At the Western Canada Apartment Investment Conference in Edmonton, we’re joined by Cynthia Jagger. She is Principal at Goodman Commercial, making her a specialist on everything about apartments in Vancouver, where she is based.

After giving a rundown of how Vancouver’s real estate market fluctuated throughout the pandemic, we hear from Cynthia about what is currently happening in the city. She talks about positives and negatives of building in Vancouver, as well as her predictions for cap rates.

Topics covered include:

• Vacancy rates seen in Vancouver during the depths of the pandemic.
• The divergence of cap rates when comparing new builds to existing properties.
• How uncertainty throughout various financial markets is affecting real estate.
• The average down payment right now.
• Uncertainty around development approvals.
• Why Vancouver is not currently seeing a lot of new purpose-built rental completions.
• Industry advocacy Cynthia is involved in.
• Do decision makers in Vancouver understand the relationship between supply and affordability?
• Sentiment around increasing interest rates in Vancouver and effect on the market.
• Reduced number of offers on bid dates and its impact.
• Cynthia’s experience as a commercial appraiser before joining Goodman.
• What coming out of COVID has looked like thus far in Vancouver.
• Why Vancouver is steady and consistent without “lottery wins”.
• Cynthia’s thoughts on if cap rates have moved.
• What investors can expect from Vancouver this year.

More about our guest…..

Cynthia Jagger is a commercial real estate broker and Principal at Goodman Commercial Inc. A former Director at Altus Group, Jagger has consulted on tens of billions of dollars’ worth of commercial real estate in B.C. and provided guidance on some of the biggest and most complex land deals in Vancouver history. Since joining Goodman Commercial in 2016, Jagger has completed over $2 billion in commercial property sales on behalf of clients in Metro Vancouver. What sets her apart is her ability to get the kind of information you can’t find on Google.

Jagger has emerged as a powerful voice for the industry in these uncertain times. She’s been a guest speaker for the Urban Development Institute, BIV, BDO LLP, REGBV and has led panels for the Vancouver Real Estate Forum and the Canadian Apartment Investment Conference. Vocal on how urban land economics respond to government regulation, she’s frequently quoted in the Vancouver Sun, Western Investor, National Post, The Globe and Mail, Business in Vancouver, Western Investor, Landlord BC Magazine and more. For contact information or to subscribe to the newsletter, please visit www.goodmanreport.com.

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Recording at the Land & Development Conference, Aaron and Adam are welcoming Benjamin Tal in this episode. He is the is the Deputy Chief Economist of CIBC World Markets Inc., and a staple at the forums.

Fresh off of his market outlook session at the conference, Benjamin talks to us about all things inflation. We hear about if he thinks the Bank of Canada’s moves will be effective in controlling inflation, what’s impacting home valuations the most, probability of recession and why he is generally bullish towards the market.

Topics covered include:

• The impact of oil prices on inflation.
• Why Benjamin thinks Alberta’s economy will outperform the rest of Canada’s.
• How the housing market has played into the Back of Canada’s decisions.
• Rental rates increasing in the past two months or so.
• Benjamin’s prediction that rent inflation will outpace home prices for the next few years.
• Why we must build purpose-built rentals.
• What Benjamin thinks the possibility of a recession is.
• The biggest factor of inflation right now, which should be temporary.
• Short-term, 5-year, and 10-year interest rates.
• Are 5-year and 10-year interest rates projecting too much of an increase?
• Good news for developers right now.

More about our guest….

Benjamin Tal is responsible for analyzing economic developments and their implications for North American fixed income, equity, foreign exchange and commodities markets. Benjamin also acts in an advisory capacity to bank officers on issues related to wealth management, household/ corporate credit and risk. Well-known for his groundbreaking published research on topics such as labour market dynamics, real estate, credit markets, international trade and business economic conditions, Benjamin not only contributes to the conversation, but frequently sets the agenda. Benjamin has close to 20 years of experience in the private sector advising clients, industry leaders, corporate boards, trade associations, and governments on economic and financial issues. National and global media regularly seek him out for his insight and analysis on economic issues that impact financial markets, consumers, corporations and public policy.

