ENGIE Services acquires PBW High Voltage

ENGIE Services Inc., a provider of energy efficiency and facility management services, has acquired PBW High Voltage Ltd., an Ontario-based power system specialist.

PBW employees will continue their employment under ENGIE Services. However, PBW will remain an autonomous entity within the ENGIE Services group and will expand its current activities with the company’s support. This year, PBW will be moving its operations to the ENGIE facilities in Mississauga.

“We are delighted to have PBW join the ENGIE Services family,” said Jean-Luc Billiani, president and CEO of ENGIE Services Inc., in a press release. “The strategic and commercial fit between the two companies and their respective networks represents an opportunity for continued growth. PBW’s reputation for providing excellent service fits ENGIE’s mission, and I know it will be a great partnership.”

“PBW will be working directly with us and will complement our electrical division,” added Louie Cosolo, CEO of ENGIE MultiTech. “They will add to our strengths and opportunity for growth as we focus on the transportation and rail markets in Ontario, as well as other markets such as data centres.”

Michael Garron Hospital design team selected

The EllisDon Infrastructure Healthcare team has been selected by Michael Garron Hospital and Infrastructure Ontario to design, build and finance a transformative campus redevelopment and state-of-the-art patient care tower at the Toronto hospital in a contract valued at $411 million. The team is comprised of EllisDon Design Build Inc., Diamond Schmitt Architects and B + H Architects in joint venture, and EllisDon Capital Inc.

The LEED Silver-targeting project will add approximately 550,000 square feet of new space and renovate an additional 100,000 square feet of the existing facility. The redeveloped hospital will feature a new eight-story patient care tower and three-story podium designed to provide a light-filled, modern patient experience. The design will also help connect the hospital with the community in an effort to support its vision to become a health promotion partner and amenity for the neighbourhood.

“The design extends the public realm through a seamless transition into public spaces with improved wayfinding around a large daylit lobby and consolidated ambulatory care services,” said Matthew Smith, principal at Diamond Schmitt Architects, in a press release.

The double-height lobby will feature full glazing extending across the podium of the patient tower, providing views of a new landscaped park that will replace some of the oldest buildings on the campus. Patients and staff will also have access to roof terraces.

“An interaction between interior and exterior did not exist previously as there was a lack of landscaped space,” added Sydney Browne, principal at Diamond Schmitt. “In addition to the positive reinforcement that access and views to nature can have for recovering patients, setting the new entrance back from the street where there now will be park space addresses the hospital expansion in the context of its community setting.”

The project is expected to break ground in April.

Capital growth nudges 2017 investment returns

Capital growth nudged up 2017 investment returns for the 43 portfolios participating in the REALPAC/IPD Canada Property Index. Annual results, released in Toronto late last week, show a 6.7 per cent total return across 2,455 directly held standing assets — an improvement from the 5.7 per cent total return the index posted in 2016 — even as income yields slipped to an all-time low.

Robust economies in Toronto and Vancouver, a continuing slump in Calgary, retailing challenges and sustained high demand for rental housing all play into index-wide capital growth of 1.8 per cent and income return of 4.8 per cent. Simon Fairchild, executive director with the index producer, MSCI, parsed out some of the components of the big picture.

“There are strong returns from residential and strong improvement from industrial. We’re left with retail being the worst performer last year,” he told the gathering on hand to hear the results. “The geographic picture is pretty much what we’ve been accustomed to in the past few years. The range of returns has narrowed somewhat and this, in part, is because Vancouver has slowed down. While it seems like the values in Calgary aren’t falling as fast as they were, they are still falling.”

Pointing to the index participants’ historic total return of 9.2 per cent since 1985, Fairchild qualified expectations for the future. “If 9.2 per cent is ultimately to be met going forward, we would have to see some truly exceptional rental growth over the next decade,” he advised.

Industry insiders enlisted to provide on-the-spot feedback likewise scrutinized underlying details of the 6.7 per cent total return — comparing markets and sectors, connecting performance to broader economic forces and grounding it in the context of institutional investors’ pursuit of stable, predictable returns over the long term.

“The averages are misleading at best, dangerous at worst,” cautioned Colin Johnston, president, research, valuation and advisory with Altus Group, one of three panellists polled in the discussion.

Retail slumps, Calgary slogs on

He tagged “headwinds for retail”, somewhat surprising gains for industrial, upbeat prospects for multi-residential and Montreal’s improving dynamics among distinct trends that bear watching. He also looked beyond the latest round of numbers to pronounce his confidence in Calgary’s future rebound — a sentiment the other panellists shared with some qualifications on timing.

“You have a disequilibrium in the market that is going to take some time to work off,” submitted Carl Gomez, senior vice president, research and strategy, with QuadReal Property Group.

“I think in the retail space, it is too early to go there,” concurred Laetitia Pacaud, former president of Strathallen Capital Corporation.

Alternatively, there’s plenty of retail repositioning potential in more lucrative markets. In 2015, retail was the index’s best performing property type with a total return of 8.8 per cent, and capital growth accounting for 4.4 per cent. Two years later, the total return was 5.3 per cent, with capital growth at 0.8 per cent.

Panellists were reluctant to label e-commerce as the culprit, particularly since it’s also seen as a contributor to the industrial sector’s recent gains, but suggested that many mall operators do need to get a strategy in place while e-commerce still accounts for a fairly modest fraction of retail activity.

“It’s up to the asset manager to value-add. There are going to be people who own assets out there who don’t have managers in place to survive the hit that’s coming,” Pacaud warned.

“There are some really good retail performers and there are a lot of bad ones,” Gomez agreed. “One of the things (asset managers must do) is unlocking the value. Many of the malls that are performing badly were built in the ’60s and ’70s. We have to figure out what to do with these properties. Some of them are in very strategic locations.”

