Co-living: the key to unlocking higher cap rates

For investors in Canada, owning and renting out multifamily properties is not the same capital building enterprise that it used to be. Although vacancy rates are decreasing, with a national average of 2.4 per cent in 2018 and rates much lower in larger cities like Toronto and Vancouver, cap rates are also being driven down, with multifamily homes offering the lowest rates in real estate. Typically, a cap rate of between 7 to 10 per cent was seen as a good return on investment. In Canada, investors can expect to see cap rates that do not exceed 5 per cent, due to the relative low risk of the investment and the rising cost of living. When selecting a rental property, investors need to start considering new options to unlock higher cap rates in a saturated market. One viable option that is gaining traction across larger, densely populated cities, is co-living.

What is co-living?

The concept of co-living is not new, although it has become increasingly popular over the past few years. It offers residents a private, furnished bedroom with access to shared communal spaces, such as the kitchen, bathrooms, common living room and outdoor space. Unlike traditional apartments, co-living tenants pay one monthly bill, which includes rent, all utilities, cleaning services and basic common provisions such as towels, kitchen supplies and other necessities. Because of the all-inclusive nature of co-living, it is seen as being similar to a hotel stay, although the duration is longer, typically on a 6-month lease.

Co-living also sets itself apart by building communities and relationships among tenants. By taking away the pain points of living with others — such as cleaning — it allows tenants to bond with one another. Roommate selection is highly strategic and done through meticulous algorithms that place an emphasis on common interests, goals and living styles to maximize compatibility. Community events usually occur regularly in co-living homes as well. Birthdays, barbecues and other social activities are often planned to give members a chance to interact and take advantage of what their city and community offers. For this reason, co-living is frequently used for newcomers or for people looking to build their network. With an increase in remote and freelance workers, co-living can fill in the gap socially and can offer shorter leases to entice people who may move frequently for work.

The difference between co-living and other rental properties

Similar to multifamily rentals, in co-living homes, there are multiple leaseholders involved. The difference is that each leaseholder occupies a single room, and there are multiple leases in one home. This takes the stress off of the tenant, as their lease is separate from their roommates and will not be impacted by others moving out. It also helps investors, as they can charge per room, resulting in a higher yield on the property overall.

To promote higher rental rates, co-living homes need to be newly renovated and modern. High-end appliances and furnishings are investments and will help raise the prices of each room. This is important because co-living homes also require the investor to pay for expenses that traditional multifamily homes would not, such as internet, cable and other amenities. Individuals who are looking for convenience are willing to pay a premium for their room in a co-living home, as they are offered more amenities than a traditional bachelor or one bedroom apartment. This can yield up to 40 per cent more than a traditional rental price, while still offering residents around a 20 per cent discount to living alone.

Building for co-living

There are many different models for co-living houses. Some take existing townhomes and renovate them to suit co-living needs, while others take large houses and rent rooms out individually. Some operate in condos, using three-bedroom units or entire

floors to create a space for co-living. Whichever way the co-living space works, there are some important elements needed to create a luxurious space that will appeal to tenants.

In general, co-living homes are made up of a minimum of three bedrooms and three bathrooms. They also typically only have one kitchen in them, and as the kitchen is the most expensive room to renovate, this helps to bring costs down. Some properties boast further amenities; rooftop patios with city views, workout rooms or offices all help add value to the property and will help to yield higher return. When building for co-living, considering the needs of the tenants is key, including amenities outside of the house. Proximity to city centres, transit and a vibrant community will help newcomers feel at ease in a new city.

To create the community aspect of co-living, many co-living providers are looking to invest in multiple homes in a close radius. With the extra elements involved in managing a co-living facility, this helps the efficiency of running the operation. This will also help foster a sense of community outside of the house. On top of that, there is the expectation that events will be planned for all of the co-living members. Whether this is a monthly or weekly endeavor is up to the provider, but social events help individuals meet each other, which will help them feel comfortable and encourage them to stay in a co-living home.

Managing a co-living home

Although owning and managing a co-living property can seem daunting, many co-living homes operate in a similar way to hotels. Traditionally, there are those who own the co-living buildings, but the property management is outsourced to co-living facility management experts. The building owner will enter into a long-term management agreement with a co-living provider, which could last multiple years, where rent and income is shared among the owner and provider. Unlike rental agreements, management agreements take the stress off the building owner to select tenants, run events, worry about utilities or invest in furnishings. It will ensure consistent revenue and high rents for the property, without the overhead costs.

The co-living provider may renovate the home to increase rental value, which also increases property value for the building owner. Also, the nature of co-living ensures that the property manager retains rights to go to the property and inspect it regularly. This ensures that the tenants act respectfully to each other and to the space. For real estate investors, this management system alleviates the stress of having to invest the time into creating a functioning co-living environment.

With vacancy rates and cap prices decreasing, it will be important for building managers and owners to look at alternatives for increasing revenue on rental properties. Co-living is the key to an evolving industry where renters are expecting more and are willing to pay for these luxuries, without putting the burden on building owners and investors.

Roman Bodnarchuk is the founder and CEO of Sociable Living, Canada’s first co-living community, located in Toronto.

Cresting a year of energy-saving achievements

Commercial real estate industry trailblazers (CREST) were honoured for energy-saving achievements last night, marking another year of progress in Toronto’s race2reduce. Frontrunners emerged from 650 buildings now pursuing the target to collectively reduce energy consumption by 10 per cent compared to 2017, and were recognized for leadership, innovation and collaboration in devising and delivering on conservation initiatives.

With still more than 14 months to the finish line, landlord-tenant teams have already saved an estimated 19 gigawatt-hours (19 million kilowatt-hours) of electricity. Waste Reduction Week, occurring Canada-wide October 21-25, provided fitting timing to bestow the second slate of CREST awards since race2reduce launched in January 2018.