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Paul Chaput is back for his second guest appearance from the Edmonton Real Estate Forum. He is the Senior Vice President at Institutional Property Advisors, a division of Marcus & Millichap. Paul is a leader in western Canada brokerage, which we’ll be focusing on today.

We get taken through how BC, Alberta, and the rest of the real estate markets in the west have performed before the pandemic as well as during it. Paul also shares his thoughts on what the rest of the year should look like for these markets, including more growth in Alberta.

Topics covered include:

• Steady growth that the prairies were seeing when Paul was last on the show in 2019.
• A surprising rental stat regarding Edmonton versus Calgary.
• Cap rates in Alberta.
• How the price of oil tanking at the beginning of the pandemic hurt the housing market.
• The rising rents seen throughout this year in Alberta.
• The fundamental change at the beginning of the pandemic that is now reversing.
• What real estate market in western Canada Paul first saw coming back to life in 2021.
• The effects of people being priced out of Vancouver.
• Being able to forecast growth to investors in proformas.
• Using leverage versus needing leverage.
• What Paul thinks the Alberta market will look like as the year progresses.
• Advantages that Alberta has which attract more investment.

More about our guest…..

Paul Chaput, having gained experience and notoriety at another commercial brokerages as a top producing multi-family investment sales specialist, joins Institutional Property Advisors (IPA) as a seasoned industry veteran. Well versed in all aspects of the multi-family market, Paul regularly assists his clients execute their various real estate strategies. Over the course of his 20 years in commercial real estate, Paul has been involved in the acquisition and disposition of over $2.5B worth of real estate throughout Western Canada. Paul has had the honour of being a guest lecturer at the University of Calgary’s Haskayne School of Business, as well as a speaker and moderator at numerous Real Estate Forums.

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We’ve got Mark Rothschild with us in this episode, back for his second appearance. He is Managing Director, Real Estate Analyst at Canaccord Genuity. He has been with the company for 17 years, and has been covering Canadian REITs for even longer.

Mark guides us through Canaccord Genuity’s latest report on Canadian real estate while also providing his thoughts on the increasing interest rates. He tells us some sectors he is excited about and how his company arrives at their real estate valuations.

Topics covered include:

• The compressing of spreads and why cap rates will likely be negatively impacted.
• Where Mark thinks values are heading for the rest of the year.
• Inflation causing rent to offset higher interest costs.
• The large amount of capital out there looking for real estate.
• Whether or not Mark’s job has become tougher due to the current environment.
• Returns seen in 2021 versus thus far in 2022.
• Movements in value that can be seen from just a 0.25% interest rate increase.
• Pressure from shareholders and how it has changed over time.
• What is possibly being ignored in The Well’s valuation.
• How much of all institutional real estate is owned by REITs?
• What’s great about investing in real estate versus other sectors.
• An asset class that has performed poorly this year that Mark is bullish on.
• Grocery-anchored retail and how it has performed.
• The amount of vacancy Mark expects to see in the retail market.

More about our guest…

Mark Rothschild is an analyst covering the real estate sector at Canaccord Genuity. Previously, Mark served in the same capacity at Genuity Capital Markets. His prior experience includes being part of the real estate and lodging investment banking team at Salomon Smith Barney and performing credit analysis on U.S. REITs at Moody’s Investors Service in New York. Mark has previously been ranked as a top earnings estimator for real estate in the Thomson Reuters StarMine survey, and according to TipRanks, in 2019 was the number two overall stock picker in Canada. He has an MBA from the University of Baltimore.

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Aaron and Adam are on their own today to talk about the rising interest rates currently being seen in Canada. It is the first time in many peoples’ careers that we’re seeing an interest rate environment like this.

We’ll hear about the implications on the conventional market, on the CMHC-insured product, and on construction. The guys give advice towards different scenarios that higher interest rates are causing and also let us know what we can be happy about regarding the market.

