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Author: Jessica Wright

Spotlight plans 4-tower project in Kitchener

Spotlight Development proposes bringing its “The Inclusive” brand of multi-residential housing to Kitchener. This rendering shows The Inclusive in Toronto. 

Transaction levels were slightly below average this week, with Hamilton lagging behind. However, with the start of a new month of transactional data on the horizon, it is expected that levels will pick up next week.

The biggest transaction of the week occurred in Waterloo, where Wilfrid Laurier University sold a student residence for $23 million to London Property Corp.

Another noteworthy transaction was the sale of 9.59 acres of industrial land on Hutchings Rd. in Brantford, which sold for $879,000/acre and further highlights the strong demand in the Highway 2 corridor. The price-per-acre is also of note, as it’s been rare to see land transactions of “market” value since the impacts of interest rate increases.

In the news, the CBRE has noted that cap rates are trending up, and transaction levels are slow for Q1 in Canada —  and based on our data, the same can be said for Hamilton. Additionally, HPL is planning to move to Pier 8, and the Hamilton Airport has released its 2022 report.

The GHA Sales Transaction Database offers you this week’s CRE transaction activity.

Take care,
Alex Manojlovich
Director, Strategy & Research

News Headlines

in Editorial, Latest News, Weekly Market Report Newsletter Posted by Jessica Wright

What is a Reserve Fund?

what is a reserve fund?

A reserve fund is like a special savings account that someone or a group sets up to have money available in case they have to pay for unexpected expenses in the future. If the reserve fund is meant to pay for planned improvements, they might use assets that can’t be turned into cash easily. Sometimes, a group of homeowners who live in the same area can have a reserve fund too. They put money in it whenever they pay their dues so that they can keep their community and its shared things in good condition.

How a reserve fund works

A reserve fund is like a special money pot that is set aside to pay for things that are planned, normal, or unexpected. This fund can be created by different types of groups, like the government, banks, or families.

Usually, people put money into the reserve fund regularly, and it earns interest if it’s not being used. The amount of money in the fund can vary, but it’s important to have enough in case there are sudden expenses. The money in the fund is often kept in an account where it’s easy to get to, like a savings account.

Sometimes, when people retire, they get money from a reserve fund. This is because when they were working, they put some of their pay into a pension plan, which is like a reserve fund for retirement. This money is invested to make more money and is then paid out to the employee after they retire.

reserve funds for condos & hoas

Homeowner groups and condos often have a special fund called a reserve fund. They use this fund to pay for big maintenance or renovation projects or for any emergencies that cost a lot of money. They also have another fund called an operating fund that they use to pay for regular things like cleaning, taxes, insurance, and utilities.

Homeowners or condo owners pay money into these funds regularly, and the board of directors decides how to spend the money. Sometimes, they use the reserve fund instead of the operating fund to pay for big expenses like insurance payments.

If there is a really big expense that the reserve fund can’t pay for, each homeowner might have to pay extra money to cover it. For example, if the condo’s parking garage needs urgent repairs, the owners might have to pay more money than usual to the homeowner group.

reserve studies and managing reserve funds

To avoid having to pay extra money for unexpected expenses, it’s important to make sure that a building’s reserve fund has enough money in it. A reserve study is done by experts who look at a property and figure out how much money should be in the reserve fund. They look at things like how old the property is, what condition it’s in, and what kind of maintenance might be needed in the future.

The experts recommend how much money should be in the reserve fund, but sometimes the actual amount is less than what’s recommended. If the reserve fund isn’t managed well, the people who live there might have to pay more money to cover expenses.

If someone is thinking about buying a house in a community, they should find out if the homeowner group or condo association is managing their reserve fund well so they don’t have to pay more money later.

Already have a reserve fund? Sounds like you might be an Accredited Investor! If you are, click here for more information.

in BuyProperly, Latest News, Thought Leadership Posted by Jessica Wright

Emblem Developments proposes 31-storey tower on John St. N.

The past week witnessed good transaction levels across most markets. However, Kitchener-Waterloo was an exception, with a very rare no-show in terms of transactions. For the second week in a row, most transactions were of average size.

