Launching May 2011

In the spring of 2011, RENX is launching a new weekly online publication called Property Biz Canada.  It is going to provide original RENX news, analysis and commentary from a National perspective about the operating and development activities of the commercial real estate industry with an emphasis on Real Estate Investment Trusts (REITs),  real estate operating companies (REOCs), pension fund owned and operated real estate companies as well as municipal, provincial and federal property assets and related Corporations.

Property Biz Canada will provide news about the commercial real estate industry, a sector of the economy that has gained prominence over the past 15 years.  Real estate securities, particularly real estate investment trusts (REITs), have grown to become a popular choice for investors and money managers since first introduced in Canada in early 1990′s.  Yield seeking investors looking for secure investments have increasingly turned to REITs and Real Estate Operating Companies (REOCs) following the rise and fall of the technology sector and more recently with the economic volatility associated with the recession.

Pension funds and other institutional investors have a majority interest in Class A commercial real estate in Canada that has a combined valued in excess of $100-billion.  These property companies have become familiar names in the business community, Oxford Properties Group owned by the OMERs, Cadillac Fairview owned by the Ontario Teachers Pension Fund, SITQ and Ivanhoe Cambridge Shopping Centres owned by the Caisse de dépôt et placement du Québec and the  Canada Pension Plan Investment Board who acquired the assets of O&Y Enterprises comprised of the building portfolio formerly owned by the Reichmann family in Canada.

In the wake of the recession, in 2010, most Canadian institutional investors have increased their allocation of investment dollars for property and infrastructure .  They have also shifted their focus from domestic acquisitions and management to foreign investments.

Urban intensification has put pressure on all levels of Government to support increased development density.  This trend has created new partnerships between the development industry, the commercial real estate sector including multi-residential builders, and owners of urban infrastructure, primarily municipalities but often with a Provincial and Federal interest.

The trend toward denser cities is being accelerated by public investment in transit lines, which create ideal locations for high density mixed use development.  Government stimulus dollars directed toward infrastructure projects has further reinforced urban development.  As a consequence cash strapped municipalities are forming new arms length property development corporations that facilitate the creation and execution of strategic plans for their real estate holdings.

All these trends combined mean the Canadian real estate professional as well as the average person in this country has a growing stake in this sector of the economy creating an expanding market for information concerned with the property business.

As Canada’s premier online news service for the Canadian real estate industry, with 8,000 subscribers, RENX is uniquely positioned to immediately start delivery of Property Biz Canada to its existing subscribers and to effectively market to a broader audience.

Property Biz Canada is RENX debut as a weekly news publisher a product that will supplement its already popular news aggregation service.

I look forward to launching Property Biz Canada in the spring of 2011.

I welcome your thoughts, suggestions and feedback about this new venture.

For the early part of my life I had the incredible good fortune to live the summer months embedded in rural Ontario.  During those months I was immersed in the daily activities of running a half cottage, half hobby farm.  It was a family owned property that supported a couple of acres of vegetables, dairy cattle and chickens perched on the edge of a lake that offered a full range of swimming and boating options.

It was a childhood paradise living under the sky only to be forced indoors at the end of the day by the discomforts of biting insects, nightfall and the insistence of adults.  Nature was home, familiar, welcoming and full of creatures large and small, domestic and wild all cherished accomplices to a youthful adventurer.

One grows up, life moves on and like almost everyone now I ended up living in a city – Toronto. Not in the suburbs but smack downtown in the shadow of the CN tower in the St. Lawrence Market neighborhood.   It was an equally valued home as the Ontario countryside only different. Toronto is engaging, meaningful, chocked full of opportunity, sports, cultural and business related thrills and pursuit.  Some evenings, at loose ends, I would catch a breath of air (fresh?) and stretch my legs by walking up Yonge St. – Front to Bloor and back – a thoroughly enjoyable outing.

Cities are not only where most people end up, urban intensification is also touted as a solution to many of our environmental troubles.  Proximity to work, shopping, transit and community are determined to be effective means of minimizing travel, space requirements and reducing the environmental footprint of a crowded planet.  In fact the LEED green building rating system scores highly urban locations and transit nodes as determinants of the degree of sustainability it attributes to a property.

All the while I was living in Toronto I imagined our family property, which as an acreage has remained essentially unchanged in its dimensions, no longer a farm but still a cottage, would continue untouched by the human hand. I imagined a place that would somehow always retain its basic character – same plants, birds, water and the look and feel of a quarter century earlier.

