Deal values stay in line with retail appraisals

There’s little cause for concern that appraisers are overvaluing retail properties, a senior real estate analyst contends. Will Robson, executive director and head of real estate research with MSCI, points to 2018 transaction data showing that purchase prices more often exceeded the most recent valuation, and cautions that retail REIT performance does not provide a fully comparable picture of directly held assets.

He’s responding to grumbling from some market watchers who question the dissonance between share prices and retail appraisals. While noting that appraisers struggled to keep pace with market conditions that are propelling capital growth, sales data indicates they were actually most off the mark on industrial appraisals.

Industrial sales values surpassed appraised values by 8.2 per cent last year. The achieved retail premium was a more modest 2.8 per cent.

“For a listed security with thousands of sellers agreeing on prices for thousands of identical shares, there is no question about the market price of the security. Negative sentiment about market dynamics can be efficiently transmitted to pricing,” Robson observes. “When it comes to private real estate, however, we don’t have evidence for specific buildings — only that of broadly comparable buildings.”

Tracking transaction data over 18 years since 2000, both retail and industrial properties sold below appraised values during the depths of the financial crisis in 2008-2018, but have sold at a premium at all other times. Residential and office properties have consistently traded at a premium.

“We can’t observe bids on assets that haven’t sold or those not offered for sale so there is no way to assess the accuracy of the valuations of such properties,” Robson adds. “For assets that have traded, however, it seemed appraisers did a reasonable job.”

Birgit Siber receives SBC’s Lifetime Achievement Award

Sustainable Buildings Canada (SBC) is set to bestow its Lifetime Achievement Award to Birgit Siber, a long-time principal at Diamond Schmitt Architects.

The honour will be presented during SBC’s Green Building Festival on October 8, 2019, in recognition of Siber’s contributions to sustainable building through her advocacy, research, innovation, and design excellence across a range of building types.

“This award is for exemplary devotion to the cause of greater sustainability in the built environment,” said Mike Singleton, SBC Executive Director.

Siber has been with Diamond Schmitt Architects since 1996, where she became a principal in 2003. In addition to leading the design installation of the first large-scale living wall biofilter in Canada at the University of Guelph Humber campus, she drove the launch of ecoMetrics, an energy-use benchmarking databank and analysis tool to highlight and inform strategies for energy-use reduction.

In her role as a project architect, Siber has left her mark on institutional and laboratory projects throughout Ontario. Recent highlights include the LEED Platinum certified CANMET Metallurgical Materials laboratory in Hamilton, which received the 2015 AIA COTE Top 10 Award for sustainable design; and the LEED Gold certified Lazaridis Hall at Wilfrid Laurier University, which was awarded a Civic Trust Award (UK) and SCUP Excellence in Architecture Award (USA) in 2019.

Outside of the firm, Siber sits on the Toronto 2030 District Advisory Board and the RAIC Committee of Regenerative Environments (CORE), and chairs the office sustainable design committee. She is also a popular speaker at international sustainability conferences across Canada, where she contributes significantly to discussions on biophilia, resilience, energy literacy, and net-zero energy.

“I think of architecture as a team sport, a creative and complex opportunity to work collaboratively towards sustainable design solutions,” said Siber.

TIPS names top innovations of the year

InfectionControl.tips and The Infection Prevention Strategy have announced the winners of its Top Innovations of the Year for 2019. This year’s focus was on global health.

Finalists are previously determined through a Call to Action for nominations.

Here are the Top Innovations of the Year in no particular order:

CASPR Medik™ Solution by the CASPR Group was created as a facility-wide solution and it is safe to use in occupied spaces. The levels of molecules put out are 33 times less than OSHA and other guidelines. In recent hospital studies, CASPR reduced employee absenteeism by over 40 per cent as the product not only reduced the HAI-causing pathogens, but also substantially reduce moulds, fungus, H1N1, and more.

THE ANNIHILYZER® INFECTION CONTROL SYSTEM by PCT Health provides a suite of electrostatic applicators including handheld, backpack, and automated 360-degree carts to minimize labour. The Annihilzer also includes patented bottle tracking for auditing and electronic protocol management and reporting systems all in one package. Management can now track what disinfectant was used in what room by what staff and what protocols were used at the touch of a button.