Toronto and Vancouver watch Montreal ascend

Even if market divergence is less pronounced than in 2016 when Vancouver boasted chart-topping total returns of 12 per cent and Calgary bottomed out with a 2.8 per cent loss on investment, there is still a discernible split between the cities pulling up and lagging behind the index average. “If you took out Calgary and just looked at Toronto, Toronto would be stronger than the TSX,” Gomez observed.

Toronto registered total returns of 10.4 per cent; Vancouver followed with total returns of 9.3 per cent; and Ottawa was in harmony with the index at 6.7 per cent. Montreal’s 6.5 per cent total return fell just short of the national average, but the climb from the previous year’s 3.3 per cent total return was the greatest gain of any market.

Vancouver’s slip may factor into other markets’ improved results as the city’s high costs increasingly pose barriers to prospective investors. Meanwhile, some index participants cashed out. “There is a net disinvestment in Vancouver, but this isn’t the market. This is just a group of portfolios,” Fairchild affirmed.

“We have a very small market that is dominated by foreign capital. I call Vancouver the Monaco of Canada,” Gomez said. “If you can crack that nut or you have a position there, it yields you very good returns.”

In turn, Johnston speculated Montreal is capturing a share of investors shut out of Toronto and Vancouver, but he listed several other plausible reasons for their interest. These include the city’s healthy job growth, renewed investment in infrastructure and growing confidence in Quebec’s political stability.

“The provincial (Quebec) government has done a bang-up job of cleaning up the financial turf,” Gomez added. Like Vancouver, he termed Montreal “a burgeoning tech capital”, but, in contrast to the “Monaco of Canada”, its metaphor might be the aging, iconic building with upside potential.

Investors are now tapping into repositioning opportunities in sync with a broader urban rejuvenation. “We are seeing a lot of interest from foreign capital and domestic capital,” Johnston said.

Geography overrides sector

On the downside of the index average, Calgary was alone in suffering a 0.3 per cent loss on investment. “Values are now down, cumulatively, 15 per cent over the past three years. For office, it’s 27 per cent,” Fairchild reported.

Winnipeg, Edmonton and Halifax achieved total returns of 4.9 per cent, 1.4 per cent and 0.6 per cent respectively, but joined Calgary in recording negative capital growth. Office properties in both in Calgary and Edmonton took a disproportionately harder hit.

Sector trends were relatively consistent in all markets, with multi-residential and industrial properties generally outperforming office and retail, but this translated into a varying range of returns. Industrial properties emerged particularly strongly in Vancouver and Toronto, recording capital growth of 10.5 per cent and 9.7 per cent respectively. On the flipside, Calgary’s industrial sector simply lost asset value to a lesser degree than other property types, recording 0.1 per cent negative capital growth.

“Geography is really the overriding factor,” Fairchild reflected. “It’s about where the assets are whether there’s a sector gain across the country.”

Nationally, residential surpassed its 2016 sector-topping performance, delivering a total return of 10.3 per cent driven by 5.8 per cent capital growth. Industrial was just one notch behind, with a total return of 10.2 per cent that represented a big step up from a 5.8 per cent total return in 2016. Office also recovered from the previous year’s loss of capital value to record an improved total return of 6.2 per cent.

A pause, not a serious downturn

In a comparison with other investment opportunities, the index fell short of the 9.2 per cent return on equities last year but significantly outperformed bonds. Looking to other property markets, it trailed the 7.8 per cent return for listed companies in the REALPAC/IPD Canada Fund Index and the returns on standing assets that MSCI monitors in the United States (7 per cent) and the United Kingdom (10.2 per cent).

Meanwhile, the drop in Ireland’s index, from a 12.4 per cent total return in 2016 to 6.4 per cent last year, seems to support Fairchild’s reading of Canadian properties’ performance. “The current slowdown looks like a pause, like 2001 to 2003, rather than a very serious downturn,” he said. “Each of the last years has now shown positive if relatively modest capital growth.”

From a three-year perspective, the index and equities are largely in step with returns of 6.8 per cent and 6.6 per cent respectively. Equities outperformed the index over the five-year horizon (8.9 per cent versus 7.7 per cent), but pushing out to 10 years, the index delivered a 8.1 per cent return versus 4.6 per cent for equities.

Hints of inflation, the narrowing yield spread between the index and 10-year Canada bonds, uncertainties over NAFTA and other potential economic upheavals are all wrapped into institutional investors’ contemplation of the future. “Is real estate still the best game in the country?” Michael Brooks, REALPAC’s chief executive officer, asked — garnering responses that leaned toward yes.

“There are still people with a lot of money to place,” Johnston observed. “Trophy assets will continue to retain their yields. Really good quality investments make up the majority of the index.” (Currently collectively valued at nearly CAD $149 billion.)

“If underlying NOI growth is there then it can withstand some of these market forces we’re seeing,” Gomez said.

When asked to peg the 2018 total return, Johnston came in at the high end at 7 per cent, Pacaud predicted 6.5 per cent and Gomez projected something in the range of 6 to 6.5 per cent. Closing out the results presentation, Nic Aaviku of HOOPP was revealed as the annual contest winner for most accurately foreseeing the 2017 total return.

His February 2017 prediction also sets him out as something of an optimist among last year’s contest participants, as 94 of the 104 submissions predicted a return in the range of 5 to 6 per cent. “It shows a consensus, but it’s true that these 94 people were wrong,” Fairchild quipped.

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

New affordable housing coming to Ottawa

The federal, provincial and municipal governments announced that they are investing over $74 million to create more than 675 affordable housing units throughout the city of Ottawa. The announcement took place at an official opening for a new affordable housing development at 455 Via Verona Avenue, which was built in partnership with the Multifaith Housing Initiative. The development will provide 98 affordable apartments, including 10 accessible units.

“Our government is taking action to strengthen the middle class,” said Jean-Yves Duclos, Minister of Families, Children and Social Development and Minister Responsible for Canada Mortgage and Housing Corporation (CMHC). “Through new investments in the National Housing Strategy, we will ensure that more Canadians have access to housing that meets their needs and that they can afford. We will reduce housing need, lift more Canadians out of poverty, and contribute to strong, more inclusive communities.”

