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Squarefoot

Commercial Real Estate On Purpose

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Low impact development (LID) stormwater management, an alternative to conventional grey infrastructure, provides a number of ecological and social benefits, while also leaving space for profit. Here’s how.

Situation

In urban and developed areas, impermeable surfaces like pavement stop precipitation from soaking into the ground. Instead, water runs rapidly into stormwater infrastructure like storm drains, sewer systems and drainage ditches, which can cause flooding, erosion, sewer system overflow, and damaged infrastructure. 

This water also carries debris, chemicals, bacteria and other pollutants into streams, rivers, and lakes, contaminating them. However, stormwater design and “green infrastructure” are increasingly being used in Barrie and Simcoe County development to capture and reuse stormwater to restore natural hydrologies.

Significance

Ontario has made a significant shift towards decentralized LID practices that increase infiltration and decrease surface runoff in order to prevent costly flooding events, damage to municipal infrastructure and polluted waterways.

Examples of LID infrastructure include:

  • rain gardens and bioswales
  • green roofs
  • perforated pipe systems
  • permeable pavement
  • downspout disconnection
  • barrels and cisterns for rainwater harvesting

Conventional stormwater management models have been adapted to incorporate more green infrastructure in order to promote its widespread adoption by engineers, planners and decision-makers in Simcoe County development. 

Solutions

Squarefoot Commercial Group is committed to the purposeful development of Simcoe County. We know what’s trending and ending in our market, and what will encourage, discourage or limit opportunity.

We know that LID will play an important role in Barrie and Simcoe Country development. Not only will it help solve problems with the current model, it will also help improve water quality, reduce urban heat island effect, and enhance neighbourhood beauty.

By implementing LID practices, Barrie and Simcoe County developers can decrease how much they’ll pay when the City of Barrie moves to charge stormwater user fees based on the size of impervious surface areas next year, and benefit from other incentives like credits, rebates, and grants. 

Permeable surfaces also offer a longer life cycle and require less maintenance than impermeable surfaces, which can make a big difference in terms of long-term costs, and can help ease the burden on existing municipal infrastructure. 

Results

Squarefoot commercial realtors are committed to purposeful Simcoe County development. We live in the community, we understand it, and we are invested in its sustained, positive growth. 

We work with local governments, other commercial realtors, and advisors to help buyers and sellers make the best commercial real estate decisions with an understanding of public policy, demand and land value, as well as highest and best use.

Contact us to learn more about our approach or get more information about our current commercial real estate listings. We can help you achieve your commercial real estate goals — reach out to our commercial real estate experts today!

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Industrial lease prices have shot through the roof and industrial land prices have doubled in some Canadian markets. Here’s why, plus an overview of the current commercial real estate market and projections for the future.

Situation

Half of Canada’s markets have essentially run out of industrial space, and many of our tightest markets (e.g. Toronto) don’t have enough serviced land zoned for industrial use. 

According to the 2021 Industrial Figures Q4 report, the national industrial availability rate fell below 2% for the first time in recent history. With less space to go around, rental asking rates have skyrocketed, increasing by 10.9% (YOY) nationally, and as much as 32.3% in markets like Montreal.

Industrial sale prices have also exploded across the country, doubling in markets like London, Ontario, and rising to above $400/sq. ft. in Vancouver, Toronto, Ottawa and Montreal. Nationally, the average asking sale price has increased by a whopping 27.9% year-over-year. 

Significance

Until recently, industrial lease terms ran from 10 to 15 years, but in a (scorchingly) hot market with (pitifully) low vacancy rates, many landlords are opting for much shorter leases — in the ballpark of 3 to 5 years — so that they can charge higher rents to renewing tenants, or to new tenants.

Obviously, this can be disruptive for businesses, both in terms of planning and stability, as well as overhead expenses. Many businesses will end up passing their rent increase along to the consumer, who’s already grappling with the worst inflation in 40 years. 

Solutions

Construction activity has increased nationwide, with 36.2 million sq. ft. of industrial space currently under construction. But — and it’s a big but — nearly 70% of commercial industrial real estate under construction is already pre-leased! This means businesses in need of space will need to act fast (or go back in time) to secure a spot.

Equal to Canada’s housing crisis, the persistent shortage of serviced land zoned for industrial use is a key driver of current market conditions. Without a tremendous effort to increase viable industrial space — which means developing unserviced industrial land and overhauling the onerous zoning restrictions and bureaucratic red tape that delays getting shovels in the ground — there is simply no way out of this affordability crisis. 

As commercial real estate availability continues to plummet amidst increasing demand, the industrial real estate market in Canada is expected to get even hotter. This will be great for landlords, but increasingly painful for businesses.

Results 

Squarefoot Commercial Group is committed to purposeful development. Serving the Barrie and Simcoe County region for more than 60 years, our commercial realtors work with buyers and sellers, as well as with landlords and tenants, to secure fair and equitable terms. We believe in honesty, integrity and community.

Whether you’re looking to buy commercial real estate, looking for industrial vacant land for lease in Barrie or looking for commercial industrial real estate for lease, Squarefoot’s commercial real estate experts can help.

Contact Squarefoot Commercial Group to learn more about our approach, find land for lease in Barrie, view our current commercial real estate listings, or find out how we can help you achieve your commercial real estate goals. 

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The 2022 Barrie municipal election will be held on October 24th, 2022. Residents of the City of Barrie, who are eligible electors, will be voting for the offices of Mayor, their City Councilor (one for each of Barrie’s 10 wards), and a School Board Trustee. 