Topics covered include:

• Why there should be upward pressure on cap rates because of bond movements.
• The need for patience when investing in apartments.
• Built-in buffers used in underwriting and why it’s now slightly nerve-wracking.
• The current 5-year Government of Canada bond yields.
• The pricing-in of future rate hikes into bond yields.
• An example of how significant the interest rates increases have been on the market.
• Whether or not Aaron believes that inflation will cause rent increases to soften the blow.
• Why lenders look at bonds for comparison.
• What the best possible deal is on interest rates today for the conventional market.
• Loan amounts coming down for CMHC deals.
• The best interest rate available from CMHC-insured mortgages.
• How much wider cap rates usually are compared to the cost of capital.
• The strength of the employment market right now.
• Advice from Adam on how to mitigate risk in this environment.
• Positive messaging for 2022

More about our hosts…..

Aaron Cameron

In 2008, Aaron began in the Canadian commercial real estate industry at First National Financial. In his journey to becoming Assistant Vice President Commercial Operations, he worked in every department in First National’s commercial division. As a lender, Aaron believes that his exposure to all asset classes, deal types, products and precedents gives him a unique perspective. For Aaron, commercial real estate is an evolving interdependence between economics and relationships. As the co-creator and host of The Commercial Real Estate Podcast, he is excited to offer a platform where real estate leaders can share their stories about how those two fundamentals intersect for them.

Adam Powadiuk

Adam started working in commercial real estate in 2010, and joined First National Financial in 2012. But his interest and passion were piqued early on in life. Growing up in a real estate family, Adam has childhood memories of walking land and touring buildings. He always knew that real estate was a viable career opportunity and a way to contribute to something tangible that affects people’s lives positively.

Prior to co-creating the podcast, Adam spent a lot of time immersed in real estate and talking about it, even outside of work. He wanted to share his love of that banter and analysis, while allowing listeners into the brightest minds in the industry.

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Joining Aaron and Adam at the Toronto Real Estate Forum is Rob Kumer. He is the President and Chief Investment Officer at KingSett Capital, having originally joined the company in 2004.

Rob takes us through KingSett’s investment strategy, including why different funds can participate in the same deal at KingSett, while they sometimes can’t at other institutions. He also explains why getting back to the office has been so important for company culture.

Topics covered include:Conceiving new funds at different points of the risk/return matrix.

• Different funds participating in the same deal.
• Privatizing the Northview Apartment REIT in 2020 and how assets were split up.
• Where Rob sees the best opportunities in today’s competitive market.
• How disposition varies across KingSett’s various portfolios.
• The disposition program that KingSett began due to COVID-19 hitting, with a focus on vacant land.
• A question to ask yourself at the beginning of each day regarding real estate investment.
• Is there such thing as having too much capital?
• Why KingSett is always in some sort of money-raising mode.
• The seminar that made Rob realize he wanted to get involved with real estate.
• A background of Rob’s real estate career and how he ended up at KingSett.
• How Rob thinks about leadership at KingSett.
• Creating a culture that permeates throughout the whole organization.
• Being sure that your people treat other people with respect.

More about our guest:

Rob chairs KingSett’s Investment Committee, which oversees new investment activity, project finance strategy and KingSett’s mortgage lending business.  Rob also chairs the firm’s Management Committee, which is responsible for the oversight and ongoing implementation of KingSett’s business strategy.

Rob holds a degree in Honours Business Administration from the Ivey Business School at Western University and is a member of the school’s Advisory Board. Rob is also a director of the Sinai Health System Foundation in Toronto.

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Back for his third appearance on the show is Michael Betsalel. He is Executive Vice President, Capital Markets, Multifamily with JLL. Formerly focusing on Ontario, Michael now has a large team spread across Canada. This makes himt he perfect guest share teh view of the apartment market at a national level.

