Halloween Alley Joins ReDev Properties Ltd for the Season

ReDev Properties Ltd. is excited to welcome Halloween Alley to two of our properties: Inglewood Town Centre, Alberta and Broadview Plaza, Alberta.

As Canada’s largest independently-owned retailer of Halloween costumes, accessories, décor and props, Halloween Alley will be a tenant with ReDev Properties Ltd from September 1 – November 10, 2014.

“It’s stimulating to have pop-up Halloween stores at our portfolios,” says Richard Crenian, President of ReDev Properties Ltd. “Halloween Alley is well-established and their temporary positions with our portfolios can bring in new demographics at our plazas.”

With over 35 locations across Canada, Halloween Alley supplies adults, children and pets Halloween costumes, décor and accessories.

Help Your Children Invest in Properties

It’s no secret commercial real estate investments in Canada have been performing very well lately and forecasts for future performance continues to look positive.

While you might already have investment portfolios for yourself, have you considered starting for your children as well? Here are six reasons why it might be beneficial to start for both you and your children.

1. Great Returns, Low Risk

Commercial real estate investments are low risk and produce above average returns. They’re safe and stable investment options.

2. Tax Benefits

Real estate investment comes with many potential tax benefits. With the help of a tax advisor, a sound strategy for CRE investment could dramatically increase your true net returns over the years.

3. Solid Long Term Investment

Unlike day-to-day trading, commercial property investments tend to be long-term profiles, with longer time leads.

4. Backup for Residential Investment

Aside from purely investing, residential investments can act as backup, incase residential prices fluctuate in undesirable ways.

5.  Funding Your Children’s Future

These investments are great sources to fund for activities, post-secondary education or other surplus to help them start their adult life on the right foot.

6. Educational

The benefits of longer leads and lower risks create perfect training grounds for new investors. There won’t be pressured to make quick decisions, nor will they need to dedicate all their spare time to the investment.

Foreign Investments in Canada

Statistically-speaking

Talk to anyone about the level of Chinese foreign investment in Canadian real estate, and you’re bound to get a different answer each time you ask the question. Why? Because the Canadian Government doesn’t actually collect the kind of data on foreign investment that most other countries around the world do. In the absence of hard numbers on the subject, we’re left to ponder the root causes of rising home prices in major cities on our own, and whether or not real estate markets are being driven by other factors.

Studies with mixed results

 In an effort to measure the impacts of foreign investment in the Canadian real estate market, many studies have come up with mixed results that range from independent studies on last names, to pseudo-scientific analysis that focuses squarely on luxury home sales from a single agency.

Regardless of which side of the fence your opinion falls on, we can all agree that foreign investment in Canadian real estate is not disappearing anytime soon.  This raises two important questions: Is the money coming from China? If so, why are they investing in Canada?

Loosening currency restrictions

The Chinese government caps the maximum amount of yuan that individuals are allowed to convert each year at USD $50,000. In addition, individuals are banned from directly transferring the currency abroad. However, despite these currency restrictions, wealthy Chinese have been buying pricey real estate in markets such as New York, Sydney and Vancouver for years.

To understand how that’s possible, we first need to examine Chinese internal politics. According to the Society for Worldwide Interbank Financial Telecommunication, the yuan surpassed the euro in 2013 as the world’s second most-popular currency in trade finance. To help maintain the surging profile of the yuan, Beijing has taken steps to free up the movement of capital in to and out of China. In February 2014, The People’s Bank of China quietly expanded a little-known trial program that’s been in effect since 2011, which makes it easier for companies with operations in Shanghai’s free-trade zone, to move yuan.

Hedge cities

What’s the allure of Canada and why are they investing their money here? There are a number of factors as to why Canadian real estate is such a big draw overseas in China. For instance, the stability of our political and investment climate, our relatively low prices, and the sheer beauty of our country. But the two biggest ones are:

1. Convenience: Canada is conveniently located across the Pacific, which makes it increasingly accessible for Chinese investors compared to other major property markets.
2. Low Risk:  Canadian cities are seen as ‘hedge cities’ by Chinese investors, which means Canadian real estate is viewed as a safe place for long term investment.

