The Evolution Of The Canadian Mall & What It Means For Investors

Our shopping habits may have changed a lot in some ways since the construction of the first covered Canadian shopping mall in 1950. Though in many ways they have stayed the same, and so has the way people enjoy shopping.

While the first monster sized shopping mall, Park Royal in West Vancouver, has certainly had its successes, not everyone wants to have to go to a large mall every time they need something. More and more shopping centres are being converted, or are developing plans to be converted, into large, mixed use, luxurious malls, though many Canadians say they love their local shopping centres just the way they are. People still prefer buying from faces they recognize and who know their names, and perhaps more importantly, don’t want to have to take 15 minutes to park and then walk equally as long to get to a single store they want to visit. They like the small local shopping centre feel. Some citizens are even very actively protesting against this new breed of mall.

Likes and dislikes are one thing, and no matter what you do, and how well you do it, there will always be critics. But the real question is, what does this trend means for investors? Of course brand new super malls demand higher rents and can accommodate more tenants, however this doesn’t always mean higher profits, and certainly means waiting longer for significant returns. For those investing in shopping malls, major renovations can mean having to pay out big figures to tenants and extended periods without income. Plus those projects that include residential units don’t always provide the best possible use of the available square footage.

For those looking into commercial real estate investment through shopping centres and who are seeking immediate income along with larger lump sum profits down the road, it is often best to put your money into existing small and medium shopping malls that already offer established tenants and rents. Should you really desire to do some type of renovation to boost your equity you will often find that the best returns are to be had from simple extensions to parking, improved signage and basic cosmetic updates to the fascia.

What about those who say that ‘malls are dead’, and that the Internet is the future of shopping? Studies show that while consumers are certainly doing a lot of research and window shopping online they are still choosing to head to the local shopping centre to execute their purchases for the most part. So there is no need for the Internet to mean doom for smaller retailers or franchises. In fact they are often best served by sticking with affordable rents in smaller shopping malls and focusing a good portion of their marketing budget on Internet and mobile marketing that drives traffic in their physical doors.

Want to learn more about how commercial real estate, or get information on some of the great deals that are available? Contact Howard Manley of Redev Properties today by phone at 1-866-668-7344 or via email at howardm@redevproperties.ca.

Thank you for reading,

Richard Crenian
www.redevgroup.com

Canada Ranks 7th In Global Commercial Real Estate Investment Study

The recently released report, the ‘International Investment Atlas Summary 2010’ from Cushman & Wakefield places Canada seventh in global investment in commercial real estate. Even better, this report shows that commercial real estate investment volume is up 150% over the previous year!

The other leaders in this study included:

1. China

2. USA

3. UK

4. Germany

5. Japan

6. Hong Kong

While China is certainly huge and attracted about $200 billion in commercial investment, it obviously has it’s own complexities when it comes to investing for the average individual. Plus, government manipulation of the market and the threat of sweeping changes at any moment are always scary. Obviously the US made it on the list from sheer size, not because of performance which continues to weaken. While similarly the UK, especially London, an old favourite, finds its way on the list due to the incredibly high prices, even though it is also still battling the credit crunch in a big way. Germany may have seen impressive economic growth recently, but it is not the easiest of countries for foreign investors to try to invest in, and definitely presents a number of challenges including the high cost of entry. Then there is Japan which is going to be a seriously scary place for anyone to put their money for a long time due to the recent tsunami.

The report further praised Canada for having one of the most stable banking sectors in the world, and pointed out the improvements in employment figures and the stabilization of commercial rents. In fact they did not go far enough to recognize that cities like Calgary are currently sitting on an almost zero vacancy rate in the retail sector.

What does this all mean for Canadians who are looking for the best place to invest their money? Clearly for many reasons Canadians are much better off keeping their money at home these days, and will also see their investments further boosted by outside attention from foreigners looking to capitalize on the country’s strength and growth.

Commercial real estate investment is a fantastic choice for those looking for an income investment and equity growth in a vehicle that provides great security and solid returns. While every commercial property and area is slightly different, recent official reports have put the average returns for commercial real estate investors as high at 11-15.7% in places like Vancouver and Calgary.

The retail sector in the Western Canadian provinces of British Columbia, Alberta, and Saskatchewan in particular, offer many great opportunities for the individual investor looking for a safe and secure place to put their money to work for them, while realizing above average returns. This has led many of the most savvy investors to start picking up more and more retail properties, such as local shopping malls and plazas.

