Toronto and Vancouver outperform market pack

Second quarter stats reveal a widening gap between Canada’s prospering and struggling office markets as investors continue to focus on downtown Class A properties. CBRE’s recently released overviews of supply, demand and cap rates shows Toronto and Vancouver outperforming national averages, while Calgary’s vacancy rate climbed above 25 per cent and analysts project it may reach 30 per cent as downtown tenants continue to consolidate or give up their space entirely.

CBRE’s 10 surveyed markets recorded an average vacancy rate of 13.1 per cent, with Toronto’s 8 per cent rate at the low end of the scale. However, that cloaks a downtown-suburban split, which saw the downtown Class A vacancy rate fall to 3.6 per cent despite the nearly 950,000 square feet of new office supply that came onto the market during the quarter.

Downtown Class A average net rents jumped $1.06 per square foot to hit $28.23. Suburban Class A average net rents are exactly $11 dollars lower, at $17.23 per square foot, after dropping $0.13 since March 31. This trend is also expressed in cap rates, which, while holding steady since Q1, are in the range of 4 to 4.5 per cent for downtown Class AA versus 5.5 to 6.25 per cent for suburban Class A.

Toronto office tenants absorbed more than 2.2 million square feet of space during the quarter, representing more than two-thirds of leasing activity across all 10 markets. Nearly 4.5 million square feet of new supply is now under construction, with about 3.2 million square feet of that located downtown.

“The next new development cycle kicked off this quarter with 16 York and CIBC Square,” the CBRE report observes. Together, the two projects will add about 1.5 million square feet to the downtown inventory.

Analysts also expect new construction announcements for downtown Vancouver as the vacancy rate continues to drop. Average downtown Class A net rents topped the 10 markets at $31.39 per square foot, while the vacancy rate fell 80 basis points, from 7.3 to 6.5 per cent during the quarter.

“This is the fourth consecutive quarterly decrease downtown, largely driven by technology tenants,” the report states. “As the Vancouver economy has grown since the recession, average office tenancy sizes have increased from 5,000 square feet to 7,500 square feet.”

The suburban Class A vacancy rate dropped 60 basis points, from 16.2 to 15.6 per cent, even though there was a modest 10,000 square feet of negative absorption across the entire suburban market. Average Class A net rents dipped slightly from $24 per square foot to $23.78.

Vancouver cap rates are the lowest among the 10 surveyed markets for all classes of downtown and suburban office — in the 3.75 to 4 per cent range for downtown Class A. Cap rates of 5 to 5.75 per cent for Class B suburban office properties are on par with rates for downtown Class AA in Calgary.

“GDP growth, strong leasing fundamentals, tech growth and demand, and limited new supply have contributed to a sound investment matrix in the Metro Vancouver area,” says Jim Szabo, vice chairman with CBRE’s national investment team.

Meanwhile, Calgary’s market is splitting more by class than by location. The pace of negative absorption subsided this spring, with 35,000 square feet added to the overall inventory of empty space versus the 282,000-square-foot augmentation in the winter of 2017. At the same time, construction wrapped up on the Brookfield Place, East Tower, bringing 1.4 million square feet of new downtown office space online.

“Despite being 81 per cent pre-leased, a significant amount of unoccupied space exists, driving the downtown office vacancy rate up by 270 bps to 27.7 per cent,” the CBRE report notes. “Due to lower rents and tenant inducements, a flight-to-quality within the city core has improved vacancy in AA properties, while lower class buildings suffer.”

This is reflected in an increase in average Class A net rents downtown, which have improved by $1.13 over the quarter, rising to $19.06 per square foot. Suburban Class A net rents declined by $0.32, but are still higher than downtown, at an average of $21.33 per square foot. Both have plunged from the Class A average of nearly $31 per square foot in the first quarter of 2014.

The suburban vacancy rate, at 22 per cent, is also lower than downtown. Nearly 490,000 square feet of office space is still under construction, now surpassing the supply pipeline of 430,000 square feet downtown. Cap rates are slightly lower than downtown, in the range of 6.35 to 6.75 per cent for Class A and 7.5 to 8.25 per cent for Class B. However, prospective investors aren’t tripping over vendors in either locale.

“Calgary has emerged as an alternative for buyers in Toronto and Vancouver,” suggests Garry Beres, executive vice president with CBRE’s national investment team. “Notwithstanding the state of the office leasing market, there continues to be institutional interest in well-leased core product and interest in Class B and C product on a per square foot basis. Overall, the market is active, but there is a shortage of product, especially core product.”

Reduce pain and fatigue with everyday ergonomics

How can everyday ergonomics help reduce pain and fatigue among office workers?

Good ergonomics are critical to reducing pain and fatigue among office workers, but not everyone is taking the simple steps to put this common knowledge into practice. Ergonomics ensure that workers can work comfortably, increasing their productivity and efficiency by keeping fatigue at bay.

By putting the following ergonomic tips into practice, facility managers can help workers to reduce pain and fatigue.

Computer setup

Place monitors so that they are around two feet away from workers, at eye level, directly in front of workers, to reduce eye strain. Their keyboards should be directly in front of their monitors too. Ideally position keyboards on platforms, just a step down from monitors, for free and relaxed upper limb movement. The mouse should also be beside the keyboard so the hand can move smoothly.

Ergonomic chairs

Specifically made to prevent back and neck pain, ergonomic office chairs help workers move around their station with ease while maintaining a good posture. Look for chairs that are comfortable and moderately cushioned, not too soft or hard, and have arm rests, adjustable seat height, and a backrest that adjusts up, down, back and front. Armrests should keep arms at a 90-degree angle and shoulders relaxed. Also make sure the chair curves forward for lumbar support.