The governments of Canada and Ontario each contributed over $54 million to these projects through the Investment in Affordable Housing (IAH) Agreement, while the City of Ottawa contributed more than $20 million.

“The City of Ottawa is committed to providing access to safe and affordable housing to all its residents,” said Jim Watson, Mayor of Ottawa. “These important investments will help our most vulnerable residents find a stable place they can call home. By working collaboratively with the Provincial and Federal Governments and with our service providers, the City is increasing its affordable and supportive housing stock and remains on track to meet its goal of ending chronic homelessness by 2024.”

“Ottawa has a pressing need for safe, affordable housing, and projects like The Haven can be life-altering,” added Mike Ward, President, Multifaith Housing Initiative. “By helping to provide nice, safe homes, the community of partners behind these initiatives, and in particular governments at all levels, have answered the prayers of single parents and their children, persons with physical disabilities, new Canadians, and hundreds of others.”

Since 2003, the province has committed more than $5 billion in funding for affordable housing, which has helped support more than 22,000 new affordable rental housing units; more than 335,000 repairs and improvements to social and affordable housing units; and rental and down payment assistance to more than 93,000 households in need.

These investments complement the commitments made through Ontario’s recent Long-Term Affordable Housing Strategy update, and support the province’s goal of ending chronic homelessness by 2025. For more information on affordable housing in Ontario, visit ontario.ca/affordablehousing.

Montreal breaks office market record

Montreal’s growing technology sector is one reason why office tenant demand in the city hit a record high in 2017, setting up what could be the first landlords’ market in more than 20 years, according to CBRE.

In CBRE’s Canada Q4 2017 Quarterly Statistics Report. Montreal saw more than 1.93 million square feet of positive absorption, breaking the previous record of 1.8 million square feet set in 2007. Record low unemployment and a strengthening economy are boosting this demand, which comes amidst rising asking rents that have increased 4.8 per cent year-over-year, to $22.22 per square foot for Class A downtown properties as of Q4 2017.

Rents in 2018 are expected to jump higher due to demand and lack of large blocks of office space, shifting negotiating power away from tenants.

“Similar to how the housing market is traditionally described as either a ‘buyers’ or ‘sellers’ market, the same thinking can be applied to commercial real estate as market conditions dictate the balance of negotiating power between business tenants and landlords,” said Avi Krispine, managing director of CBRE Quebec.”

Tech sector heats up office market

Montreal’s tech sector has experienced sustained growth over the last year. In addition to the city’s renowned multimedia sector, with companies in the video game, multimedia and digital entertainment industries driving office space demand, the artificial intelligence (AI) field is beginning to establish a larger footprint.

Thales Group, a French multinational that designs and builds electrical systems for aerospace, defense, transportation and security markets, recently announced the creation of the Centre of Research and Technology in Artificial Intelligence eXpertise (cortAIx). Borealis AI, an RBC Institute for Research, also announced plans to open an AI lab in the city.

Scarcity of office space

The 1.93 million square feet of additional office space that was occupied in 2017 was met with only 1.35 million square feet of new product on the market. This led the overall Montreal office vacancy to drop a full 100 basis points to 12.8 per cent, with the downtown market in particular dropping 90 basis points to 9.7 per cent.

“Companies looking to expand in their current buildings or new entrants in need of enough space to house large operations are finding it hard to keep all of their employees under one roof,” noted Krispine. “Much of Montreal’s vacant space is made up of only 5,000-6,000 square foot pockets. Instead, companies with these large space requirements are having to get creative and open second or third office locations to accommodate their workforce.” In some instances, companies, such as National Bank, are looking at purpose-built options to create their new home instead of leasing existing space.”

Morguard buys office in Airport Corporate Centre

Morguard has acquired a three-storey Class A office building in the Airport Corporate Centre in Mississauga, Ont, for $50.6 million.

5985 Explorer Drive encompasses 136,000 square feet on 12.5 acres near the 400 series of highway, Pearson International Airport and access to public transit. With abundant existing parking and a sizeable plot of land, the acquisition provides future expansion potential.

The property was purpose-built in 1999 for the Canadian headquarters of a multi-national Fortune 500 company, who still fully occupies the building. Since then, modern office buildouts and an upgraded cafeteria are a couple new features.

“An ideal location and a strong covenant tenant make this premium office property an excellent acquisition for Morguard,” said K. Rai Sahi, chairman and CEO of Morguard Corporation. “This property is an excellent low-risk, long-term addition to our portfolio as part of our sustainable growth plan.”

Food delivery changes challenge condo security

Tail-gating is when an unauthorized person follows a resident into a condo building to bypass security. Traditional remedies for this issue include security awareness education for the residents as well as detailed signage.

However, this continues to be a problem for condo corporations, because even if the authorized condo resident notices that someone is following them, rarely do they feel comfortable confronting the person. And recent innovations in delivery services may raise additional security concerns, placing renewed importance on access control.

Uber has faced an uphill battle when it comes to security acceptance. One of the most cited criticisms (by their competitors) of Uber’s transportation system is the lack of registration of the drivers.

Now condo corporations may face a new security challenge as Uber enters into the food delivery industry. One issue that may arise is the fact that the people delivering the food are not employees of the franchise that is delivering the food.

For instance, if a resident was to order a pizza from a franchise organization, that pizza is usually delivered by an employee of said franchise. This means that there is accountability, as the employer is responsible for the actions of the employee and presumably has insurance to cover any intentional or accidental security incidents.

It would appear that Uber drivers act as contractors and, as such, there is no accountability from the food provider. If any damage was caused to the facility by the driver, it would appear that the only recourse the condo corporation would have would be against the driver specifically.