After giving an overview of Canadian apartments as a whole, Michael gets into specific markets. We hear about what has been driving investment in Southwestern Ontario, why the Prairies could begin seeing more institutional investment, and how markets will be affected by Ukrainian refugees settling in Canada.

Topics covered include:

• Gaps in rent caused by rent control.
• Why average price per suite numbers are becoming less meaningful.
• Toronto’s passing of Vancouver last year when it comes to average cap rate.
• A rundown of how busy multifamily was in Canada in 2021.
• Which areas have the lowest and highest vacancy rates.
• Multifamily deals in Toronto nearly reaching 2019 levels in 2021.
• Buyers of purpose-built rentals in Toronto.
• Numbers showing that the Southwestern Ontario market has been on fire.
• New development occurring in Ottawa.
• Big deals that have recently happened in Quebec.
• The most prominent transaction that happened in Vancouver last year.
• Why Michael thinks current cap rates are the new normal and little affected by interest rates.
• The popularity of low rise, wood frame deals in Alberta.
• Cap rates seen in Manitoba and Saskatchewan, and why Michael thinks we may start seeing more activity there.
• The large Ukrainian population in Calgary and Edmonton.
• Michael’s outlook for the rest of 2022.

A bit about our guest…

Michael is the Practice Lead for JLL’s Multifamily Ontario Team and leads JLL’s Canadian National Multifamily Group.

Michael specializes in helping institutions, REITs, Asset Managers and private investors to acquire and dispose of multi-family real estate investments across Canada. Michael accelerates his clients’ success by sharing market insight to create knowledge driven solutions. He has an unfettered dedication to achieving high results for his clients. His strong financial acumen and communication skills have helped Michael become the clear choice for selling multi-family assets throughout Canada. Michael has built a unique network of local, national and international investors, enabling him to provide his clients with geographic investment flexibility.

Michael has been involved in the sale of approximately 300 multifamily properties valued at over $5.0 billion. Prior to the completion of his Schulich School of Business Masters Degree, Michael spent five years in Management with a Fortune 500 organization.

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Frank Magliocco is back in this episode to break down all the findings of the heavily researched Emerging Trends in  Real Estate 2022 report. He is a partner in the Audit and Assurance Group of PwC Canada, and has been on the podcast to discuss emerging trends for several years in a row.

After giving a background on the methodology used in the report, Frank reveals the three main themes this year: the changing world of work, the prominence of ESG, and the impact of costs and competition.

Topics covered include:

• The three broad themes seen in the past year.
• Why Frank thinks that flexibility in work is going to be key.
• The perfect storm created by competition and pricing.
• Where investors are putting their money this year.
• Increasing interest in life sciences and healthcare real estate.
• Reasons to not mandate a 5-day work week that requires going into the office.
• A favourite quote of Frank’s from when the survey was administered in July 2021.
• Using office space to encourage collaboration.
• How ESG has evolved into a competitive advantage.
• The influence that consumers have in making ESG advances.
• Why prudence is the name of the game right now.
• Some assets becoming harder to underwrite.
• Parties that don’t have much motivation to focus on ESG.
• Labour, supply, and government issues that put stress on affordability.
• What developers are doing to improve labour problems.
• What has changed about the way the three levels of government work together.

Emerging Trends in Real Estate 2022: https://www.pwc.com/ca/en/industries/real-estate/emerging-trends-in-real-estate.html

More about our guest…

Frank Magliocco is a partner in the Audit and Assurance Group of PwC Canada working in the Toronto office. He is also the national leader for the Canadian Real Estate practice.

Frank specializes in auditing, accounting and regulatory matters for real estate companies. He provides advice to clients in the broad real estate sector including property developers, residential construction companies, large national office, industrial and retail property owners, and property managers. In addition, Frank’s experience in the real estate sector includes instructing courses at the Real Property Association of Canada (RealPac), where he is a member of RealPac’s Financial Best Practices Committee.