PathO3Gen Solutions FSS utilizes its patented Solestice 3/15 Technology to prevent and destroy 99.9 per cent of all microorganisms colonizing footwear, thus eliminating the deadliest pathogens before they spread. It is the only patented technology that utilizes UVC + Ozone. This combination cracks the outer capsid and denatures the DNA of pathogens, thus preventing regeneration. When incorporated into a comprehensive infection control program, the PathO3Gen Solutions Footwear Sanitizing Station can help reduce the risk of HAIs.

OGOW Medical Records System: Somalia‘s primary goal is improving the delivery of immunizations in Somalia by empowering and equipping practitioners and caregivers with digital solutions that are easy-to-use, in Somali language and able to revamp the current procedure of immunizations.

AP-4 ™ High-Level Disinfection System is an ultrasonic high-level disinfection machine capable of eliminating 100 per cent of pathogenic bio-burden including C. difficile spores, VRE, MRSA, CRE and C. auris in a treated space. The ultrasonic transducers create sub-micron droplets at a density of 3-5 trillion/cubic foot that permeates every nook and cranny in the entire room getting 3-D coverage of all surfaces. It uses a very low concentration (1.06%) of PAA that is effective on all surfaces including curtains.

High-Capacity Ultrafiltration (HUF™) offers several High-Capacity Ultrafiltration (HUF) tools in the fight to control Legionella and pathogen levels in building water systems.
The HUF systems, featuring hollow fibre membrane technology from German innovators, Seccua GmbH, filter out nearly all bacteria, parasites, viruses, and nutrient particulates, with low-pressure loss. This keeps systems clean, minimizing biofilms, fouling, corrosion, and risk of a disease outbreak. Disinfectant residuals (whether provided municipally or onsite) remain in the water, with much higher effectiveness, due to drastically reduced biomass and sediment. This adds up to healthier buildings, happier residents, and reduced liability risk to owners.

UV-CLEAN by Proximity Systems offers an affordable and powerful automated disinfection solution that will give healthcare facilities the peace of mind they deserve when battling germs on high-touch surfaces. As new automated disinfection technologies are being developed and implemented, ultraviolet disinfection has emerged as a powerful line of defence against the spread of infectious pathogens on high-touch surfaces that cause HAIs.

TapSnap Flushing Surveillance Monitors snap directly to high-risk water outlets like showers, aerated-faucets, and eyewash stations. They combine a sensitive vibration sensor with a timer and LED light. When the monitor senses no water flow in the outlet (i.e. no vibration) that exceeds a stagnation timer setting, the red LED flashes alerting staff the outlet needs flushing. Turning on the water and flushing for the appropriate time will reset the LED to green. Flushing times are variable and depend on how long the outlet has been stagnant (i.e. longer stagnation requires longer flushing). Premature termination of flushing will cause the sensor to revert to the flashing red LED. The monitor is battery-powered, easy to install or remove, and water-resistant.

Theraworx Protect by Avadim Health, Inc., is a topical, immune health system designed to stage the patient’s skin for improved quality of care. Theraworx Protect is designed to be a SMART approach to address Stratum corneum optimization, minimization of biofilm synthesis, antimicrobial barrier support, the reestablishment of healthy inflammatory response and tissue respiration support.

Environmental Services (ES) Optimization Playbook by ESOP Initiative is a collaborative approach to support reliable design (standardization of evidence-based practices) for environmental cleaning and disinfection in health care facilities in alignment with AHE Standards, to reduce the risk of HAIs resulting in a playbook/resource guide to drive sustaining gains for Antimicrobial, Resource, and Economic Stewardship.

Medical Office and Healthcare Furniture by Kwalu does not have surface joints or seams and does not support microbial growth, and are warranted for 10 years.

From functional patient room furniture such as recliners, sleeper sofas, and case goods, to stylish medical waiting room furniture and guest chairs; our commercial healthcare furniture is purposefully created for healthcare environments.

EvaClean’s Touchless Disinfection & Sanitizing by EarthSafe Chemical Alternatives uses data to deliver process improvement and a streamlined approach to optimal cleaning and surface disinfection within healthcare institutions and other industries. By standardizing protocol around highly efficient application methods like electrostatic spraying technology and industry-leading chemistries like NaDCC sporicidal disinfection tablets, compliance can be improved, processes can be easily scaled across staff of any size, and continuing education can be more targeted by using measurable auditing to identify areas of strength or weakness in any process. By using technology to deliver efficiency to the housekeeping staff, outputs can be increased up three-fold within existing time, staffing, and budget constraints.