Posture, breaks

Educate workers on how to maintain a good posture. They should avoid slouching and ensure the lumbar region is comfortably straight against the lumbar support of the chair. They should keep elbows close to the body or on the arm rests at all times. Armrests should be set so that their shoulders are slightly raised. Their wrists should also be straight to minimize arm pain.

Encourage workers to take regular breaks, perhaps every couple of hours, to walk around and stretch their legs, which relaxes muscles and maintains adequate oxygen supply to them. Also remind them to take a break from looking at computer monitors every 20 to 30 minutes to reduce eye strain.

Task lighting

Task lighting can help reduce eye strain. Equip workers with focused anti-glare lights for any work that does not require the computer screen. Also equip them with a task light for computer work to reduce eye strain from the strong lights of the monitor.

Personal customization

Support workers who may require customization of their workstation. Taller people may find their lower bodies jammed with very little space to move their legs below their desk and want to raise the height of their desk a few inches. Shorter people may find their feet do not reach the ground when sitting in their chair and lowering the height of the chair lowers their height from their desk. They should use a foot stool to prevent leg and lower back strain they would feel if their feet were to dangle all day.

By sharing these ergonomic tips, facility managers can help reduce pain and fatigue among workers, who may otherwise see their productivity drop due to pain and fatigue.

Adam Robertson is a professional in the office furnishings industry. He works for Allard Office Furniture, an office furniture company which has 18 years of shared experience in office desks, chairs, supplies and accessories.

Versatile LVT flooring exploding in popularity

Luxury vinyl tile (LVT) and luxury vinyl plank (LVP) has exploded in popularity over the last few years. As a result, it is the cause of a lot of discussion. Everything from great value, fast to install and very durable to shrinking, buckling and peaking at the seams. Should we glue it down or float a click together product? What are the criteria that separate the good from the bad? As usual there’s no one silver bullet to answer all the questions. Each client has a different set of needs, set of job site circumstances, time frame and budget influencing the final decision. Needless to say, no one wants the problems which seem to be plaguing this sector of the industry.

National Floor Covering Association (NFCA) floor inspectors have seen and reported on many of the problems associated with LVT and LVP. Problems range from using the wrong adhesive to incorrect product acclimation, to sunlight overheating the floor, to substrates that are not flat to manufacturer’s standards.

Here are a few pointers that should help:

Understand the restrictions for the type of LVT that is being installed before the product is delivered to site. They are found in the installation guidelines that should come with every carton of material.
LVT products have good water resistance, making them good for just about any space in a residential or commercial space.
Spend time setting your client’s expectations regarding what to expect regarding wear and tear and maintenance. Yes, LVT scratches!
Discuss sub-floor flatness and the likelihood that extra work and dollars will be needed to meet the manufacturer’s strict sub-floor flatness guidelines. NFCA standards call for 3/16″ over 10′ feet using the straight edge measurement system.
Ambient temperature on site should be 18 to 29 celsisus. Acclimate the flooring indoors under acceptable conditions for a minimum of 48 hours. Deliver materials to site only when eventual living conditions have been achieved, usually 20 celsius with Relative Humidity at 35 – 55 per cent.
Concrete sub-floor temperature is important. Understand that a concrete substrate can be 10c cooler than the ambient temperature of a room – more than enough to cause significant problems. It is reported that 90 per cent of LVT failures occur because the product was installed too cold. Make sure the product is stacked in a ‘log cabin’ way so that warm air can circulate and bring all of the packs up to ideal temperatures.
When gluing LVT or LVP to concrete, moisture and alkalinity levels in the concrete must meet the manufacturer’s guidelines. If they don’t, then delay the installation, change the product or use a moisture barrier that you know works when high moisture and alkalinity are present.
For south facing windows, sunlight and heat are the enemy of LVT and LVP. Here is a direct quote from the installation guidelines of a well known distributor regarding their product and sunlight/heat affecting the floor.
“Avoid exposure to direct sunlight for prolonged periods; such exposure may result in discoloration, and excessive temperatures can cause the flooring to expand and lift off of the sub-floor. During peak sunlight hours, the use of drapes or blinds is recommended.”
Understand that it is the flooring contractor’s responsibility to check that site conditions meet the manufacturer’s recommended levels before shipping the flooring to site. Installation should not proceed if conditions are not correct. NFCA standards state: ‘Installation implies acceptance of conditions’.
Installers should record site conditions prior to installation for future reference in case there is a problem. Homeowners, designers, general contractors should request these results. Take a photograph showing the date and a picture of the test results. Once these conditions are proven to exist and recorded, move forward with the installation. At the end of the day it’s the homeowner’s responsibility to manage their own interior living conditions after installation.

With a few simple guidelines followed at the beginning of each installation, many of the problems associated with LVT and LVP can be avoided. With this done, what a great flooring category this is because it solves so many design issues and provides visual appeal, durability, resilience and value all in a growing segment that is adding new designs, colour and style every day.

Chris Maskell is president of the National Floor Covering Association.

ACSA opens new training facility in Ft McMurray

The Alberta Construction Safety Association (ACSA) has opened a brand new training facility in Fort McMurray. The facility will help support safe rebuilding efforts in the municipality.

The opening of the new ACSA facility comes at a good time. About 2,457 (8 per cent) of the 30,713 private dwellings were destroyed in last year’s fire.

According to the Canadian Mortgage and Housing Corporation, 785 housing starts have been recorded in Fort McMurray since the beginning of the year, demonstrating the rebuild is well and truly underway. Making available safety training is an important priority in the construction industry.

The association is looking forward to continuing to grow its partnerships with company owners and workers of the Wood Buffalo region during this important period of construction. The priority is support the strongest safety performance and upholding company and worker certifications.

