Why facilities must be proactive to improve cyber security

Technology is integral to facility managers’ job and workflow, but it’s important to remember that increasing reliance on technological solutions also increases cyber security risks.

Independent research and advisory firm Verdantix notes that there has been an increase in cyber attack threats to building systems that have generally been under-reported.

The company warns that facilities are particularly vulnerable due to the interoperability between operational technologies (OT) and information technologies (IT) from multiple manufacturers, resulting in a convergence of physical and digital threats. IBM research found that cyber attackers increased their targeting of internet-connected OT devices by 2,204 per cent between January 2021 and September 2021.

For example, a commercial REIT-owned Class A office building in Canada was attacked by ransomware that shut down the BMS and damaged central plant equipment, resulting in hundreds of thousands of dollars of cost. In another example, attackers infiltrated around 4,530 internet-connected video cameras installed by a cloud-based access control manufacturer, gaining access to video feeds across 68 organizations.

“Without sufficient security controls, these systems are introducing significant new risks and more entry points for cyber criminals to exploit,” says the company’s blog on the topic. For example, AI algorithms are vulnerable to data poisoning, where data inputs are maliciously altered to impact the decision making of the algorithm.

“The first step for rebooting a smart building cyber security strategy is defining clear responsibilities and embedding cyber management into facilities operations across procurement, technology management, and staff training,” said Rodolphe D’Arjuzon, Global Head of Research at Verdantix.

“Facilities managers should not develop a siloed cyber program on their own, but rather partner with their IT and security peers to integrate cyber security into different building management processes.”

To counteract these threats, Verdantix stresses that facility managers should look to redefine their security protocols, ensure that their technology and data have no weak points, and work with their IT programs to ward off potential threats before they infiltrate.

U of Waterloo team to investigate missing middle housing

Three researchers from the University of Waterloo’s Faculty of Environment have been awarded funding from the Social Science and Humanities Research Council of Canada to work with the community to investigate the lack of family-sized apartment housing despite the recent building boom in Waterloo Region.

The affordable housing crisis is especially apparent for families there due to a lack of suitable low-rise, high-density housing such as low-rise multi-bedroom apartments, row houses, and townhomes.

These kinds of units are referred to as ‘the missing middle,’” School of Planning professor Dawn Parker said in a media release. She added that providing more suitable housing for families in high-density areas such as the central transit corridor would permit a greater number of residents to “grow in place” and have access to transit-oriented development. It would also help the Region to get closer to its carbon reduction goals.

“We are so excited and grateful to the many partners who have been willing to come to the table to collaboratively explore potential solutions to our deeply complex local housing challenges,” Parker said. “Our research builds on our previous productive partnerships and adds valuable new collaborators in the for-profit and non-profits development sectors.”

Professor Parker, Sean Geobey, and Martine August, all professors at Waterloo, have been developing a three-year project titled, “Why did the ‘Missing Middle’ miss the Train?”

By working at the grassroots level with the development industry, the community and public officials, the team hopes to explore local barriers explaining the “missing middle” and identify feasible and efficient potential solutions, such as developing a “missing middle” site plan and finance typologies. Finally, they will test the solutions using land and housing market simulations.

In 2019, the ION light-rail transit in Waterloo Region was launched with the mission to move people and intensify land use. Those objectives have been reached as more than 2.6 billion dollars were invested in the corridor, allowing more high-rise residential buildings to be developed. However, at the same time as the development, housing in Waterloo Region became much less affordable.

“Developers primarily built single bedroom units to maximize margins,” said Parker. “These units served the Region’s young tech sector workers but failed to meet the needs of families, who are being pinched by increasing demand for a finite number of detached and semi-detached homes.”

The team’s research directly relates to provincial and federal government calls to identify housing supply barriers, as well as solutions. The team’s research is also in line with the Faculty of Environments Strategic Plan by collaborating with external partners to shape their research agenda and co-create and mobilize knowledge.

How to secure appropriate property coverage

From summer hail storms in Calgary to flooding in British Columbia to windstorms in the Eastern provinces, 2021 was full of catastrophic losses. Canada hit $2.1 billion in insured losses last year, the sixth highest in insured losses since 1983. Residential property risk also increased, including for condo buildings.

As a result, real estate owners with multi-family high-rises in their portfolio are beginning to layer policies just to secure their baseline coverage needs.

Planning in 2022 is more worrying than usual. With hard-to-secure coverage and limited policies available, many property owners and condo boards are stressed over the possibility of frequent and significant claims without adequate coverage in place for when the next catastrophe hits.

In 2022, insurance professionals will be relying on risk management tools like catastrophe (CAT) modelling to help owners understand their financial risks and secure appropriate coverage – a trend that will actually help mitigate risk over time and even lower the costs of coverage as well.

The impact of catastrophic exposures on the real estate market

Western Canada faced an extreme heat wave last summer that shattered all previous records, and wildfires led to issuing 181 evacuation orders and the burning of 8,700 square kilometres of land in B.C. alone.

While these stories may seem extreme, they are no longer rare. Climate-related catastrophes are growing around the world, both in frequency and severity, and the “new normal” must take the possibility of catastrophic losses into account during the planning stages. Whether your condo is near woodlands or water, it is at risk from wildfires, flooding and even extreme heat waves. And since the costs of CAT claims can be so high, it’s not realistic to self-fund.

The real problem is that the trend is continuing into 2022. The residential real estate market will be particularly affected, with reinsurers exiting the market, drying up capacity. As a result, there will be fewer coverage options and higher rates for condo buildings, particularly in areas where catastrophes are more frequent.

Risk management tools to the rescue

After several years of pandemic-related struggle in the real estate sector, the story is disheartening. And globally, first-half 2021 catastrophe losses reached $42 billion, of which $40 billion was related to natural disasters. With scientists expecting the climate-related disasters to continue into 2022, it would be easy for condo boards and operators to give up.

Instead, real estate owners and operators are digging in to the data, working intimately with tech tools such as catastrophe (CAT) modelling to provide information and make the right choices when it comes to risk management.

In short, CAT modelling is a computerized process that simulates possible catastrophic events in order to estimate the amount of loss that stems from those events. When done right, this kind of data analytics connects data sets to draw important conclusions, such as helping property owners understand their risk, estimate suitable policy limits and even secure appropriate coverage.