The largest transaction of the week took place in Paris, where approximately 26 acres traded for $19.7 million or $734,000/acre. The Highway 2 corridor continues to be a hot commodity, as evidenced by the recent purchases made by Orlando Corp. and Panattoni. Over the past 24 months, these two companies have purchased hundreds of acres in this area.

In Hamilton, the largest purchase of the week occurred near the Upper Red Hill area, where 7,300 sq. ft. of industrial space traded for $3.22 million.

In the news, the DRP has reviewed two proposals for downtown residential projects, Corktown Condos sales will begin next month, and Toronto still leads North America in crane count.

Take care,
Alex Manojlovich
Director, Strategy & Research
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News Headlines

Design briefs for Hamilton DRP, April 2023
92-100 John St. N.
325 James St. N.

Condo sales in new Corktown highrise will open next month – developer
The Hamilton Spectator, April 24, 2023

Council backs Hamilton’s housing road map
The Hamilton Spectator, April 20, 2023

Council backs plan to repair 476 empty CityHousing units
The Hamilton Spectator, April 21, 2023

Questions raised about FirstOntario Centre renovation
The Hamilton Spectator, April 19, 2023

McMaster University’s new downtown residence ‘neither sustainable nor affordable’ 
The Hamilton Spectator, April 20, 2023

Toronto continues to lead North America in crane count
Remi Network, April 18, 2023

Canada’s record population growth signals opportunities for CRE
RENX, April 18, 203

in Editorial, Latest News, Weekly Market Report Newsletter Posted by Jessica Wright

Downtown Hamilton Could See Two New Towers on the Horizon

A conceptual render presented at the March 2023 Design Review Panel meeting showcases plans for two towers at 117 Jackson Street East.

This past week saw low transaction levels across all subject markets except for Brantford, which was absent.

Hamilton’s only transaction was the sale of 169 Jackson St. E. to Fengate Asset Management for $3 million ($13 million per acre). This purchase positions the property as a potential high-density development site, especially given that Fengate had already acquired the adjacent property at 48 Ferguson Ave. S. last December.

The largest transactions of the week occurred in Cambridge, where Suncor Energy sold 11.4 acres of industrial land for $8.5 million.

In the news, two towers have been proposed for downtown Hamilton, another two towers are proposed for Stoney Creek, and designs for a mid-rise at 392 Main St. W. have been revealed.

The GHA Sales Transaction Database offers you this week’s CRE transaction activity.

Take care,
Alex Manojlovich
Director, Strategy & Research

News Headlines

Two towers proposed in downtown Hamilton at 117 Jackson St E
The Public Record, March 3, 2023

117 Jackson St. E. Design Brief
392 Main St W Design Brief
Design Review Panel, March 2023

Seasons retirement home seeks to build twin towers near Stoney Creek Lakeshore
The Hamilton Spectator, February 28, 2023

A look at Hamilton’s office market
The Hamilton Spectator, March 4, 2023

Hamilton company which produces cancer drugs will have 10 times the space
In The Hammer, March 3, 2023

Hamilton to explore pipeline tax hike
The Hamilton Spectator, February 27, 2023

Ongoing track work at West Harbour GO
In The Hammer, March 1, 2023

Ontario moves to ban NDAs in real estate transactions
The Globe & Mail, March 1, 2023

2023 Canadian Real Estate Outlook
CBRE Research, February 2022

BoC expected to hold interest rate this week
The Hamilton Spectator, March 3, 2023

in Editorial, Latest News, Weekly Market Report Newsletter Posted by Jessica Wright

Downtown Hamilton Site Purchased By Brad Lamb

Brad Lamb has purchased this 0.7-acre parking lot at 117 King William St. in downtown Hamilton.

 

This week witnessed good transaction levels in all subject markets.

We saw multiple eight-figure transactions as Sycamore Partners purchased several Lowe’s for approximately $140/sq. ft each. (It was announced earlier this month that Lowe’s will operate as RONA.) Among these transactions, the largest was in Woolwich, where 278 acres of land adjacent to the Waterloo airport was purchased for $35 million ($125,000/acre).