Now after many years I have had the incredibly good fortune once again to return to that enclave of early sweetness and there have been some discoveries.   It isn’t the same.  It is really very different and some changes it isn’t easy to recall, describe or fully understand.  While the owners have done little to alter the landscape the winds of change have blown in from beyond its border.

No barn swallows, where in the past flocks used to lined the electrical wires in the evenings, eating their weight in insects, swooping, diving, chattering and tormenting building owners by nesting where they weren’t welcome.  No wrens, humming birds, meadow larks,  king birds, purple martens but a lot of crows and vultures.  The first birds in the morning a robin, a blue jay, a chickadee and a sprinkling of other songs where an orchestra of voices once filled the air.

No water snakes, salamanders, toads and a distinct decline in the number of smaller frogs and common garter snakes.   There seems to be a bonanza of turtles and some larger frogs but not the same mix as in the past – a different sound emanates from the marshes.

While the water is still fairly clear the lake bottom is now covered in a thick layer of  algae that clings to rock, soil and sea weed alike.  An algae bloom in the spring appears like huge green cauliflower beneath the surface that in the heat of the summer settles to the lake bottom.

Uncountable numbers of zebra mussels clinging to the rocks and crevices of the lake bottom and around the docks and shorelines making walking in the water treacherous.  Fewer pan fish, the rock bass, perch and sunfish that used to swarm around the dock always willing to grab a hook and worm just as the line hit the water.

There are also the new arrivals such as deer, coyotes, bears and raccoons in healthy numbers unknown in the days when farmers eliminated animals that preyed on their livestock and crops.

There is a flourishing collection of noxious plants that thrive in the warmer summers, poison ivy, sumac, grape vines and now also the giant hog weed.  These are plants that are known to have adverse reactions when in contact with people or to readily steal the sustenance from another species.

Co-incidentally, or perhaps not, this summer I had a skin reaction to an as yet unidentified plant that wasn’t poison ivy – the result of a gardening incident – that created permanently scaring blisters.  In the past I have been immune to plant toxins and able to stroll through fields of nasty and prickly weeds with little concern.

These are some of the obvious changes to our family’s country property that are easy to point out. Then there are all the things that you can’t quite recall or place a finger on – a forgotten flower, bird, tree, bush, butterfly or insect.  Come to think of it there is tons of milkweed but not many monarch butterfly caterpillars.

The environment is simply not as diverse, lively, bright or full of the same rich mixture of sounds and sights.  While it is still nature with all its infinite attractions, in my view, the quality of the environment has quite obviously deteriorated.

I wonder how many people living in cities were raised in similar rural settings?  How many of them are living with this fantasy that their sanctuary awaits them?  Given that there has been an unprecedented trend toward urbanization over the last 50 years I imagine many Canadians are in this category.

There is also a whole generation of people who will experience nature, as we know it today as ‘normal’.  For them the missing animals, algae infested water, the invasive species are all simply the way it is – it is their starting point – a new lower standard and expectation.

Furthermore with such a high proportion of the population living in cities how accurately is the environment going to be understood, observed and monitored and who is going to do it. Environmental scientists already suffer a credibility gap evidenced by the recent debate about whether climate change is caused by humans.

While urbanization presents a genuine solution for slowing the pace of climate change it may also produce an environmental amnesia amongst a generation of city dwellers.    Paradise Earth of only 25 years ago is rapidly becoming a forgotten World, residing in the memory of an aging population, many of whom naively may think it still exists.  A robust and healthy planet is being replaced by media imagery of the way it used to be perpetuating the belief that beyond the urban boundary little has change.

This is a personal account of my observations over the summer of 2010.   While I prefer to dwell on solutions I occasionally feel compelled to remind myself, and others, that the natural world is suffering at our hands.  It is also important, once in a while, to reinforce what an enormous loss we are experiencing by not preserving the natural environment.

Canadian governments at all three levels are spending an unprecedented amount of public money on upgrading and replacing existing infrastructure as well as new construction projects.

How is the average person, really anyone besides the relatively few professionals directly involved in the daily activities associated with infrastructure, able to comprehend the extent and nature of the expenditure of billions of infrastructure dollars?   Do you know anyone who can articulate the rational for the allocation of funds across the country?  At best most people may be familiar with projects underway and proposed in their own municipality but another Province or City?

Those employed in the real estate industry, particularly the commercial sector, have more reason than the average taxpayer to monitor infrastructure news.  In the wake of many projects there is a trail of real estate related opportunities.  The classic case is installation of urban transit and transit stations, each a potential new residential and commercial hub.  There are many other examples; airports, roads, bridges, wind and solar farms where each type of project can generate an associated real estate requirements.

