Nov 20

Canadian Commercial Real Estate Investment: Trend Predictions for 2015

Written by: Richard Crenian

Nov 10 - Predictions for 2015

As we approach 2015, investors need to know what to expect for both the Canadian and global property market in order to maximize their income and wealth potential. So where is the market heading?

 

2015 Global Real Estate & Capital Trends

Next year is expected to be one of the most pivotal years for international real estate investment. The latest data shows global investment in real estate is already up close to 20% in 2014. This is expected to be just the tip of the iceberg of what will be seen in 2015.

Perhaps the most notable factor of all is the new London CGT (Capital Gains Tax), which comes into effect by April 2015. London investment property prices have already been compressing to facilitate fast sales ahead of the deadline in order to preserve wealth and minimize tax liabilities. Analysts are predicting that more noticeable discounts in the London real estate investment market are expected over the next two quarters, with some of this new capital coming to Canada.

While there will be ongoing uncertainty in the markets in 2015 due to the political landscape, global civil unrest, and frothy Asian and US markets just to name a few, this will be accepted as the new norm. Fund managers and private investors have become comfortable operating in this type of environment and know how to pull off wins in spite of it.

Increased liquidity in capital markets and access to investment property financing is expected to ease significantly in 2015. Banks in the United Kingdom have pulled back on financing prime London property and need other channels to put their capital to work, with Canada emerging as an easy choice. The US has also begun forcibly pushing lenders to make more loans and free up credit.

 

Canadian Commercial Real Estate Performance

On the Canadian stage, Edmonton continues to demand the spotlight as the most promising destination for asset value growth and yield performance, as its fundamentals keep improving.

Edmonton continues to evolve and command respect as a leading business destination, startup scene, a magnet for VC’s and angel investors, and tourism. While many projects have been in the works and in talks for 12 to 24 months, it will be in 2015 that many of these projects come to fruition.

As these developments begin to have a tangible impact on the local economy, new jobs will be created and wages will grow. This will result in increased competition for Edmonton retail floor space causing shopping plaza rents to head upwards, providing significant yield and equity gains for those who invested early.

 

Posted in Canadian Economy, Commercial Real Estate, Edmonton, Investing Alberta, real estate investment, Richard Crenian
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Nov 20

How Commercial Real Estate Investment Is Solving Harvard’s Retirement Crisis

Written by: Richard Crenian

Nov 10 - How Commercial Real Estate

Harvard Business says we are facing a new retirement crisis. However, some Canadians may have already solved it through commercial real estate investment.

What is causing today’s leading financial minds to believe that even those with substantial investment portfolios are facing a crisis in retirement? What does the Harvard Business Review see happening to many portfolios that private investors aren’t being shown, and what investment opportunities can perhaps assist Canadians dodge the coming disaster?

The Quiet Investment Crisis

In a new Harvard Business Review (HBR) report, a leading Harvard and MIT professo and Nobel Prize winning economics leader poses that the vast majority of individuals are investing using incorrect strategies, in the wrong vehicles and are watching the wrong measurements. Combined, this is setting them up for falling short of their financial goals for retirement, as well as their ability to support themselves after they finish working. HBR specifically hones in on the fact that individual investors aren’t investing well to produce passive income after their working years.

Anthony Robbins’ new book “Money” also discusses this trend and how markets are poised to deliver crushing blows to many individuals with investments in tech and the stock market unless they act quickly to appropriately restructure their portfolios with the right balance.

The Advantages of Commercial Real Estate Investing

In contrast to stocks, bonds and tech startups, direct commercial real estate investment appears to not only deliver on income needs in retirement, but also provides Canadian investors with other benefits, including:

  • Keeping ahead of inflation
  • Wealth preservation
  • Reducing tax liability
  • Above average returns
  • Built in diversification
  • Security

Honing in on the Best Commercial Property Investments

So where are the best commercial property investments today?

The barriers to commercial real estate investing have been dramatically lowered in recent years.  This is great for new savers and workers, as well as those in mid-life needing to get back on track. It’s now easier than you think to get in with new options and partnership structures. In terms of searching for an optimal location for both yields and capital growth over the next few years, Edmonton appears to stand out as a top pick.

 

Posted in Commercial Real Estate, real estate investment, Richard Crenian
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Nov 19

How to Choose the Best Type of Commercial Investment Property for Your Portfolio

Written by: Richard Crenian

Nov 10 - Choosing the Right Type

There are a number of choices to make when looking for a real estate investment. One of the most significant choices can be selecting the type of property to invest in. How does one choose?

Whether you are looking for your first property investment in Canada or seeking the right acquisition to compliment your existing real estate portfolio, there are a number of decisions which must be made. These may include taxation considerations, finding a reputable and effective asset manager, and determining which type of partnership or structure is best suited for your investment goals.