“We are increasing our presence in the Wood Buffalo region, by providing additional safety training services and resources for the local construction community at this brand new training space in Fort McMurray,” said ACSA chief operations officer Tammy Hawkins.

“We are also proud to provide a unique resource to the community through the work of our Wood Buffalo Regional Safety Committee (WBRSC), who are a volunteer led committee of safety representatives from across the region’s construction industry. The WBRSC meets regularly to identify regional and trade-specific health & safety issues and best practices, engaging regularly with the community. The committee represents a passionate, committed, and hard-working group of HSE professionals.”

Shibley Righton LLP’s condo law group expands

Prominent local condo lawyers Audrey Loeb and Armand Conant have teamed up under the Shibley Righton LLP banner. Loeb, along with Warren Kleiner, Patrick Greco and Megan Mackey, have left Miller Thomson LLP to become part of Shibley Righton LLP’s condo law group, which includes Conant, John De Vellis, Deborah Howden and Joel Berkovitz.

The move doubles the size of the firm’s condo law group and makes the condo law practice one of Toronto’s largest, according to a release announcing the news.

“I am thrilled to announce that we are welcoming such a talented, experienced group of condo law lawyers who will add more depth to our already-strong team,” partner Conant said in the news release.

Partner Loeb echoed Conant’s sentiments in the news release, saying, “[The move] affords our group an opportunity to form what we believe will be the pre-eminent condominium group in Ontario.

“The joining together of our two excellent teams will benefit all of our clients.”

Loeb and Conant are well-known condo law experts. Loeb wrote a guide to Ontario’s current Condominium Act (1998 version) and served on the expert panel that advised the provincial government on recent changes to the legislation. Conant also served on the expert panel and currently serves as an interim board director for the Condominium Authority of Ontario, a newly established non-profit corporation which will administer some of the recent legislative changes that will soon be brought into force.

Shibley Righton’s condo law group, which has full-service backing, advises condo corporations, boards of directors, owners and industry professionals.

Meanwhile, Miller Thomson announced Monday in a newsletter the return of Jason Rivait to its condo practice as a partner in the firm’s real estate group. Rivait, who previously worked at the boutique condo law firm Lash Condo Law, “will continue scaling his practice focused on representing condo corporations, developers and unit owners in all condo-related matters,” said the newsletter.

“He brings energy, fresh perspective and a deep commitment to timely client service, all of which will be central to taking the firm’s condominium practice in an exciting new direction,” the newsletter added.

Rivait sits on the Canadian Condominium Institute’s communications committee. He also teaches at Humber College, delivering the condo law course that is required to earn the Registered Condominium Manager designation.

TREB revises 2017 home buying forecast downwards

Following the announcement of the Ontario Fair Housing Plan, the Toronto Real Estate Board (TREB) commissioned Ipsos Public Affairs to conduct two consumer surveys focusing on home buyers and home sellers. The surveys were conducted between May 23 and 29.

The survey of home sellers found that 30 per cent of GTA households are very likely (12 per cent) or somewhat likely (18 per cent) to list their home over the next year. It reported that 15 per cent of households said that the Fair Housing Plan was the primary reason why they would list their home over the next year. Of the respondents who are likely to list their home, 80 per cent said they would be purchasing another home.

Meanwhile, the home buyers’ survey found that 35 per cent of households indicated they were very likely (13 per cent) or likely (22 per cent) to purchase a home over the next year. Forty per cent of those respondents indicated they would be first-time buyers, a significant decline from the 53 per cent in Ipsos’ fall survey. Among those who reported they would not be purchasing a home, 10 per cent said the Fair Housing Plan was a key factor in this decision (one per cent) or a contributing factor (nine per cent).

“The recent Ipsos survey results suggest that home buying activity in the GTA will remain strong moving forward. The year-over-year dip in home sales we have experienced over the last two months seem to be the result of would-be buyers putting their decision to purchase temporarily on hold while they monitor the impact of the Fair Housing Plan. On the supply side of the market, it certainly looks as though buyers will benefit from more choice in the second half of 2017 compared to the same period in 2016,” said Jason Mercer, TREB’s director of market analysis and service channels.

TREB releases 2017 forecast results

The Ontario Fair Housing Plan has prompted some households to decide to wait to purchase a home, at least in the short-term. This includes would-be first-time buyers, who have more flexibility, allowing them to wait and see before making a decision. However, the recent Ipsos survey results on likely home buyers suggest that many households who have moved to the sidelines will return to the market over the next year, possibly after reassessing the type and/or location of the home they plan to purchase.

“The Ontario government recently released their first wave of foreign buyer statistics, which confirmed earlier TREB research that showed foreign buyers, even in the pre-Fair Housing Plan era, represented a very small proportion of overall home purchases – slightly less than five per cent,” said John DiMichele, TREB CEO. “This, taken along with the strong buyer intentions reported by Ipsos, suggests that we will see many households moving back into the home ownership market over the next 12 months.”

“It remains to be seen whether the level of inventory will hold up to accommodate the eventual resurgence in demand. The Fair Housing Plan was less precise as it related to long term housing supply issues,” continued DiMichele.

While the impact of the Fair Housing Plan on home sales may only be temporary, the TREB notes that the probability of higher borrowing costs over the next year has increased. TREB believes the Bank of Canada will raise its Target of the Overnight Rate at least once during the second half of this year. Prospective Bank of Canada increases have already been reflected in Government of Canada bond yields and posted mortgage rates, at least to some degree. Advertised discounted mortgage rates, however, remain at or near historic lows.

When considering the temporary impact of the Fair Housing Plan and the further impact of higher borrowing costs, the TREB has revised its forecast range for 2017 transactions down to between 89,000 and 100,000.