At the same time, however, traditional, low-tech risk solutions and controls, such as water mitigation and disaster recovery planning, will never go away completely. In many cases, you may be able to secure lower rates by creating risk mitigation plans that are unique to the building, training your staff to implement those plans and allowing regular on-site inspections.

Underwriters have begun to take notice of the trend. As a result, they are beginning to require CAT modelling and other predictive tech for large real estate portfolios as a means of mitigating risk and providing coverage. Owners may also discover that they need to paint a clear picture of their risk management processes and operational controls – whether high- or low-tech – in order to secure any coverage at all.

Best practices in the 2020s

Higher prices for less coverage seem to be the trend – and the challenge – of the 2020s. To counter that challenge, it’s imperative that condo operators and boards demonstrate best practices in risk management. Property owners who want to reduce their exposure and increase resiliency will need to engage both new tech and traditional controls across their portfolio — regardless of location, condition and catastrophe exposure.

Appropriate coverage will be difficult – but not impossible – to find, and successful real estate owners and operators will have to go the extra mile to secure it. Insurance brokers may be the key to that success. Those who consult with an expert broker will find themselves in a better position than those who don’t.

Dru Douglas is an account manager for the Ontario region for global insurance brokerage Hub International. He specializes in insurance and risk solutions for the office, retail, industrial and multifamily sectors of commercial real estate.

Glass standards to reflect climate priorities

Three Canadian glass standards will be updated in keeping with priorities for climate resiliency. That will also allow the obsolete standard outlining procedures for the structural design and production of glass for buildings to be brought back into active use. The current 33-year-old version is so outdated it has been withdrawn from the Canadian General Standards Board’s (CGSB) offerings.

The Standards Council of Canada (SCC) has approved funding for that work, along with updates to the standards for safety glazing and insulating glass units, as part of a program to develop standards for climate resilient buildings and infrastructure. That’s also identified as a priority in SCC’s recently released National Standards Strategy, which specifically references standards to promote climate change mitigation and adaptation in building design and construction.

“To have the Standards to Support Resilience in Infrastructure Program, led by the Standards Council of Canada, offering funding for updating these valuable glass standards is a big step forward,” says Amy Roberts, director of Canadian and technical glass operations with the Fenestration and Glazing Industry Alliance (FGIA). “With changes to the National Building Codes as well as more stringent energy requirements, keeping the standards relevant is vitally important.”

What are office managers looking for in a commercial cleaning company in 2022?

Most business owners understand the value of hiring a commercial cleaning company to make sure their facilities are regularly cleaned and disinfected to a consistent standard. Professionals do a much better job than employees would, and not adding cleaning to their already full workload makes them a lot happier.

But office managers tasked with the job of hiring a commercial cleaning company have their work cut out for them. According to 2022 figures from IBIS World, there are 1,136,663 janitorial service businesses in the United States. Some are large franchise operations with dozens of locations around the country. Others are smaller chains or mom-and-pop shops. They provide many different services and a variety of price points.

There are a few specifics office managers are looking for when they decide which cleaning company is the best fit. Knowing what they want will help you stand out from the competition.

Reputation

The first thing they will search for is a company with a great reputation. They will talk with office managers at similar businesses. They also read online reviews and avoid companies that have a lot of negative ones.

The personnel of a commercial cleaning company are also very important. You need to have a trustworthy staff that can get the job done correctly. What kind of background checks do they undergo before being hired? Are they licensed, bonded, and insured in case of breakage and theft? Make sure you can answer questions about what kind of training they undergo to make sure they really know what they are doing. Office managers often want to know if the same team will visit their facility each night, so be prepared to provide the consistency they are looking for.

Professionalism

Professionalism is a must, both in the way the staff acts to their appearance. Uniforms are a small thing, but they make a big difference. Studies have shown that wearing uniforms increase professionalism and productivity in workers. Plus, it’s an added level of security for the business. If a cleaner is wearing a uniform, everyone in the building knows they are supposed to be there.

Equipment and chemicals

In order to do the job correctly, you need to have the right tools, specifically the correct chemicals. Reputable cleaning companies know there are no one-size-fits-all cleaning solutions. Cleaning a restaurant is different from cleaning a medical facility, which is different from cleaning an automotive centre. The best cleaning companies know which chemicals are strong enough to do the job while gentle enough not to damage surfaces.

More and more companies are now offering green cleaning. While cleaning solutions aren’t as harsh as they were decades ago, many still contain chemicals that are damaging to the earth’s environment. They also impact the environment inside the facility as they contain volatile organic compounds (VOCs) that may cause headaches and respiratory problems in building occupants. Because of this, many office managers are now adding green cleaning to the list of things they’re looking for in a commercial cleaning service.

Since the start of the pandemic, there are new standards for disinfecting and sanitizing surfaces to kill the COVID-19 virus. The CDC and OSHA both have guidelines concerning the best ways to clean to prevent the spread of disease. Any professional cleaning service should be aware of these guidelines and make sure their employees are following them.

Cost

While cost shouldn’t be the determining factor in whether someone hires a certain cleaning company, it will play a role. Decisionmakers want to find the company that will provide the most value for the price.

Many office managers start the process of finding a commercial cleaning company believing all are the same. Following some of these suggestions will help your company show why and how quality matters.

Doug Flaig is the President of Stratus Building Solutions, a janitorial services franchise organization, where he ensures that franchisees and customers receive world-class service. He previously served as Chief Operating Officer with Safe Facility Services, a janitorial services provider, headquartered in Thousand Oaks, CA.

Defining ‘Net Zero’

Broadly speaking, the term ‘net zero’ refers to any time the same amount of something is produced as removed or expended. In the building sector, we often hear “net-zero” used in connection with energy or carbon—two words that are not interchangeable but commonly misused as such. Wendy Macdonald, Sustainability Consultant at RJC Engineers, is on a mission to help clear up some of the confusion around these terms, given the urgency building owners are now facing to join this all-important movement. As the world takes collective steps to reduce greenhouse gas emissions and embrace clean energy sources, there’s no more room for ambiguity.

“Net zero just means a balance of things—and that could be energy, carbon, water, waste, money or even jellybeans,” she says. “If we want to be successful, it’s important to be clear about what we’re trying to achieve.”