“Waste Reduction Week encourages all of us to make sustainable changes and choices,” Susan Allen, president and chief executive officer of the Building Owners and Managers Association (BOMA) of Toronto, observed in opening remarks.

However, expansion is equally a theme of celebration for the program that BOMA Toronto sponsors jointly with Toronto Hydro. There has been a nearly threefold increase in commercial space coverage — from 33 million square feet to 95 million square feet — since the unofficial kick-off in June 2017. Perhaps even more impressively, the field of competitors has grown from 88 to 650 buildings, indicating that many more smaller and mid-sized players have signed on to track down energy savings.

“I think it’s in our DNA because the commercial real estate industry is enthusiastic and it’s competitive by nature,” theorized Joe Bilé, Toronto Hydro’s business development manager.

The distinctive race2reduce moniker also signifies that this challenge is the second iteration of the program that Toronto CivicAction first introduced in 2011 under the name Race to Reduce. That initial friendly rivalry surpassed its target as 200 buildings, including some located in the 905 regions neighbouring Toronto, collectively curbed energy use by 12.1 per cent over a four-year period. It also served as a model for programs like the Manitoba Race to Reduce and Quebec’s Building Energy Challenge.

This year, teams representing buildings in five different size categories received CREST awards for energy management leadership, including:

< 50,000 square feet

2973 Islington Avenue, CIBC (Managed by BGIS)
3940 Keele Street, CIBC (Managed by BGIS)
1 Fort York, CIBC (Managed by BGIS)

50,000 to 150,000 square feet

5 Park Home Avenue, Colliers International
111 Wellesley Street East, City of Toronto
180 Bloor Street West, Greenrock Property Management Limited

150,000 to 250,000 square feet

2 Berkeley Street, Berkeley Castle Management
20 Carlson Court, Crown Property Management Inc.
3381 Steeles Avenue East, Centrecorp Management Services Ltd

250,000 to 500,000 square feet

90 Sheppard Avenue East, Crown Property Management Inc.
901 King Street West, Crown Property Management Inc.

> 500,000 square feet

55 John Street, City of Toronto
200 Bay Street, RBC (Managed By Oxford Properties Group)
200 Bay Street, Oxford Properties Group

Landlord-tenant teams from 390 Bay Street, managed by Crown Property Management, and 155 Wellington Street West, managed by Cadillac Fairview, were CREST award winners for innovative excellence. The two-building Commerce Court complex on King Street West, managed by QuadReal Property Group, was named the CREST collaborative excellence winner.

Photo of CREST winners courtesy of BOMA Toronto.

First redevelopment phase begins for a renewed SickKids

The first phase of SickKids’ redevelopment project, known as Project Horizon, took off this week with the official groundbreaking ceremony for the Patient Support Centre (PSC), a 22-storey educational training and administrative tower.

Two more projects will follow, including the Peter Gilgan Family Patient Care Tower and renewals to other areas of the existing campus to support new and renovated outpatient clinics.

The Patient Support Centre will house SickKids Learning Institute, which supports more than 1,000 world-class trainees, students and learners annually, a Simulation Centre for hands-on teaching, bright, modern workspace for professionals, management and support staff, as well as a variety of collaboration and activity spaces accessible to all staff from across the campus.

The site of the new Patient Support Centre initially housed SickKids’ Elizabeth McMaster building – an eight-storey laboratory and administrative building that was built in 1987. For the greater part of this year, SickKids has been demolishing the Elizabeth McMaster building, working to reach ground level so they could begin this exciting new phase of redevelopment:

“Moments like these are not possible without the vision and support of our dedicated staff, government partners, donors and the community,” Dr. Ronald Cohn, president and CEO of SickKids, said in a press release. “As we build a new SickKids, we are defining a new approach to paediatric medicine using precision child health to diagnose and then treat our individual patients.”

Photo: In attendance were donors who contributed a minimum of $1 million – including the Peter Gilgan family, whose visionary gift of $100 million was announced in June.

Built Green Canada promotes waste management

In recognition of Waste Reduction Week, Built Green Canada acknowledges the integral role waste management plays in environmental sustainability, as well as those builders who have long chosen responsible waste reduction methods.

“While energy performance is a dominant focus across the country to mitigate climate change, Built Green builders and supporting industry have championed a holistic approach to sustainability—as part of this, integrating waste reduction practices,” says Built Green Canada’s CEO Jenifer Christenson in the press release.

“There is still more we all need to do to reduce the amount of waste we produce, divert more waste from landfills, and recover its valuable resources,” said Jeff Yurek, Minister of the Environment, Conservation and Parks, in a statement.

The province’s waste diversion rate has been stalled at about 30 per cent, meaning 70 per cent of waste materials continue to end up in landfills.

Waste Reduction Week in Canada is a national year-round program that kicks-off in October and focuses on the circular economy, resource efficiency, and waste reduction. It runs alongside the Canadian Home Builders’ Association’s Renovation Month, intended to help educate consumers on what goes into a renovation and how to find a professional renovator.

Built Green’s renovation programs, both single-family and high density, guide industry through an environmentally friendly approach. As part of this, credit is offered for reuse of building materials, including building walls, floors and roof structure—practices that result in high percentages of landfill diversion and offer another way to save through reduced landfill fees and fewer new materials.

Whether through municipality pressure or guided through programs like Built Green or driven by their own sustainability goals, builders can encourage their trades to recycle their onsite waste. Moreover, utilizing waste management services further help builders reduce the load, in terms of administration and supervision.

Many UK co-working users prefer traditional office

Forty per cent of co-working users in the United Kingdom would rather work in a conventional office space, according to a new joint-research study from Gensler and the British Council of Offices.