While home sales this year will be down, listing activity is expected to grow. As home owners react to strong equity gains over the past year, as well as feelings that price growth will moderate in the future, TREB expects new listings to increase year-over-year, predicting new residential listings in 2017 to range between 175,000 and 190,000.

TREB predicts we will see more balanced market conditions, with sales accounting for a lower percentage of listings in the second half of 2017 compared to the first half. The overall growth rate for the average selling price in 2017 will sit between 13 per cent and 18 per cent. Although this annual rate of growth is still very strong, it is still a moderation in year-over-year average price growth in the second half of 2017. This is expected to be caused by more balanced market conditions and a change in the mix of homes purchased, with a larger share of purchases in both the townhome and condominium apartment home types.

New technology advances safety management

An elevator technician conducting weekly maintenance on a moving walkway at a Montreal university never returned home from his job. After his arm was caught between the cylinder and the walkway belt, it tore from his body and the worker died.

Accidents like this, which made headlines last year, keep happening across Canada, with trades, transport, equipment operators and related industries recording the most deaths. The latest overall statistics show 852 fatalities in 2015, a number that hasn’t reduced much over the past two decades. Meanwhile, facilities continue to lack rigor in identifying risks and checking worker training and compliance. As a result, many face legal and financial consequences, along with a damaged reputation.

Case Study

An investigation report, released by the Committee on Standards, Equity, Health and Safety at Work (CNESST), reveals that the university and owner had not visited the mechanical room to identify hazards associated with the maintenance job and didn’t ensure effective controls were in place to safeguard workers performing maintenance on the walkway belt. The owner generally knew that a hazard would be present with this type of maintenance work, but didn’t ensure proper guarding of moving parts or publish a procedure on de-energizing equipment.

As for the elevator contractor, it had not provided specific training on de-energizing equipment, such as the lock-out tag-out procedure. The CNESST blamed both the owner and contractor for not identifying, controlling and eliminating hazards.

The CNESST stated that even though the university had a contract stating the technician’s company was responsible for the health and safety of workers, the university was still to blame for not identifying, controlling and eliminating hazards associated with maintaining equipment.

“Incidents such as this should not be happening in 2017,” says Anne-Sophie Tétreault, senior expert, HSSEQ Compliance & Risk Management Processes at Cognibox, a global company that provides digital tools to help facilities complete all contractor qualification processes online using a single platform. “This worker’s life could have been saved. Whether it’s maintaining equipment in a large facility, or completing construction, repair or renovation work, we have to foresee the hazards associated with the tasks we need to do or have done to us.”

She says once facilities identify hazards and define how to control them, managers shouldn’t assume workers are using these controls. Supervisors need to check for compliance, and if something goes wrong, they should assess what was missing and make changes in future contracts. This process becomes “more daunting when tasks pile together.” Documenting work becomes vital because managers need to show due diligence if an accident occurs.

Technology Advances Safety Management

Information technology is helping safety management in big ways, notes Tétreault. To simplify the process, rapid advances in cloud computing and data management technologies are helping to safeguard facilities that often manage multiple tasks. Rules are in place, but most facilities need better implementation and enforcement procedures.

“The digital revolution is happening; we finally have a way to reach hundreds of people fast and effectively with cloud software,” she says. “We’re not inventing new processes on what to do, it was just more complicated before with spreadsheets, paperwork and emails.”

Technology like Cognibox connects live to both facilities and contractors. Facilities can effectively control outsourcing risks, and contractors can ensure compliance with the requirements of facilities.

Manage contractors. Safeguard compliance

The technology centralizes and archives all employee training files, no matter where training takes place or which company provides the training. Facility managers can access this online database on a mobile phone or tablet and see a worker’s training qualifications. They can also do background checks and view a company’s health and safety statistics. Sometimes, in order to complete a job, there are several tasks that must be completed by different contractors. Facility managers can list all jobs needed, from repair to delivery, and alert contractors about hazards, written procedures, required training and permits and necessary personal protective equipment.

This information is dispersed to hundreds of contractors and their workers in real time over the cloud application, without the need for recording. Contractors receive this information and direct qualified workers to do the job.

Facility managers can export the whole task on a print-out copy for floor supervisors who are not equipped with a mobile device. In turn, floor supervisors can see a picture and name of each maintenance worker, their specific task, when and where it is happening, a checklist of their training, and what permits and protective gear they need to have on the job site. The report also highlights when training expires, alerting the manager or supervisor that this needs to be resolved by the time the worker arrives on site or throughout the contract duration.

“We all agree that front line supervisors need to be out there on the floor checking that workers are performing their jobs safely,” says Tétreault. “But what exactly should they be checking? You cannot assume that all your supervisors will know about all safety controls that workers should implement. By providing them with a checklist that has been though out carefully, you can rest assure that front line supervision checks will be simple and thorough, and that you’ll have valid proof of it.

She adds that with this piece of paper, the supervisor can sign and date it, without “guessing what the requirements should be.” The worker also has to sign the document in order to receive the permit.

Era for Zero Accidents

Regarding the escalator maintenance incident in Montreal, a missing checkmark in a comprehensive safety job analysis would have shown the worker wasn’t trained in de-energizing equipment. Improper lighting, no cell reception in the basement, a missing safety guard removed years before and no button to slow or stall the escalator were all hazards that played a role in the accident, but were not proactively identified.

With sub-contracting on the rise, facilities may assume workers are properly trained through their company, but this isn’t always the case. Facility managers are responsible for showing that both workers and supervisors have required training, even if a contractor is hired to complete work.

The Association of Workers’ Compensation Boards of Canada says at last count there were 232,629 claims accepted for lost time due to a work-related injury or disease, including 8,155 from young workers aged fifteen to nineteen.

Because these statistics include only what is reported and accepted by compensation boards, the Canadian Centre for Occupational Health and Safety says the total number of workers impacted is likely much higher, in turn affecting coworkers, friends and family.