SILVERbac by Novel Technologies Holdings Limited helps to combat pathogens such as E. coli and MRSA, creating a safer environment for medical procedures. SILVERbac can be incorporated across a variety of substrates, from scrubs to sheets, and even into technical equipment.

Trust Medical by Lighthouse Healthcare Partners is a single wipe dispensing system to prevent cross-contamination. Powered by DisinfecTech technology to effectively clean and disinfect surfaces. Compatible and stable with Defender Sporicidal, Cleaner and Disinfectant.

All award winners will be on display at the upcoming The Healthcare Infections Transmission System Conference (#HITS2019) in Buffalo, N.Y. Aug. 5-8, 2019.

Keys to condo board success

Serving as a director can be a daunting task considering all the responsibilities involved in governing a condo corporation’s affairs, which can include making tough financial decisions. Why do some condo boards excel and others struggle? There may be lessons to glean from the best practices successful boards tend to have in common. Pat Crosscombe, founder and CEO of BoardSpace, answers: What makes a condo board successful?

Experience as a condo board president and conversations with people involved with dozens of other condo boards suggests there are best practices that will help condo boards excel. In no particular order, here is a checklist:

Introduce sound policies
Good governance begins with good policies. Every condo board needs to have policies in place for governance, finances and communication.

Aim for a balance of director expertise
Condo boards don’t get to handpick their directors, but every board can strive for a balance of skills and expertise. For example, it can be helpful to have a director that understands the legal side of things and another with a background in financial management or accounting.

Add officers to bring in needed skill sets
Officers do not vote and are not elected, so there is much more freedom in their selection. Once the board is elected, the directors can appoint officers to fill any gaps in expertise. Being an officer for a year or so is also valuable training before becoming a director. Adding officers lightens the overall work load of the board and when specific skills are needed, their knowledge can be extremely valuable.

Create committees
Anyone can be on a committee. Many condo boards have created committees for things such as organizing social events, looking after gardens, and writing newsletters. Because committee members don’t have to be official board members, this is also a fantastic way to get new people involved. It’s advisable to include a board member or officer on each committee, to liaise between the board and the committee. If this isn’t possible, consider asking the committee chair to attend board meetings whenever an update is required.

Have written job descriptions for director positions
Current or potential directors may not know what is required of a president or a treasurer. Giving every director a clearly defined role ensures board members understand their respective responsibilities.

Don’t leave positions vacant
Appointing a new director as soon as a position becomes vacant is a good practice. It’s not easy to find a new director, but the sooner a replacement is appointed, the better. There is always a concern that the remaining directors will be overworked (and then also leave the board) because too much is expected of them. Directors are volunteers and are already making a significant time commitment to serve on the board.

Make documents available before being asked
Make all relevant documents available to everyone. Transparency is key.

Keep corporate records organized and accessible
Condo records — such as meeting minutes and financial statements — are crucial to a condo corporation. These records must be organized, up-to-date and easily accessible to everyone who needs them. Directors must remember to start saving corporate records as soon as they join the board — if they wait until they leave the board, it will be too late.

Practice consistent and reasonable rule enforcement
Condos have lots and lots of rules. Enforcing all these rules is not so easy. Rule enforcement requires two key aspects: be consistent and be reasonable. Being consistent means that rules are applied equally to all owners. No one is granted special permission to ignore a rule. Being reasonable means that after an owner is informed of a rule violation, he or she is given a reasonable amount of time to fix the problem before the board takes the next step.

Commit to proactive maintenance
It pays to be proactive. Maintaining building systems proactively identifies small problems before they become giant disasters. Conducting annual inspections of major building systems costs money in the short term but pays off in the long run.

Take, for example, the board of high-rise tower that replaces all the unit furnace filters on an annual basis. Replacing filters improves furnace efficiency and prevents damage to more expensive parts.

Overall, condo boards should strive for balance, proactivity, and transparency. Having the proper balance of skills and understanding ensures that the board is knowledgeable and able to get the job done. Proactivity and transparency keep minor issues from becoming more significant. By following this checklist, every condo board can be successful.

Pat Crosscombe is the founder and CEO of BoardSpace, a company that provides board management software for condo boards and property managers.

Graham awarded $267M Paramount condo project

Graham has been awarded The Paramount project, for Keltic (Canada) Developments Ltd. The new $267 million residential community includes office and retail spaces, located in downtown Richmond. Construction is slated for completion in April 2022.