The 2019 Rise of Flexible Workspace in the Corporate Sector Report examined the growing rise of flexible workspace in the UK corporate sector, primarily in the financial services, real estate and consulting industries.

When looking at the preference for traditional versus flexible space across industry sectors, the numbers show that 46 per cent of workers in consulting services would favour the return to a traditional set-up, compared to 37 per cent in financial services.

“A one-size-fits-all flexible workspace does not cut it,” said Cesar Jeri, digital workplace strategy lead at Verizon. “There are still many firms with a high degree of process with individual focus needs; so flexible and collaborative spaces can be highly distracting for some whilst energizing for people in other parts of the business. A workspace needs to be first and foremost inclusive and empower people to make a choice so that it can address the needs of most, if not all, its end users.”

The research also uncovered that only 29 per cent of the respondents agreed or strongly agreed that a flexible workplace had increased their efficiency for tasks where they needed to concentrate, while 38 per cent disagreed. Satisfaction rates for spatial and service features were 12 per cent lower in London compared to other regional cities. More than half of respondents said they were happier at work (57 per cent), while 69 per cent agreed or strongly agreed that they were able to collaborate more in their workplace.

UK-based large corporates are at different stages in the adoption of flexible workspace. The more mature ones have combined several approaches that enable them to collect feedback on user experience in order to have a better understanding of the type of spatial settings and flexible working arrangements that drive employee productivity and enrich user experience.

Collaborative or shared spaces were rated as the top three spatial features in the user survey conducted for this study. Large UK corporations increasingly see the benefits of either developing their own co-working area within their real estate portfolio or leasing a private area in a shared serviced space.

“Our research suggests that the companies interviewed are all progressively moving away from this individual membership model and capitalizing on lessons learned – implementing a flexible workplace strategy in their own space where they can influence its design, tailor the user experience and envision specific business outcomes,” noted Jane Clay, principal and design director at Gensler. “This approach also has the added benefit of enabling large corporates to personalize their space and showcase their brand within a less traditional work environment, with a direct positive impact on their recruiting process.”

Quebec residential sales hit new Q3 record

Residential sales in Quebec’s real estate market hit a new high in the third quarter, one that hasn’t been seen Q3 2003. Sales jumped 16 per cent compared to the same time last year. In total, 21,662 sales were recorded.

This was also the 21st consecutive quarterly increase in residential sales, according to the Quebec Professional Association of Real Estate Brokers (QPAREB), who based these market statistics on the real estate brokers’ Centris provincial database.

Sales transactions for condos and plexes (two to five dwellings) saw the most activity, jumping 19 per cent. (5,227 and 1,817 sales, respectively). Sales of single-family homes also increased significantly, rising by 14 per cent.

In fact, all cities, including Montreal, Quebec City, Gatineau and Trois-Rivières, registered a double-digit increase in sales, with Quebec City topping it at 24 per cent. Smaller urban centres, such as Joliette, also saw strong sales results.

Supply continues to dip. Between July and September there were about 54,522 properties for sale, down 12 per cent compared to Q3 2018. This trend is most prevalent in Gatineau, Montreal and Sherbrooke.

It’s clear that the Montreal area does not have a monopoly on market vitality, as it has spread to other metropolitan areas and many agglomerations across Quebec,” said Charles Brant, director of the QPAREB’s Market Analysis Department. “The result is often a rapid decrease in active listings and, in many cases, significant price increases. There is thus a catching-up effect in recovering markets or signs of overheating, especially for condominiums, in the tightest markets, such as Montreal.”

The average price of a condo in Quebec increased by six per cent, with half of all condos selling for more than $255,000.

Properties sold in Q3 found a buyer faster year-over-year. The average selling time of condos also dropped significantly over the past year. Across the province, a condominium sold in this Q3 remained on the market for 91 days, a drop of 23 days compared to last year. This was the thirteenth consecutive quarter that average selling times fell for condos.

True North Commercial acquires two office properties

True North Commercial Real Estate Investment Trust (the REIT) has closed the acquisition of two office properties.

The GTA Property is a Class A office property located at 101 McNabb Street in Markham, Ontario and the Calgary Property – commonly known as ATB Westwinds Campus – is a three-storey Class A office property located at 3699 63rd Avenue NE in Calgary, Alberta.

According to the REIT’s press release, the aggregate purchase price of the two office properties is approximately $190.5 million.

The GTA Property features include:

Situated on 29.1 acres, the property has 315,400 rentable square feet
LEED Gold and BOMA Best Platinum certifications
Recipient of the 2019 TOBY Award for The Outstanding Building of the Year in the Renovated Building category
Market-leading parking ratio of 5.1 parking stalls per 1,000 square feet with 1,609 parking stalls
Located between Highway 407 and Steeles Avenue offering access via Highways 7, 404 and 407 as well as direct bus access to the GO train and subway systems.
The building is 100 per cent occupied by The Toronto-Dominion Bank and General Motors of Canada Company.

The Calgary Property features include:

209,400 rentable square feet with 329 underground parking stalls and 314 surface parking stalls.
Situated on 11.13 acres, the Calgary Property is strategically located at the southwest corner of the intersection of Metis Trail NE and 64th Avenue NE and is also in close proximity to the Calgary International Airport.
A remaining lease term of 9.2 years, the building is 100 per cent occupied by ATB Financial, a financial institution and crown corporation owned by the Province of Alberta.

Closing of the office properties is expected in November.

Climate risk profilers wrangle fragmented data

A newly released report from Global Property Index producer, MSCI, draws on geospatial and climate hazard data to identify where and how real estate assets could be vulnerable to extreme weather events and patterns. The work underscores the widening scope of resources that can be tapped to build increasingly sophisticated property profiles, as well as the challenges of that task.