Want to learn more about how commercial real estate, or get information on some of the great deals that are available? Contact Howard Manley of Redev Properties today by phone at 1-866-668-7344 or via email at howardm@redevproperties.ca.

Thank you for reading,

Richard Crenian
www.redevgroup.com

Best Canadian Cities For Commercial Real Estate Investment

Calgary

Calgary is perhaps the most buoyant and brightest commercial real estate market in the country with retail sales already seeing the second highest growth rate in Canada, and predicted to soon become number one. This is a pole position expected to be held until at least 2015 with many retailers choosing Calgary as the location for their first and second Canadian store openings. In fact this jewel in Alberta’s commercial real estate crown already boasts a vacancy rate of just 2.4% with some areas as low as 1.7 percent!

Vancouver

Commercial real estate investment in Vancouver has rebounded at an amazing rate. British Columbia saw a 58% surge in dollar volume last year alone, with Vancouver making up a good portion of that figure. While aggressive growth is expected to continue during the next 5 years, investment returns are also staying high. At second place for the entire country average commercial investment, returns here averaged an appetizing 13.7%. Each of the 4 major sectors of the commercial property market performed well, but retail remained in the lead for a 2nd year running, with returns at an incredible rate of 15.6%.

Edmonton

While perhaps not in the headlines as often as some of the bigger metropolitan cities, Edmonton is still a thriving location with excellent business opportunities and a great place to live. In comparison to Calgary, you will find commercial real estate prices more affordable, yet still providing healthy returns. The city’s appealing lifestyle will continue to attract more residents and businesses during the coming years, providing excellent growth for investors. What to invest in? As the home to Canada’s 1st mall, the Westmount Centre, and the largest mall in North America, the West Edmonton Mall, you can be sure shopping is big business here: and retail outlets offers many opportunities.

Regina

Nicknamed the ‘Sunniest Capital City in Canada’, Regina, in the western province of Saskatchewan, is an important economic hub and a highly desired location for both business and Canadians looking for a sunnier place to live. Real estate here is known for being very affordable, and as the country rebounds, it is certain there will be plenty of profits to be had, especially for those investing in shopping malls, and those who benefit greatly from the big tourist influx.

Victoria

Victoria felt much less of the effects of the global economic crises than other cities in BC, and has always been considered to be more stable. This commercial property market has continued to see a great upward trend since the second half of 2009, with retailers exceeding expectations, which has led many local businesses to launch plans for expansion including a number of car dealers announcing multimillion dollar construction projects.

Want to learn more about how commercial real estate, or get information on some of the great deals that are available? Contact Howard Manley of Redev Properties today by phone at 1-866-668-7344 or via email at howardm@redevproperties.ca.

Thank you for reading,

Richard Crenian
www.redevgroup.com

It is ok to be Boring! by Richard Crenian

Richard Crenian Blogs
March 3rd, 2010
Banking Money and You……by Richard Crenian
Just the facts, Ma’am:
First quarter profits…….
National Bank at $215 million up from 69 million;
BMO -Bank of Montreal $657 million from 432 million;
TD Bank shows double their quarterly profit posting a gain of 1.3 billion dollars.
These are the quarterly results of the Canadian banks. These banks are what the global standard is set by. It is obvious why.
With all the bank failures in the US (15 alone in the month of January), it is wonder why one picks Canada for safety and security. The knock about Canada and the Canadians is that they are too quiet, too polite, and too boring. If you are an investor boring is good, and if you are an investor past 45 years old, boring is great.
Oil, gold, etc have been great commodities for the rich commodity Canada. Is it any wonder why we are lucky to be here and live here? Is it any wonder that foreign investors are flocking here; wealthy immigrants are moving and wanting to move, to Canada. Boring is good sometimes, and being here in Canada we are glad.
Howard and I are both boring investor turtles, we will go slow and steady into the sunset, like we want our investments to do. Why not? We aren’t going to be around forever but when we are we will take care of our day to day concerns and leave well for those that remain.
Call Howard at 4036304544 or email him at howardmanley@shaw.ca to chat or exchange ideas. Of course you can always write to me at richardc@redevgroup.ca. Thanks for reading.

Richard Crenian
www.redevgroup.com

Canada, eh?

Richard Crenian Blogs
2-Mar-10

Canada Eh?

