Comments from the Chair
I was delighted to get AmCham involved in this event and want to give a big thanks to Bisnow for hosting.
The tone from the panel was optimistic and the audience was engaged. While most experts agree that a slowdown is imminent, the vibrant Toronto commercial and residential real estate industry is still very active and a great place to invest.
If you missed the event, you can read the event summary below. Stay tuned for more exciting event announcements in the fall and be sure to register. I look forward to seeing you next time!
Daintry Springer, Chair
AmCham Canada - Ontario Chapter
HOW FAR CAN $30B GET YOU?
How good are things in Toronto? Multiple experts at Bisnow's Future of Downtown Toronto event Wednesday agreed a slowdown could actually be good. Someone better tell the politicians and planners that are proposing such things as the $30B transit expansion plan on the front pages of the morning papers.
Those planners could have been among the 225 guests from the local CRE community at the Ritz-Carlton for an insightful and amusing 90-minute breakfast session on the future of the city’s downtown.
PwC's Lori-Ann Beausoleil moderated, here with First Capital CEODori Segal, Freed Developments founder Peter Freed, Cushman & Wakefield Canada CEO Pierre Bergevin, The Rose Corp CEO Sam Reisman, and James McKellarundefinedhead of the Real Property Program at the Schulich School of Business. "We're 15 years into a 10-year cycle," said Sam. He also thinks the 100,000 annual immigrationfigure we keep hearing is exaggerated to make us feel good. But aside from a few other comments about too many spec condo purchases and the strong likelihood of a slowdown, there was lots ofoptimism. In fact, count Sam, Dori, and Peter among those who think a slowdown would be healthy for the booming Toronto scene. Pierre was most optimistic. "This may be the most important renaissance in Toronto since they paved over Muddy York."
Pierre figures office growth jumped the tracks, expanding the financial core south, because the condo boom lured so much talent downtown. “Ultimately, you’ve put a bunch of educated young people in a place,” he says. “They have tiny kitchens so they hang out inpubs and restaurants.” His theory is that gave Toronto a vibrant atmosphere, which triggered investments in education, healthcare and other services. When leases can be 10 to 15 years long, and when firms spend heavily on high-tech change, the business cycles don’t fit. So, he figures, the only thing creative firms and office space suppliers can influence involves locating where the talent is. Sam agreed, joking he should invest in a sports bar.
“We talk about these smart young people downtown, and they are smart,” says James (right, with Pierre and Sam). One thing that impresses him most is that they know better than to waste money on cars and condo parking spaces. (Statistics Canada data reveal that for every dollar people spend on houses, they spend 67 cents on driving, he says.) He pointed to Bob Rennie of Rennie Marketing, who says urban real estate is no longer about location, location, location. “It’s about transit, transit, transit."
Dori and Sam noted we build small units for young adults, then force them out
of the core when they want kids. Sam says it’s time to capitalize on the mental shift we’ve made from the days when everybody wanted a single detached home. Dori had the idea of the day, suggesting developers buy land zoned for a certain density and ask for greater density for family-sized units. They’ll be more expensive, but he pointed out there’d be big savings in avoiding two or three years of wasteful arguing. Pierre added that if politicians and planners want the larger units, tax credits and development charge breaks would help. (If there were politicians in the audience, they didn't jump up to volunteer any)
Lori-Ann Beausoleil said despite fears for the boom’s lifespan, she’s never had so many phone calls from inbound investors. “When they see the landscape of 300 or 400 cranes, they’re in awe.” She cited the stable Canadian banking system and James mentioned the boost Canada has been getting from years of high commodity prices. (Nobody likes our theory that we're finally getting a boost from the 1976 Montreal Olympics Games.) He noted that lots of places where wealth is being created don’t provide the solid safe opportunities to invest. James also said he'd like to see data on the number of incoming suitcases full of cash.