“Data is fragmented. It’s difficult to obtain. It’s hard to patch together across portfolios,” Darryl Neate, director of sustainability for Oxford Properties Group, told a gathering earlier this fall at the release of 2019 results of the GRESB global benchmark for environmental, social and governance (ESG) performance of commercial real estate portfolios.

MSCI’s effort began with geocoding to pinpoint the exact global coordinates of 23,771 properties located in Australia, South Africa, the United States, United Kingdom and the Netherlands. This was cross-referenced with various national and regional level geomatic, scientific and planning data to derive a picture of physical risks and mitigating factors in play at each address.

Three separate analyses were performed in line with generally recognized climate-related concerns in the scrutinized regions: drought in Australia and South Africa; hurricanes in the U.S.; and flooding in the U.K. and the Netherlands.

“Climate risks vary widely across real estate markets, making it critical to define exposure by country and to focus on the hazards that are specific to each region,” advise the MSCI researchers, Gillian Mollod and Will Robson. “A market’s desirability may be affected both by its specific vulnerabilities and the climate-resilient strategies that aim to mitigate risk.”

Climate risk profilers analyzed addresses in drought-prone zones using data from the World Resources Institute that captures seasonal and year-to-year variability in the water supply and the longer-term plenitude or diminution of groundwater resources, known as baseline water stress (BWS). Collectively, these indicators provide a reading of the flow-through potential for water shortages, higher water costs and resulting implications for building operations and marketability.

Data to help plot vulnerability to hurricanes in areas exposed to the U.S. Atlantic and Gulf coasts came from two sources: Munich Reinsurance Co.’s mapping of tropical storm intensity zones; and the U.S. National Oceanic and Atmospheric Administration’s (NOAA) SLOSH model for projecting the height of storm surges. The MSCI report also points to the dilemma of flawed data as extreme storms occur with more frequency.

“The insurance market has relied heavily on Federal Emergency Management Agency (FEMA) 100-year floodplain maps, which designate as Special Flood Hazard Areas those with a 1 per cent risk of flooding each year. Yet, as was made clear during Hurricane Harvey — after which almost three-quarters of the damaged homes were outside of the Special Flood Hazard Area, leaving thousands of residents and commercial land owners uninsured — these maps are now outdated,” Mollod and Robson recount.

The SLOSH (sea, lake and overland surges from hurricanes) model considers water depth, land elevation and water flow dynamics when projecting the height of storm surge. Whereas, FEMA’s Special Flood Hazard Areas do not yet account for rising sea level, even though that translates into higher water levels in the path of coastal storms, increasing the threat of damaging and dangerous storm surges.

Flood maps largely uncharted in Canada

For data related to flooding risks, researchers turned to the U.K. Environment Agency’s flood risk mapping and the national risk map in the Netherlands, known as risicokaart. Both countries provide easily accessible resources to the general public.

In the U.K., for example, petitioners can request a “flooding history” of any property, which is promised within working 20 days and at no cost if it requires fewer than 18 hours to compile. Anyone can find immediate online information about a property’s probability of flooding simply by entering address information. In the Netherlands, the online risicokaart demarcates areas where flooding could occur and includes projections of how high the water could rise.

In contrast, Canada’s efforts are still in early stages. A Federal Flood Mapping Framework was published last year, under the auspices of Public Safety Canada, as part of a series of documents produced in consultation with provincial governments and stakeholders.

“These are a series of evergreen guidelines that will help advance flood mapping activities across Canada. The publication of these documents will contribute to better addressing overland flooding — Canada’s costliest hazard — by strengthening flood mapping across the country,” the website states.

Knowledgeable observers note much of the existing information is in piecemeal documents from local planning and conservation bodies, and difficult for untrained users to grasp. In a 2018 policy brief for the Centre for International Governance Innovation, University of Waterloo associate professors Daniel Henstra and Jason Thistlethwaite highlight the differences between the flood hazard maps developed for land use planning purposes and flood risk maps like those available in the U.K. and the Netherlands.

“Flood hazard maps typically contain highly technical data, lack information on potential adverse consequences associated with flooding and fail to distinguish between different flood sources. These characteristics limit their utility for strengthening public understanding of flood risk,” Henstra and Thistlethwaite maintain. “Flood risk maps, by contrast, include information about assets at risk and potential adverse consequences associated with floods, typically denoted in terms of households affected, the likely impact on economic activity and so on. They are intended to support policy dialogue, promote public risk awareness and inform decisions about strategic interventions to mitigate flood risk.”

Factoring capacity to respond

Sustainability practitioners contributing to discussion at the Canadian GRESB results presentation concurred that a data-supported picture of climate risk is an imperative first step to inform other decisions about investing in preparedness or selling off assets.

“We know physical risk is a key risk to our real assets,” affirmed Derek Billsman, director of real estate management and sustainability with the Healthcare of Ontario Pension Plan (HOOPP). “You can’t move that building.”

He described the two-part evaluation derived from a recently completed profile of HOOPP’s portfolio of commercial, industrial and multifamily assets. Each property now carries a score denoting the risk of its physical location — i.e. potential for inescapable extreme weather — and a score for capacity to respond.

MSCI researchers similarly accounted for mitigating factors such as levees in U.S. coastal zones, the Thames River barrier that provides flood defence in London, the Netherlands’ Room for the Rivers resilience strategy, and other local or regional codes and standards. They also considered how the intensity and repercussions of climate-related stresses can vary for different property types. For example, water shortages are likely to be felt more severely in multifamily buildings.

