactions affects appraisal.

“Sales really drive yield rates, but there is a whole other piece of the puzzle — the cash flow. The value of real estate is driven by cash flow projection and an appropriate yield, and there is a lot of work you can do inside the cash flow projection to reflect current markets, fundamentals and circumstances,” Locke submitted. “When it comes to yield rates, in the absence of sales, I think we survey the market a lot more than we ever have. We talk to brokers and investors and fund managers, and we try to build consensus and consistency. We look to the financial markets for clues as well.”

“We have a well-defined methodology that’s consistent across valuations in a given sector, save for market- or asset-specific nuances. What’s happening is just a lot more conversations with clients, brokers, investors, anyone involved in underwriting assets,” Helm concurred. “Something really important to clients right now is the performance of their assets versus their peers.”

For Q1, Colliers reports a quarter-over-quarter increase in office transactions with $786 million worth of deals, up from $452 million in October, November and December. Wrapping up 2022, Colliers analysts remarked on the diminished REIT and institutional activity that accounted for just 49 per cent of office acquisitions for the year. For the start of 2023, they characterize office transactions as “on the smaller end of the market” primarily in the $20- to $25-million range.

“I am not hearing the same conversations around distressed assets or sales that we’ve heard in the U.S. So I wonder if that will continue to be the case over the balance of 2023,” Helm reflected.

Locke foresees more deal activity with stable interest rates and some initial sales to reset the market.

“The gap between purchaser expectations and vendor expectations, that’s the key hurdle to kind of get over,” he maintained. “There’s lots of capital out there that’s looking to be deployed; it’s getting an understanding around pricing. I think there could be a situation where you see one or two benchmark transactions and a bunch to follow.”

Barbara Carss is editor-in-chief of Canadian Property Management.

Toronto and Montreal experience steepest fallout with Vancouver yet to follow

Drop in deal volume complicates valuation

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