Additionally, even locating the driver would be a challenge for the corporation, as the food provider does not have a record of who picked up and delivered the order. The corporation would need to obtain that information directly from Uber.

Optimizing access control

A security measure is meant to delay, deter or detect any unwanted intrusions to the facility. As a rule, condo corporations usually rely on two security measures: access control and video surveillance systems. Access control is the facility fob system, key, locks — any mechanical or electronic device that would prevent an unauthorized person from being able to enter the building. The purpose of access control is to both delay and deter security breaches.

In order to accomplish this goal, security-conscious condo corporations expend considerable resources, both in time and money, to ensure that their access control system is performing at optimum capacity. These efforts include undertaking projects such as fob audits, ensuring that each fob is only authorized to access the area required (for instance, a guest fob does not need to access the locker room), and ensuring that their system is up to date with system upgrades and computer patches.

When discussing the protection of a facility, it is often useful to discuss security layers or protection in depth. A property boundary would be considered the outlying or extended layer — this area is protected by fences, signage, hostile vegetation, etc.; the building envelope would be considered the outer layer, which is protected by the above-mentioned access control system; and the inner layer would be the condominium unit doors, which are protected by the locks of the residents. The concept of protection in depth dictates that each circle of security becomes more stringent the closer a person moves to the interior.

With all these security concepts in place, a condominium manager or board of directors can rest easy knowing that they have taken all reasonable steps to protect the residents and their property. Or can they?

Responding to new risks

One security solution to the rise of third-party delivery services has been that residents are now (more often than previously) meeting their delivery drivers in the lobby. This is safer for both the resident and the corporation.

It is safer for the resident as the lobby is usually under video surveillance and is a more public area than a condo hallway. Without casting any derision on any driver for the many companies currently offering these services, if there was one driver that had ill-intent, he or she would likely be hesitant to do anything inappropriate in this situation. It is also safer for the condominium, as it restricts unauthorized personnel, such as the delivery person, to the outer boundaries of the property.

Other, newer services for groceries will allow delivery people to bypass both the outer and inner boundary of a unit. With this service, not only are the groceries delivered to the building, but the delivery person will also put the groceries into a person’s unit (refrigerator, cupboard, etc.). This could cause condominium security concerns due to extra foot traffic within the property, as well as a lack of key control.

Should items go missing from a unit, and if the condo corporation maintains a master keys system, it could be unclear on who is responsible for the theft. If the missing item is not noted at the time of the delivery, it may be assumed that it was taken at another time — maybe during an annual fire inspection (when all units need to be entered) or by a site superintendent that needed to enter the unit for innocent purposes. It would be wise for a condominium manager and/or board members to discuss policies regarding entry into the units to prevent any future liability issues.

While new services are very convenient for residents of a condo, there is still the potential for security issues to arise. The solution for these issues may be as simple as including a blurb in the condo newsletter, or it may be more complex, such as updating the corporation’s integrated security plan. It is recommended that condo corporations regularly review and discuss any new issues — such as the changing nature of delivery services — that could affect the safety and security of the residents.

Scott Hill of 3D Security Services has been a practicing RCM with ACMO since 2012, a Physical Security Professional (PSP) with ASIS and a Certified Security Project Manager (CSPM) with the Security Industry Association.

Funding announced for Alberta treatment plants

The Canadian and Alberta governments will provide $16.3 million to upgrade three wastewater treatment plants and build a water reservoir in Alberta. The investment is part of an agreement between Canada and Alberta for the Clean Water and Wastewater Fund.

Wastewater treatment plants in the towns of Vermilion, Barrhead and St. Paul will receive upgrades to increase capacity and improve water cleanliness.

A water reservoir will be constructed in the Municipal District of Pincher Creek for the hamlet of Beaver Mines. This project aims to ensure an emergency supply of drinking water is available at all times.

“Projects like the wastewater treatment plant upgrades in Vermilion will help the community better manage its wastewater while protecting regional waterways and maintaining a healthy environment,” said Amarjeet Sohi, minister of infrastructure and communities. “These improvements will both support future economic growth and ensure that the region remains healthy and sustainable for years to come.”

The federal government has invested more than $196.7 million in 66 water and wastewater projects in Alberta through the fund. The Government of Alberta has invested over $102.5 million in 17 of those projects.

Provincial funding for the project is provided through the Alberta Municipal Water/Wasterwater Partnership (AMWWP) and the Water for Life program. AMWWP supports municipal water supply and treatment and wastewater treatment and disposal facilities.

“We are putting people to work with this kind of investment in needed infrastructure,” said Brian Mason, Alberta minister of transportation. “Support for these local water projects will help ensure wastewater is properly treated, protecting our critical waterways and land.”

The four projects are in addition to those approved in June 2016 receiving nearly $117 million under the AMWWP, along with those approved in May 2017 receiving over $131 million, for a total provincial investment of $352 million over two years in more than 100 projects.

Sears leaves large-scale vacancies in Regina

Vacancy in the Regina, Saskatchewan retail market rose to 4.59 per cent as a result of Sears Canada’s bankruptcy.

The departure has left an additional 266,000 square feet of retail vacancy and many landlords are deciding they would rather deal with smaller and mid-size tenants than rely on one single lease, according to Colliers Regina Retail Market Report Q4 2017.

Sears was a large influence on Regina, “especially when combined with the 900,000 square feet of industrial space also abandoned by Sears in the city.”

However, even without Sears’ exit, Colliers says vacancy rates would have dropped to rates lower than 2016. The retail market remains strong with steady rental rates forecasted for 2018. It’s expected that retailers will snap up portions of the empty Sears space this year, as several development projects unfold across the city.

Some of these include the city’s first H&M, set to open after extensive renovations in the Cornwall Centre, located in Central Regina where 75 per cent of the total vacancy is attributed to Sears. Nearby, The Shoppes on Hamilton has attracted boutique retailers including Sara Lindsay Makeup Studio, Two Fifty Two Boutique and Queen V Fashion House. A new Costco location is expected by summer 2018, along with Dream Centre’s seven-acre grocery anchored site in Coopertown, starting construction in 2019.