Steady advancements in data analytics make it more feasible to cross-reference all the details, but it can involve collecting and coordinating insight from various disparate sources. Billsman reiterated the challenges of the task when, as in HOOPP’s case, assets are scattered across many jurisdictions in multiple countries. “I am not going to say it’s easy and I’m also not going to say it’s cheap,” he reported.

Those logistical and cost hurdles are expected to dissipate. “All of these data systems are going to get better and better and better,” predicted Regan Smith, director of sustainability with Manulife Investment Management. Nevertheless, MSCI researchers are mindful that openness to the data is an equal part of the equation.

“Real estate investors acknowledge that physical climate risk by itself is not enough to dissuade them from entering into an otherwise attractive real estate market,” Mollod and Robson observe. “However, this risk-reward calculation may evolve if the economic impact of a changing climate manifests itself.”

Do you know the condition of your fan coil?

Fan Coil Units (FCUs) are a vital, yet often overlooked part of an apartment/condo complex. Nevertheless, they are directly responsible for the climate control within the apartment complex in the form of heating and cooling. That makes them critical to the health of the building unit, both from an environmental and building efficiency perspective.

There are two models of FCUs that are found within an apartment or condo complex: the two-pipe-configuration and the four-pipe-configuration. The two-pipe configuration FCU is a dual temperature system which can only supply one type of climate at a time. Typically, this means the complex will set the system to produce cool air during warmer months, and warm air during the colder months. The four-pipe-configuration, on the other hand, has the capability to produce and distribute both hot and cold air at all times, which means the unit has full climate control at all times.

The standard lifespan of an FCU is about 20 to 30 years; however, industry experts will often anticipate the former. Over those decades, the FCU will experience standard issues pertaining to what’s commonly known as ‘wear and tear’, wherein components within the unit will eventually degrade and lose effectiveness. Moreover, as the unit ages, it becomes less efficient and has a direct impact on the environment’s air quality.

Insulation deterioration and mould are additional considerations. Over time, the insulation will erode and find itself within the FCU only to be circulated throughout the apartment unit. Meanwhile, mould can arise if the conditions are favourable for growth. The long-term health effects of both of these issues can be extremely harmful.

Refurbishment options

In the event that the FCU is past its life cycle, there are options for refurbishment:

1. Cleaning and Insulation replacement: Here, the internal FCU insulation is removed and the internal surfaces are thoroughly cleaned/ disinfected. Once cleaned and dried, new mould resistant insulation is installed.
2. Refurbishment with Energy Efficient Upgrade: This option looks to fully replace the components within the FCU that are exhibiting signs of excess wear and that require replacement or repair. The PCU motors are also replaced with EC motors which will extend the expected service life of the existing FCUs and improve the indoor air safety and quality.
3. Complete FCU replacement: Going with this option means completely replacing the existing FCU with a brand new unit. When considering the estimated age of the existing FCUs compared to their expected lifespan, replacing the entire unit makes sense. Doing so will provide all of the benefits of an energy efficient upgrade, as well as eliminate any concerns over the indoor air quality associated with the residues and moulds found within the original FCU.

Next steps

To find out the exact age or approximate time-frame of installation, residents should contact the building manager or manufacturer. The manufacturer will be able to estimate the current condition of the FCU based on several factors – predominantly the age of the building (which will most likely correlate with the FCU’s date of installation).

Buildings rely on a number of critical systems. And considering the health and building performance risks of leaving an aging FCU unchecked, it pays to stay diligent.

Mitchell Redshaw is with M & E Engineering, a professional multi-disciplined mechanical and electrical engineering consulting firm serving clients in the GTA and across Canada. For more, visit www.me-eng.com.

—

Value of FM services poised to soar: report

Rising investments in smart city projects across the world have led to the growing demand for facilities management (FM) services. It is expected that the value of the global FM market will hit US$2 trillion by 2025, according to new research by Global Market Insights.

Higher investments in the real estate and construction industry is supporting this growth. For instance, in 2017, the Canadian government issued additional funding of US$81.2 billion across five priority infrastructure streams, including public transit, trade, green, social and transportation. The government is taking initiatives to develop rural and northern communities’ infrastructure through the ‘Investing in Canada’ plan to build advanced economic cities.

With the increase in the number of construction projects, there is higher demand for various FM services, including construction, maintenance, operations, electric and mechanical works. Post-construction services, such as building cleaning and maintenance are also increasing across the world.

Other report findings show the growing tourism and hospitality industry has led to the rising demand for FM services across hotels, restaurants and entertainment centers. Also, growing industrialization will enable manufacturing companies to outsource the management of their facilities to enhance their focus on core competencies.

Tougher regulations and high scrutiny have enabled companies to outsource and deploy technology solutions that can optimize their facilities management.

The slow adoption of outsourced FM services can restrict market growth, as companies are inclined toward the use of in-house management staff. The report suggests that an in-house FM team may lack the required skill set and training required for performing specific operations, which may result in an inefficient approach toward the management of valuable assets of the organization.

With companies focusing on their core competencies to gain a competitive edge, outsourced services are expected to skyrocket during the forecast period. Meanwhile, hard services are poised to hold a major share by 2025 due to the development of smart homes and offices. Mechanical and electrical equipment like elevators, fire safety and HVAC systems require frequent maintenance to support their uninterrupted operations. The hard FM service providers have skilled labor to manage these services without affecting the core operations of any business.

Is your facility ready for winter?

A third of all emergency department visits are due to unintentional falls, according to the Canadian Institute for Health Information data collected in 2016-2017. As stewards of workplaces and public facilities, it is important to keep our staff and community members safe not only as a matter of human health but also of liability management.

In British Columbia, the Occupiers Liability Act requires us to “take that care that in all the circumstances . . . is reasonable to see that a person . . . and property on the premises . . . will be reasonably safe in using the premises”. The legislation may vary across the country, but our responsibilities are clear – we need to ensure our facilities are reasonably safe.