Net zero energy is achieved when a building generates as much energy as it uses. If the energy generated comes from renewable sources, this can often be considered “operationally zero carbon” since no carbon is emitted to meet the operational energy needs of the building. Net zero carbon, on the other hand, is achieved when a building project is responsible for removing as much carbon from the atmosphere as it emits over its entire life cycle, either through operation or in the generation of the materials (and processes) used to construct the building.

When determining net zero energy, a common approach is to figure out how much energy a building uses on an annual basis and produce enough energy on site to match that amount—in other words, giving as much as taking. But some buildings are made to be ‘net zero ready’ which adds another layer of confusion. A typical building’s energy needs are so high that on-site energy generation simply would not be able to meet the demand. ‘Net Zero ready’ means the building’s energy requirements are hypothetically low enough that they could produce enough energy on site to meet their own needs.

A common approach that some jurisdictions have used (e.g. BC Step Code, Toronto Green Standard) is to establish maximum amounts of energy that can be consumed per area of the building. This is called energy use intensity (EUI). A low EUI is an indicator that a building may be able to generate sufficient on-site energy to be net-zero energy. In Canada’s heating-dominated climate, another commonly used metric is Thermal Energy Demand Intensity (TEDI), which is a metric used to quantify how much energy is specifically needed to heat the building.

Carbon is a little different. To start with, carbon is frequently used as a proxy for all relevant greenhouse gases (GHGs). Other GHGs are translated into carbon “equivalents” to simplify the comparisons. Establishing the ‘net’ carbon of something depends on which carbon emissions are being included in the calculation. For instance, is it solely whatever carbon is emitted while the building is in operation, or does it include the emissions associated with constructing the building in the first place? And what about the emissions associated with the people coming and going from the building? According to Macdonald, drawing these lines in the sand by identifying the emissions ‘scope’ makes a big difference in reducing ambiguity.

“Typically, determining net-zero carbon for a building includes determining the GHG emissions from any on-site combustion, the emissions associated with electricity generated for the building, and increasingly a recognition of the emissions associated with the materials in the building, and the construction, maintenance, and ultimate disposal of the building itself,” she explains. “Since the building is likely unable to absorb enough carbon to offset what it generates, carbon offsets are a useful tool to achieve ‘net-zero’ by funding opportunities for GHG reductions elsewhere. Whatever cannot be achieved by good design and operations” within the building can be offset to help someone else, somewhere else, reduce emissions.”

As Macdonald sums it up, “You can have a net zero energy building that is not zero carbon, or a net zero carbon building that is not net zero energy. It’s all in the definitions.”

Systems and design

While a net zero energy building might be extremely energy efficient with a photovoltaic system on the roof large enough to supply as much electricity back to the grid that the building took from it, Macdonald describes a net zero carbon building as one that minimizes energy use, eliminates systems that rely on fossil fuel combustion (such as gas fired boilers), and offsets emissions associated with materials/construction/maintenance/deconstruction, and emissions associated with electricity generation.

“Even better,” she says, “is if the building is net-zero energy for its operations—then it’s just a matter of offsetting the materials. The carbon zero building would also supply enough of its own on-site renewable electricity, or it would purchase electricity from the grid but pay for carbon offsets for the emissions associated with generating that energy. Different electrical grids have different amounts of carbon associated with how their electricity is generated. The less carbon associated with the electricity, the easier it is to get close to net zero carbon just by switching from fossil fuels to electricity for your energy needs.”

For grids with higher emissions, Macdonald says net zero carbon can end up looking a lot like net zero energy. Still, most projects targeting net zero carbon choose to focus on electrification (i.e., fuel switching) given many utility companies have committed to lowering the carbon emissions associated with their grids.

The path forward

Of course, every project is going to be a little different. For existing buildings, an assessment or audit is a good place to start.

“Likely, there will need to be some combination of envelope upgrades, lighting and mechanical systems upgrades,” Macdonald says. “For reduction in carbon, fuel switching may be required, moving from high carbon to low carbon sources. A good team of consultants will help in figuring out the best path forward.” There may even be funding or incentives available for these retrofits.

For new building projects, the path can be simpler—it’s a matter of telling your consulting team if you want a net zero energy or a net zero carbon building, and they can give you more information and design options for what that would mean for your specific project. To help clarify the confusion, building owners can look to third-party rating systems which define specific goals. While Passive House is energy focused (though not specifically net zero energy) the International Living Future Institute (ILFI) has certifications for both Zero Energy and Zero Carbon. Meanwhile, LEED has added LEED Zero to its certification programs, which recognizes net zero goals in existing buildings: zero carbon, zero energy, zero water, and/or zero waste.

“Each rating system has its own benefits. My personal favourite is the Canada Green Building Council’s (CAGBC’s) Zero Carbon Building (ZCB) standard,” Macdonald says. “It focuses on net zero carbon, and does so in a way that integrates design, energy efficiency, inclusion of embodied carbon, consideration of being a good “grid citizen”, and encouragement of on-site renewable energy. A good mix of the right things.”

She adds that ZCB is intended to be inclusive and educational—and the fact that it was developed in Canada means it takes into account our cold winters and large variability of electricity grids. “ZCB gives designers and building owners a chance to wrap their heads around how they’ll be building in the future, and it also comes with the bonus of support and recognition for the achievement…because we all need to figure out how to get our carbon emissions down. Once we’ve clarified what we want to achieve, we can get there, with a little help from our friends.”

For more information, visit RJC.ca or contact Wendy Macdonald directly at [email protected]

GTA rents rise at fastest pace on record

According to Q2 2022 rental market research from Urbanation, GTA rents rose at their fastest pace on record, with smaller units experiencing the strongest growth rates since the pandemic. This, it says, is due to a reacceleration in population growth, near record-low unemployment, and a sharp reduction in home purchasing power as interest rates increased.

For the fifth consecutive quarter, rental demand outstripped growth in supply, causing market conditions to tighten significantly. Condo lease transaction activity in the second quarter remained close to the record high reached last year at 12,048 units, down by 6 per cent, while the total volume of condo rental listings in Q2 declined 21 per cent.

Condo rental inventory dropped to a record low 0.3 months of supply and the quarterly ratio of leases-to-listings rose to a record-high 90 per cent. This led average per-square-foot condo rents to rise 5.9 per cent quarter-over-quarter to a new high of $3.57 ($2,533), with annual rent growth reaching a record pace of 16.7 per cent.

