Ryan Shropshire, a talented and dedicated Sales Associate, joined the ICR Commercial Real Estate team two years ago, and his presence has been invaluable ever since. With his exceptional skills, industry knowledge, and unwavering commitment to delivering exceptional results, Ryan has proven himself to be an asset to both the team and their esteemed clientele.
The real estate industry in Saskatchewan is thriving, and professionals from across the province are eagerly looking forward to the highly anticipated 2023 Saskatchewan Real Estate Forum. Among the esteemed participants is the dynamic team from ICR Commercial Real Estate, a leading player in the commercial real estate market. With their extensive knowledge and experience, the team is excited to attend this event, fostering valuable connections, gaining insights, and contributing to the growth of the real estate sector in the province.
The Saskatchewan Real Estate Forum is known for its networking opportunities, bringing together industry leaders, experts, and professionals from various sectors related to real estate. The ICR Commercial Real Estate team recognizes the significance of networking as a means to build relationships, exchange ideas, and explore potential collaborations. Attending the forum allows them to connect with like-minded individuals, share experiences, and stay up-to-date with the latest trends and developments in the market.
The Forum is renowned for curating events that provide unparalleled industry insights and expert panels. The Saskatchewan Real Estate Forum is no exception, featuring a lineup of prominent speakers and thought leaders who will shed light on the current state of the real estate market in Saskatchewan. The ICR partners were facilitating several panels at the Forum this year.
ICR Commercial Real Estate has earned a reputation for its expertise in various areas of the commercial real estate market. Attending and participating in panel discussions gives the team an opportunity to share their knowledge and insights with a wider audience. By actively participating in panel discussions, workshops, and breakout sessions, the team can contribute to the dialogue surrounding key topics, such as investment opportunities, property management, market trends, and regulatory updates.
The real estate market is constantly evolving, and staying ahead of the curve is crucial for success. The Saskatchewan Real Estate Forum offers a platform for the ICR Commercial Real Estate team to explore new opportunities and stay informed about emerging trends. They will gain valuable insights into the latest developments in various sectors, such as retail, industrial, office, and investment properties, helping them identify potential growth areas and capitalize on new opportunities for their clients.
ICR Commercial Real Estate strongly believes in community engagement and actively supports initiatives that contribute to the overall development of the province. Attending the Saskatchewan Real Estate Forum allows the team to connect with other industry professionals who share a similar commitment to community building. By engaging in discussions centered around sustainable development, urban planning, and community revitalization, the team can foster meaningful partnerships and contribute to the growth and well-being of the Saskatchewan community.
As the 2023 Saskatchewan Real Estate Forum in Regina approaches, the team at ICR Commercial Real Estate is eagerly preparing to attend this event. With their passion for the industry, commitment to community engagement, and hunger for knowledge, the team is excited about the prospect of networking with industry leaders, gaining valuable insights, and exploring new opportunities. By actively participating in the forum, they hope to contribute to the growth and success of the commercial real estate sector in Saskatchewan. The team looks forward to a fruitful and rewarding experience at the event, bringing back valuable knowledge and connections that will benefit their clients and the wider community.
Owner occupants and developers alike have felt the pressure of low vacancy rates
- The vacancy rate in the Saskatoon industrial market remained low at 2.5% with a negative net absorption of (93,860 s.f.) quarter over quarter.
- Vacancy in the Regina industrial market continued to decline. In the second quarter of 2022, vacancy was at 2.3%, with a positive net absorption of almost 50,000 SF quarter over quarter.
Average asking rates were $11.59 p.s.f. with average operational costs of $6.50 p.s.f. This represents a new asking rate high increasing from $11.54 last quarter. While the quarterly increase is modest, rates are up 13.0% over the past 18 months as demand for industrial space has been unprecedented.
Despite high construction prices, and supply chain interruptions and rising interest rates, both owner occupants and developers are anticipating the City of Saskatoon’s release of much needed new development lots south of 71st Street.
In Regina, industrial submarkets Ross and Tuxedo experienced positive absorption as demand continued to rise in the area. The demand for top-quality warehousing and distribution space in a tight market has shown the need for further construction to match that demand. Even with a new development now being built in Pasqua Business Park, it will do little to relieve the pressures of a tight market.