For decades, placing a yellow “wet floor” sign or an orange cone was a quick and easy fix to reducing liability and preventing slip and fall accidents. And while good signage is an important part of any facility’s strategy, it is not enough in today’s environment.

Start Outside with Ice Melters

Quality ice melters should be part of your outdoor strategy. Rock salt is inexpensive but highly corrosive and damages both your concrete and your landscaping. Specially formulated ice melting products usually have optimally sized granules for performance, are less corrosive, and are safer for plants and animals. Using a spreader will assist with evenly applying products to ensure you get a product where you need it and in the correct amount to save you money.

Consider a preventative strategy. Drivers in British Columbia and in many areas of the country will recognize that road maintenance crews have shifted to applying liquid brine solutions before weather events. This prevents ice build-up before it starts and because it is liquid, there are no granules to track into your facility.

Trap Water and Debris with Entrance Matting

Entrance matting systems are the hardest working cleaners in your facility. Lying at guard, an effective matting system can scrape and wipe off both large and small debris and keep liquid from entering your facility. A full winter solution will incorporate scraper type matting outdoors or in vestibules and then scraper/wiper or wiper matting indoors.

Size matters with matting – the more footsteps on the matting before walking on your hard floors, the better. You can run a little experiment by taking 8 steps (4 per foot) and measuring the distance with a tape measure. Now think about the variations of someone taller or walking faster than you. Most people are surprised at how much matting they need but the footsteps don’t lie.

Quality matting is not only beautiful with the look of the high-end commercial carpet but has incredible performance. The highest quality matting can hold up to 7 litres of liquid per square metre. This makes it very difficult to saturate, keeps liquid below the level of foot traffic, and in turn, helps to keep liquid from getting onto your floor and creating a slip and fall risk.

Get the Right Tools

Make sure your staff have the right tools to deal with winter conditions. Auto scrubbers are the best way to clean since they are always applying fresh solutions and they pick up liquid leaving a nearly dry surface. The latest crop of compact units can make this convenient for front-line staff even if a custodian isn’t available. However, good mopping practices using highly absorbent microfibre mops can also mitigate your risk. Use wet/dry vacuums to clean your entrance matting and avoid damaging vacuums you normally use on dry carpet. And don’t forget the “wet floor” signs!

Reduce the impacts

Even the best ice melting products leave residue on your floors and will leave a film of haze that doesn’t go away with normal neutral floor cleaners. Use a salt neutralizer to remove white films and bring beauty back to your floors.

In the end, a solid plan to get your facility winter-ready will help keep your community safe, reduce your risk profile, and keep your facility looking great.

Timothy Ambler is the general manager for Swish in British Columbia. Contact him at [email protected].

The preceding article has been adapted and reprinted with permission.

GTA realtors report condo sales up

Greater Toronto Area realtors reported 6,407 condominium apartment sales through the Toronto Real Estate Board’s (TREB) MLS system during the third quarter of 2019. This number is up by 11.1 per cent compared to the third quarter of 2018.

New listings of condominium apartments were at 9,538, down by one per cent year-over-year in the third quarter.

One factor underpinning this dip may be that, according to CMHC data, new condominium apartment completions were down year-to-date through August relative to the same time frame in 2018. This may have translated into fewer investor-owned units being listed for sale.

“As economic conditions continue to be favourable for job growth in the Greater Toronto Area, people have continued to come to the city for work,” says TREB president Michael Collins. “Home ownership is important to many Canadians, and, as a relatively affordable housing option, condos in the GTA offer prospective buyers the chance to achieve their dreams of owning property.”

The average price for third quarter condominium apartment sales was $584,564 – up 5.8 per cent compared to the same period in 2018.

“Condominium apartments are obviously a popular choice amongst first-time home-buyers,” said TREB’s chief market analyst Jason Mercer. “Moreover, it is also important to remember that condominium apartments owned by investors represent a huge component of the GTA rental stock and certainly account for most additions to the rental stock, on net, over the past decade. With this in mind, a well-supplied condo segment will be important moving forward to ensure that we can keep up with population growth driven by a strong and diverse regional economy,”

New Tarion measures to inform future home buyers

Tarion has unveiled new measures that attempt to help consumers make more educated decisions when buying a home.

These measures include the addition of new search tools on Tarion’s Ontario Builder Directory and a new detailed information sheet highlighting the potential risks of purchasing certain types of pre-construction condominiums.

“The purchase of a new home is often the most important one that many Ontarians will make,” said Tarion’s President and CEO Howard Bogach. “At Tarion, we’re doing our part to ensure that these purchases are informed by a thorough understanding of the risks, builder history, and status of a given project. The initiatives that we’re announcing today will contribute to a better informed purchasing process.”

Improved Disclosure Around Risks

New rules, effective January 1, 2020, will require these purchase agreements to include information sheets highlighting the risks and considerations that come with buying a residential condo unit, including:

pre-construction condominiums come with the risk that they may never be completed;
early termination conditions that would allow a developer to cancel a project;
information about the status of the development (e.g., formal zoning approval,relevant approval authority and date of commencement of construction);
information about any restrictions on the developer’s land title that may prevent the project from going forward;
a purchaser has an initial ten days under the Condominium Act, 1998, to cancel a sales agreement; and
the expected date when a purchaser can take occupancy.

Specifically, this new information sheet applies to agreements of purchase and sale for units where the purchase agreement for the project or phase of the project is signed after January 1, 2020. Tarion points out that leasehold, common element and vacant land condominiums are excluded from this requirement.