As the GTA rental market fully recovered from the effects of COVID-19 and rents reached new highs, the smallest and least expensive unit types experienced the strongest growth rates. Rents fell the most during the first year of the pandemic as renters moved out of small spaces in the core, causing them to drop by as much as 24 per cent. However, when comparing rents in Q2-2022 to those three years earlier, studios are still down by 1.0 per cent.

Meanwhile, vacancy rates fell to 1.4 per cent as rental demand flowed back into the core. Less than one quarter (24%) of new purpose-built rental projects completed in the GTA since 2005 offered incentives in Q2 2022—a sharp decline from the 45 per cent last quarter and the 88 per cent share for a year ago.

Still, as rental demand heated up, new construction almost completely stopped in the second quarter with a low of only 87 rental starts, down from an average of 1,916 starts during the preceding four-quarter period. This occurred while 1,263 new rental units began occupancy, resulting in the largest quarterly decline in total rental inventory under construction since Urbanation began tracking the data in 2015. However, at 18,976 units, the number of rentals under construction remained near a multi-decade high. Furthermore, long-term interest in purpose-built rental development continued to grow as the inventory of proposed rentals that have not yet started construction grew to over 103,192 units in Q2, up from 88,258 units a year ago.

“The GTA rental market was as strong as ever heading into the peak summer months, which is sure to place further downward pressure vacancies and upward pressure on rents,” said Shaun Hildebrand, President of Urbanation. “Although the drop in construction during Q2 may be partly attributed to data volatility, it was also likely impacted by quickly rising construction and development costs, long delays in obtaining approvals, rising borrowing costs and tighter lending conditions. With housing affordability at generational lows and continuing to deteriorate, it’s concerning to see rental demand and supply deviate so strongly.”

For more, visit GTA RENTS REACH NEW HIGH IN Q2 AS VACANCY RATE FALLS | Urbanation

Intelligent City advances building innovation

As pressure mounts in cities globally to address sustainable, affordable housing needs, proptech company Intelligent City announced it has raised $22 million to advance building automation and robotics in the production of prefabricated mass timber buildings. Departing from what it describes as “fragmented and hierarchical design and construction processes,” the company says developers that use its flexible yet scalable technology and design platform can expect to build 150 per cent more residential units on the same site, at a savings of up to 50 per cent on life cycle costs per home compared to traditional methods.

“We are focused on revolutionizing an industry that is notoriously slow to innovate while making a significant impact on our climate with lower carbon emissions from the construction and operations of buildings,” explained Oliver Lang, CEO, and Co-Founder of Intelligent City. “By utilizing green building strategies and patented technology to deliver affordable, mass-customizable urban housing, we can help cities to adapt more quickly as the needs of people and the planet evolve.”

According to Lang, it begins with proprietary parametric software for design, construction cost estimation, carbon footprint confirmation, and material quantifications— then Intelligent City’s manufacturing technology brings automation to the prefabrication of building components. Data on the life cycle and performance of the building are provided before construction even begins.

“Intelligent City’s technology is set to enable the future of the built world to be more climate-resilient by replacing emissions-intensive materials such as concrete and steel with a renewable material that naturally sequesters carbon,” said Matt Stanley, Director, BDC Capital’s Cleantech Practice. “We are excited to support the team to accelerate the development and scale-up of its mass timber building system and advanced offsite manufacturing capabilities.”

In combination with mass timber construction, Intelligent City uses the energy-efficiency standards of Passive House design to achieve a 90 per cent carbon emissions reduction in its buildings. Continuous insulation and air-tight seals, high-performing windows and doors, balanced heat- and moisture-recovery ventilation, and minimal space conditioning throughout the entire building lead to improved indoor comfort for occupants.

“As proptech industry disruptors, we were excited by the combination of Intelligent City’s platform technology with prefabricated and modular mass timber products to radically speed up construction and dramatically reduce carbon emissions,” said Dana Goldman Szekely, Senior Principal with Greensoil PropTech Ventures. At the same time, Jamie James, Managing Partner at Greensoil PropTech Ventures, will join the Board of Directors of the company

“ESG technologies are not only imperative but demanded by building operators, owners, and tenants,” added Patrick Robinson, Chairman of UIT.Our investment in Intelligent City resulted from careful consideration of the future landscape of the construction industry as well as the vision and the passion demonstrated by the entire team at Intelligent City,”

With a pipeline of more than 2,300 homes, Intelligent City is supported by leading developers in Vancouver, Toronto, Ottawa, and the United States, including two high-rise projects in Downtown Vancouver. The company was previously granted funding by the CleanBC Building Innovation Fund, the National Research Council of Canada’s Industrial Research Assistance Program (NRC IRAP), and Natural Resources Canada’s Breakthrough Energy Solutions Canada program (BESC).

For more information on Intelligent City, visit https://intelligent-city.com/

5 tips for using ATP monitors

ATP monitors, broadly speaking, are a rapid testing method used to quickly assess the cleanliness of surfaces or liquid samples. Adenosine Triphosphate (ATP) is present in all organic material, living or not living, and is the universal unit of energy used in all living cells, whether found in plants, animals, bacteria, mould, or microorganisms.

The Safety-First Credit from the U.S. Green Building Council’s LEED Rating System recommends using ATP meters to measure cleaning performance.

“What is most important for us to know is that the detection of ATP on a surface indicates the presence of biological matter,” says Steve Ashkin, a leading professional cleaning industry advocate for green cleaning and sustainability. “In the cleaning world, this is a ‘red light’ that potentially health-risking pathogens are on a surface.”

While ATP monitors are one of the most reliable indicators we have to measure cleaning performance, “to take advantage of this technology, we need to ensure our [surface] sampling skills are up to par.”

To do this, Ashkin provides the following five tips:

Soil distribution on a surface can vary. If there are concerns about the health of a surface, conduct several tests in the same general location.
Assessing a surface area of a minimum of about four inches by four inches is recommended.
After swabbing a surface, place the swab in the luminometer that comes with the system, gently shake it from side to side for a few seconds, and close the lid within one minute.
The ATP monitor will report the amount of contamination on a surface. A high reading, indicating a large amount of ATP, means the surface must be cleaned or recleaned; a low rating indicates the surface has been adequately cleaned or does not need further cleaning.
Proper training is mandatory and often works best when several cleaning workers are taught simultaneously. In a group, they may raise questions that others are also wondering about.