“Technology is going to change performance and prevent less injuries,” says Tétreault. “There is a real opportunity to bring technological advances happening in all aspects of the economy to help make a major difference in reducing workplace accidents.”

Rebecca Melnyk is the online editor of Facility Cleaning & Maintenance

What board directors should ask condo auditors

An independent Chartered Professional Accountant (CPA) prepares, audits and issues the financial statements of a condominium corporation. In doing so, he is reporting to the owners of the condominium units the state of the financial position of the corporation. However, before issuing the final report, he needs the approval of the board of directors, who represent the owners.

It’s important for board members to review the draft financial statements and know what questions to ask before giving their approval. The board is familiar with the financial dealings of the corporation and therefore well-positioned to detect any unusual items. This step ensures that proper financial controls have been followed. After all, the owners rely on the board members to fulfill this responsibility.

The financial statements consist of three main parts: the balance sheet, the statement of general fund operations and the statement of reserve fund operations. Supplementary statements include the statement of cash flow.

The balance sheet

The balance sheet reflects the financial position of the corporation at a point in time, the year end of the corporation. It breaks down the financial position to the following components: assets, liabilities and fund balances (operating and reserve). When the financial statements are presented to the board for its approval, board members should ask some of the following common questions when they review the balance sheet:

Is there enough operating cash to meet the immediate obligations of the corporation? In other words, the directors should ensure the operating bank account, together with any receivables, is sufficient to meet accounts payable and accrued liabilities.

Are the cash reserve and investment in line with the reserve fund balance? Remember that the reserve fund study ensures sufficient cash is available to meet anticipated capital replacement costs.

What are the common element assessments receivable (better known as unpaid condominium fees)? Is any of this amount outstanding more than 30 days? And, if so, what action has been taken to collect it? If the receivable is current, was it collected after the year end?

What is the breakdown of the accounts payable and the accrued liabilities? Is there any amount outstanding more than 60 days? And if so, what is the reason for not paying it? It’s important for the board to be aware of any amount that is unpaid for a long period. This will help avoid, among other things, potential lawsuits or a lien against the corporation.

Does the reserve fund balance meet the reserve fund study requirement? If not, what are the reasons? What can be done about it? It’s common to see capital replacement expenses incurred earlier — or later — than expected. This should be noted and brought to the attention of the engineer who conducted the reserve fund study.

The statement of general fund operations

On the one hand, the balance sheet reflects the financial position of the corporation at year end. The statement of general fund operations, on the other hand, reflects the results of the 12 months before year end. It also includes, for comparison purposes, the prior year’s results and the current year’s budget.

Common questions about the statement of general fund operations include:

Is there any large variance compared to the prior year’s results or the current year’s budget? The answer should help the board identify any unusual fluctuations in expenses and seek out explanations.

What is the reason for variances? Was it a controllable or uncontrollable expense? Controllable expenses can include hydro, repairs and maintenance. Some of the uncontrollable variances are utilities, insurance and new contracts, such as landscaping, snow removal and elevators.

Has the corporation broken even, generated excess revenue or ended up in deficit? The result will influence the future condominium fee. Any deficit will have to be incorporated into the next year’s budget. A surplus may help keep the condominium fees in line or be transferred to the reserve fund if the board finds it necessary. Note: Once the funds are transferred to the reserve account, they cannot be then transferred back to the operating account, should a need arise.

The statement of reserve fund operations

The statement of reserve fund operations refers only to expenses that are qualified to come from the reserve account. The common questions are as follows:

Was the allocation to the reserve account from the owners’ condominium fees done in accordance with the budget, which reflects the contribution required by the reserve fund study? A review of the reserve fund study will show the required yearly contribution, which should match the amount shown on the statement of reserve fund operation.

Do all the expenses qualify as reserve fund expenses as defined in the Condominium Act? Section 93 (2) of the act restricts these expenses to major repairs and replacement of the common element and assets of the corporation.

Are there any reserve fund expenses that happened earlier than expected in the reserve fund study? Knowing the answer for this question will explain any variance between the reserve fund balance and the financial statement balance.

Knowing and understanding the financial position of the condominium corporation is one of the most important aspects of the board’s role in governing for the corporation’s current and future strength.

Shlomo Sharon is the CEO of Taft Management.

Impact of CMMS on facility maintenance: report

Companies are using computerized maintenance management systems (CMMS) to drive more predictive and preventative maintenance (PM), lower operations costs and impact their bottom line. New research, the 2017 State of CMMS Report, released by CMMS provider Maintenance Connection, helps facility maintenance teams understand the impact CMMS has on their performance and operations.

The study analyzed the maintenance operations of more than 1,000 organizations around the world, specifically in North America, in order to understand how well CMMS was impacting cost savings, equipment downtime, customer satisfaction rates and labour efficiency.

Respondents spanned 10 major industries, from education and healthcare to government and manufacturing. Roughly 50 per cent of educational organizations and 40 per cent in government maintenance have more than 30 employees, while 82 per cent of other industries have fewer than 15 maintenance workers.

The report was researched and written using information from a CMMS Score, which grades and guides maintenance teams on how they’re using maintenance management software. Maintenance teams can benchmark themselves against others in similar industries and team sizes by taking the five-minute survey.

Here are some findings:

Preventative maintenance drives strong ROI

Organizations that perform more preventive maintenance, versus reactive or corrective maintenance, realize a stronger ROI on their CMMS investment.
Organizations that achieved a high CMMS Score also have a high number of preventive maintenance activities configured in their CMMS. This should incentivize maintenance teams to develop PM procedures, schedule them in their CMMS, establish performance metrics and finally, build (or automate) PM reports in their CMMS to understand problem areas and opportunities.
73 per cent of facilities that have 50 per cent or greater preventive ratio report significant cost savings from their CMMS, from tens of thousands to millions of dollars.