Updates to Ontario Builder Directory

Tarion has also made updates to its Ontario Builder Directory to include information about condo projects and builder history. Beginning October 23, 2019, prospective buyers will be able to search for condo projects by name and/or location and receive important information, including the name of the vendor/builder, the project name, the status of the project and the number of units. They can also see cancelled projects and any builders who have been convicted under the Ontario New Home Warranties Plan Act.

To learn more about these and other consumer education and protection initiatives available from Tarion, new home buyers are encouraged to visit Tarion.com

Forest Hill condo promises direct LRT access

The Forest Hill will become one of the first condos with direct subway access to the Eglinton Crosstown LRT when the fourteen-storey building rises at the corner of Bathurst and Eglinton Avenue West.

Situated among million-dollar homes in one of Toronto’s most affluent neighbourhoods, Forest Hill, the CentreCourt development will feature a mix of suites from studios to three-bedroom units, many starting in the $400,000s.

“We wanted to bring a high-quality development to this area, but in a way that allowed the vast majority of people interested in purchasing a condo to have a type of unit they could afford,” says Gavin Cheung, vice-president of CentreCourt.

The vision for the condo also includes connecting the lobby directly to the future Forest Hill subway station, with a private and secure entrance for condo residents and a 24-hour concierge.

Crosslinx, whom CentreCourt teamed up with for The Forest Hill, is currently using the developer’s site as a staging area to accelerate building the station, set for completion in 2021. Once direct connection to the condo is in place and much of the below grade construction finished, Crosslinx will hand over the site to developers to build upon. In that sense, the subway is expected to be mostly operational by the time residents move in.

Such projects are unique in a growing city where development opportunities near transit nodes often go unrealized.

A new study, “Transit Nodes in Ontario Have Untapped Development Potential,” published earlier this year by Ryerson University’s Centre for Urban Research and Development, found there is substantial capacity for development, especially around many of Toronto’s subway stations.

Toronto’s newest subway stations between Downsview Park and the Vaughan Metropolitan Centre offer the most space for residential development. Land is also underutlized around a quarter of Toronto’s older subway stations, such as York Mills, where density is under four units per square acre. Meanwhile, the study cites less construction activity around the future Eglinton and Finch LRTs, compared to new LRTs in cities like Hamilton where zoning changes have boosted housing supply.

CentreCourt also found the rarity of their project when conducting internal research ahead of the land purchase. The company found their building would be within only one per cent of Greater Toronto Area condos with a lobby-to-subway connection.

“There are challenges anytime you want to do something out-of-the-box “ says Cheung. “But we’ve been able to execute on that. It requires a lot of heavy lifting, good coordination, lots of give and take and good partnerships with the city and municipal institutions. At the end of the day it’s very doable.”

The new LRT offers a chance to perhaps increase these types of transit-oriented-developments, which, in turn, provide economic advantages.

“I expect that over the course of time you’ll see a lot of that type of development along the new subway line because it brings huge benefits to the developments directly connected, but also to everyone who lives near them and has an extra access point to the subway—a full integration into the mass transit, which is the lifeblood of our city,” notes Cheung.

Lobby

As for the design, the metal-clad building will be broken into three distinct volumes and incorporate a monochromatic colour palette, according to the architect Quadrangle. The design will allow for sunlight to penetrate suites, balconies and terraces, and a retail street presence along Eglinton Avenue West.

Traditional architectural and design elements will be reimagined through a contemporary lens, as figure3 takes on the role of interior designer. The firm says the result will be classic and timeless.

“The beauty of this building is we have a breadth of product and fabulous amenities that appeal to a of mix people, everyone from empty-nesters to students,” adds Cheung. “It’s set up for this amazingly high-end experience the moment you walk in, which carries through to the shared amenities.”

A co-share social workspace with a coffee bar and meeting rooms will cater to those part of the modern economy, such as remote workers looking for flexible workspace, entrepreneurs and students. An almost 4,000-square-foot gym will feature CrossFit and yoga areas.

Co-working space

Above all, CentreCourt is expecting a lot of perceived value for a condo with direct access to transit.

“It is a very, very rare occurance,” says Cheung. “That huge price appreciation that naturally follows the opening of a subway—we’re just on the front end of it at The Forest Hill. We’re confident that the people who make it into the condo now will see that ground floor opportunity and be the beneficiaries of it.”

Rebecca Melnyk is the editor of CondoBusiness

Henriquez Partners celebrates 50th anniversary

Henriquez Partners Architects is celebrating its 50th anniversary and honouring the lasting legacy of the architecture studio’s founder, Richard Henriquez, C.M.

Recognized as a Member of the Order of Canada in 2017 for his outstanding contributions to Canadian architecture, Richard Henriquez is also the recipient of the Royal Architectural Institute of Canada’s Gold Medal, the highest honour in Canadian professional architecture. Richard’s work has left an indelible legacy on Vancouver’s cityscape and character, as well as on the studio itself. His architectural creativity and commitment to design excellence continue to influence Henriquez Partners Architects’ work to date.

Richard Henriquez’s notable projects include Vancouver’s Sylvia Tower, Eugenia Place, Sinclair Centre, the United Nations Peacekeeping Monument in Ottawa, Trent University’s Environmental Sciences Building, New Westminster’s Justice Institute of British Columbia, and the BC Cancer Research Centre.

As stated by the Royal Architectural Institute of Canada, Richard’s work has had “a broad and significant impact on the profession, reaching beyond his hometown of Vancouver. His understanding of the art of sculpture and architecture is evident as he works from an imaginative tradition where buildings are much more than just composed technologies. His work expresses a search for meaning, demonstrating his ability to transform modest projects into highly symbolic works. His accomplishments raise the profile of architecture for the public and the profession alike.”