“Additionally, an effective ATP monitoring program requires first identifying areas in a facility that need to be regularly evaluated,” adds Ashkin. “Bring in a [jansan] distributor to help with this. Their ‘fresh eyes’ will uncover test areas that everyday facility users may overlook.”

Q2 market trends follow familiar patterns

Office vacancy rates declined in seven of the 12 urban markets Colliers Canada surveys during the second quarter of 2022, but the countrywide vacancy average nevertheless inched up to just below 13 per cent. Meanwhile, the average industrial vacancy rate dropped below 1 per cent across the same markets.

Midway through the year, Colliers Canada’s recently released National Market Snapshot pegs average asking net rents for office at $20.12 per square foot (psf) and average asking industrial net rents at $11.13 per square foot. Office shows more distinct market-to-market variance with vacancy rates ranging from Vancouver’s 5.8 per cent to Calgary’s 27.9 per cent. Industrial vacancy rates are squeezed between the unprecedented low of 0.1 per cent in Vancouver to 4.4 per cent in Edmonton, and, apart from Edmonton, are no higher than 2.5 per cent elsewhere.

“Industrial continued its bull run driven by fulfillment centres. Canadian markets are among the tightest in North America, with no end in sight to the space crunch despite a record-setting 36 million square feet under construction,” the Market Snapshot report states. “Return-to-office reached its highest levels of the past two years, but office attendance is still below pre-COVID norms, especially in central business districts. Subletting has declined from its heights in 2020/21, and now accounts for only about 17 per cent of the overall office market, a number in line with historical averages.”

Flight-to-quality and return-to-work reflected in office demand

Suburban office markets are tighter than downtown — with average national vacancy rates at 12 per cent and 13.7 per cent respectively — but net asking rents edged up in both segments over the course of April, May and June. Downtown office continues to command higher rent with an average asking net of $21.83 psf for the quarter versus $17.29 psf for suburban.

Vancouver’s suburban vacancy rate sits at 4.8 per cent, 260 basis points lower than for downtown space, but the rent differential goes in the opposite direction with average net asking rents downtown at $40.02 psf compared to $25.45 in the suburbs. The quotient of available downtown sublet space grew to roughly 634,000 square feet or about 26 per cent of vacant space, reflecting a flight to quality as 345,000 square feet of newly completed space came onto the market during the quarter.

“Larger office tenants form the most active segment but face a limited number of available options, which continue to shrink,” Colliers analysts note. “Smaller tenants appear to be taking a wait-and-see approach as larger companies navigate the complexities of return-to-office strategies.”

There is a 980-bps spread in Calgary’s downtown and suburban vacancy rates, which increased to 31.8 and 22 per cent respectively during Q2. Suburban space commands higher rents with average net asking rent at $17.57 psf versus $12.20 psf downtown. Nevertheless, downtown rents were on upward trend for the quarter, while suburban rents slipped. Colliers analysts track growing interest in “move-in ready, small-to-medium sized blocks” of Class AA and A space and a new category of investors for older downtown buildings.

“Sales activity for office assets has increased over the last several quarters with both B and C Class buildings trading with intentions of converting to residential through the municipal government’s Downtown Revitalization Plan,” they report.

Toronto and Ottawa both recorded upward office vacancy trends in Q2, but continue to post rates below 10 per cent. The Market Snapshot paints somewhat contrasting views of the two city’s downtowns.

“Office occupancy in downtown Toronto has risen to 24 per cent from 7 per cent at the beginning of the year, as employee sentiment towards both travel and work safety improves. Coupled with the warmer weather, this has led to a renewed vibrancy in the streets of the downtown core,” it reports. “The federal government employees’ presence in downtown Ottawa is still lacking in number, as the majority continue to work from home. Uncertainty remains about what the federal government will do with their excess office space.”

In Toronto, average asking net rents rose both downtown and in the suburbs — hitting $35.61 psf downtown — and the roughly 355,000 square feet of negative absorption downtown was largely on par with the 304,000 square feet of newly completed space that came onto the market during the quarter. Rare among the 12 Canadian markets surveyed, a downtown vacancy rate of 8.2 per cent is 270 bps lower than in the suburbs.

Ottawa posted a 10.1 per cent office vacancy rate downtown — 70 bps higher than in the suburbs. Average asking net rents fell to $19.08 psf downtown and to $15.14 psf in the suburbs.

Montreal saw a drop in the downtown office vacancy rate, falling to 12.9 per cent, while the suburban vacancy rate remained static, around 16 per cent. Suburban net absorption is up nearly 17,000 square feet thus far in 2022, while downtown absorption is in the negative 186,000-square-foot range. Average asking net rents declined in both market segments, falling to $21.96 psf downtown and $15.80 psf in the suburbs.

“Flight-to-quality is in full effect as major tech and institutional users occupy best-in-class offices,” Colliers analysts observe. “Meanwhile, the increasing cost of construction, specifically for fit-outs, will negatively impact NERs (net effective rents) as concessions continue to rise.”

Industrial outlook optimistic across all regional markets

Montreal is one of five surveyed markets where the industrial vacancy rate sits below 1%. In Q2, that was at 0.6 per cent, largely on par with the Q1 rate, while average asking net rents climbed to 13.77 psf. Nearly 480,000 square feet of new industrial space came onto the market over the course of April, May and June, while more than 2.5 million square feet is currently under construction.

In Toronto, the industrial vacancy rate dropped to 0.2 per cent in Q2, while average asking net rents were up by 35 per cent from Q2 2021 levels, reaching $15.24 psf. Elsewhere in Ontario, vacancies opened up slightly in Waterloo Region and Ottawa, hovering slightly below and above 1 per cent in the two markets. Average asking net rents of $10.74 psf in Waterloo and $13.67 psf in Ottawa represent a dramatic climb from Q1 2022 in both markets.

Looking west, average asking net rents soared to $19.19 in Vancouver and $17.23 in Victoria with vacancy pegged at 0.1 per cent in both markets. The largest shares of industrial space under construction are set for Toronto (12.5 million square feet) and Vancouver (7.8 million square feet) but there is also more than 5 million square feet underway in Edmonton and about 4.4 million square feet in progress in Calgary.

Calgary’s industrial vacancy rate fell to 2.5 per cent in Q2 as average asking net rents rose to $10.15 psf. That surpasses average asking rents of $10 psf in Edmonton. Winnipeg, with a Q2 industrial vacancy rate of 2.3 per cent, is the only market among the 12 with average asking net rents in the single digits — at $8.95 psf.

