Fraser Valley – Growing Confidence in Industrial Real Estate

April 21, 2011

Indicative of the activity is a major new industrial park in Pitt Meadows — which recently opened its first building — that it’s developers say will eventually be the second-largest industrial park in the province, after Richmond’s Kingswood Industrial Park.

“We’re seeing a big change from ’09 and ’10 when things were fairly muted,” Avison Young broker Michael Farrell, who specializes in Fraser Valley industrial property sales and leasing, said in an interview of their report, its first “sub-market” report on Metro Vancouver industrial real estate released in 2011.

The report followed an earlier 2010 year-end report focusing on the entire Metro Vancouver region that concluded there was a substantial increase in industrial real estate investment last year.

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Signs Point to Severe Housing Correction in Canada

April 20, 2011

Some believe that low interest rates, solid banks, a growing economy, abundant natural resources and a relatively conservative mortgage market (at least compared to the United States) will all continue to support Canadian housing prices. Optimists argue that the runup in Canadian home prices has been based on strong demand from homeowners, while construction in the U.S. ran well ahead of actual demand and was fuelled by speculators.

But there’s another side to this debate. I believe that Canada’s high house prices in relation to incomes, combined with record household debt levels and overinvestment in residential construction, will cause a severe correction in the real estate market.

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US Commerical Real Estate Surges – Needs Corporate Hires to Continue

April 20, 2011

First quarter commercial real estate market fundamentals continued their improvement over 2010. This will come as no surprise to anyone who understands that commercial real estate demand is derived from activity in the overall economy. As the economy goes, so go commercial real estate fundamentals.

When looking at the change in economic indicators outlined below, the continued improvement makes sense. Just consider:

• This time last year unemployment was at 10.2% versus 8.8% today.
• Since the February 2010 employment trough, 1.7 million jobs have now been added.
• Manufacturing capacity utilization now stands at 74.3%, up from 69.7% in February of 2010.
• The S&P 500 has doubled from its March 2009 low.

Maybe the most important indicator is investor confidence.  According to Price Waterhouse Coopers’ First Quarter 2011 Real Estate survey, it’s on the rise.

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Nevada – Highest Foreclosure Filing 1 out of 31 Homes

April 20, 2011

Nevada’s foreclosure rate continues to lead the U.S., with one in every 35 homes having a foreclosure filing.  But there was some good news out of the 2011 first quarter U.S. Foreclosure Market Report, released today by RealtyTrac.

In Las Vegas, activity declined 11.54 percent and 7.74 percent over the same periods. Nevada’s numbers were down 10.38 percent and 7.21 percent, respectively.  “The slight declines in the Reno-Sparks foreclosure filings in the first quarter are, on the surface, positive indicators that the market is moving in the right direction,” said Brian Kaiser, housing and real estate analyst with the University of Nevada, Reno’s Center for Regional Studies. “The wildcard, though, is how much of that perceived improvement is related to the banks’ backlog?

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PwC – Cap Rate Decreased 27 out of 34 Markets in US

April 20, 2011

A stronger economy has commercial real estate investors feeling optimistic in 2011, according to a report from PwC.   Enthusiasm for commercial is growing as the market emerges from the bottom of the latest cycle, but in a report released Mar. 21 detailing the results of its first quarter survey of real estate investors, PwC said the industry’s rebound has been a slow one.

With a decrease in jobless claims along with rising business and consumer confidence, the PWC Barometer supports the consensus among more than 100 surveyed investors across the country, that that real estate industry is in recovery phase.
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US: Naples Florida – Stagnant recovery

April 20, 2011

Five years ago, the housing market in Naples was pegged as the country’s most overvalued, with single-family homes estimated to cost 85% more than they should. Now, one in three of those homes sits vacant, a testament to how deep the housing crisis runs in the United States and a signal that a recovery in real estate may not be in reach after all.

“I can’t see anything positive is going to happen with housing for at least a year to a year and a half,” said Jack McCabe, a housing analyst with McCabe Research & Consulting in Deerfield Beach, Fla. “Even at that point, we may just hit the bottom and bounce along it for a while.”

Just as some positive indicators in the United States sparked speculation the economic recovery is taking root, home sales and prices plummeted last month, according to data released Wednesday by the U.S. Census Bureau.

New home sales in February fell 17% to an annualized rate of 250,000 units, the slowest pace of sales activity since the agency began tracking figures in 1963. The median sale price fell 13.9% from the previous month to $202,100, the lowest value since December 2003.

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AB: Calgary Commercial Project Starts Rised

April 20, 2011

If commercial real estate is a good indicator of the economic health of a city, then Calgary has rebounded to a state where it is sitting pretty. That can be seen especially in the number of projects that were put on hold and that are now being resurrected.

A good example is 11th Avenue Place, a 200,000-square-foot retail/ office block that was put on hold but is hoping to begin construction next month. Located on the north side of the avenue across from the successful three-building IBM Campus complex, owner Prism Developments has contracted Will Smith, president of Smith to the Power of 100, as its development and project manager.

11th Avenue Place is an 11-storey building made up of 20,000 square feet of ground-floor retail, and office floors that are reduced in size at the penthouse level to accommodate green spaces on the east and west sides. Structural design allows for an interconnecting stairwell between the top two floors.

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