The RENX Canadian Infrastructure newsletter is a unique publication dedicated to assembling and prioritizing news available from on-line sources that provide information about this important topic.  Media sources across the country and government websites release news about infrastructure on a daily basis and RENX is gathering it into one place.

So far RENX has published three infrastructure newsletters.  With each new newsletter we are gaining experience with the character of the information available from this sector.  Later in 2010 we will restructure the newsletter with new headings to reflect this knowledge but for now, although the organization may be less than ideal,  it is still providing remarkable insight into Canadian Infrastructure.

Some simple questions with answers that can be derived from reading the newsletter are what type of infrastructure costs millions versus billions? Which projects take many years to build and which have shorter construction schedules?  When is infrastructure private,   public or P3. When is it a maintenance and replacement project versus new.  When is it a Municipal, Provincial or Federal undertaking and which are in Western and Eastern Canada?

One of RENX observations, to date,  is that in broad terms municipal projects tend to be smaller scale – in the millions – compared to most energy related projects – oil and gas, electrical transmission lines, nuclear power which are in the hundreds of millions and billions of dollars.  This may seem like an obvious conclusion however it is a question of scale of expenditure that helps put into perspective the appeal by the Mayors of Canada’s major cities to continue with a Federal municipal infrastructure budget beyond the current recession related stimulus spending.  More on this topic will be included in future blogs.

RENX Canadian Infrastructure newsletter provides a birds eye view of this dynamic and vital part of the national economy.   You can subscribe to electronic mail versions of our newsletters, all which are supported by advertising revenues and free to the reader, or read recent editions here.

The discussion at the last weeks Real Estate Forum in Toronto, attended by over 2,000 people, was dominated by the global financial crisis and its implications for the U.K., U.S. and Canadian economies. Throughout a three-day period, in spite of the impending Copenhagen Summit on climate change starting Monday December 7th, there was almost no mention of green buildings and sustainability.

A prominent theme of The Forum was the decoupling of the Canadian and U.S. economies particularly with respect to real estate. The superior policies and practices of the financial sector in Canada was frequently attributed with preventing an economic crisis here at the scale experienced in other parts of the World and in the U.S. in particular.

For the first time in history Canada seems to have broken free, at least temporarily, from the over bearing economic influence of the U.S. There was little discussion about ‘sleeping with the elephant’ to the south who seems to have been transformed into a far more fragile creature.

While there was a parallel green building conference at The Toronto Forum it is still surprising that climate change was barely raised. Silence on the issue prevailed despite the vast majority of individuals who believe the research pointing to a potential global environmental disaster.

Furthermore, the building sector is attributed with generating about 40% of the green house gas emissions that contribute to climate change. It is considered a sector where existing technologies can be readily applied to make significant and near term reductions in the amount of carbon released into the atmosphere.

The prominent companies represented at the real estate forum almost all have sophisticated sustainability programs. CB Richard Ellis is one of the first global companies to adopt a climate change strategy. Oxford Properties alone has one of the most admired initiatives in Canada to green its buildings and other major pension fund owned property companies have made similar commitments.

To allow the circumstances and issues of the current financial crisis to dominate the agenda with no mention of climate change issues may reflect a perilous denial of the global threat it represents. While the intangible nature of the danger makes it difficult to grapple with its enormity, and complexity of the problem and solution, avoidance is clearly not the answer.

The animal in our bed in Canada may no longer be the elephant to the south but the climate change dinosaur  – a dinosaur whose sleep we should all be aware of disturbing.

Last Friday’s news that Dubai World is not going make payments on US$ 59-billion in debts adds to a mélange of global economic factors influencing the World economy and in various ways directly and indirectly the Canadian real estate markets.

Imagine if this news were announced three years ago, in the absence of information about the financial crisis that has gripped the world for the past year. It would have hijacked almost any headline in Canada but this weekend the Grey Cup results and various domestic tragedies have already taken precedent. (Well in this case perhaps the Grey Cup trumps World Dubai. Phew! What a game!)

There are Canadian companies that are active in construction and development in the Middle East and some in Dubai who are likely severely impacted by the trouble at World Dubai and related companies. Canada’s expertise working in severe climates where extreme cold and hot have common characteristics is a valuable resource in the region. Other companies have invested and participated in development there to get a foothold in another part of the World and diversify their business.

What is particularly note worthy is that Dubai World’s distress is sandwiched between a year and half long financial crisis in the U.S. and the impending unwinding of billions of dollars of lousy commercial real estate debt in the U.S.

