Stories to watch in 2019

What’s trending in commercial real estate this year
Friday, January 11, 2019

With 2019 underway, REMI’s award-winning editorial team takes a look at the top stories from 2018 and how they will continue to impact the commercial real estate management industry. The articles appear in no particular order and are based on reader traffic.

Proptech and smart buildings

Barbara Carss, editor-in-chief, Canadian Property Management: Proptech and the data that underpins it play an increasingly influential role in real estate investment, management and operations. With algorithms taking on some of the traditional labour-intensive aspects of gauging building, asset and portfolio performance, the focus is turning to big data’s predictive capabilities and the emergence of networked smart buildings that can communicate with the urban infrastructure around them.

The affordable housing crisis

Erin Ruddy, editor, Canadian Apartment MagazineAffordable Housing is a topic that isn’t going away anytime soon. Much discussed in 2018, and sure to be equally compelling this year, the lack of affordable rental housing in Vancouver, Ottawa and the GTA, namely, is a subject of considerable debate. In Ontario, Doug Ford’s announcement that his government was removing rent control on all new apartment buildings constructed after 1991 garnered more views on Canadian Apartment than any other news brief in the website’s six-year history. From new government policies to funds designed to spur new development, rental housing professionals are tuned in to this ongoing discussion and hopeful that some day soon, building affordable rental housing will emerge as a fiscally viable option. For now though, it would seem market and high-end rental properties remain the more attractive investment. What will the new year bring in terms of new affordable housing? It remains to be seen, but we’ll be eagerly covering this story as it unfolds…

Ongoing issues with the rollout of legalized cannabis

Kavita Sabharwal-Chomiuk, editor, CondoBusiness, Canadian Facility Management & Design: Those managing and living in multi-residential communities had many concerns prior to the introduction of the Cannabis Act on Oct. 17, 2018. The Act permits each household to grow up to four plants for personal use, but this allowance does not come without risk.

The hazards of growing cannabis include electrical overloading due to increased electricity consumption; excess humidity, leading to the growth of mould; use of hazardous chemicals, such as pesticides; strong odours; potential liability for the landlord and risk to the tenants and mortgage holder; and potential cancellation of building insurance. Meanwhile, smoking cannabis indoors could result in odour complaints from other residents; health impacts from second-hand smoke; and altered behaviour.

Landlords in Quebec were among the first to insist that property owners should be entitled to ban cannabis cultivation from their premises. The province ended up amending legislation so all residents, both homeowners and renters, were prohibited from growing cannabis for personal consumption. Nova Scotia similarly granted landlords the authority to amend existing leases to implement rules regarding recreational cannabis smoking and cultivation.

Expect this divisive topic to be covered in greater detail in 2019.

The impacts of tariffs on the construction industry

Cheryl Mah, editor, Design Quarterly, Construction BusinessPolicy changes at all levels of government in 2018 raised concerns and questions about potential impacts to the construction industry. One of the major issues last year and into 2019 is the steel tariffs and safeguards imposed on aluminum and steel products. The duties are creating steel shortages and driving up prices. Supply of construction steel is particularly challenging in B.C. and the industry will continue to push the federal government for a solution to the ongoing trade dispute.

The evolution of commercial floor cleaning

Zandile Chiwanza, online editor, Facility Cleaning & Maintenance, Canadian Property Management: Autonomous cleaning equipment continues to replace or complement jobs as the professional cleaning industry embrace robots. According to a study by Techsci Research, cleaning robots – including automated sweepers, scrubbers, vacuums and burnishers – are projected to be a market worth $4.38 billion by 2023.

Currently, cleaning robots are extensively used in healthcare and high-traffic facilities such as airports. As Canadian cleaning companies continue to think how technology can make them more efficient and competitive, expect the conversation about how robotic cleaning equipment is changing the industry to rise to the forefront.

The realities of retrofits

Erin Ruddy: Aging apartment buildings in need of repair are a huge burden on property owners, as evidenced by the number of readers seeking out solutions to address the growing concern. Furthermore, with an aggressive COP21 target pledging to eliminate greenhouse gas (GHG) emissions associated with the operation of all buildings by 2050, every conscientious building owner is primed to do their part. Hence, topics like “deep retrofits” and “energy efficient upgrades” had the sector riveted. Whether you are a small landlord looking for ways to cut energy costs through LED lighting or HVAC improvements or a large portfolio owner with a fleet of relics in need of complete overhauls, Canadian Apartment will continue to be your source for the latest maintenance and retrofits information, helping you bring your buildings up to a whole new standard of efficiency.