A number of new retailers were announced for the Grasslands shopping centre, including a Winners/Homesense, the first Justice and Stuctube location in the province and three or four restaurants. In total, Grasslands completed an additional 70,000 square feet of new retail or 64 per cent of the total new construction for Regina.

Northwest Regina continues to have the lowest vacancy in Regina. No new development took place in 2017, but at Capital Crossing, a large-scale retail and mixed-use development is underway. In the new Westerra subdivision, a projected 250,000 square feet is expected for the first phase of Horizons, a 69-acre retail development.

Construction retirements drive recruitment need

Canada’s construction industry must remain focused on recruitment and retention as more than one quarter of a million construction workers are expected to retire this decade.

“To meet labour requirements and counter rising retirements, as many as 277,000 new construction workers will be needed this decade,” said Bill Ferreira, executive director of BuildForce Canada. “With increasing competition for a shrinking pool of young people, it will be necessary to step up recruitment efforts to attract greater numbers of new Canadians, women, and Indigenous people to Canada’s construction workforce.”

BuildForce Canada’s 2018-2027 Construction and Maintenance Looking Forward forecast shows construction activity is expected to soften in most provincial markets due to the aging population and weaker demand for Canadian natural resources.

While slow and uneven construction job growth is anticipated this decade as construction activity levels off, the notable provincial exceptions are B.C.’s Lower Mainland and Ontario’s Central and Eastern regions, where rising project demands have outpaced the available local workforce.

“Despite slower employment growth in most provinces, recruitment pressures will intensify with the estimated retirement of up to 21 per cent of Canada’s construction workforce this decade,” said Ferreira. “Simply put, the industry must remain focused on recruitment, training, and mentoring efforts to prevent a potential skills and capacity gap over the next 10 years.”

The workforce is still estimated to rise by approximately 22,000 workers by the end of the decade, as modest gains in non-residential job growth outpace small declines in residential construction. Public infrastructure modernization and growing demand for residential renovation and heavy industrial maintenance activity should help sustain industry employment over the decade.

Major transportation, utility, and other infrastructure projects are expected to nudge non-residential employment up a further 3 per cent, or 18,400 workers to a near-term peak in 2020. That growth is concentrated in Ontario and British Columbia, driven by major nuclear refurbishment, LNG (liquefied natural gas), energy, and transportation infrastructure projects.

Steady job growth related to anticipated increases in demand for commercial and institutional building construction will prevail in most provinces. While slower population growth may lead to lower demand for new housing construction, any declines should be offset mainly by rising renovation and maintenance activity.

BuildForce Canada’s forecast also shows several common themes across most provinces:

Commodity price uncertainty and changing global demands translate into resource development project delays and cancellations across Canada. As a result, engineering construction employment is expected to decline by 4 percent this decade, partly offset by planned investments in infrastructure modernization.
Major public transportation and other infrastructure projects add to employment opportunities across most provinces, boosted by federal and provincial infrastructure investments.
Maintenance work (heavy industrial and non-residential buildings) is on a steady, but moderate increase this decade, with higher demands expected this year in Alberta and New Brunswick.

Highlights of BuildForce Canada’s 2018–2027 Construction and Maintenance Looking Forward forecast can be found for each province at www.constructionforecasts.ca.

Retail leads GTA investment transactions in Q4

The Greater Toronto Area’s (GTA) commercial real estate market recorded $14.5 billion in investment capital for 2017, outpacing the 2016 tally of $11.8 billion. In Q4, two frontrunners surfaced in Avision Young’s GTA Commercial Investment Review Q4 2017.

While there was an overall 27 per cent sales dip from Q3 to Q4, retail was the top-performing asset class in the last quarter, completing three of its four biggest deals, such as the $192-million sale of retail podium at the One Bloor St. E. condominium in downtown. This sector posted more than $891 million in sales (26 per cent of total GTA dollar volume), while the industrial sector followed closely at $844 million, despite declining nine per cent quarter-over-quarter.

The most active industrial region for the first three quarters was Peel, and then the City of Toronto rose to the top in Q4 with nearly $254 in sales. The year’s biggest industrial sale was 8875 Torbram Rd., sold by Carttera Private Equities to Concert Properties for $158 million in April.

Sales were down in the multi-residential and office sectors. Multi-residential was the only sector not to approach or set a new high for sales volume in 2017, falling short of its $1.9-billion 2015 peak. Lack of available product and commanding the lowest yields hindered this sector the most, which tallied $547 million in Q4 and $1.6 billion for the year.

Office building investment dropped 74 per cent between quarters, with $456 million sold in Q4. But an annual total shows almost $4.2 billion in sales and back-to-back quarters above $1 billion in trades. This performance also included nine of the GTA’s 19 $100-million-plus sales.

A new sales benchmark was established for the ICI land sector, with $2.2 billion in 2017. This declined five per cent between quarters to $628 million. As sales were boosted in the City of Vaughan and Township of King, York Region was the most active for both acreage and dollar volume during Q4, Avison Young reports 701 acres were sold in this region (34 per cent of the GTA total) for a combined $279 million. Overall, almost 2,100 acres changed hands during the fourth quarter and more than 13,300 acres in all of 2017.

Unique recreational cannabis retail concept design

Calgary-based Spiritleaf, a premium recreational cannabis retail chain establishing dispensaries across Canada, has unveiled its unique concept retail store design that it developed in collaboration with industry leaders Tricarico and Seven Point Interiors.

“With more than 100 Spiritleaf locations already at various stages of planning, we wanted to ensure that each location will provide an incredible experience for our future customers, employees, communities, franchise partners, landlords, and other stakeholders,” said Darren Bondar, CEO of Spirit Leaf Inc.