I’ve been thinking about this quite a bit. I’ve been reading in the newspaper about what’s happening in Greece. Their economy is so laden with debt. When you look at the countries like Greece, Germany, Portugal, Spain you can’t help but notice they are all in dire straits. It’s no wonder! The trouble starts because they’re buying each other’s paper and gradually there isn’t money to back the paper.

In the case of Greece, the country has so much debt it cannot issue any more paper as it isn’t worth anything.

Next thing you know the Euro is affected and the European Union is scrambling to figure out what to do. What a mess!

Also, last week we spoke about what is happening in the U.S. in terms of foreclosures.
It is still scary.

Yet is happening in the USA seems starts to seem tame by comparison to what is happening in parts of Europe. Now that the Euro is weakened by all the debt you are seeing the U.S. people are now buying the U.S. dollar despite the scary things happening in the States.

I am not an expert on world politics or the world economy but whenever you read things like this it really makes you appreciate what is happening in Canada.

As the Euro falls the Canadian dollar picks up steam.

How does that play into Canada or why is Canada such a good place? When you read what has happened in the last few days you know that the Canadian economy has expanded by 5% (annualized) in the fourth quarter of 2009, and when you see a number like a 5% annualized you know that things are going well.

We haven’t seen gross domestic product growth since 2000. Why is that? Well when you look at what is happening in Canada, we have mining we have oil and gas, and we have manufacturing, construction and a whole gamut of service producing industries.

This has continued to fuel the wholesale trade along with real estate in Canada.

This may mean we will see our Canadian government raise interest rates in the third quarter or fourth quarter of this year (2010) so the economists say, in an effort to control growth and inflation and help maintain the safe economic environment we’ve grown accustomed to.

Its little wonder Canada’s fast becoming worlds preferred place to invest in.

Good governance, good place, good timing. Go Canada, go!

Richard Crenian

www.redevgroup.com

richardc@redevgroup.ca

Why invest in Canada?

Here is a transcript of my latest chat with our media consultant.

Q: Why does redev focus primarily on Canada?

RC: Our strategy and focus on Canada goes hand-in-glove with my professional aversion to risk. I only shop for opportunity where risk can be controlled, minimized or eliminated completely. These days this means staying inside our traditional investment zone.

These days when you look at the US home prices are deflating in 21% of the 143 markets according to The Economist. According to the web site zillow.com 1 in 5 home owners are under water on their mortgages especially on the fourth quarter of last year. We see that for this year in the US there have been 4.5 million foreclosure filings up from 2.8 million in 2009, according to Realty Track. When I hear those kinds of numbers, I’m actually scared. I see in the States, quoting from the mortgage bankers association that 15% of homeowners are either in foreclosure or behind at least one payment on their mortgage in quarter four. According to the mortgage bankers association at least 3.9 million Americans are more than 90 days behind on their payments, which is triple the level of two years ago.

In the US in 2010 there were four more regional banks that failed recently bringing the total to 20 banks that have failed. We’re talking 20 billion plus in assets.
Those are the kinds of numbers I hear and see, I have to ask do I really want to invest in a place where things are going so poorly? Being risk averse this is something I just don’t want to do. You have to worry and you have to wonder.

In Canada we have good government and a well-regulated banking system and a safe economy and we have many resources. We should be very thankful to live here in Canada. So the bottom line is, "I go where I know and know where I go..."

Richard Crenian
richardc@redevgroup.ca
http://www.redevgroup.com

On risk aversion

Here is a transcript of my latest chat with our media consultant.

Q: Having read a number of your blog posts it seems you have a strong aversion to risk. Why is that?

Richard Crenian: That’s a good question. I think the older you get the more adverse to risk you become. Later in life you realize that if you loose money you don’t have the energy and time you once had to make up the differences. So it’s very import to try and save your money and not blow it on something silly.

So I think that you know that if you lose money at age, (whatever your age is) say your 55 years old and you are planning to retire by age 65 it will be much harder to make that money up in the next 10 years. So you really want to watch where you invest your money and at a minimum make sure you are not going to lose your money which you are saving for retirement.

Beyond your retirement goals being conservative means protecting those you might one day leave behind. Obviously you want to make sure your family is well taken care of. In my view this is the legacy of a good human being.

When you’re 35 years old, the possible losses associated with risk are easier to compensate for, assuming you don’t compromise the welfare and safety of your family.
When you get into 55 and beyond, is there any real need for you to take on unnecessary risks?

Richard Crenian
richardc@redevgroup.ca
www.redevgroup.com