When it comes to investing in property, you simply can’t lump all real estate together in the same category. That would be similar to investing in the stock market without any consideration for which sectors, industries, funds and individual stocks are performing.

When it comes to real estate investing, the results Canadian investors should expect will vary. This will depend on location, the performance drivers of a given property and the type of property. All real estate is local and each property sector operates on slightly different cycles.

There is a massive difference in the timing and way residential homes and even commercial multifamily apartments perform. This is a big part of the reason why Canadians need to diversify into commercial property in order to withstand future fluctuations in their home value.

When looking at the commercial property landscape there are industrial, office, multifamily, retail and even vacant land to consider. So which is the best investment?

Rather than one right answer, the best answer is which property type is right for you and your portfolio now. Some of the deciding factors and guiding questions that you should be asking to determine this include:

  • Which types of property do you understand the best?
  • Which have the best prospects for performance and income generation?
  • Which properties are likely to grow in the future?
  • Which type of real estate might provide the most non-monetary perks?
  • Which types of buildings will perform best in the market you want to invest in?
  • Which are best aligned with your personal timeline for potentially cashing out or restructuring?

Perhaps you are an engineer or an oil executive and know the industry’s needs inside and out. Maybe you own a sizable company with a large staff and can reap multiple benefits from an office building investment? For most individual Canadians, retail property stand out as the top choice. Most people clearly understand the concept of how they function and understand that shopping is not just popular, but is also a necessity. In locations such as Edmonton, it is also clear that there is great growth in the works, anchored by a high demand for space, which can deliver attractive cash flow and yields.

So the questions that still remains…What will you invest in?

Posted in Commercial Real Estate, Investing Alberta, real estate investment, Richard Crenian
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Nov 5

Alberta Remains Top Province for Real Estate

Written by: Richard Crenian

Alberta remains top investing real estateAccording to a new report, Alberta continues to top the rankings in real estate markets across Canada.

A new study, ‘Emerging Trends in Real Estate 2015’, from the Urban Land Institute and PwC pegs Edmonton and Calgary as the top two cities in Canada for real estate.

Strong job creation, continued urbanization, downtown development and population growth are among the reasons why Calgary and Edmonton took the top spots.

Data also shows 27 per cent of the Canadian population as Millennials and 27 per cent as Baby Boomers. This suggests the real estate market will be heavily active in the near future.

Boomers’ housing needs are changing, and not only are Generation Y migrating and buying homes, Generation Z is also on the verge of becoming a massive home buying and real estate investment force as well. According to a recent Wakefield Research study, Generation Z is incredibly bullish on real estate ownership, with over 80 per cent saying it is critical to them.

These factors, as well as the side effects of more global economic and real estate trends are colliding to provide for more fuel to the growth of Alberta’s top cities. When compounded, many may find their investment property performances in Alberta exceptional.

Posted in Alberta Vs., Canadian Economy, Commercial Real Estate, Edmonton, real estate investment, Richard Crenian
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Nov 5

Construction Boosts Canadian Property Returns

Written by: Richard Crenian

Consturction boosts Canadian economy

The latest data and commentary from the Canada Mortgage and Housing Corp. (CMHC) reveals an optimistic forecast for construction growth through 2015 and beyond. Canada’s housing agency anticipates 189,000 new housing starts in 2015.

Obviously much of this investment and construction will go to Alberta’s leading cities Calgary and Edmonton. The Urban Land Institute states these two destinations hold the best growth for real estate in Canada through 2015.

While Calgary and Edmonton continue fighting to be the most attractive and top performing real estate market in Canada, Edmonton seems to be coming out ahead. With the city’s current value proposition and velocity of growth, it looks to be leaving Calgary behind.

Edmonton has been attracting residents and businesses alike. Where the residential properties and small businesses go, demand for retail space follows. So does better performance of retail properties.

However, recent reports of Calgary’s steaming real estate market, in both new developments and resale tells us, this fight for Canada’s leading real estate market is far from over.

Posted in Alberta Vs., Canadian Economy, Commercial Real Estate, Edmonton, Investing Alberta, real estate investment, Richard Crenian
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Nov 5

Opening Up Canada to Foreign Investments

Written by: Richard Crenian

Opening up Canada Investment

Global investment in real estate is rising rapidly and with continued growth in the construction sector, property investors can expect increased returns.

Global real estate investment has risen by almost 20 per cent. Analysts not only expect new money to be invested, but they also believe large portfolios will be shifting as well.

According to The Globe and Mail, Alberta’s new leadership is pressing the federal government for new clarity and rule reform to aid the province in attracting more international investments.

In particular, those pushing for the changes want to open the doors wider for wealthy Chinese investors and firms. By doing so, Canada would draw attention from the likes of the largest sovereign fund in the world.