“We searched for a top design firm that would not only immerse themselves in our brand message with enthusiasm, dedication, and passion, but also design with honesty, nurture innovation, cultivate creativity and strive to use sustainable materials that will inspire and resonate with our customers.”

Spiritleaf commissioned Tricarico and Seven Point Interiors for the design. Tricarico has worked with some of the world’s top brands. The firm collaborated with the creative team at Spiritleaf to understand the company’s desire to evoke emotion and bring customers together in an inviting, engaging atmosphere where people can gather, share unique experiences.

“Upon reviewing the brand package and meeting with the team I immediately felt a strong connection and couldn’t wait to tell the Spiritleaf story,” said Jessica Archeval, design manager at Tricarico. “We wanted to create something completely unique so that when a customer walks inside, they immediately feel the positive energy, and are embraced by the natural feeling of the dispensary.”

The design concept features include crisp white walls to help brighten the space and create an extension from the fresh outdoors. Distressed woods and metals were carefully selected to add unique character to the space.

Tile trends – bigger is better

The designer trend towards tiles and stone that are larger and have fewer grout joints continues in 2018. Many new sizes such as 60x60cm, 75x75cm, 90x90cm, 120x120cm and larger in both natural stone and porcelain tiles have become popular. Along with these new panel formats, the more stringent requirements for substrate flatness, anti-fracture membranes, proper setting material systems and expansion joints layout must be followed. Experienced installers and installation tools have also become more specialized and are vitally important for a successful, attractive installation.

The preparation of the substrates is a key factor in the overall successful outcome. Both floors and walls must be flat to 2mm across 3049mm at the maximum. These strict criteria are necessary to avoid any lippage between the tiles. Lippage is a dangerous trip hazard on a floor and must be avoided.

INSTALLATION

In new construction for floors over concrete, where possible specify to allow for a depressed slab of 2-3 inches. The tile or stone is then installed into a mortar bed (a mix of sand, cement and a binder) over a 6mm poly slip sheet. This installation method is more than 2,000 years old and allows for plenty of room to adjust for any unevenness in the subfloor and achieve a beautiful flat outcome without any trip hazards. With an average cost of about $1- $2.00 /sqft labour and materials it is a very economical solution.

For retro fit installations several options are available. Self levers are often used as option. Many allow for build ups from a feathered edge to 12mm thick. These options may be used over old adhesive residue, existing tile and other difficult substrates (consult your mortar systems supplier). The average cost ranges to about $3.00/sqft labour and materials.

For both new and retro fit installations both bonded and unbonded anti-fracture membranes are available. These membranes allow for independent movement between the tile and substrate. The unbonded version simply floats atop the exiting flat subfloor and the tile is bonded directly to the membrane mat. This system has the benefit of being laid out over substrates that are difficult to otherwise tile over such as old vinyl and linoleum floors, old painted or treated concrete. With often little or no floor prep, these systems save time and time is money. The bonded option is installed on to the subfloor with either a mortar or a special adhesive on the level or leveled substrate.

Walls must be equally flat to the same tolerance as floors with the added criteria of being sturdy enough to support the weight of the massive slabs. It will be likely that both existing and new walls will have to be parged flat to meet flatness requirement. Cement board or similar CBU have a better stiffness and are preferred for these large panels

MORTAR

New technology in mortars has advanced along with the growing tiles sizes. Many manufacturers have developed systems to support these heavier tiles. Installers require increased working time to comb the mortar over the substrate and back butter the tile. Also, increased non-sag capabilities are important factors when installing walls and floors. Often the tile suppliers will have recommendations for the proper installation products and systems to follow. Your supplier partners want you to be successful so follow their guidance. Keep in mind that these are new, very large panels to install and many installers have never seen a 75x75cm or 90x90cm tile before, whereas the tile suppliers consult clients and specifiers daily on their use and installation product requirements.

JOINTS

Plan to have perimeter joints and expansion joints as required by the industry guidelines in TTMAC detail 310MJ. The recommended spacing and sizes for expansion joints and control joints are as follows:

for interior tile applications: the control joints must be spaced at intervals of 4800 mm to 6100 mm in each direction. The minimum joint width is 6 mm wide. In areas exposed to moisture or direct sunlight the spacing placement reduced to 2400 mm to 3700 mm apart in each direction. The minimum joint width is 6 mm wide. For above-grade concrete slab substrates again the placement is 2400 mm to 3700 mm apart in each direction. With a minimum width of 6 mm wide.
for Exterior tile applications: due to high temperature ﬂuctuations, use a minimum 10 mm wide control joint spaced at intervals from 2440 mm to 3600 mm apart in each direction. In areas of extreme temperature variations (over 40ºC) between summer highs and winter the joint width shall be a minimum of 13 mm.

These large panel sizes will require new handling tools. Suction cups or an aluminium handing frame for moving these pieces are a must. Large portable light weight tile cutters and tile water saws are now available for the installers.

When all the pieces are properly in place, the finished installations are beautiful and long lasting.

Bill Wright is training and education, technical services manager at Stone Tile International.

Paperwork 2.0: The Power of Digitizing Paper in Property Management

From servicing tenants and managing staff, to working with vendors and putting out proverbial fires, there’s little time to spare in property management. However, with advancements in digitization, automation, and artificial intelligence, stakeholders now have access to tools that can help them save time and resources when it comes to tackling some of the more onerous tasks – particularly, paperwork.

“Property managers spend the majority of their day distributing, collecting, and processing documents – whether it’s invoices, release forms, insurance information, security sign-offs, or internal communications,” says Steve Oblin, Marketing Manager of Fujitsu’s Imaging Products. “The time it takes for them to manage the abundance of the documents they receive from vendors and tenants keeps them glued to their desk, rather than out in the field where they need to be.”

Managing those documents in a digital space can go a long way towards recovering that time, he adds, explaining, “By digitizing your documents to overcome that paper overload, you can cut through the clutter, free up that manpower, and improve efficiency.”