By comparison, Chinese investors spent $22 billion on American real estate in 2013, and $17.2 billion on Australian real estate. So while we know there’s no official data for Canada, the smart money is on Chinese investor spending in Canada being on par with those two countries.

But it’s not just wealthy Chinese investors who are getting in on Canadian real estate. Small-time investors like China’s middle class are buying individual units. They probably number close to the half-billion mark, they make up less than 45% of the total Chinese population, and they are flush with savings and disposable income. This means they need a safe place to deploy their capital.

Some families are looking for a safe-haven for their life savings, while others might be looking for a place to retire. While that does technically reduce the overall number of units available for purchase by small-time Canadian investors, there are far worse things than having your country viewed as a hotbed for investment.

Shining star

The one thing we know for sure is that without any data on foreign investment in Canada, it’s hard to have a truly informed debate on the subject. We also know that capital always flows where the risk is low and the returns are high, so in the absence of that hard data, we see Canada continuing its reign as a shining star on the international property map throughout 2015.

Richard Crenian

Update at Kensington Commons, ReDev Properties Ltd

ReDev Properties Ltd. is excited to report construction at Kensington Commons is progressing well and on schedule.

The two buildings’ exterior structures, such as storefront frames and glazing, exterior stucco and wall panel installation are close to completion, with exterior sidewalks expected to be completed shortly.

“We’re exited to see our blueprints come to life,” says Richard Crenian, President and CEO of ReDev Properties Ltd. “There have been minor delays due to wet weather last week, but with next week’s warm and sunny forecast, the team is expecting to get back on schedule.”

The next phase of construction will focus on completion of the interior finishes for the buildings.

             

Private Investors Scooping up Commercial Real Estate Deals

According to the latest data, private Canadian investors have finally managed to beat off big pension funds in order to close on more commercial real estate deals.

As individual Canadian investors got serious about investing at home, investment in local commercial real estate improved during the second quarter of 2014.

According to the Real Property Association of Canada (REALpac) Q3 2014 Canadian Real Estate Sentiment Survey, the most comprehensive study of confidence in the Canadian commercial property industry remained strong. Opinions regarding the availability of debt, equity capital and low interest rates were all positive.

However, it’s also noted there is some separation beginning to appear in gateway markets and class B properties. Although new development remains brisk, retrofitting existing properties has also gained momentum.

The Digital Journal reports that private investors scooped up the lion’s share of the $5.1 billion of commercial real estate deals completed in the second quarter of 2014. Action from public REITs collapsed to under 10 percent. Pension funds took in just 11.4 percent of the deals, while private investor activity soared by almost double to over 60 percent.

Total activity was up almost 10 percent year over year. The bulk of transactions were smaller deals, yet increased volume is expected for the final two quarters of 2014.

Big funds and public REITs are unable to compete effectively in smaller deals and operate too slow for fast moving markets like Edmonton. This trend is anticipated to continue as more investors chase the superior returns and better security of other alternatives such as private syndications and real estate partnerships offering direct investment opportunities.

Analysts expect there to be more opportunity ahead for smaller investors that can move fast, especially if they can pool money together in partnerships with other accredited investors in Canada.

Edmonton Gets Two New Luxury Hotels

Downtown Edmonton hasn’t had a new hotel since the 70s. Now it’s getting two luxurious ones.

It surprising that the city has gone this many decades without a trendy new hotel development, especially with the billions of dollars pouring into other types of infrastructure in Edmonton.

But the wait is now over. According to Edmonton Journal coverage, the first hotel should be opening by Q3 2015, which will be the $45 million Hyatt Place at Jasper Avenue and 96thStreet.

The second hotel, which will be a part of the Katz Group Edmonton Arena District, may not open its doors until late 2017. While flag negotiations are still in process, many speculate that the hotel will open under the Marriott banner.

Hotel advisory consultants at PKF have already increased their forecasts for hotel rates, revenues and occupancy in Edmonton for 2014, by more than double. Rates for the new hotels are expected to run between $150 and $400 per night.