Equipment life

Equipment life increases as more assets are configured in CMMS, and78 per cent of organizations that configure most assets in their CMMS report strong improvements to equipment life span.

Customer satisfaction

A slight improvement in managing work orders in the CMMS, from none to few, has a significant impact on customer satisfaction, and 64 per cent of facilities that configure most work orders in their CMMS report strong improvements to service satisfaction.

Labour efficiency

Organizations that invest in CMMS training see improvements in labour efficiency. Respondents were asked about the number of maintenance and operations personnel trained and using the software, along with how their work scheduling and labour efficiency has improved.
Even a small amount of training, from none to few, can have a significant impact, and 74 per cent of facilities that have most technicians trained on their CMMS report strong improvements.

Impacts of mobile CMMS

Organizations were asked how many maintenance employees were using a mobile CMMS. Those with a greater number of personnel using a mobile CMMS reported greater improvements in labor efficiency. Maintenance Connection says this is not surprising when considering how a mobile CMMS allows technicians to access and update work orders from the field.
80 per cent of organizations that actively use mobile CMMS report strong improvements.
Roughly 40 per cent of organizations still don’t employ a mobile CMMS system, an improvement over last year’s report. About 75 per cent who took the 2016 State of CMMS survey were not using a mobile CMMS.

Halifax tech hub expands office in Maritime Centre

Slate Office REIT has completed a 60,000 square foot lease for tech hub Volta Labs in the Maritime Centre in downtown Halifax.

Volta Labs currently occupies about 20,000 square feet of the nineteen-storey building at 1505 Barrington Street. This new space will occupy the ground, mezzanine and second floors, with more room for resident start-up companies, corporate innovation outposts and Volta’s 600 network members. Expansion will start this winter, also making way for a large multi-purpose space, private meeting rooms, and larger co-working spaces.

“These new headquarters will allow Volta to be the growth catalyst for Halifax’s technology community, establishing a home base inside the city’s Innovation District and attracting new interest from entrepreneurs,” said Volta Labs CEO Jesse Rodgers. “For many reasons, Halifax is a great place to build a technology-focused company and we are looking forward to providing more resources to these businesses. Ultimately, this growth will result in new jobs and a massive economic impact for Nova Scotia.”

Maritime Centre stands at 549,171 square feet and is currently the largest office property in Canada east of Montreal.

“Slate Office REIT has a long-term commitment to revitalizing Halifax’s iconic Maritime Centre and we are proud that the building has become an integral part of Halifax’s Innovation District, with Volta as a marquee tenant,” said Slate Office REIT CEO Scott Antoniak. “Slate Asset Management has an excellent track record of repositioning assets and will bring this expertise to the Maritime Centre.”

VRCA calls on industry to help during B.C. wildfires

The Vancouver Regional Construction Association (VRCA) is calling on the construction industry to help communities affected by the wildfires in B.C.

The association, representing more than 700 members, is challenging the Canadian construction industry to donate $1,000,000 directly to the Canadian Red Cross British Columbia Fires Appeal by July 31, 2017.

Earlier this month Todd Stone, B.C.’s minister of transportation and infrastructure, announced a provincial state of emergency to ensure a co-ordinated response to the current wildfire situation and to ensure public safety.

Deeply troubled by the extent of destruction of communities affected by the wildfires currently raging in B.C.’s interior, the member-centric association is urging the industry to step up and help in all ways possible to support those affected e.g. through volunteerism, or provision of supplies, equipment, un-used camp accommodations and/or financial donations.

With more than 700 members, VRCA is British Columbia’s largest and most inclusive regional construction association, representing union and non-union, general and trade contracting companies, manufacturers, suppliers and other professionals throughout the Lower Mainland from Hope to Whistler.

Please visit http://www.here4BC.ca where companies, employees and associations can pledge financial and/or non-financial help to this worthy cause.

CetraRuddy selected to design Yorkville condo

CetraRuddy, the New York-based architectural team behind Manhattan’s One Madison tower, has been selected to design Adi Development Group’s latest Toronto project, 64 Prince Arthur. The project is located on Prince Arthur Avenue in Toronto’s Yorkville neighbourhood and will be designed as a boutique luxury development.

“Our practice is grounded in developing a unique responsive solution to local context,” said Nancy Ruddy, co-founding Principal at CetraRuddy Architecture, in a press release. “This will be our first building in Canada and our intent is to add to the vibrant fabric of this global style neighbourhood through an exploration of the lifestyle and architectural history of this part of the city.”

CetraRuddy was chosen to design the project following an extensive selection process of internationally-recognized firms. “Our aim is to create an iconic legacy project in Toronto while at the same time paying respect and having sensitivity to the evolution of Yorkville,” said Saud Ali, COO of Adi Development Group. “Nancy Ruddy and John Cetra understand neighbourhood context and their commitment to socially responsive design was a very important factor in our final decision-making.”

CetraRuddy and Adi Development Group plan to host a series of public consultations later this year to collect community input prior to submitting a design to the City.

Canadian home sales cool further in June

The number of homes sold in Canada fell 6.7 per cent from May to June, marking the largest monthly decline in home sales since June 2010, says the Canadian Real Estate Association (CREA). With slower sales also logged in April and May, activity in June came in 14.1 per cent below the sales record set in March of this year.

June sales had fallen on a month-over-month basis in 70 per cent of all local markets, led by the Greater Toronto Area (GTA). Monthly declines were also experienced in all surrounding Greater Golden Horseshoe housing markets, the Lower Mainland of British Columbia, Kingston, Montreal and Quebec City.