The Paramount project comprises the construction of a mixed-use development with four towers on a common parkade/podium structure, including three 15-storey residential towers, one 12-storey office tower and multiple retail units at ground level. The building is 625,000 sq. ft. on a 375,000 sq. ft. four level parkade.

Overall this development provides 533 for sale residential suites; 27 low income market rental “LIMR” suites; 16,000 sq. ft. early childhood development hub “ECDH” – fully fitted out; 24,000 sq. ft. retail units; 118,000 sq. ft. office space and 618 parking stalls.

Graham’ completed the construction of a Presentation Centre on Cook Road in October 2018. Graham also undertook abatement and demolition for the main site, followed by an Enabling Works package which consisted of site preparation works including soil densification and the construction of a DSM water cut-off perimeter wall (completed January 2019).

New construction consists of bulk excavation, shoring and dewatering to facilitate the parkade structure, the construction of a CIP Concrete structure to parkade, podium and all towers. The façade is window wall to the residential towers, curtain wall to the office tower and storefront to the retail units, with ACM Panel Cladding to accent areas and membrane roofing systems throughout. The building is designed to achieve an overall LEED Silver Equivalent with LEED Gold Certified to the ECDH only.

The residential areas will be fully finished under this contract to typical mid-high-end standard. The office and retail areas are to be constructed to typical ‘shell and core’ standard only. The office includes one level of ECDH which is to be fully fitted-out under this contract for hand-over to the City of Richmond.

Real estate flies red flags of money laundering

Real estate transactions top a global list of financial activities deemed most likely to provide cover for money laundering or terrorist financing. Recently released guidance from the Financial Action Task Force (FATF) — the intergovernmental entity that has developed recognized global standards for anti-crime vigilance in the financial system — focuses on the role legal professionals can play in either enabling or disrupting criminal efforts, and offers advice for interpreting and responding to clues that clients have nefarious intent.

Some of the identified suspicious real estate antics include: cash, crypto currency payments or other unusual means of payment, such as precious metals or gems; repayment of mortgages significantly in advance of maturity dates; transfer of assets between parties within a short time period for no discernible reason; or acquiring an asset then rapidly using it as collateral for a loan. However, many other hints of potential malfeasance are not obvious and/or appear more ominous when they are part of a pattern of questionable conduct.

A representative from Canada’s Department of Finance was among FATF members from nine nations and two multinational organizations involved in drafting the document, which outlines an approach to manage and mitigate risk. A six-step checklist — recommended as particularly pertinent for small law firms and sole practitioners — urges legal professionals to: scrutinize their clients; clarify clients’ commercial or personal reasons for requesting action; be aware of actions that have the potential to facilitate money laundering; look for obvious red flags; have a response protocol if red flags arise; and document everything.

“Due to the nature of services that a legal professional generally provides, automated transaction monitoring systems of the type used by financial institutions will not be appropriate for most legal professionals,” the FATF guidance acknowledges. “Although individual legal professionals are not expected to investigate their client’s affairs, they may be well positioned to identify and detect changes in the type of work or the nature of the client’s activities in the course of the business relationship.”

A shorter list of 23 dubious activities characterized as red flags is annexed to the guidance document, but it follows after extensive chronicling of several dozen potential signals of risk. “Any one of the factors discussed in this Guidance alone may not itself constitute a high-risk circumstance, but the factors should be considered cumulatively and holistically,” it reiterates.

Country/geographic risks relate to the origin and destination of the funds and assets in a transaction. These include: countries credibly believed to provide support for terrorist activities or a haven for corruption and organized crime; countries with notably weak regulatory regimes; or countries subject international sanctions or embargoes.

Client risks arise when the beneficial owner of an asset is unclear. Legal professionals are advised to be wary of: unusual or irrational instructions; lack of transparency; deals that seem disproportionate to purchasers’ resources or inconsistent with their stated business concerns; reliance on financial intermediaries or alternative financing; and demands for an unduly rapid transaction, reluctance to obtain required regulatory approvals or other indications of attempts to avoid oversight.

Transaction/service risks are tied to the specifics of the deal. Much of this flagged suspicious activity overlaps with client risks. In both cases, the guidance document underscores the risk of inadvertently providing a guise of propriety. “Legal professionals may in practice represent or assure the client’s standing, reputation and credibility to third parties without commensurate knowledge of the client’s affairs,” it warns.