Frank began his career at PwC in 1989 and became a partner in 2001. Prior to focusing on real estate, he provided assistance with acquisitions, reorganization and debt and equity offerings to a number of private and public companies. He has significant experience with Canadian securities regulation, and has provided assistance with public filings.

Frank is a CA and holds a BComm from the University of Toronto.

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Today, Peter Altobelli is with us again to do a recap of the 2021 Toronto Real Estate Forum. Peter is the Vice President of Yardi’s Canadian operations, having been involved with the company for about 35 years. Yardi is the largest software provider of real estate technology worldwide.

Some time has passed between the forum taking place and getting together to discuss it, so we hear about the guys’ thoughts back then compared to now. Peter explains what he sees happening with return to work, and we hear about how quickly technology is advancing real estate.

Topics covered include:

• The sentiment of interest rates at the forum versus when this episode was recorded a couple of months later.
• Impacts that increased interest rates will have this year.
• Why apartments will continue their great performance.
• The supply and demand of apartments not being close to equilibrium.
• Office vacancy rates now compared to the early 90s.
• Why Peter thinks companies will start creating flexible office spaces.
• The new annual record of commercial real estate transactions in 2021.
• Reasons why some investors will accept lower returns.
• Building for affordable rates versus market rates.
• ESG and the desire for more responsible investments.
• Why Canadian real estate companies are at a tipping point regarding technology.
• Five big areas of tech disruption happening in real estate.
• Deploying IOT (internet of things) to improve viewings.
• How artificial intelligence is already revolutionizing communication.
• Bold predictions from Aaron, Adam, and Peter for 2022.

More about our guest….

Peter Altobelli is Vice President of Sales and General Manager for Yardi Canada Ltd. Yardi develops industry-leading property and investment management software for all real estate asset classes.

Peter has worked in the technology industry for more than 30 years, with a foundation in software development for the healthcare sector in the 1980s. His first role involved transforming existing software for an outpatient clinic scheduling system and introducing innovative PC technology for what has now become Hamilton Health Sciences.

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Andrew Joyner is our returning guest in this episode. He is the Managing Director at Tricon Residential and head of their Canadian apartment platform, tasked with trying to create thousands of brand-new apartment units in the Greater Toronto Area.

We hear about what elements Andrew looks for when considering a new area to invest in and why there is little need to do new research on what amenities tenants want. He also gets into different types of financing and tells us why relationships are so important in this space.

Topics covered include:

• How Tricon determines the areas that they want to invest in.
• Focusing on long-term trade relationships to avoid becoming too passive.
• Inclusionary zoning and how it will affect Toronto.
• The Rental Construction Financing Initiative (RCFi) and how it improves the bottom line.
• What matters more than rates and proceeds in a loan deal to Andrew.
• How partnerships helped Andrew when COVID-19 first hit.
• An example of the importance of relationships in real estate from the 1990s recession.
• Creative loans in Canada compared to other parts of the world.
• The loan process of CMHC.
• Looking at loans from banks and CMHC to decide which one is right for the situation.
• How Andrew views cash flow and amortization.

More about our guest….

Andrew Joyner leads Tricon Residential’s Canadian multi-family rental business. In this role, he designs and implements strategy, sources investment opportunities, and oversees teams responsible for business plan execution, including development, construction, and ongoing asset management. In addition, Mr. Joyner manages senior relationships with joint venture partners.

Prior to joining Tricon in 2016, Mr. Joyner worked at Canada Pension Plan Investment Board in Toronto, where he focused on real estate transactions across a number of asset classes throughout North America. Prior to that, he worked at Hines in London, UK, where he was responsible for property acquisitions and investment management of core, core-plus and opportunistic real estate strategies throughout Western Europe. In addition, Mr. Joyner previously worked at Goldman Sachs in New York in the investment banking division.

Mr. Joyner has a Master of Business Administration degree from Columbia University and an undergraduate degree in Economics from Queen’s University, from which he graduated with distinction, and is a CFA Charter holder. Mr. Joyner is a member of the Multi-Family Council of the Urban Land Institute.

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