Beyond the Lowe’s transactions, the largest transaction in Hamilton took place downtown as Brad Lamb purchased 117 King William St., a 0.7-acre parking lot, for $7 million ($10 million/acre).

In the news, 43- and 36-storey towers have been proposed in Stoney Creek, the Jamesville Lofts development sees new life, and there’s an update on Oracle Condos, Coletara’s Main and Queen St. development.

The GHA Sales Transaction Database offers you this week’s CRE transaction activity.

Take care,
Alex Manojlovich
Director, Strategy & Research

News Headlines

43 and 36-Storey Towers Submitted for 8 Shoreview Place in Stoney Creek
The Public Record, February 5, 2023

Another residential high-rise bringing density downtown
The Hamilton Spectator, February 4, 2023

Construction resumes on momentarily defunct Jamesville Lofts development
The Hamilton Spectator, February 6, 2023

Investors own big chunk of Ontario’s condo market
The Globe & Mail, February 3, 2023

CIBC: Higher interest rates here to stay until 2024
The Financial Post, February 4, 2023

Canadian hiring spree puts pressure on BoC
The Globe & Mail, February 10, 2023

Pair of Kitchener heritage buildings to be incorporated in development
The Record, February 10, 2023

Pent up demand for housing is growing
The Toronto Star, February 11, 2023

Here’s an excellent opportunity for business owners who want to move into one of Brantford’s fastest-growing areas!
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These fantastic units are great places to set up your business. There’s lots of visibility to vehicle and pedestrian traffic, and parking is available on site. This location is close to the highway and in one of Brantford’s few historical districts. The property is transforming into a great entertainment district — be part of the excitement! Tenant incentives are available.

Contact leasing@forgeandfoster.ca today or call (888) 410-9440 to book your private tour!
in Editorial, Latest News, Weekly Market Report Newsletter Posted by Jessica Wright
A rendering of the proposed 8-storey mixed-use development at 1866 Rymal Rd. E. in Stoney Creek. The Hamilton Design Review Panel will assess the proposal at their meeting on Thursday, February 9.

8-Storey Mountain Development Will Go to Design Review Panel

A rendering of the proposed 8-storey mixed-use development at 1866 Rymal Rd. E. in Stoney Creek. The Hamilton Design Review Panel will assess the proposal at their meeting on Thursday, February 9.

This week witnessed good transaction levels in all subject markets.

The largest transaction occurred in Kitchener as ONE Properties sold a relatively new retail plaza for $18.75 million ($240/sq. ft). It’s great to see the retail asset class rebounding from its pandemic lull.

The largest Hamilton transaction occurred on the Mountain, where Winzen Group purchased 8.44 acres of land for $11.2 million ($1.3 million/acre). Although it’s currently zoned agricultural, the property looks primed for a residential infill project.

Lots of news: The DRP will discuss an 8-storey proposal, the proposed towers project by Stoney Creek Battlefield House Museum and Park is headed to the OLT, and CBRE released their Q4 2022 cap rate report.

The GHA Sales Transaction Database offers you this week’s CRE transaction activity.

Take care,
Alex Manojlovich
Director, Strategy & Research

 

News Headlines

DRP to discuss an 8-storey proposal on 1866 Rymal Rd E
The Public Record, January 29, 2023

Proposed towers by Stoney Creek headed to OLT
The Hamilton Spectator, January 31, 2023

Hamilton EcDev January 2023 Stats
Invest in Hamilton, January 2023

Dofasco to build 14 km pipeline for ‘green steel’ project
The Hamilton Spectator, February 2, 2023

Hamilton considers fund for non-profit housing
The Hamilton Spectator, January 31, 2023

Hamilton not taking position at urban boundary court challenge
The Hamilton Spectator, February 1, 2023

Another strong year at HOPA Ports
HOPA, February 2, 2023

Federal Environment Minister might intervene in Ontario’s Greenbelt development plan
The Globe & Mail, January 26, 2023

Hamilton to restrict short-term rentals to tackle affordable housing crisis
CBC News, January 27, 2023

Intelligent Investment: Canadian Cap Rates & Investment Insights
CBRE Research, Q4, 2022

Canada Monthly Mortgage Commentary — Intelligent Investment: The Conditional Pause 
CBRE, January 30, 2023

in Latest News, Weekly Market Report Newsletter Posted by Jessica Wright

Is Real Estate Inflation Proof?