For Edmonton this suggests that there will be an increase in visitors and tourists. It also suggests that more affluent visitors will be inbound and will be staying for longer.

On the street level this will boost the retail and hospitality industries even further. On the macro level, these hotels will help support Edmonton’s new elevated status on the world map and push it closer to being a real world city.

For Canadian real estate investors this doesn’t necessarily suggest that it’s time to jump on the hotel train. In fact, there are many areas in Edmonton for investors to flourish in. It just needs to be the right choice for you.

Retail Industry in Canada Gets a Boost

The Canadian retail sector continues to flourish in the last quarter of 2014, bringing out positivity amongst Canadians.

The Bloomberg Nanos Canadian Confidence Index, a Canadian consumer sentiment tracking system has been climbing since June 2014. Areas such as job optimism have almost reached 70 percent in satisfaction.

In July 2014, confidence surged even further, reaching a four-year high. Both sub-indexes of the Nanos Canadian Confidence Index – The Expectations Index and The Pocketbook Index have remained optimistically above two-thirds of the population since May.

It isn’t hard to see the reasons behind the spike in confidence amongst Canadians. For example, Statistics Canada reports Canada’s trade surplus came in at more than double the expected forecast at $2.6 billion.

Furthermore, Canadians are receiving even more support in the retail sector. Canada’s Finance Minister Joe Oliver is currently trying to reduce Visa and MasterCard fees to retailers by as much as 10 percent. While this move won’t necessarily lead to lower prices, it could significantly add to the revenue and profitability of retailers.

Richard Crenian

Technology and Retail Marketing

From mobile apps to social media to push notifications via iBeacon, marketing continues to increase effectiveness and investment returns. Through retail marketing technology, retailers are increasingly able to custom tailor buying experiences and better serve consumers to create win-win situations for all sides. Ultimately, this drives sales and profits for brick and mortar retailers in Canada, resulting in increased tenant revenues and higher rents for retail property investors.

When used by both landlords and retail tenants, technologies can help increase foot traffic, community, loyalty, customer retention and consumer spending for local shopping plazas.

In addition, new marketing technologies are also helping landlords and property managers promote and increase performance of retail properties in Canada. Better data, accuracy and effectiveness in marketing and improving per-foot sale figures allow for filling units and maintaining maximum occupancy at the best rates easier.

Operational efficiency is also improving for both retail tenants and landlords – thanks to many new technologies and software. Better bookkeeping software results in less down time dealing with paper and taxes, while online and mobile payments are decreasing retailers’ possibility of fraud.

Foreign Investments in Canada

Statistically-speaking

Talk to anyone about the level of Chinese foreign investment in Canadian real estate, and you’re bound to get a different answer each time you ask the question. Why? Because the Canadian Government doesn’t actually collect the kind of data on foreign investment that most other countries around the world do. In the absence of hard numbers on the subject, we’re left to ponder the root causes of rising home prices in major cities on our own, and whether or not real estate markets are being driven by other factors.

Studies with mixed results

 In an effort to measure the impacts of foreign investment in the Canadian real estate market, many studies have come up with mixed results that range from independent studies on last names, to pseudo-scientific analysis that focuses squarely on luxury home sales from a single agency.

Regardless of which side of the fence your opinion falls on, we can all agree that foreign investment in Canadian real estate is not disappearing anytime soon.  This raises two important questions: Is the money coming from China? If so, why are they investing in Canada?

Loosening currency restrictions

The Chinese government caps the maximum amount of yuan that individuals are allowed to convert each year at USD $50,000. In addition, individuals are banned from directly transferring the currency abroad. However, despite these currency restrictions, wealthy Chinese have been buying pricey real estate in markets such as New York, Sydney and Vancouver for years.

To understand how that’s possible, we first need to examine Chinese internal politics. According to the Society for Worldwide Interbank Financial Telecommunication, the yuan surpassed the euro in 2013 as the world’s second most-popular currency in trade finance. To help maintain the surging profile of the yuan, Beijing has taken steps to free up the movement of capital in to and out of China. In February 2014, The People’s Bank of China quietly expanded a little-known trial program that’s been in effect since 2011, which makes it easier for companies with operations in Shanghai’s free-trade zone, to move yuan.