This U.S. financial crisis is highlighted by the failure of Lehmann Brothers, the take over of Merrill Lynch by Bank of America, the largest bank failure in U.S. history with the collapse of Washington Mutual and the take over of mortgage giants Fannie Mae and Freddie Mac by the U.S. Government to mention the most significant of the events of the past year. In addition there is the provision of about a trillion of US dollars stimulus dollars and an annual US operating debt also of about a trillion dollars.

The other half of the sandwich is distressed commercial real estate debt in the U.S. It is considered to be in the area of U.S. $1.4 trillion dollars plus an additional $600 million in Commercial Mortgage Backed Securities that are to come due over the next three years. Smaller banks that may not be able to carry the losses hold a significant portion of the debt.

Today we learned from a report in the Globe and Mail that the Toronto Dominion Bank may have as much as $19-billion invested in commercial real estate in the U.S., some of which is likely distressed, more than originally reported. There may be other Canadian financial organizations that may also announce that their financial position has worsened due to continuing declines in the value of U.S. commercial real estate. Individual Canadian investors not subject to public disclosure of their activities are no doubt affected.

The Global Property Market to be held tomorrow, December 1st, in Toronto where experts in the Worlds commercial real estate are presenting their perspective on these issues is sure to be a highly informative event.

Please check Twitter (RENXca) for RENX blow-by-blow coverage of the event. RENX will also be providing a follow-up article to the GPM this week.

With the launch of a new website RENX is taking a bold step toward changing how Canadian real estate professionals consider news about their industry.  The new website is offering five news channels: two new channels Infrastructure and Canadian listed properties in addition to the existing three channels: Commercial, Residential and Green Real Estate News.

As RENX broadens its scope of coverage, it is moving away from the narrow interpretation of ‘real estate’ made by main stream publishers.  Most news services target home owners with  a single ‘home and condo’ section. RENX’s intent is to redefine ‘real estate news’ to encompass the entire built environment by pulling together all the news on this topic into one online location.

Expanding into new industries with the launch of this website is a natural progression following from steps RENX has taken in the past.

RENX started  in 2001 with one channel  publishing as the Commercial Real Estate News (commercialrealestatenews.ca).  From the beginning RENX has provided an informative, thorough and edited summary of news available on the Internet for industry professionals.

In 2004 the Residential Real Estate News (residentialrealestatenews.ca) was launched as a venue for collecting news on that subject.

At that time concern about Environmental issues particularly climate change was gaining momentum.  Green Building Councils were forming in the U.S. and the Canadian Green Building Council had just been established in Canada.

With the RENX subscriber base in the thousands, the logistics of operating two separate websites and mailing lists from a desktop computer had run its course.  A more sophisticated database driven site with email list management services was required.

In 2005, the Real Estate News Exchange name was coined and site we very recently retired, first opened.  Shortly thereafter the Green Building News was added as a third channel.   The old RENX  website served as a sturdy and reliable platform that has delivered it to this point.

In 2009, RENX service has over 8,000 subscribers and serves up about 130,000 page views a month.  It has secured a place in the industry with a loyal following particularly among Commercial real estate professionals.

Now infrastructure issues and the increasing role of cities in the evolution of the built environment is driving news content.   Government expenditures on infrastructure stimulus spending has provided further reason for it to become a break away topic for RENX.

Over the last five years Canadian listed properties, particularly Real Estate Investment Trusts (REITs) but also Real Estate Operating Companies (REOC) have flourished as they are seen, in spite of recent economic events, as stable income producing securities by both individual and institutional investors.  It too has emerged as a topic with its own readership and deserving of dedicated attention.

If this wasn’t reason enough for a new website, changes in news publishing both print and online, social media, mobile devices, Blogs, changes in email news, content management software, each in their own way, are a compelling reason to launch a new RENX website.

Over the years, RENX has struggled with how to provide original content without compromising our existing news service.  Our most fervent hope for for the future is that we will finally be able to provide our own news stream.

Attracting sheer numbers of readers to a news site plays a significant role in its ability to attract more subscribers and generate advertising revenue.  We hope that the expanded scope will provide sufficient resources to hire professional writers on something more than an occasional basis.

Anyone who has developed a complex websites will understand that it can be an overwhelming task that takes months to plan and execute. I am happy to say it is almost finished.

I am grateful to have benefited from the sage advice and hard work of a talented team of software developers at Gossamer Threads in Vancouver.  I look forward to expanding RENX capability with them in the future.

It is terrific that opening day has finally arrived and I will shortly be able to return to writing and editing content for RENX.

RENX will be one of the topics addressed in this blog but its real focus will be to provide news, commentary and an editorial perspective on the Canadian built environment.  Please return to read RENX Writes.