The guidance document also provides a breakdown of standard, simplified and enhanced processes for vetting clients. That calls for consideration of risks and associated mitigating factors before taking on the client’s business, as well as throughout a continuing business relationship if or when scrutiny is considered necessary. Each step of the process should be documented and kept in the client’s file.

“Where the legal professional is unable to comply with the applicable client due diligence requirements, they should not carry out the transaction nor commence business relations, or should terminate the business relationship and consider filing a suspicious transaction report in relation to the client,” the guidance document states.

Sample recycling drive helps design students

Save A Sample!, a non-profit, North American recycling drive, will take place September 18-19 in five cities: Montreal, Toronto, Ottawa, Vancouver and Winnipeg.

The drive encourages designers to donate materials and samples to local design schools, which redirects “tons” of materials from landfills into the hands of talented students.

Every year, Save A Sample! creates a second life for unused brochures, fabrics and finish cards. Over the years, thousands of pounds of materials have been donated by some of the country’s busiest design firms. Materials are delivered to local design schools with the help of local furniture dealers. As a result, talented students have richer resources to choose from during the year.

SpecSimple.com’s Save A Sample! Canada 2019 welcomes back Formica as this year’s national sponsor.

“Last year’s Save A Sample! Project was a real success and we’re pleased to renew our collaboration. Supporting the next generation of designers and protecting the environment are two core values for Formica Canada and we are very proud to participate in the Save A Sample! Initiative, which combines the two. We wish the best to this new edition,” says Christelle Locat-Rainville, marketing director at Formica Canada Inc.

Suzanne Swift, Save A Sample!’s founder and president of SpecSimple.com, notes that Save A Sample! design firms and schools count on the support of companies like Formica “who are committed to both the environment and the growth of tomorrow’s designers.”

To sign up for this year’s event, visit www.SaveASample.ca .

Starlight offers U.S. multifamily investment strategies

Starlight has released a new white paper analyzing the ways in which investors can earn attractive risk-adjusted returns in the mature U.S. multifamily market, while also ensuring they remain protected from the risk of a possible downturn.

Highlighting key economic drivers influencing the U.S. multifamily market, the paper examines how Starlight achieves both of these objectives by narrowing its investment focus and maintaining an innovative and rigorous asset management program.

According to the report: “While there are many facts and statistics available to support the view that the current U.S. economic growth cycle is exceptional and will continue at its current pace for the foreseeable future, all cycles eventually mature, leading to a moderation in growth. Attempting to “time the market” is not an advisable investment strategy as it involves more luck than skill and investors cannot afford to sit on the sidelines with uninvested capital.”

So, what is advisable? At Starlight, the approach begins with an investment thesis and a thoughtful perspective on market selection.

“We focus on identifying changing market dynamics and getting ahead of opportunities as they present themselves,” the paper states. “As demand drivers remain uniformly strong across markets in the Southern and Western United States, the variable that is most affecting rental growth is new supply. In many markets however, the volume of development activity has led to a dramatic increase in construction costs, making development returns relatively unattractive. As future projects are delayed or cancelled, rents in these markets will naturally rise. Therefore, to find value at this stage of the cycle, Starlight is focusing on markets where we can buy properties at (or close to) replacement cost.”

The next step is to identify assets that consistently outperform their competitors. “Starlight seeks well-located and constructed, high-quality assets that are differentiated from their competitors by features including: walkability, proximity to retail and employment, unique amenities, high visibility, healthy demographics and strong barriers to entry with clear potential for rent growth.”

However, competition for these assets later in the economic cycle often remains exceptionally high and to avoid the “winners curse” of overpaying, investors must find new ways to access opportunities based on their own expertise. “Given Starlight’s strong track record of underwriting and executing lease-up opportunities, one approach that has been utilized is to acquire newly-constructed, but pre-stabilized, properties directly from merchant developers. This has provided Starlight with more control over asset selection, while providing an efficient exit for the developers. Controlling lease-up of these properties also provides Starlight with the ability to qualify tenants and manage lease expiry profiles, reducing future leasing risk.”

It also advises a rigorous asset management program focused on maximizing value and strengthening the quality of cash flows: “While newer properties already feature a rich array of amenities, there is often significant unmet demand for additional services amongst tenants. Starlight’s asset management program aims to provide a full-service experience for tenants. The implementation of customized services, results in a higher lease renewal rate, strong rent growth and additional ancillary income.”