Actual (not seasonally adjusted) activity was down 11.4 per cent year-over-year, which is mostly due to the significant fall in GTA sales activity. Still, half of all housing markets experienced year-over-year sales declines. Meanwhile, Calgary, Edmonton, London and St. Thomas, Ottawa, Montreal and Halifax-Dartmouth all experienced sales increases compared to June 2016 levels.

“Canadian economic and job growth have been improving, which is good news for housing demand,” said Andrew Peck, CREA president, in a press release. “However, it also means that interest rates have begun to rise, which may impact homebuyer confidence – particularly in pricier markets like Toronto and Vancouver where recent housing policies had already moved potential buyers to the sidelines. In lower priced markets, the effect of higher interest rates on housing affordability will be relatively muted.”

The number of newly listed homes fell 1.5 per cent in June, led by large declines in the GTA compared to record levels in April and May. Other markets in the Greater Golden Horseshoe also saw a decline in new supply.

The national sales-to-new listings ratio indicated a more balanced market than what has been seen in months, moving to 52.8 per cent. Just three months ago, the sales-to-new listings ratio was in the high-60 per cent range, indicating a seller’s market.

Less than half of all local housing markets favoured sellers in June. The majority of markets with ratios higher than 60 per cent are located in British Columbia and Ontario, but some markets in the Greater Golden Horseshoe have moved into more balanced territory. The ratio fell below 40 per cent in the GTA and Barrie, indicating a buyer’s market in these regions.

Nationally, there were 5.1 months of inventory at the end of June 2017, which is an increase of a full month compared to where the measure stood in March and the highest level since January 2015.

The Aggregate Composite MLS HPI climbed 15.8 per cent on an annual basis in June 2017, representing a further slowdown in year-over-year gains since April. Price gains fell in all benchmark home categories, but were still significant.

In apartment units, the year-over-year price gains were the largest at 20.4 per cent, followed by townhouse/row units, which experienced price increases of 17.4 per cent. Two-storey single family homes saw prices increase by 15.4 per cent annually, while one-storey single family homes saw prices increase by 12.3 per cent year-over-year.

The actual (not seasonally adjusted) national average price for homes sold last month was $504,458, an increase of 0.4 per cent year-over-year. The national average price continues to be inflated due to sales activity in Greater Vancouver and Greater Toronto, two of the country’s most active and expensive housing markets. When excluding these two markets from calculations, the national average price falls to $394,660.

Due diligence for tenant health and safety

Merriam-Webster defines due diligence as the care that a reasonable person exercises to avoid harm to other persons or their property.

For building owners and operators, this means planning ahead to ensure the health and safety of your tenants is recognized with reasonable precautions. A key component of this is identifying fire and life safety issues that impact your building. This type of planning protects you and corporate shareholders and directors from potential litigation, civil or at worst a criminal lawsuit in the event of a serious injury or death occurring as a result of a building emergency incident.

How do you go about achieving due diligence? Comply with the law and codes, adhere to industry best practises and ensure your actions are documented.

WPS breaks down due diligence into a four-step process:

Planning: Develop a fire safety plan as per fire code requirements and submit the plan to the local authority having jurisdiction for approval. Though not legally required, it is highly recommended you also develop an emergency response plan for other potential hazards or threats that could impact your building and occupants.
Implementation: Appointing emergency personnel, training personnel, conduction drills and exercises and maintenance of the plans are necessary and mandatory. This is the most critical and important step to achieve your fire and life safety goals.
Compliance: If you successfully complete steps one and two, you will achieve what most other buildings have not – reduced risk and liability at a personal and corporate level. Remember, if your work and records are not in writing, they do not exist.
Goals: These goals do not happen by accident. They require diligence, care and commitment by building management and owners.

Working with a reputable company that specializes in building fire and life safety planning can provide you the necessary guidance and support to develop your building fire and life safety program policy. Do not attempt to underwrite emergency plans yourself, unless you are an expert in the field and willing to assume responsibility and potential liability.

This article was submitted by WPS Disaster Management Solutions. For more information, visit wps-plan.com

Ontario leaves live-in superintendents exposed

Live-in superintendents in multifamily buildings continue to have little protection in Ontario law. Earlier hints that the provincial government might move quickly to guarantee entitlement to the minimum wage, overtime pay, set working hours with food breaks and public holidays proved unfounded when proposed amendments to the Employment Standards Act (ESA) were introduced, in Bill 148, in June. Instead, a review of the Act’s many exemptions and industry-specific rules has been promised for the fall of 2017.

For now, market demand and the goodwill of employers are still the prime determinants of superintendents’ working conditions. Industry insiders affirm that they have to offer compensation in line with other positions in the labour force even if there are few formal requirements to do so enshrined in law.

“Especially in light of fierce competition for site staff from the condo industry, we typically remunerate them above what is currently required according to the Employment Standards Act,” says Randy Daiter, vice president, residential properties, with M&R Holdings. “Superintendents have hours in the 40-per-week range. However, given the nature of the role, they also fulfill the very important requirement to be available for urgent situations outside regular business hours. They do receive holidays and days off when they are not expected to be at the building.”

Employees in dozens of sectors are named in Ontario Regulation 285/01, which sets out allowed exemptions to the Employment Standards Act, but live-in superintendents are the only non-student category excluded from entitlement to the minimum wage with no stipulated alternative minimum threshold. Nor is there guidance for calculating the value or wage equivalence of living accommodations — something the regulation does spell out for live-in workers, like nannies, in private households.

Findings from the Changing Workplaces Review — conducted by the Ontario government’s specially appointed advisors, who were mandated to consult widely and deliver the recommendations that now underpin much of Bill 148’s core content — reiterate that superintendents enjoy greater regulatory safeguards elsewhere in Canada.