Also in Regina, the Global Transportation Hub has added a new major international organization to their footprint. A major e-commerce user has purchased 14.35 acres for $3.3 million. At this moment there are no details as to what the land use will be.
Owner occupants and developers alike have felt the pressure of low vacancy rates and are expected to explore new development opportunities as tight market condition are expected to continue. While demand for industrial space is expected to remain strong in the second half of the year, rising interest rates and a potentially slowing economy have introduced some uncertainty for the coming quarters.
Adjustments aren’t speedy
Let me explain.
Typically, at the beginning of the calendar year, a property manager or owner will estimate the occupancy costs tenants must pay for their proportionate share of the property.
This estimate is based on the previous year’s expenses. One example is that the property taxes for the upcoming year are not yet finalized when that estimate is prepared.
Let’s assume a sale takes place on June 31st. The property manager or lawyer must wait until all invoices for Jan 1st to June 31st have been received.
Expense items, such as utility charges, yard maintenance, repairs, etc., can vary monthly and are therefore impossible to project with certainty.
Once all invoices have been collected, an adjustment is made in favor of either the buyer or seller for the subject period.
At year-end, the buyer must total the invoices, compare the occupancy cost estimates to actual numbers, and reconcile with each tenant.
Super long snags
We recently experienced another issue that complicated matters even more.
A multi-tenant retail property had been recently subdivided.
The seller was also the business owner that occupied a freestanding building at the end of the parcel of land.
They completed the subdivision of the freestanding building and sold the remaining multi-tenant tenant building to an investor.
Even though two new titles had been raised and the sale was able to complete, the city had not yet completed the re-assessment.
It now appears that the assessment will be finalized about six months after the sale closed.
While it is possible to make an educated guess of how the taxes might be adjusted afterward, there is no way of knowing with certainty.
That final statement will have to wait until the Assessor’s Department has completed its process.
A lot of headaches can be avoided if all parties to the transaction are well informed of the process ahead of closing.
Myths are described as either traditional stories of phenomenon or more commonly a widely held but false belief or idea.
Myth #1 – My buddy paid (insert silly value) right down the street for the same thing.
Not all commercial real estate sites are created equal.
Zoning can vary even on the same block as your buddy.
This will affect the allowable uses which then affects the allowable tenants or buyers.
The more flexibility a site offers, the more attractive it can be.
Also, land relative to building structures plays a role in value.
The percentage of land required versus the building is tied to use.
Land shy properties become harder to accommodate business and therefore could be de-valued.
There are many reasons why some sites might be worth more or less than their neighbour so you can’t judge value by address alone.
Myth #2 – I’ve got plenty of time to get a lease in place.
Whatever timeframe you’ve set aside for your search and lease negotiation, double it.
Searching, viewing, securing and moving into a property can take a lot longer than you realize.
Decision making timelines are well within your control but be prepared to wait on the other side.
Landlords are eager to lease vacancy, however, they often have other businesses and believe it or not, personal lives.
They can be unavailable to make snap decisions or expedient in responding to offers.
The best way to bust this myth is to find out from the listing agent what kind of response time the Landlord requires.
You may also need to engage third parties for part of the transaction and sometimes cannot speed up the wheels of bureaucracy.
Keeping on top of the professionals you’re using for reports or financing does often keep things rolling more smoothly than not.
Patience is a virtue, as they say.
Myth #3 – This building can be repurposed for the next person.
This myth comes with a caveat.
While developers are mindful of building new structures that be used for the most purposes, commercial assets can have a shelf life though.
It’s not uncommon that tenants or owners find themselves unable to reuse previous tenant improvements.
So long as that can be torn out, though, the space can get a new lease on life.
Buildings that have been constructed with a specific use are the most obvious types in this category.
A cost analysis could reveal that retrofitting a building may not be feasible.
The same can be said of older functionally obsolete properties with dimensions that are simply no longer desirable to tenants.
Demolition and redevelopment of the site can be the logical step to recover the highest rents and most functional uses going forward.