• Economic uncertainty.
• Cost of benefits.
• Recruiting/retaining qualified
• Regulatory requirements.
• Government policy.
• Weak demand.
• Data security.
• Employee productivity.
• Access to capital.
• Employee morale.
Those concerns served as food for
thought for participants as they
contemplated and discussed future
demand for office space.
Multifamily: Canada and
Ross Moore, director of research,
Canada, for CBRE, provided a
glimpse into the Canadian multifamily market, which is changing in ways
Moore characterized as “dramatic”
on the ownership front, as investors
seek new opportunities. He indicated
that much of the nation’s multifamily
stock is old and not of institutional
quality. It is locally controlled by families that hold onto the properties for
generations because they are subject
to huge capital gains taxes when the
properties are sold. (There is no 1031
exchange equivalent in Canada.)
Moore said that Swedish investors,
including Akelius and others, have re-
cently entered the Toronto multifamily
market in pursuit of value-add op-
portunities. New investors are taking
a much more active role than those
of the past, renovating apartment
buildings and resetting rents from,
for example, CA$800 to CA$1,200
per month, a 30 percent jump that
is achievable because of very low
vacancy rates, which historically
have hovered around 2. 5 percent.
Asian money and pension funds are
also getting in on the action, having
registered a tremendous increase
in the amount of capital invested
in multifamily properties in Canada
between 2014 and 2015. Asked why
multifamily in Canada (and else-
where) is gaining investor attention,
Ross replied, “because investors have
run out of things to buy.”
Moore added that Canada is moving
to a European model of residential
living, with immigrants, empty nesters
and millennials becoming more com-
fortable with smaller spaces in vibrant
During the retail discussion, partici-
pants talked about how millennials
do much of their shopping online,
predominately via their smartphones,
making purchasing decisions based
on ratings provided by sites like Yelp,
and how they respond to terms like
“authentic,” “natural,” “social” and
“environmentally responsible.” Videos
are a huge component of millen-
nial purchases; according to CEL &
Associates, Inc. roughly 70 percent
of millennial shoppers view videos as
part of their online shopping process.
Participants discussed how “
experience” continues to be the driving
force behind brick-and-mortar retail
leasing, with small-format grocery
stores as well as fitness and wellness
facilities like gyms, yoga studios and
massage services occupying space,
while restaurants are also generating demand. In short, personalized
experiences that cannot be achieved
online — at least not yet — are filling
The group also explored the concept
of showrooming, not only in terms of
displaying goods to be touched and
tried on before they are purchased
online, but also in terms of branding.
Bennett Gray, senior director, national
forums and NAIOP Research Foundation at NAIOP, mentioned the example of Capital One’s 360 Cafe in San
Francisco, where anyone can work,
Source: CBRE Limited, RealNet Canada, Collette Plante, JLR Land Titles Solutions, Q2 2015.
CANADIAN MULTI-RESIDENTIAL PURCHASER PROFILE – ALL TRANSACTIONS
2009 2010 2011 2012 2013 2014 H12015
Private Investor – Canadian REIT/REOC Foreign Investor Pension Fund Institution Private Equity
Canadian Multifamily Purchaser Profile, All Transactions
Source: CBRE Limited, RealNet Canada, Collette Plante, JLR land Titles Solutions, Q2 2015
Private Investor, Canadian REIT/Real Estate Operating Company Foreign Investor Pension Fund Institution Private Equity