Additionally, Starlight seeks to upgrade the quality of its properties through renovation, resulting in significant rental increases while maintaining a meaningful discount to new construction rents in the submarket, providing downside risk protection. Of course, attracting and retaining high-quality, long-term tenants is also important at this stage of the cycle.

Find the complete white paper at www.starlightinvest.com

Cynthia Cruickshank receives $5.1 million in funding

Cynthia Cruickshank – a Carleton University professor in the Department of Mechanical and Aerospace Engineering and director of Carleton’s Centre for Advanced Building Envelope Research (CU-CABER) – has received $5.1 million from the NRCan Energy Innovation Program and the Ontario Research Fund (ORF) to develop more energy-efficient building framing systems.

Catherine McKenna, Minister of Environment and Climate Change visited the campus to make the announcement supporting the construction of large-scale building envelope test equipment, including a state-of-the-art, two-story guarded hot box with a spray rack, capable of testing full-scale residential and building facades, and a materials characterization lab.

CU-CABER will work with researchers from Algonquin College and the Cold Climate Housing Research Center to study how heat, air and moisture move through materials and highly insulated wall systems, and how these elements contribute to occupant health, comfort and building science risks, including condensation, mould growth and rot.

Cruickshank says the partnership is “especially valuable as it creates learning opportunities at all levels in the workforce – including construction trades, building design professionals, engineers and project managers, and building science researchers.”

The research will also provide new technical solutions to cut heat loss in buildings and reduce the cost associated with net-zero ready and deep energy retrofit construction.

Image courtesy of Fangliang Xu/Carleton University.

Feds invest $8.8M in Royal Aviation Museum of Western Canada

The Government of Canada announced it is contributing $8.8 million toward the construction of the new Royal Aviation Museum of Western Canada in Winnipeg bringing the government’s total funding to $10 million. This is through the New Building Canada Fund – Provincial-Territorial Infrastructure Component – National and Regional Projects.

The 86,000 square foot facility will be built to accommodate current and future artifacts (the museum specializes in preserving, presenting, and promoting the history of aviation development in Canada.)

Located on the Winnipeg Airports Authority’s campus on Wellington Avenue and within minutes of the James Armstrong Richardson International Airport once complete, the general public will have access to interactive spaces, classrooms, a library, special exhibitions and galleries. The second floor will feature an observation deck with views of the aircraft runway and the main aircraft display space on the first floor.

Royal Aviation Museum of Western Canada building site plan.

“Cultural institutions play a key role in developing dynamic communities that celebrate Canada’s diverse heritage and ingenuity. The Royal Aviation Museum of Western Canada’s new facility will provide a gathering place for the community and will help to attract more visitors every year. Our government is proud to be investing in projects that preserve culture, spark curiosity and bring people together while contributing to economic growth and community development,” said Jim Carr, Minister of International Trade Diversification, on behalf of the Honourable François-Philippe Champagne, Minister of Infrastructure and Communities in the announcement.

The new museum has also received financial support from the Province of Manitoba, which has contributed $10 million, and the City of Winnipeg with fundraising efforts underway to raise the remaining costs.

The $40-million project is scheduled to open in 2021.

Images courtesy of Royal Aviation Museum of Western Canada.

Kevric to buy 600 de la Gauchetière West

Kevric Real Estate Corporation (Kevric) has signed a final purchase agreement for the office tower located at 600 de la Gauchetière West in Montreal with a Canadian Institutional Partner.

Devencore put the 28-storey building on the market following National Bank‘s announcement that it would be moving to Saint-Jacques Street.

“This important acquisition allows Kevric to expand its offering of commercial real estate spaces for organizations which aim to distinguish themselves and will ensure the company’s growth in Montreal for years ahead. Kevric is proud to continue fueling the evolution of downtown Montreal into a world-class Canadian city,” said Richard Hylands, Kevric’s president in the press release.

Redevelopment Plans
Toronto-based Kevric also announced that the buyers plan to make significant investments to redevelop the LEED Gold and BOMA Platinum-certified tower such as a new lobby facing Square Victoria and modernizing its architecture.

The transaction will be finalized today.

AHIP to sell Economy Lodging portfolio

Vancouver-based American Hotel Income Properties REIT (AHIP) has entered an agreement to sell its Economy Lodging portfolio for US$215.5 million to an affiliate of VCM, Ltd. (VCM). The portfolio consists of 45 Hotels.

