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Real Estate Bisnow
January 3, 2012  
Timbercreek LTile3
Banking On US Recovery

Cushman & Wakefield’s new office outlook report provides a tale of two 2013s and a tale of two GTAs.
Apparently, we should settle for mere stability in the first half, but a strengthening US recovery, a steadier euro zone, and a slow drop for the loonie should kick-start solid growth in Q3. And while Michael Caplice, SMD office leasing, says it will still be a landlord’s market downtown, suburban markets will likely struggle with weak overall demand, at least in the first half. “Longer term, I’m a big believer in the suburban markets.” He sees the west GTA best-positioned once the US recovery is solidified, and that also goes for industrial space. Key advantages are proximity to the border, the airport and the GTA’s best highway network (a veritable fugitive's paradise). You can see the report here.

David Garrett, 1948-2012
Colleagues and competitors from the local CRE community gathered at an Oakville funeral home yesterday to pay respects to longtime Cushman & Wakefield leasing specialist David Garrett. The former office leasing SVP was remembered as a father, husband, grandfather, storyteller, fisherman, horse lover, gardener and art collector. David, a 27-time recipient of the President’s Round Table Award, died Dec. 27 after a brief battle with cancer. He was just 64. The family would appreciate donations to the Princess Margaret Hospital Foundation. Memories and messages of condolence can be sent here.

The Year of the Multi-res REIT
The Bloomberg Canadian REIT Index posted total returns of 19.1% in 2012, completing a great four-year run. Whether you go price only (104.7% vs. 33.4%) or include dividend re-investments (166.3% vs. 49.7%), REITs have been more than three times as profitable as the S&P/TSX Composite Index since January 2009. Can it continue? Frédéric Blondeau, Dundee Capital’s senior RE analyst thinks so. “Although, by historical standards, absolute valuations are high,” he tells us from snowbound Montreal, “institutional investors are seeking large platforms that almost exclusively publicly traded REITs provide.” But not all REITs are created equal. “We think multi-residential is particularly well-positioned,” he says, citing a shortage of quality product and strong institutional demand.

Habitat Needs CRE Help
With 10 companies on board, Secure Capital founder David Ogden (right, with Joseph Sorbara) is daring to dream the third annual Habitat for Humanity CRE Campaign might deliver two homes in 2013. “We’ve done one in each of the first two years, and that’s great, but there’s a reasonable chance that by the end of Q1 we’ll have everything in place for two,” the Habitat board member says. “It’s nice to be able to tell prospective supporters every nickel donated goes directly into the homes, and we can do that because all our overhead is covered by the ReStore [building supply] outlets.” So far, Sorbara Group, KingSett, Colliers (where David worked five years), Cushman & Wakefield Atlantic, GPM, Firm Capital, Strathallen Capital, Goodmans, Pinchin Group and Secure Capital are in.

Auld Lang Signposts
The comment we heard more than any other from the Toronto CRE community in 2012: If we don’t get serious about transit expansion, especially a new downtown subway, the entire GTA economy is endangered. (The other most popular comment: We want hockey back!) Looking ahead, Bisnow will make three not-so bold 2013 predictions: 1) Toronto will surpass Chicago in population in Q4 (though trends indicate the Golden Horseshoe will have to wait a couple of decades to catch Chicagoland). 2) Someone will buy the site and resume construction on what was to have been the new Globe building. 3) When the province’s OLG decides where to put the new casino, it’ll be embarrassing for the province’s Metrolinx transit agency—and Cabinet—if it’s not at a Mobility Hub.

Diamond Digging New Career
Diamondcorp CEO Stephen Diamond can’t believe how well he timed his transformation to developer from A-list real estate lawyer at McCarthy Tétrault, specializing in complex rezoning applications. “It’s been an incredible five years,” he says about Toronto’s hyper-intensification and his new role in the process. He can’t talk yet about JV projects in the works with Allied and RioCan, but he speaks proudly of the heritage preservation parts of condo developments at Deer Park United Church and 5 St. Charles. "The big thing I say about the transition is: In law, your chances of success are based 75% on hard work and 25% on luck. As a developer it’s about 50-50.”
Now that we’ve survived the latest apocalypse, you should know NASA and the NOAA forecast intense solar storms in 2013. Let us know how it affects you at stephen.wickens@bisnow.com.
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