Gregory Henriquez, Richard’s son and managing principal of Henriquez Partners Architects, explains: “Our 50th anniversary marks the continued growth and success of the business, and is a celebration of my father’s lasting impact on the studio and on the city of Vancouver. Our social justice roots, which date back over 40 years, are a part of my father’s legacy and the studio’s future.”

Refreshing shared amenity spaces

When was the last time you were excited at the look of a common area such as a lobby, corridor, or other shared amenity spaces? For most people, it’s when they first move into a new condo. For some, it’s never. And for others, it is whenever they visit residents of a new condo or a condo with a recently renovated common area.

Regardless of your situation, you deserve to be excited about an opportunity like this, as it only comes along once every decade or so. So, to help you get the ball rolling, here are five things to consider before your next common area renovation.

1. Is it accessible

One of the greatest things about upgrading a common area is the new and modern look it brings to the whole building. However, aesthetically pleasing does not always equal accessible or functional. This is because designers are typically focused on the overall look of the design – it’s what they are good at, and we wouldn’t want it any other way.

Still, depending on when the building was constructed and the laws at the time, a common area renovation may require that new accommodations be made to adhere to current accessibility laws. For example, the Ontario Building Code was amended in 2013 and now addresses accessibility in newly constructed buildings, as well as those that are to be “extensively renovated.”

Also, the design should ensure its compliance under the Accessibility for Ontarians with Disabilities Act (AODA) 2005, which has stipulations that condo corps would be subject to as well.

Overall, if you are considering an extensive renovation, it would be a good idea to seek advice from an appropriate legal consult.

2. Do you have a permit for that?

In keeping with the idea of modernization roadblocks, common area renovations can often require a permit depending on the type of work being done.

Once again, it is not necessarily the designers’ responsibility to know what may or may not require a permit. Furthermore, some contractors don’t ask about permits before starting a project, whether that is because they don’t want to know or assume that they are already in place.

In any case, the responsibility still falls on the corporation to determine and acquire any permits deemed necessary for the project ahead.

3. Did you get the owners’ opinions?

Section 97 of The Condominium Act allows the board to make decisions such as additions, alterations, or improvements to common elements if the change is necessary in order to:

ensure the safety or security of persons using the property or assets of the corporation or;
to prevent imminent damage to the property or assets.

In these cases, decisive leadership from the board is needed in order to make quick and just decisions to rectify the problem.

However, being a director during a large common area renovation can be a lot more complex, as there are some new things to consider and plan for. Fortunately, the planning process will allow time to get the opinion of owners who want to be involved, even though it is not necessary to do so.

For a director, the most significant advantage of getting owner input during a common area renovation is the reduction or mitigation of complaints after the work has been done. By not soliciting feedback from owners, there is a potential for conflict and friction within the community to arise.

The best reason, though, is fairness. Common areas are just that … common areas. Renovations affect everyone, so those who want to be heard should at least be given the opportunity to share their opinion on how their home looks and feels.

These days, technology has given us so many ways of being able to quickly and cost effectively solicit feedback, so why not give it a try?

4. What is your expected return on investment?

While most of the community might be focused on the visual appeal of a new common area, it is also important to consider that this is an investment.

A beautifully designed and executed common area project has the potential to pay for itself in terms of property value. Different designers and contractors will offer different value for their price, so approaching the project purely from a price-focused mindset may mean you are not comparing apples to apples. Because of this, a large common area renovation project should be approached with value in mind in addition to the price.

5. Did we plan enough?

According to KPMG, just 31 per cent of projects came within 10 per cent of their budget in the past three years. Inaccurate project estimates, project design errors, not planning for change orders, administration errors, poor site management, and not hiring the right team can all be traced back to a root cause of poor planning.

Often, the longer a problem goes undetected during a project, the more it will cost to fix. Imagine committing to a beautiful new modern design, getting halfway through the project and find out that it does not adhere to the accessibility requirements defined in the Ontario Building Code or AODA.

Taking time to do it right

Investing the right amount of time into the planning process can potentially save thousands of dollars down the road, so it is worth working closely with your designer or contractor to answer their questions and ask plenty of your own.

Holden Johnson is Manager of Business Development and Marketing at Armourco Solutions.

Holborn University Heights wins international award

Vancouver-based real estate developer, Holborn Group, received high praise at the 26th International Property Awards ceremony in early October for their single-family residences in Phase II of Holborn University Heights.

Holborn University Heights received recognition in several categories, including three coveted 5-Star Awards for Best Architecture Single Residence, Best Interior Design: Private Residence, and Best Interior Design: Show Home for British Columbia. The project was also a winner for kitchen and bathroom design.

The International Property Awards celebrate the highest levels of achievement by companies operating in all sectors of the property and real estate industry. Judged by an independent panel of more than 80 industry experts in design, quality, service, innovation, originality and commitment to sustainability, The Awards are a world-renowned mark of excellence.

The homes in Holborn University Heights, designed by Frits de Vries Architects, represent the harmonization of wild natural landscapes and contemporary built environments. The striking modern architecture, beautifully juxtaposed against a breathtaking mountain backdrop, is complemented by thoughtful design details carried throughout the homes’ spacious, light-filled interiors. The sophistication of the minimalist linear design of each house is amplified by the awe-inspiring natural surroundings, creating an aesthetic balance that’s refined, organic, yet refreshingly modern.

Holborn University Heights is a master-planned community situated at one of the highest residential elevations in Squamish, B.C. Each home has uninterrupted views of the Garibaldi mountains and features contemporary design aesthetics for those seeking to connect with nature while still enjoying the comforts of modern living.

“The level of architectural design and custom interior details in our homes are things you don’t typically find in master-planned communities anywhere. We wanted to raise the bar for multi-family developments by being the first to offer it and at an attainable price,” said Joo Kim Tiah, principal, Holborn Group