When the acquisition closes AHIP’s portfolio will be comprised of 100 per cent Premium Branded hotels.

According to the press release, after the repayment of property mortgages and transaction closing costs, the net proceeds from the sale of approximately US$90 million will be redeployed to acquire additional hotels that are better suited to AHIP’s long-term strategy, and also used for general corporate purposes.

John O’Neill, CEO of AHIP said that following the sale of the Economy Lodging properties, the real estate investment trust will be better aligned with other U.S. hotel REIT peers.

“By owning a focused portfolio of purely mid to upscale, select-service branded hotels. We anticipate this more focused strategy will help effectively value our business in the public markets,” O’Neill added.

CIBC Capital Markets and R.W. Baird & Co. Incorporated are acting as financial advisors, and Farris LLP is acting as legal advisor, to AHIP on this transaction.

The transaction is expected to be closed in September 2019.

Offbeat locales hold co-working space bargains

Bargain hunters willing to work in a somewhat unconventional office hub can find a great deal in one of Toronto’s aging industrial pockets. The co-working space broker, Instant Offices, lists a $16 per desk, per month, opportunity in the inner-city suburb of Don Mills among the nearly 130 buildings comprising the company’s Greater Toronto Area portfolio. However, the average cost per desk across all supply is pegged at $790 per month.

Eliminating the low-end outlier, advertised co-working space ranges from $200 per desk per month in a Mississauga office park to $1,200 per desk per month in the downtown financial district. The 43 options at $500 or less are relatively evenly split between 21 with convenient access to Toronto’s subway system and 23 in suburban locations. Only eight of the remaining 85 higher priced buildings lack convenient subway connections.

Co-working space — and flexible space purveyors — are steadily coming onto the office market. Instant Offices reports a 14 per cent expansion of its Toronto office footprint since the summer of 2018, on par with the company’s momentum in New York City. It also brokers deals for 48 sites in Vancouver, 43 in Montreal, 31 in Calgary and 12 in Ottawa.

Despite shared status for the lowest office vacancy rate in North America, at 2.6 per cent, co-working space in Toronto and Vancouver appears generally more affordable than in major markets in the United States. Vancouver’s listed per-desk rates trail those commanded in Toronto, ranging from a high of $999 (USD $759) to a low of $125 (USD $95) per month.

Looking south of the border, per-desk rates top out at USD $2,500 (CAD $3,300) per month in New York; USD $1,220 (CAD $1,610) in Chicago; and USD $1,675 (CAD $2,211) in Washington, D.C.. The cross-border price variation narrows considerably for low priced co-working space with New York’s best deal at USD $150 (CAD $198); Chicago’s at USD $132 (CAD $174); and Washington’s at USD $200 (CAD $264) per desk per month.

Meanwhile, nascent Canadian co-working space provider, iQ Office Suites, is venturing into the Ottawa, Montreal and Calgary markets. In total, the company will add another 112,000 square feet of office space as it also expands its existing holdings in Toronto and Vancouver. This will boosts iQ’s capacity to 3,000 desks.

Colliers International promotes John Duda

John Duda has been appointed the president, real estate management services, Canada by Colliers International. According to the commercial real estate services and investment management company, this is a newly created position for the Canadian business. Duda is currently the executive vice-president, real estate management services, Canada.

Duda began his career as director of national property services at CIBC and joined Colliers in 2010.

According to the press release, Duda has driven significant growth both organically and strategically through the development of new service lines and markets. He helped establish the firm’s Asset Advisory Services group and assisted in the expansion of platforms focusing on Class A office, industrial and retail properties. Duda oversees 14 offices across Canada, working closely with local teams to create value-driven strategies in support of clients’ goals.

“John has a deep understanding of the real estate services industry and is a true champion of Colliers’ people and culture,” said David Bowden, CEO, Colliers Canada. “He exemplifies our core values to think differently, embrace change and maximize the potential of property. I am confident he will continue to lead with integrity and build teams that will deliver new and better solutions to our clients.”

Duda is an active member of the National Advisory Council of BOMA Canada. He also serves on board of Junior Achievement of Central Ontario. Duda holds an MBA from Queen’s University and a BASc.in industrial engineering from Windsor University.

“We have an enterprising team of dedicated professionals across the country, a team I believe to be the best in the industry,” Duda said. “I’m honoured to lead our real estate management services team and foster a culture of leadership, collaboration and flexible solutions based on exemplary service.”