In Halifax, industrial vacancy is at an all-time low of 1.8 per cent, dropping 130 bps since Q2 2021, while average asking net rents rose to $10.74 psf. About 22,000 square feet of new supply has come onto the market thus far in 2022, all of it during the first quarter, but nearly 480,000 square feet is currently under construction.

“The lack of vacant space and intense demand from users will ensure the market continues to exhibit strength into the foreseeable future,” Colliers analysts project.

An equipment buyback program to help boost your bottom line

As a property manager, knowing that properties’ mechanical equipment is well-maintained and operating at optimal performance is vital for your peace of mind, for the peace of mind of residents and tenants, and for your bottom line.

All equipment requires recurring maintenance and replacements to perform optimally over time. When you own your HVAC, water heating, water purification, or other mechanical equipment, servicing and maintenance costs are inevitable and the price of labour, repairs, and replacements – not to mention time spent – all adds up. At critical times when property managers may be short on reserve funds yet still have to spend time and resources on other building repairs and maintenance and overall property upkeep, this can hinder your business and your operation.

But it doesn’t have to be this way. That’s where Reliance Commercial Solutions comes in.

You already know that Reliance’s Property Management program is built to be a one-point solution for real estate owners, managers, and operators of residential and commercial properties.

Did you also know that Reliance also offers a buyback and rental program that is designed to boost your bottom line and help you make the most out of your operation?

Lift the pressure with Reliance’s Buyback Program

Exclusive to Reliance Commercial Solutions™, the Reliance Buyback Program is a way for business owners who own their current water heaters, boilers, or HVAC equipment to transfer ownership of their equipment to Reliance for funds that can be used for other investments in your business. If your equipment meets the right criteria, you could be eligible to earn up to $20,000* that can be reinvested in other areas of your operation and ultimately improve your bottom line.

In the face of the need to adapt to unprecedented financial and operational challenges, property owners and managers can benefit from an infusion of capital for qualifying equipment.

First, determine how old your equipment is. You may qualify if:

Your water heater is six years old or less
Your boiler is eight years old or less
Your furnace unit is 10 years old or less

Next, arrange for one of Reliance’s qualified technicians to inspect your equipment to ensure that it meets requirements. If your equipment meets the necessary requirements, Reliance will calculate the buyback amount in one of two ways:

If you have the proof of purchase and installation, we will use this full amount to calculate the total buyback amount.
If you no longer have the proof of purchase on file, we will be happy to provide you with a quote based on the cost of our own equipment.

Find a rental solution to make your job easier

After the buyback is complete, Reliance assumes ownership of your old equipment. Property residents will then rent the equipment from Reliance, and you will never have to worry about the costs associated with repairing or maintaining your heating and cooling equipment. Renting with Reliance eliminates the risks associated with equipment ownership and the risk of downtime due to equipment failure, with no extra repair or service costs. Reliance offers flexible rental and financing options and has 800+ licensed HVAC and water heater technicians, installers, electricians, and plumbers, available for round-the-clock customer service and same-day response times to provide the expertise and peace of mind needed to keep your essential facilities running smoothly.

Putting your residents’ and tenants’ service needs in Reliance’s hands lets your team focus on other core management duties and re-invest capital into high-value areas. You can also speak with a Reliance representative to find out more about potentially gaining access to government grants by outfitting your properties with Reliance equipment that may be energy-saving.

Get tangible results

Don’t just take our word for it.

Reliance helped a Brantford co-operative resolve its serious heating and cooling problem. Not only was the equipment old, outdated electric baseboard heating that was creating uncomfortable conditions for tenants and staff, it was inefficient and led to rising hydro bills. Replacing the system was a challenge for the members because the Co-op could not afford to purchase entirely new equipment.

In response, Reliance installed a new ductless HVAC system to replace their baseboard system. Individual installations were coordinated by a designated Install Manager to accommodate the facilities’ and condo owners’ requirements, and Brantford was able to rent the equipment through a plan that suited them, unlocking cost savings as well as improved heating and cooling throughout the year. The Co-op ultimately lowered its hydro bills by half in the first year thanks to their new equipment, and they can also now resolve any service or billing issue with a phone call to Reliance.

Meanwhile, in Huntsville, Ont., condo owners and the property manager at Vernon View Condominiums were dealing with significant challenges caused by the building’s aging gas-powered water heater tanks failing, leading to a lack of heat and hot water as well as flooding damages.

Reliance delivered and safely installed 20 Combomax Ultra water heater units to restore the supply of hot water and heat, as well as residents’ comfort and peace of mind. To help the property manager establish more cost certainty, the equipment and future maintenance services and costs are now covered through the Reliance Rental Program. This new energy-efficient equipment has also led to tangible results such as a reduction in CO² emissions.

Teaming up with Reliance and taking advantage of the Buyback Program and Rental Program ensures you can rest easy knowing your equipment is being cared for by experts and allows you to reap the reward of benefits for property managers and residents alike.

To learn more about Reliance’s equipment solutions or to speak to a dedicated Key Account manager, call 1-866-764-8131 or visit Reliance Commercial Solutions – Property Management Program online.

Safe & Secure: Enhancing healthcare through smarter tech

The healthcare industry is in constant evolution. Every year brings new or advanced practices, techniques, and resources to the fold that improve both patient outcomes and the delivery of care. This unending transformation is crucial to public health, and today, it is largely driven by smarter, more secure, and connected technologies.

“Technology has transformed the healthcare industry in many different ways,” says Paul Cannon, healthcare industry leader with SALTO Systems. “For many, that transformation is most visible at the patient level, where integrated systems are making building controls and patient information more accessible to medical professionals.”

More importantly, he adds, modern advancements in healthcare technologies are today being designed with a “patient-centered” philosophy. This approach puts patients’ abilities, limitations, challenges, and preferences at the core of their design, leading to solutions that are more aligned with patients’ needs.

“You can introduce the latest, greatest technology into a healthcare facility, but if patients or staff can’t – or don’t want to – use them, you’re not going to get the full benefit from your investment,” says Cannon.

Patient peace of mind

Digital innovations can be found throughout the hallways, patient rooms, and operating suites of healthcare. For Cannon and the SALTO Systems team, however, the focus is introducing next-gen building access and security solutions.