Digitization on Display

“There was too much information flowing in,” he recalls, noting the property management firm was contending with a growing volume of invoices over several managed properties and, as such, faced an increasing risk of errors and service delays.

To solve the problem, Polar Imaging installed Fujitsu’s fi-7160 image scanner in five of the firm’s offices and distributed a scanning environment between them, using their cloud computing capabilities. Forms-recognition software was also added to minimize data entry by leveraging Artificial Intelligence (AI) technology to extract key pieces of information from the scanned documents. The captured data was then routed through an integrated Accounts Payable Automation system.

“Thanks to this solution, payments that might have taken weeks can now be done in a day,” Todd reports. “We see clients finding documents in 15 seconds which, in the past, might have taken them hours to locate.”

Ahead in the Cloud

“Prior to ScanSnap Cloud, you could scan your documents to Google Drive. However, there would be different steps involved and you would have to go through a few different screens,” Steve Oblin says. “ScanSnap Cloud makes that a one-step process. It is all about simplicity.

Going Digital

No industry is immune to paperwork. As the property management industry continues to become more complex, and the speed of business accelerates, many are seeking a better way to collect, sort, share, and archive paperwork on a digital level.

Here, adds Steve Oblin, is where technology like Fujitsu’s scanners have plenty to offer the property management industry: “By trading physical paper for secure data, stakeholders can access, organize, and disseminate critical information faster than ever. The result is reduced costs, better response times, fewer errors, and – perhaps most importantly – letting machines do the work while property management stakeholders focus on what’s more important – the people.”

Learn more about the advantages of digitizing paper and visit www.fujitsu.ca for more.

Facility managers eye IoT investments

By 2020, there will be 34 billion connected devices worldwide, more than triple the number in 2015, according to a forecast from BI Insider. There are several reasons for this rapid growth: drastically lower technology costs resulting in more devices with built-in sensors and wireless technology; ubiquitous smartphone use; a multitude of open wireless networks; and the wide availability of broadband Internet.

The shift towards Internet of Things (IoT)-enabled buildings has already started and is fundamentally changing the role of facilities professionals. According to a recent Schneider Electric study, 63 per cent of facility managers are interested in implementing new digital technologies such as intelligent analytics to improve maintenance decisions and operations. And 89 per cent said they expect to achieve a return on their IoT investments within three years.

As smart technology proliferates in everyday control devices, it raises questions. For example: How can IoT solutions be integrated with the many other legacy devices present in buildings without ripping and replacing existing infrastructure? How can facility managers integrate new wireless devices into existing systems?

More devices, more insight

Understanding the inherent value of these new wireless systems is key to getting benefits from the IoT. These networks allow a facility manager to install new, low-cost devices and connect them with existing devices in building and energy management systems with ease and flexibility.

Connected technology such as wireless has been around for decades. The difference today is that the IoT allows building managers to connect more devices and gain enhanced insight at a much lower cost. For example, 10 years ago it was common to monitor the power consumption on one of the main electrical lines coming into a building. Today, it is feasible to not only monitor the individual electrical feeds for each floor/section but also compile that data along with water and gas usage in those areas.

Facilities managers can now quickly and easily install wireless thermal sensors onto their main electrical bus bars, giving them early warning of a potential overheat condition in their electrical system. They can also monitor the status of their stand-by power system, their data centre uptime, control lighting room by room, know when their elevators need servicing before they go down, monitor their access control and security cameras, all within a single platform.

IoT devices can improve and speed decision-making. A facility manager equipped with an analytics dashboard could receive an alarm if a temperature threshold is exceeded, track building operations in real time and drill down to isolate the cause. The IoT also makes it possible to predict things such as energy consumption, allowing a facility to minimize usage during peak demand hours, or to predict the risk of failure for important pieces of equipment to avoid expensive downtime.

Building performance improved

A decade ago, facility managers didn’t need to consider the integration of connected devices. The typical facility manager was responsible for overseeing the mechanics and operations of traditional building systems, such as heating, ventilation and air conditioning (HVAC), plumbing and elevators.

Today, facility managers still need to understand those building systems, but they also need to know how to take advantage of the many available connected devices to improve their buildings’ performance. Facility managers are no longer being asked just to “maintain” the status quo. They need to bring together a holistic picture of their building as part of the forecast around financial performance and sustainability goals.

Facility managers need to optimize the control, operational efficiency and energy management of their buildings to ensure they can meet these objectives. They are being tasked today with more than just understanding the complete building operating system. They are now expected to contribute to the overall success and profitability of the building by ensuring occupants are safe and comfortable while at the same time saving energy.

As an example, a hotel whose rooms are either too hot or cold will see a loss in fill rates. A hospital that cannot identify when a patient leaves a room will be faced with security issues. An airport that has a critical failure of its escalators during a peak travel period will experience flight delays and suffer the ire of their airline partners and travelers.

Failures predicted, maintenance planned

The traditional role of a facility manager was to fix things when they broke. Now, managers are being asked to forecast outages and conduct maintenance before a critical breakdown and schedule that maintenance when it is convenient for building occupants.

For example, when a piece of equipment, say an escalator mechanical system, is nearing its end of life, there is a specific power profile that can indicate it is about to fail. Through IoT devices, facility managers can now easily monitor the individual current draw on that escalator motor and use that number as a baseline profile. When the escalator starts to wear and bind, there is an increase in current draw deviating from that profile which triggers a notification that something is not right and repairs need to be planned.

The manager can then schedule a repair before the breakdown causes an issue within the building. This not only is more convenient for the occupants of the building, it also saves money and enhances safety. This applies to any device in the buildings system, including complete electrical distribution systems, elevators, stand-by power systems and HVAC systems.

One platform, holistic view

In an ideal situation, facility managers will be able to bring all their IoT-enabled devices and information together under a single, unified platform. The open networks and communication protocols now available allow any manufacturer to ensure their equipment can communicate with a building management system and seamlessly integrate.