Hedge cities

What’s the allure of Canada and why are they investing their money here? There are a number of factors as to why Canadian real estate is such a big draw overseas in China. For instance, the stability of our political and investment climate, our relatively low prices, and the sheer beauty of our country. But the two biggest ones are:

1. Convenience: Canada is conveniently located across the Pacific, which makes it increasingly accessible for Chinese investors compared to other major property markets.
2. Low Risk:  Canadian cities are seen as ‘hedge cities’ by Chinese investors, which means Canadian real estate is viewed as a safe place for long term investment.

By comparison, Chinese investors spent $22 billion on American real estate in 2013, and $17.2 billion on Australian real estate. So while we know there’s no official data for Canada, the smart money is on Chinese investor spending in Canada being on par with those two countries.

But it’s not just wealthy Chinese investors who are getting in on Canadian real estate. Small-time investors like China’s middle class are buying individual units. They probably number close to the half-billion mark, they make up less than 45% of the total Chinese population, and they are flush with savings and disposable income. This means they need a safe place to deploy their capital.

Some families are looking for a safe-haven for their life savings, while others might be looking for a place to retire. While that does technically reduce the overall number of units available for purchase by small-time Canadian investors, there are far worse things than having your country viewed as a hotbed for investment.

Shining star

The one thing we know for sure is that without any data on foreign investment in Canada, it’s hard to have a truly informed debate on the subject. We also know that capital always flows where the risk is low and the returns are high, so in the absence of that hard data, we see Canada continuing its reign as a shining star on the international property map throughout 2015.

How to finance commercial real estate investments in Canada

Looking to add real estate investments to your portfolio but unsure how to balance your financing? Here are four ways to help you leverage your finances to include real estate investments as one of them.

Bank Loans & Mortgage Lenders

Local banks are the most popular destinations to look for a loan. Many provide appealing terms to borrowers who have good credit risks and substantial savings.

If personal banks can’t service all your needs, there are many mortgage lenders that specialize in this area. They often offer expanded underwriting options for a wider variety of property types and transaction scenarios.

Crowdfunding

Crowdfunding’s popularity has been increasing over the past couple years. This source has become a staple in commercial property finance, by expanding on simple peer-to-peer direct lending over the internet to donation based funding for art and nonprofit projects.

New platforms offer both debt and equity crowdfunding solutions. This can be an advantageous option for those looking to launch new developments from the ground up, with needs of extra visibility and marketing, as well as funding.

The main caveat with this option is that successful crowdfunding campaigns can require extensive resources in promoting the campaign itself.

Partnerships

Joining in with a partnership structure can prove to be advantageous. However, it’s important to do your research and ensure your personal investing priorities are in line with the partnership’s.

The Hybrid Approach

Maybe the standard approach isn’t up your alley. There are always opportunities to combine these options. This could involve partnering up on the down payment or improvement funds and financing the balance through more conventional means, or using third party funds to assist with additional value.

Whichever approach you decide to take, it’s important to know none of these above options are the best ways or the right way. It’s all about selecting the best option of each individual investor and for the current opportunity.

How will you finance your next property investment?

Warren Buffett says stick within 

‘Your Circle of Competence’

Are Canadians missing out on the best benefits their investments can provide by not sticking as close to home as they could?

With the U.S real estate market still on uncertain ground and rumors of a potential market crash in cities like Hong Kong and Singapore, many Canadians have decided to start shifting their investment portfolio closer to home.

In fact, this transition to invest on home soil might not be such a bad idea.

Even legendary investor Warren Buffett, who recently became a big fan of real estate investing and investing in Canada, says he is always careful to stick within his ‘circle of competence’.

This means investing in what you know best.

For Canadians, investing close to home accomplishes this advice perfectly. Just by peering out the window, going for a coffee walk or doing routine grocery shopping, Canadians get first-hand experience and information on current happenings of the country.

Also this makes it easier to keep a regular eye on investments.