The move towards hot-desking

Kavita Sabharwal-Chomiuk: While hot-desking first became an office design buzzword a few years ago, it has taken a few years for this trend to gain traction in real-life applications. Attributed with facilitating a more efficient use of space while reducing real estate and operational costs, hoteling is seen as a more convenient alternative to traditional cubicles and assigned workspaces.

Some firms with large offices in Canada, such as KPMG and LoyaltyOne, have moved away from traditional cubicle-style workstations and into hot-desking, which can not only free up space for more employee-centric amenities in an office, but also provide a cleaner, more efficient environment. Employees are sometimes assigned a locker in which they can store personal items, which can allow building cleaners to more effectively sanitize workspaces in the absence of personal effects.

In 2019, expect to hear more about the benefits and potential ergonomic implications of hot-desking as more firms transition their workplaces into this model.

Diversity in construction

Cheryl Mah: Canada pledged $76 million to draw more women into the construction trades in the 2018 federal budget. Skills training remains a top priority for the construction industry. With men comprising the majority of workers in the building trades, and a significant portion of them set to retire, creating a diverse workforce will be critical to addressing labour shortages. Attracting and retaining talent will continue to be at the forefront in 2019.

Climate risk and resilience

Barbara Carss: Climate risk drives a corresponding demand for resilient buildings and portfolio-wide risk management strategies. The buildings sector has a critical role to play in achieving Canada’s greenhouse gas reduction targets and has been flagged as a potential economic driver in the transition to a low-carbon economy. Real estate investors, owners, managers and occupants all have a stake in buildings and infrastructure that can withstand extreme weather events and promise a timely return to normal operations after the onslaught. As major consumers of electricity and natural gas, commercial real estate operators know they must prepare for flow-through costs of carbon tax in 2019. What Mother Nature will deliver is yet to be revealed.

Occupant well-being in the built environment

Kavita Sabharwal-Chomiuk: While it is already established that green building and design features can improve the health and wellness of building occupants, recent research from Harvard suggests that green design features can also lead to more productive building occupants. A study from the World Green Building Council similarly found that workplaces with natural light, thermal comfort and minimal contaminants in cleaning agents helped cut down on absenteeism and enhanced job satisfaction.

Since employers spend up to 90 per cent of their total costs on employee salaries and benefits, many find it is in their best interest to invest in building improvements that support employee health and well-being. Last year, the first office building in Canada became Fitwel-certified following a stringent process, but many employers are taking it upon themselves to at least introduce some wellness features into the workplace, such as bike racks and showers, fitness centres or a nutrition program for employees.

As more focus is placed on occupant health and well-being, the WELL v2 pilot, which was launched in 2018, and Fitwel standards are guiding steps companies can take to improve employee wellness in the workplace. In 2019, expect more companies to make strides towards improving quality-of-life for employees, leading to more productive workers.

Addressing the effects of tariffs on the cleaning industry

Zandile Chiwanza: There has been a trade war brewing between the U.S. and China since last year, and the big question for many in the professional cleaning industry is how much tariffs might impact the cleaning industry in Canada.  ISSA,  the worldwide cleaning industry association, publicly opposed the proposed tariffs, that would affect, among other things, intermediate component parts or ingredients used by U.S.-based manufacturers in the production of finished goods such as mops, buckets, brushes, janitorial carts and cleaning product formulations.

Looking ahead, industry experts are concerned these tariffs will continue to hurt the entire supply chain as there is potential for more price increases in 2019 passed on to governments, manufacturers, distributors, and ultimately consumers.

Regulatory manoeuvres

Barbara Carss: Whether it’s the introduction of new rules or relaxation of old ones, the regulatory landscape is likely to shift in 2019. Provincial governments are just settling into office in Ontario and Quebec, watching a slim majority margin in British Columbia and readying for an election in Alberta — translating into manoeuvres with repercussions for real estate investors, owners, managers and occupants. Environmental and economic pressures are flagged to headline this fall’s federal election debates, while Canadian cities experience rising demand for affordable housing, sustainable growth and business certainty. Taxes, tariffs, codes, standards, targets, incentives and promised red tape reduction will all play into the mix.

Innovation influences design

Cheryl Mah: Building livable future cities will mean embracing technology in its various forms. Self-driving vehicles is one technology that is being actively developed and will impact urban design. Technology and innovation is changing the way industry is designing and constructing buildings, and will once again be at the forefront of conversations for design professionals this year.

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