For example, a facility manager might want to trigger a camera in a secure area to record entry into a room every time the door is opened. That room also has a secure card-access device and a room thermostat.

A single system could monitor the card access system and the door sensor which triggers the camera to record the individual(s) entering, logging the time and date. Facial recognition software could confirm that the person who used the access card is indeed the person who entered the room.

The system could also identify if anyone entered the room without using their card (piggybacking or forced entry). The room lighting and temperature settings could also be adjusted for that individual and could also automatically be lowered when the room thermostat senses the room is empty.

Once different systems can be tied together, facilities can achieve a level of comfort, security and sustainability not previously available.

Adrian Thomas is vice president, partner business and channel, for Schneider Electric Canada.

B.C. firms win Wood Design & Building Awards

Five B.C. firms have won 2017 Wood Design & Building Awards from the Canadian Wood Council. The Wood Design Awards recognize exceptional wood buildings and serve to inspire designers to push the boundaries of what they think is possible for wood in construction.

“The Wood Design & Building Awards program has been in existence for over 30 years,” explains Etienne Lalonde, vice-president of market development for the Canadian Wood Council. “We’ve been continually impressed with the quality of submissions each year, and it’s a testament to the sophistication of wood products, due to improvements in technology and advancements in applications.”

The Canadian Wood Council, as well as this year’s sponsors, Sustainable Forestry Initiative, Western Red Cedar, and Sansin, also granted special Wood Design Awards. Unique to this year’s program, two special jury awards were selected, one for technical innovation and one for public art education.

The B.C. winners were:

HONOUR
Audain Art Museum, Whistler, British Columbia, Patkau Architects (Photo above)

MERIT
Pause, Vancouver, British Columbia, DBR / Design Build Research, Alsu Sadrieva

SPECIAL JURY AWARD – TECHNICAL INNOVATION
Brock Commons Tallwood House, Vancouver, British Columbia, Acton Ostry Architects Inc.

SUSTAINABLE FORESTRY INITIATIVE – SPONSORSHIP AWARD
Solana, Whistler, British Columbia, Murdoch & Company Architecture + Planning Ltd.

SANSIN – SPONSORSHIP AWARD (use of Sansin DEC)
Grange Park Playground, Toronto, Ontario, PFS Studio

Winning projects were selected by an esteemed architectural jury consisting of Alan Organschi, principal at Gray Organschi Architecture, Betsy Williams, principal at Williamson Williamson, and Richard Bonnin, design principal at HGA Architects and Engineers.

For the full list of winners, visit Canadian Wood Council.

GTA condo fees average 65 cents per square foot

Maintenance fees across condos in the GTA averaged 65 cents per square foot in 2017, according to a recent report from Condos.ca. This marks an increase in average maintenance fees per square foot of 2.52 per cent from 2016 and of 3.79 per cent from 2016 to 2015, which is the last time the website reported the statistic.

Condos.ca plans to start reporting on average maintenance fees per square foot across condos in the GTA annually going forward, said partner and VP of sales Andrew Harrild. He said their goal is to promote transparency and understanding of the sometimes misunderstood monthly payment required of condo owners to help fund their building’s ongoing operations and maintenance.

“We wanted to remove some of the fear that surrounds maintenance fees,” he said. “When they’re done right, they can be an important component of ensuring the long-term viability of your investment.”

To that end, Condos.ca’s latest report on maintenance fees tackles some of the myths surrounding the monthly payments.

The report encourages prospective condo buyers to look to sound building management as a sign of value as opposed to low fees. That’s because prospective condo buyers drawn to a building by low fees can get shocked with special assessments if those monthly payments fail to cover the building’s actual operating and maintenance costs and leave the condo corporation’s reserve short of the funds to pay for big-ticket repairs as they arise.

Just as condo corporations may be tempted to artificially depress maintenance fees to boost the marketability of their building, so may be developers. The report acknowledges that it’s common for maintenance fees to rise in new buildings in their first three to five years, although it adds fees should level off afterwards. Fees generally trend upward in lockstep with inflation, but fees can decrease in well-managed buildings, the report found, highlighting a 30-per-cent drop at Toy Factory Lofts.

Maintenance fees can range dramatically between buildings. The lowest rate in the GTA in 2017 rang in at 22 cents per cent per square foot, according to the report. That’s more than a dollar less per square foot than the highest rate in the GTA in 2017, which was $1.35 per square foot.

The report cites building size and number of units, along with amenities, as some of the most significant factors in determining maintenance fees levels. Contrary to misconception, it says, maintenance fees are not necessarily lower in small boutique buildings than high-rise towers. All else equal, in smaller buildings, there are fewer units to spread costs across, but the report adds that while larger buildings may have a greater number of units to spread costs across, larger buildings may also see increased wear and tear from higher foot traffic.

Fee levels may also vary between buildings depending on what is and isn’t included in the monthly payments, the report points out. In buildings where utilities were included in the monthly payments, maintenance fees averaged 69 cents per square foot in the GTA in 2017. That is almost double the average of 37 cents per square foot in buildings where utilities were not included in the monthly payments. But, the report says, owners have to pay utilities regardless of whether they’re accounted for in maintenance fees, so low fees are not synonymous with low costs.

The report adds that maintenance fees for certain amenities, such as lockers and parking, are typically charged separately. It found that parking fees averaged $46.22 per month and locker fees averaged $15.15 per month in condos across the GTA in 2017.

Harrild recognized that some condo communities are willing to pay higher fees for the luxury of valet service, as an example. For other condo communities, he suggested above-average fees could serve as a wake-up call.

“If you’re in a building where you’ve just taken it for granted that your maintenance fees are higher than what we’ve determined to be an average, then perhaps it’s time to reach out to other condo boards in the area, other people in different buildings, to find out what they’re doing,” said Harrild.