Calgary tower features distinct curtain wall system

The new 707 Fifth AAA office tower in downtown Calgary, Alberta, features a distinctive, curved glass appearance with high energy-efficiency and a comfortable interior.

With its triple-glazed, curtain wall system, the 27-storey, 564,000-square-foot (52,400m²) building is targeting LEED Gold certification. The curtain wall relies on state-of-the-art, bent, triple-pane insulated glazing units (IGUs) with two low-e coatings.

World-renowned architects Skidmore, Owings and Merrill designed the iconic, energy-efficient structure. The building’s façade combines convex and concave forms to shape elliptical and undulating elevations. The floor-to-ceiling glass maximizes internal daylighting and comfort, minimizes unwanted solar heat gain and heat loss, and provides panoramic views of the city and the Rocky Mountains.

The building’s lead tenant is PetroChina, whose employees and visitors have a choice of nearby transit solutions and a breadth of on-site amenities, retailers and restaurants. The soaring 30-foot-tall lobby and interconnected winter garden provide an attractive, year-round setting.

Bringing the vision to reality, construction manager EllisDon worked closely with Contract Glaziers West Inc to engineer the custom, high-performance, unitized, structurally glazed, aluminum-framed curtain wall system, and to manufacture and install it to precise specifications.

Before beginning construction in 2014, EllisDon’s virtual design and construction team produced three-dimension conceptualizations using building information modeling (BIM) tools.

According to the construction manager, this visualization of the project led to “a complex, yet achievable coordination process” guiding the way to its successful conclusion.

The project was completed on time in for a grand opening in April 2017. Total construction costs are estimated at $200 million.

Janitors locked out of luxury Toronto condo

Five janitors – who, up until three weeks ago, cleaned the Icon Condominium towers at 250 and 270 Wellington Street — hosted a rally on July 23, 2019, in Toronto rejecting their cleaning contractor, Luciano Janitorial Services latest offer.

The janitors are demanding the cleaning contractor end the lockout and negotiate a fair contract.

“He is demanding we give away things we need,” said Villamor Castaneto in a press release. Castaneto has been working at the building for seven years. “Right now, all we want is for our employer to come back to negotiate so we can keep working and find a fair deal.”

“With the modest health benefits we get I can buy medication for my high blood pressure,” added Llanes, who has worked at the condo for six years. “Without those benefits, I will really struggle to get my medicine.”

The cleaning company wants workers like Emma Llanes to give up two out of her four yearly sick days and increase her monthly benefit contributions from the 20 per cent employee paid to 70 per cent.

According to a press release, Luciano Janitorial Services is offering a pay increase of only 30 cents spread over three years. The workers currently make 14.50/hour or 15.25/hour depending on their job classification, and the standard set by City-Wide agreements negotiated just a few weeks ago is a $1.20 raise over three years. Other cleaners in the city were also able to win the start of a pension plan to begin in 2021 which Luciano Janitorial Services has rejected for the janitors.

Images courtesy of GlobeNewswire.

“Zoomer” condo community planned for Kelowna

A condominium community for “active baby boomers” is being planned for BC’s West Kelowna area. In development by Ariva Resorts, the $100+ million project will introduce a 200-unit gated community for so-called “zoomers” seeking to downsize from their traditional homes and maintain their dynamic lifestyles.

Ariva Resorts founder Barry Johnson came out of retirement to lead the project, which will cater to a demographic that he believes has been largely overlooked by residential developers.

“We intend to change that thinking,” he said. “This group is highly active, health-conscious, and want to live life to its fullest. Kelowna is the perfect place to live with its excellent climate, wines and vineyards, outdoor activities and remains affordable.”

The development is located on a 12.5-acre site close to downtown Kelowna. It will offer units ranging 1,250 to 1,760 square feet in size and featuring glass interior doors and outdoor decks with views of the nearby Okanagan Lake. The community itself will include a café/bistro, lounge, fitness centre, pool area, barbecue and picnic area, and a children’s playground, among other shared amenities. Residents will also have access to an “urban farm,” outdoor leisure areas (e.g., putting green, bocce courts, and pickleball courts), and e-bikes to take full advantage of the 12.5-acre site’s surroundings.

Kelowna’s Team Construction will serve as construction manager for the project and is slated to break ground in 2020.

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