Commercial properties gain popularity

Hey there, time traveller!
This article was published 03/10/2016 (3317 days ago), so information in it may no longer be current.

Multi-family buildings in Winnipeg aren’t the darlings they once were for local and out-of-province investors, according to a new Re/Max report.

In its recently released 2016 commercial investor report, the real estate firm says while the demand for commercial properties continues to outstrip the supply in Winnipeg, investors aren’t as enamoured with apartment blocks and other multi-family properties as in previous years. Instead, vacant land and retail or industrial buildings are now the properties of choice.

“Demand in the market has shifted away from multi-family properties as the cost to renovate or repurpose the buildings that make up the current stock of inventory is often deemed to exceed the value of those properties,” the report states. “As a result, investors interested in multi-family properties typically look for vacant land to build new structures.”

Or they look to buy good retail or industrial properties, added Mark Thiessen, a veteran commercial real estate agent with Re/Max Professionals.

Thiessen said retail properties are appealing “because they’re straightforward and visible, and people can get a handle on them a lot easier.” Vacancy rates and the demand for retail space also remain healthy.

The same goes for good industrial properties, he added. With interest rates so low, a growing number of local businesses also see owning their space as an attractive alternative to leasing, he added.

Thiessen said the turning point for multi-family buildings came last year, when the province’s Residential Tenancies Branch introduced stricter guidelines for residential-rehabilitation projects. The new guidelines mean landlords had to spend a lot more on upgrades to their properties in order to get their building temporarily exempted from rent-control guidelines.

Also, most of the better-located and better-quality apartment blocks have either been sold or aren’t for sale, he said. That leaves mostly less desirable properties, which often cost too much to refurbish or to convert to condominiums.

While multi-family properties are less popular now, Thiessen said some are still selling. A case in point is an older, three-storey, 30-suite, apartment block at 45 Carlton St., which was purchased by a local investor — the Sunrex Group of Companies — which plans to rehabilitate it.

Sunrex vice-president Phil McAmmond said the building is solid and boasts a lot of character. He noted Sunrex’s specialty is purchasing older buildings and either rehabilitating them, or converting them to a different use. Another example is its recent purchase of the 105-year-old Sterling Building at 283 Portage Ave. Sunrex plans to convert the office tower into rental apartments at a cost of about $9 million (including the cost of acquiring it).

Local firm joins forces with Toronto’s JLL

One of the country’s largest commercial real estate firms — JLL Canada — now has an official presence in the Winnipeg market.

The Toronto-based firm recently announced it has formed strategic partnerships with three commercial resale estate companies in Manitoba, Saskatchewan and Atlantic Canada.

The new Manitoba partnership is with Winnipeg’s Capital Commercial Real Estate Services Inc., which until August of last year had been the local affiliate for CBRE Canada Ltd. When CBRE severed those ties in favour of opening its own office here, the Winnipeg firm changed its name from CB Richard Ellice Chartier & Associates to Capital Commercial.

Trevor Clay, a principal with Capital Commercial, said it was shortly after that Capital Commercial began working informally with JLL. Now that informal relationship has become a formal one.

Clay said having a strategic partnership with a national player such as JLL makes sense for Capital Commercial. If clients have needs in other markets, it can work with JLL agents in those markets to meet those needs, and Capital can do the same for JLL clients who are doing business here.

“We’ve already seen a substantial volume of referral business and co-operative pitches in the last year as a result of this partnership with JLL,” he said.

JLL Canada president Brett Miller said the new partnerships also enable JLL to expand its brand in the Canadian market.

Know of any newsworthy or interesting trends or developments in the local office, retail, industrial or multi-family residential sectors? Let real estate reporter Murray McNeill know at the email address below or at 204-697-7254.

murray.mcneill@freepress.mb.ca