There’s no doubt that real estate is a great investment. Over time, it has proved to be one of the most stable and reliable ways to grow your wealth. But is real estate immune to inflation? And if not, what can you do to protect yourself against rising costs? 

In this article, we’ll explore the relationship between real estate and inflation, and give you some tips on how to stay ahead of the curve.

what is inflation?

Inflation is defined as a sustained increase in the prices of goods and services. It’s usually measured by the Consumer Price Index (CPI), which tracks the cost of a basket of everyday items. When inflation is high, your money doesn’t go as far as it used to. You might not notice it at first, but over time, the prices of things start to creep up.

why are we currently seeing inflation?

There are a number of reasons why inflation is on the rise. One of the main drivers is the global pandemic in 2020. The shortage of goods and materials and the increased demand for them have led to inflationary pressures.

Additionally, central banks around the world have been pumping money into the economy through quantitative easing (QE) programs. This is often referred to as “printing money,” and it can lead to inflationary pressures similar to what we’re seeing now.

how does inflation affect real estate?

Inflation affects real estate in two ways: home prices and mortgage rates. 

When inflation is high, home prices tend to rise as well. This is because demand for housing is usually high when there is economic growth, and prices go up when there aren’t enough homes to meet that demand. Mortgage rates also tend to rise during periods of inflation, because lenders are looking to protect themselves from the potential for higher prices down the road. Inflation can have a number of different effects on real estate. One of the most direct is on real estate prices. When inflation is high, prices for both commercial and residential real estate tend to increase. This is because as the cost of goods and services goes up, so does the cost of land and buildings. In addition to prices, inflation can also affect real estate buying behavior. When inflation is low, buyers are more likely to purchase real estate, since it’s a relatively safe investment. However, when inflation is high, buyers may be more hesitant to invest, since the value of their money is decreasing. Despite these effects, real estate is still considered a relatively safe investment during periods of inflation because it’s a physical asset that can’t be devalued by inflationary pressures. Additionally, real estate tends to appreciate over time, which can help offset the effects of inflation.

what does this mean for investors?

If you’re thinking of buying a home, it’s important to be aware of how inflation might affect your purchase. You’ll need to budget not only for the purchase price of the home but also for the higher mortgage payments that come with inflation. And if you’re already a homeowner, you’ll need to be prepared for your property taxes and insurance premiums to go up as well.

is real estate a safe investment during inflation?

Real estate is generally considered to be a safe investment during periods of inflation. This is because home prices tend to rise along with inflation. Since real estate is a physical asset, it’s not as susceptible to the volatility that can occur in the stock market.

However, there are some risks to consider. If inflation is high, interest rates are likely to rise as well. This means that your mortgage payments will go up, even if your home’s value doesn’t increase. And if you’re carrying a lot of debt, rising interest rates can make it difficult to keep up with your payments.

Let’s look at the main reasons why real estate is a great investment during periods of marketing instability and inflation:

  1. It’s a physical asset: Real estate is a physical asset, which means it’s not as susceptible to the volatility that can occur in the stock market.
  2. It tends to appreciate in value: Over time, real estate has tended to appreciate in value, even during periods of inflation.
  3. It can provide a steady income stream: If you choose to rent out your property, you can generate a steady income stream that can help offset the effects of inflation.
  4. It can be a hedge against inflation: Since real estate tends to appreciate in value during periods of inflation, it can be a good way to protect your wealth from the effects of rising prices.