“Remote visitor management systems are an important part of building trust and a sense of security in the healthcare space,” he says. “What we’re focused on is bringing smarter, more mobile, and more integrated building security and access control solutions to the sector that do just that.”

Those solutions, he continues, provide building teams with a suite of building security controls they can access via mobile devices, as well as live video and audio feeds from connected cameras throughout the building. Moreover, these technologies enable authorized hospital staff to virtually manage various hospital activities, such as health screenings, emergency mustering, and attendance recording.

“Importantly, these solutions include mobile credentialing that can control how these security solutions are used, by whom, and to what extent,” Cannon adds. “The result is integrated building security and access control solutions that deliver more control and peace of mind.”

Making peace with tech

Whether securing facilities, enhancing communications, or revolutionizing care, the technology is only effective when it is embraced by actual people. Here again, part of implementing patient-centered technologies is taking measures to bring everyone on board.

“The first step to introducing any new piece of tech is educating users on the benefits they’ll get from using it,” advises Cannon. “There is always resistance with any new process, so a well thought educational program is critical in gaining the end user’s trust.”

When adopting new technologies in any environment, it helps to have training programs and resources at the ready, gain “buy-in” from the top, as well as enlist “tech champions” among the staff who can help guide others in its adoption.

Technology adoption is also an ongoing process, part of which involves ensuring the tech and associated systems are working as effectively as possible. For this reason, says Cannon, it’s important to make regular monitoring and updating part of one’s schedule: “Being proactive with a defined program allows for fixable problems ahead of time, rather than a potentially larger challenge that may take place once the issue occurs. A good software and hardware maintenance plan will ensure that the software is updated with the latest version and that the hardware is in good working condition.” After all, he warns, “Failure to upgrade these systems can leave openings in the security layer that make it easier for hackers to find vulnerabilities.”

Moving ahead

The healthcare revolution is never over. And much like SALTO’s ongoing mission to rethink building security and access control, innovators in all corners of the industry are seeking ways to take the industry into the future.

“Ultimately, the future of healthcare includes mobile technologies that will integrate multiple systems, such as a patient’s medical history, real-time health updates, insurance coverages, and access control management,” Cannon adds. “And as always, the end-user experience will continue to drive expansion into these newly digitized areas.”

Learn more about SALTO Systems’ healthcare access control solutions. Visit saltosystems.ca or call 514-616-2586.

Urban mobility perks for Le Moden in Montreal

When the two-tower Le Moden condo development rises in the Ville-Marie borough of Montreal, residents of the 126 units will find a living environment of urban convenience.

Bertone Development Corporation’s $50-million project, which just celebrated its ground-breaking ceremony, consists of a four-storey and a 10-storey condo with ground-floor commercial space. “Our project is a model of urban development that takes into account the new realities of mobility,” says Claudio Bertone. “Many buyers have appreciated the concept as much as the architecture on a human scale.”

Located next to Frontenac métro station on the green line, a BIXI station, bus stops and a bike path, the project also promotes active mobility around the large Médéric-Martin park and a shopping centre that will soon be completely renovated by Bertone.

“The goal is to enrich the life of the neighbourhood and create a friendly living environment for residents, all at the doorstep of a highly accessible downtown core,” adds Michael Bertone. A public square is also planned at the heart of the project.

The real estate company teamed with NEUF architect(e)s. Le Moden is in keeping with modern trends, while its red brick cladding is reminiscent of the district’s industrial past.

The units include studios, starting at $264,900 and one- to three-bedroom condos, each with a private outdoor space. On the roof of the 10-storey building, a few penthouses have been designed with private terraces. Two other terraces are common areas, each with views of the Jacques Cartier Bridge and downtown skyline. On the ground floor, there are co-working spaces and two private teleworking offices.

Feature photo: At the first ground breaking ceremony on July 13th: Michael and Claudio Bertone (founders, Bertone Development Corporation); Dominic Cleroux-Cloutier (Director – Projects and Development, Bertone Development Corporation); Samuel Brand (Bertone Development Corporation); Guy Caron (Associate Architect, Neuf Architectes); Patrick Moreau, Sonia Swift, Jocelyne Jasmin, William Saulnier, and Hui Ma (Agence Six).

New clean building tax credit for B.C. owners

A new tax credit will make energy retrofits for multi-unit residential and commercial buildings more affordable, saving owners 5 per cent on retrofits to help reduce their energy use.

The Clean Building Tax Credit supports the CleanBC commitment to reduce provincewide emissions by 40 per cent from 2007 levels and aligns with B.C.’s target to reduce emissions in buildings and communities by more than half by 2030.

“Building owners want to reduce the energy use of their home, office or retail space but the upfront costs of these retrofits can be a challenge for people,” said Selina Robinson, minister of finance. “This Clean Building Tax Credit will help owners of larger, often older and energy-inefficient buildings invest in cleaner energy retrofits by putting dollars back into their pockets.”

Buildings eligible for the Clean Buildings Tax Credit include residential buildings, commercial spaces and warehouses in the private sector. Examples include office spaces, food retail and purpose-built rentals.

“Our members want to be part of the climate change solution, but retrofits can be costly and do not always make financial sense,” said Damian Stathonikos, president of the Building Owners and Managers Association of B.C. “The tax credit helps reduce the retrofit cost for building owners and lowers energy expenses for tenants, while modernizing buildings to reduce greenhouse gas emissions. It benefits everyone involved, and the environment.”

The credit supports work involving building systems, such as heating, ventilation, air conditioning and building envelopes. A successful retrofit in the public sector is Vancouver’s Kitsilano Community Centre, which underwent heat-recovery improvements that nearly eliminated the need for natural gas to heat the facility. It also reduced greenhouse gas emissions by more than 80 per cent. The Clean Buildings Tax Credit will support commercial and multi-unit residential buildings looking to complete similar retrofits.

To be eligible for the credit, building owners must work with a certified professional to determine that the energy use-intensity of their building has been reduced and is meeting made-in-B.C. targets through a qualifying retrofit before applying for certification with the Ministry of Finance. Qualified professionals include architects, a qualified energy adviser certified by Natural Resource Canada, and engineers.

The Clean Buildings Tax Credit is open and ends March 31, 2025.

Podmore inducted into NAIOP Icons Hall of Fame

Concert’s chair, president and CEO, David Podmore was inducted into the NAIOP Icons Hall of Fame.