“British Columbia and Nova Scotia are the only other provinces that have exemptions for superintendents. However, their exemptions are narrower than those in Ontario,” states the special advisors’ interim report, released in the summer of 2016. “In British Columbia, superintendents are exempt from eating periods and overtime pay. They are also subject to a special minimum wage rule under which they are entitled to a monthly base wage and a certain amount per unit supervised. In Nova Scotia, they are only exempt from overtime pay.”

Differing Workplace Circumstances

The interim report suggested the advisors would recommend a straightforward reinstatement of superintendents’ entitlements unless they heard convincing arguments for the exemptions, However, their final report, released in late May, pulls back from that position. The recommendations outline a potential a new process for ongoing review of the ESA’s sector-specific rules and exemptions to ensure they continue to be relevant and defensible.

The special advisors acknowledge that a multi-sectoral and steadily evolving economy needs flexibility to address differing workplace circumstances and varying challenges that might arise. Notably, landlords carry obligations as both employers and highly regulated housing providers.

“There would be backlash if superintendents are not able to respond to tenant service requests in a timely manner. We view the current exemptions under the employment legislation as recognition by the government of the distinct elements of the superintendent role,” Daiter observes. “Like any job, there are pluses — i.e. the housing benefits — and minuses, but, overall, I’d say the scale balances for a mutually beneficial employment arrangement.”

In another industry-related example, the construction sector is also exempt from the ESA’s requirements relating to hours in the workday and prescribed periods for eating, but it has not been an issue in a largely unionized workforce. “A collective agreement, as long as it doesn’t promise less than the ESA, supersedes. It’s always the dominant document,” explains Andrew Pariser, vice president with the Residential Construction Council of Ontario (RESCON).

The Changing Workplace Review’s special advisors caution against occasional adjustments to the Act becoming inadvertently entrenched. Those pertaining to live-in superintendents are pegged to the less-than-precise date of “at least since 1969” and are among some of the 85 current exemptions under the ESA that are deemed due for critical scrutiny.

“We received no submissions (following the interim report) from residential property employers with respect to residential building superintendents, janitors and caretakers,” the final report notes. “Rather than eliminate the exemption on the basis that no submissions were received from the employers, we recommend an early review of the regulation applying to this group of employees because of its breadth and the resulting anomalous treatment compared to others similarly situated in the rest of the country.”

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

ISO publishes third facility management standard for 2017

The International Organization for Standardization (ISO) has published its third facility management (FM) standard in under half a year.

ISO — an independent, non-governmental organization and developer of international voluntary consensus standards — published two standards in April 2017: ISO 41011:2017, Facility management – Vocabulary and ISO 41012:2017, Facility management – Guidance on strategic sourcing and the development of agreements. Now, ISO has published ISO/TR 41013:2017 Facility management – Scope, key concepts and benefits.

The International Facility Management Association (IFMA) has served as administrator on behalf of the American National Standards Institute (ANSI) U.S. Technical Advisory Group (TAG) since 2012, playing a vital role in supporting the development of international FM standards. The benefit of global unification within the FM industry is a top priority for IFMA, which, thanks to its global footprint and the landmark IFMA-RICS collaboration launched in 2016, is uniquely positioned to support such a goal.

“A unified FM industry is a goal worth investing a lot of time and energy,” said Jay Drew, who was the co-convenor of Working Group 1. “Not only do ISO standards make individual FM professionals and their organizations more effective and efficient, but they can improve the outcomes for end users in terms of safety, security and productivity. Some of the leaders who helped make this happen include Jim Whittaker, who leads the effort for the U.S. ANSI TAG; Stan Mitchell, the ISO Technical Committee chair; and Paul Stadlöder and Olav Egil Sæbøe, who also served as working group convenors.”

The ISO Technical Committee 267 for Facility Management is continuing its work on the ISO 41000 series for FM and is currently developing a management systems standard with guidance notes. For practical guidance on the ISO management system process, read the six-part article series in IFMA’s FMJ magazine, beginning with “Setting the Stage for ISO 41001.”

Dream Global chooses Netherlands to bolster European presence

Dream Global REIT (the REIT) has entered into a sale and purchase agreement for a portfolio of 135 office and light industrial properties in the Netherlands, which the REIT calls one of the largest and growing office real estate markets in Europe.

“In creating Dream Global in 2011, we saw an opportunity to enter Germany and to acquire quality real estate at a very good time in the real estate cycle,” said Jane Gavan, chief executive office of Dream Global REIT. “Over the past six years, we have created a valuable portfolio, established a skilled management team and built local relationships. We are now leveraging that experience and track record to strategically expand our European presence into the Netherlands at what we believe to be an opportune time in their real estate cycle.”

The portfolio includes 101 office properties that total more than 4.8 million square feet of gross leasable area (GLA) and are worth $728.7 million. About 68 per cent are located in the Randstad, which is the largest urban region and primary office market in the Netherlands, and includes Amsterdam, Rotterdam, the Hague and Utrecht. This portfolio also includes some value-add properties which are currently being repositioned and are expected to be a source of growth for the REIT.

The industrial portfolio consists of 34 properties of 2.9 million square feet of GLA that are primarily located in the Netherlands’ five largest industrial hubs. The REIT believes that investment in this sector is highly desirable, given the strong fundamentals supporting the European industrial real estate market. The Industrial Portfolio offers the REIT stable, high-quality cash flows, with the potential to provide further strategic benefits in the future.

“We are entering a market that has good office fundamentals and growth potential, and we will have a sizeable Dutch real estate management team that has a successful track record of increasing occupancy and achieving NOI3 growth.” added Gavan. “We believe that this transaction is a meaningful milestone for Dream Global REIT on the path to becoming the premier European REIT for capital market investors.”