The bottom line is that real estate is a great investment during periods of inflation. It’s a physical asset that tends to appreciate in value, and it can provide a steady income stream. However, there are some risks to consider, such as the potential for higher mortgage payments and the difficulty of carrying debt in an inflationary environment. But overall, real estate is a safe investment during periods of market volatility and inflation.

so, is real estate inflation proof?

Yes and no; here are some of the reasons real estate is not technically inflation-proof:

  1.  Home prices don’t always go up: 
    While home prices have tended to appreciate over time, they don’t always go up. In fact, there have been periods of deflation (when prices fall) in the real estate market.

  2. You still need to make mortgage payments: 
    Even if home prices go up, you’ll still need to make mortgage payments. In an inflationary environment, these payments will likely become more expensive.

  3. You could still lose money: 
    If you need to sell your home in a hurry, you could end up selling it for less than you paid for it.

  4. It’s not a liquid asset: 
    Real estate is not a liquid asset, which means it can be difficult to sell quickly.

Despite these risks, real estate is still a great investment during periods of inflation. Just remember to consider the risks before investing, and to consult with a financial advisor to get the most accurate advice for your situation.

If you’re thinking of buying a home or investing in real estate, it’s important to do your research and understand how inflation might affect your purchase.

Make sure you budget not only for the purchase price of the home but also for the higher mortgage payments that come with inflation. And if you’re already a homeowner, be prepared for your property taxes and insurance premiums.

how can you invest in real estate during periods of inflation?

If you’re thinking of investing in real estate, there are a few things to keep in mind. First, remember that real estate is a long-term investment. This means you’ll need to be prepared for periods of market volatility and inflation. 

You can also consider investing in real estate securities, such as REITs, which are designed to provide investors with exposure to the real estate market without the hassle of owning and managing property.

There is also fractional ownership, which can help inventors get started in real estate with a minimal budget. If you’re interested in this model, visit our friends at BuyProperly to learn more.

Finally, make sure you do your research and understand how inflation might affect your investment. By being prepared and knowing what to expect, you can protect yourself from the most common pitfalls.

No matter what your real estate goals are, it’s important to be aware of how inflation can affect your plans. By being prepared and knowing what to expect, you can protect yourself from the most common pitfalls.

In conclusion, real estate is a great investment during periods of inflation because it’s a physical asset that tends to appreciate in value, and it can provide a steady income stream. Just remember to consider the risks before investing, and to consult with a financial advisor to get the most accurate advice for your situation.

in BuyProperly, Thought Leadership Posted by Jessica Wright

Hamilton’s DRP discusses Delta Secondary

This week witnessed a light amount of transactions. However, January is typically a slower month.

The largest transaction took place in Hamilton, where a trucking company purchased 86,000 sq. ft of industrial buildings situated on approximately 20 acres of land for $25.5 million ($297/sq. ft).

Coincidentally, the second largest purchase occurred in Stoney Creek by another trucking company that purchased 19.58 acres for roughly $8.2 million ($420,000/acre).

In the news, Hamilton’s DRP reviewed the development plan for Delta Secondary, an environmental group filed for a judicial review of Hamilton‘s boundary expansion, and HOPA expanded its industrial inventory with a large acquisition along the Welland Canal.

If you’re interested in learning what happened in Hamilton during 2022 and the trends heading into 2023, please join me at The Hamilton Commercial Real Estate Report: Year in Review at CoMotion on King at 115 King St. E. on January 25 at noon. RSVP today!

The GHA Sales Transaction Database offers you this week’s CRE transaction activity.

News Headlines

Hamilton Design Review Panel to discuss Delta Redevelopment
The Public Record, January 10, 2023

Group files for judicial review over Hamilton urban boundary
CBC News, January 9, 2023

HOPA expands industrial inventory at Thorold port lands
RENX, January 9, 2023

Ford, Horwath at odds on development fee cuts
CBC News, January 8, 2023

Waterloo may add a dozen more towers
The Record, January 10, 2023

in Editorial, Weekly Market Report Newsletter Posted by Jessica Wright

Weekly GHA Sales Transactions

in Roadblock Posted by Jessica Wright

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