The NAIOP Vancouver Chapter established the NAIOP Icons Hall of Fame by including previously named NAIOP Icons from the past two decades. The NAIOP Icon Award is given to individuals in the commercial real estate development field who have demonstrated great leadership, contributed to the industry and community, and who can be held up as a positive example in the sector and Metro Vancouver as a whole.

Between his multi-decade career in the real estate industry and his numerous philanthropic endeavors, Podmore exemplifies these qualities. He co-founded Concert in 1989 under the mandate to deliver assured rental housing and he has led Concert through a tremendous amount of growth and diversification.

In 2000, to balance the variability of the condominium market, Podmored led Concert’s expansion into commercial property investment with the purchase of a portfolio of properties. Acquisitions across the country followed, most recently in Quebec.

Then, in 2016, he led the creation of the CREC Commercial Fund LP, offering investors a diversified portfolio of office and industrial real estate across Canada – now valued at nearly $2.5 billion.

Today, the company has an asset value of $8 billion and a portfolio that includes commercial, rental, condominium, seniors’ communities and infrastructure projects.

Podmore has also been active in countless community initiatives, served on numerous industry and philanthropic boards, and has made a tremendous impact on the industry, including his leadership role in raising more than $4.2 million for trades training programs across Canada, and more than $100 million for redevelopment of the British Columbia Institute of Technology’s Burnaby campus.

“I am humbled and extremely proud to be included among this list of industry giants,” says Podmore. “Using my position to help support the sector and improve the lives of those who live and work in our communities – and British Columbia in general – is very meaningful to me.”

The other Icons inducted into the Hall of Fame include Nat Bosa, Dr. Robert H. Lee, Joseph Segal, Keith Beedie, Peeter Wesick, John R. McLernon and Doug Pearce. Ben Yeung, executive chairman and CEO, Peterson Group was named NAIOP Icon of 2022.

Canada excelling at fostering tech talent

Eight Canadian urban centres rank in CBRE’s newly released analysis of the top 50 North American markets for fostering tech talent and related economic growth. Toronto attains the highest placing among Canadian contenders, deemed to be offering the third best combination of factors that attract a skilled workforce and provide employers with human resources and competitive economic attributes.

That’s a one-notch ascent from the 2021 rankings to exchange places with Washington, D.C., which dropped to 4th this year. Among the remaining top 5, the San Francisco Bay Area and Seattle are unmoved in first and second, while Metro New York continues in the fifth spot.

Toronto now has the third largest tech workforce of the five top markets — 289,700 — after posting 44 per cent employment growth in the years between 2016-2021. While San Francisco Bay (379,000) and Metro New York (344,500) surpass that in sheer numbers, they recorded more modest respective gains of 12.6 per cent and 2.6 per cent during the same period.

Vancouver cracks the top ten for 2022, rising three positions to eighth place, while Ottawa and Montreal make the top 20 at 13th and 15th respectively. Waterloo Region (24th), Calgary (28th), Edmonton (35th) and Quebec City (39th) fill out the Canadian complement.

Additionally, Halifax, London, Ontario and Winnipeg are identified as part of the “next 25” emerging North American markets — ranked ninth, 10th and 12th for their tech growth potential. Notably, London, with a total of 13,700 tech-related jobs in 2021, boasts 99 per cent growth in the sector’s workforce during the previous five-year period.

“It’s a testament to the impressive momentum this sector has been gathering over the past five years,” maintains CBRE vice chair, Paul Morassutti. “Though the industry faces some very real, short-term cyclical challenges, our longer-term thesis remains unchanged: the technology sector will continue to drive outsized growth as our knowledge-based economy expands.”

Canada accounts for about 1 million or slightly more than 15 per cent of the 6.5 million tech jobs in the two countries. Comparatively, the sector has more economic impact in Canada, representing about 6.4 per cent of the national workforce versus 3.9 per cent in the United States. Toronto, Vancouver, Ottawa and Montreal collectively host more than 635,000 tech jobs, while Waterloo Region, Calgary, Edmonton and Quebec City are home to nearly 133,000.

Last year, Toronto and Vancouver recorded the largest number of tech job gains among the 50 top markets. Toronto also added the most positions — 88,900 — in the years between 2016 and 2021, while Vancouver saw the third most new jobs, at 44,640. Nearly 45 per cent of Toronto’s added tech contingent, equating to 39,700 jobs, was hired during the COVID-19 pandemic — another list-leading statistic over the course of 2020 and 2021.

Ottawa, Toronto and Waterloo Region make the top five for quotient of their workforces holding tech-related jobs. Ottawa leads that list with 11.6 per cent of its total employment in the tech sector, slightly ahead of the San Francisco Bay area with 11.4 per cent. In Toronto, 10.3 per cent of the total workforce is employed in tech. That falls slightly to 9.9 per cent in Seattle and 9.6 per cent in Waterloo, but all well above the 50-market average of 5.6 per cent.

“This sizeable concentration of highly skilled workers offers an environment conducive to innovation,” the report submits.

Devcore unveils plans for new Nav Centre in Cornwall

Gatineau-based real estate firm Devcore has unveiled plans to invest up to $1 billion over the next decade on a new hotel and thousands of residential units at the site of the Nav Centre in Cornwall, Ontario. The 630,000-square-foot conference, hotel and training facility overlooking the St. Lawrence River will undergo a massive transformation and expansion, with a portion of the hotel suites slated for conversion into student apartments to serve nearby post-secondary institutions, including St. Lawrence College and Ottawa’s La Cité.

Nav Canada will remain the primary tenant of the complex, which has been renamed the Dev Hotel and Conference Centre. The complex was once Nav Canada’s primary training facility until the agency decentralized its operations 15 years ago, and the building became Cornwall’s main meeting and convention hub. Devcore president Jean-Pierre Poulin told the Ottawa Business Journal that he sees “massive untapped potential” at the 75-acre Nav Centre site, which drew about 35,000 visitors annually before the pandemic struck in March 2020.

Equipped with new green energy technology, Poulin said Denvore’s vision for the Nav Cenre site is to make it “the smartest and most sustainable village in the world,” akin to the nearby Zibi community. Plans include using chilled water from the St. Lawrence River to cool the hotel, residential units, and convention centre in the summer while methanol from the city’s sewage plant would be used to heat the buildings in the winter, potentially generating hundreds of thousands of dollars in annual energy savings.

For more, visit Devcore.com