Until then, the Alberta market is open for smaller private and individual investors to capitalize on value opportunities in prime property.

Posted in Canadian Economy, Commercial Real Estate, real estate investment, Richard Crenian
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Nov 5

Strategies of Billionaire Investors

Written by: Richard Crenian

Strategies Billionaire InvestingThe world’s wealthiest investment gurus and billionaires are becoming increasingly transparent about their investment strategies. Wealthy global billionaires such as Warren Buffett, Carl Icahn and Tony Robbins are increasingly opening up about their investment secrets in new books, blogs and podcasts as they seek to share their success and help others achieve similar results in their portfolios.

Here are some areas they focus on:

Wealth Preservation

There’s a saying “big risk, big reward”, however, these risks should always be calculated. Wealth preservation and the return of investment capital is a priority, above return on investment.

This can explain why strongholds like London, Hong Kong, New York City and San Francisco continue to draw global investments even though yields have been poor lately.

Taxes

Paying close attention to taxes is important, especially minimizing tax liabilities. For example Amazon founder, Jeff Bezos has a map prohibiting staff from entering certain regions to prevent triggering new tax liabilities.

While Mr. Bezos and Amazon’s route might be a bit extreme for the average private investor, for most it can still mean 25 to 50 per cent difference in net returns, income and wealth. The difference becomes more significant overtime, as gains or losses are compounded.

Passive Income

Time is limited. No one wants to be tied to their investments, while their friends and family are having fun. Hence choosing investments with passive income can be beneficial.

Diversification

Diversification brings together the best of the above. It helps protect wealth further and ensures the consistency of investment returns and ongoing income.

Posted in Canadian Economy, Commercial Real Estate, real estate investment, Richard Crenian
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Oct 29

Global Real Estate Investing Continues to Grow

Written by: Richard Crenian

Global Real EstateAccording to the latest figures, global real estate investments have grown by over 17 per cent to almost $790 billion, and this figure is expected to continue to increase in 2015.

In addition, sources are leading us to believe we’ve only seen the tip of the iceberg in investment portfolio restructuring. With London’s looming new capital gain tax on the horizon, it’s set to create a substantial shift in the market, sending significant amounts of capital flowing into new investments and new markets.

Some of the world’s largest real estate funds are also exiting their earlier investments and re-allocating them into new investments and industries.

Profits made in emerging markets like Africa and India by local entrepreneurs are also being reallocated and placed into more secure markets or for diversification.

Regardless of where international real estate trends are heading, we’re sure Canada will be part of it.

Posted in Commercial Real Estate, Investing Alberta, real estate investment, Richard Crenian
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Oct 29

How to Start Investing in Commercial Real Estate

Written by: Richard Crenian

Oct 27 - How to Get Started

How to Start Investing in Commercial Real Estate Many Canadians are already investing in real estate via their own homes. However, investing in commercial real estate can diversify an investor’s portfolio and bring other valuable advantages residential real estate can’t, such as ongoing passive income or multiple tax benefits.

In the past, commercial real estate has been thought of as more challenging than residential investing. And for new investors, the whole process can be overwhelming and scary.

While there are differences between the two and different procedures are needed, investing in commercial real estate doesn’t have to be intimidating. Today, there are many options investors can choose to help ease them through their investments. From commercial financing, third party partnerships and syndication structures, expert management is always accessible.

Before investing, here are five strategies that can lead you to successful commercial real estate investing:

  1. Define your investment goals
  2. Clarify how much you want or have to invest and know your limits
  3. Layout timelines for when you want to start and how long you want your investment to carry on for
  4. Research which investment types are best suited to you
  5. Decide who can help, and what options are available
Posted in Canadian Economy, Commercial Real Estate, Investing Alberta, real estate investment, Richard Crenian
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Oct 23

Will the Current Stock Market Plunge Impact Real Estate Investing?

Written by: Richard Crenian

Richard CrenianNews headlines have been buzzing with alerts about the latest stock market plunge. While this may be a temporary slump in the stock market, analysts have been predicting as much as a 60 per cent dive in stock prices for some time. It’s difficult to estimate a precise moment, but the current fundamentals of the stock market suggest that a steep sell-off is inevitable.

Money markets have already been reacting to the mayhem with mortgage interest rates reportedly edging even further down. This creates significant opportunities for Canadian investors to expand in commercial property acquisitions with low rate financing, which will enhance the property’s cash flow and NOI.

Existing commercial property owners can find lower rates ideal for restructuring debt leverage to improve investment property performance. Individual investors can also find it to be an ideal moment for refinancing their homes and even accessing additional capital to invest.

Posted in Commercial Real Estate, Investing Alberta, real estate investment, Richard Crenian
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