Situation

Most, if not all, City Council candidates have municipal tax reductions — or at least, no increases to municipal taxes — as part of their election platforms. But municipal taxes pay for all of the City services — is this really the best way to support Barrie residents?

Conversely, there are currently 147 proposed developments listed on the City of Barrie’s website, only 34 of which were submitted or amended in 2022. That means 113 of Barrie’s proposed developments were submitted in a very different market and now face significant new challenges. 

Significance

We’re in the middle of a housing crisis, yet municipalities collectively are making it harder and more risky for developers to build. The development process is depressingly long and complex, and subject to seemingly endless studies, approvals, comments and permits. Additionally, development proposals are subject to public input, which can further delay or block new projects.

Development is critical in order for Barrie, and Simcoe County, to thrive. It creates jobs, attracts skilled labour, and creates new housing units to support the growing community. This can help address the missing middle, diversify housing options, help first-time home buyers get into the market, and add to the tax base, thus improving the City’s ability to provide quality services. 

In light of all this, we urge the new City Council to consider the following: What can be done to improve Barrie’s development application process and get shovels in the ground faster? 

Solutions

If Barrie development applications were approved in a more efficient and effective manner, the result would be construction of new assets, increased housing options for families, and a community that can thrive.  

Squarefoot would encourage City of Barrie councilors to learn more about the risks and costs associated with development. At present, only the developer is exposed to increased risks and costs, as well as the potential decrease in demand as market conditions change between project inception and final sales. Applications that were submitted in a market environment that was flourishing yet remain in a ‘proposed’ state are now at the mercy of a very different market.   

By understanding the risks and challenges our developers face, councilors and staff at City Hall may be more committed to working collaboratively with developers on common goals, for the common good. 

Results

Squarefoot Commercial Group is committed to the purposeful development of Simcoe County. We live in the community, we understand it, and we are very passionate about its sustained, positive growth. As a team that specializes in ICI real estate, our approach is holistic. 

Squarefoot Commercial Group serves the City of Barrie and Simcoe County, both  facing some of the fastest growth in the province. We believe in honesty, integrity and the power of community.Contact Squarefoot Commercial Group to learn more about our stance and views on the upcoming municipal elections or find out more about our current listings. Let us know how we can help you achieve your commercial real estate goals.

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Now more than ever, real estate transactions are shaping Ontario communities. Real estate speculation is at an all-time high, with investors now making up the largest segment of homebuyers in Ontario. 

But it’s not just homes in the crosshairs; land parcels are also being snapped up across the province by investors speculating that prices will only keep rising. But what exactly is a Speculator, and how do they differ from regular Buyers/Developers?

Difference Between a Real Estate Speculator and a Developer

Real Estate Speculators

Speculators are buyers who purchase property or land with plans to sell it and make a profit. These buyers anticipate selling for a higher price in the near future, often based on market forecasts. 

Speculators’ interest in your land parcel begins and ends with holding the title. This means they will likely attach fewer (if any) conditions to the Purchase Agreement. This could be an advantage to Sellers who need to sell quickly and can’t wait for a Developer to do their due diligence. 

Real Estate Developers

Developers more often purchase land with the intent to build on it once the transaction is complete. Whether that’s housing units, commercial buildings, industrial lots or other infrastructure, a Developer buys land to do something with it in the very near future.

Developers will not often buy land without conducting their due diligence or “de-risking” the property essentially making the Purchase Agreement conditional for a period of time. Developers answer to a number of stakeholders, including, lenders and end-users; failure to anticipate and mitigate potential risks can have disastrous consequences for the project and everyone involved.

Selling your land to a Developer usually means waiting a little longer to close; understanding the land development process can help you understand timelines and set realistic expectations. 

Should You Sell Your Land to a Speculator or a Developer?

As a Seller, you have the right to sell your property to whomever you want. Your land, your choice. That said, your decision can directly impact the community in and around the property. 

A Developer stimulates the economy and provides employment and/or housing. A Speculator sits and waits, generally without contributing anything, and may even slow down or hinder growth plans in the area around the property.

If you live in the community, you may want to consider factoring in the property’s end-use into your decision. If you do not live in the community, your interest in what happens with the land may end with the sale.

Whatever you decide to do with your property, it’s a good idea to have an experienced Commercial Real Estate Agent to guide you through the process. We can provide you with the information you need to make an informed decision on the terms and conditions used by each type of Buyer. 

Listing Your Real Estate Assets

For the best result in any real estate transaction, you want to choose a Commercial Real Estate Agent with:

  • Granular understanding of local market conditions;
  • Thorough understanding of all aspects of commercial real estate;
  • Excellent negotiation skills;
  • Strong analytical skills;
  • A solid network.
  • Good understanding of contracts and reasonable conditions.

Squarefoot Commercial Group is specialized in all of the above. They are actively serving clients in   Barrie, Simcoe County and some of the fastest-growing communities north of the GTA. 

We know what’s on the open market and more importantly, what’s not. We can provide data and insight that will help you understand the bigger picture and how it affects your land.  Thinking of selling? Contact Squarefoot today!

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A solid understanding of the process, costs and risks associated with the land development process in Ontario can help Sellers manage their expectations, understand closing conditions and timelines, and make informed decisions.

Situation

A Seller wants cash with few conditions. The Developer wants a property that they can develop without unexpected costs or project delays outside of their control. The Developer is accountable to various other stakeholders, including the lender, local government councils, end-users, and the community in which the development will occur.

A good Commercial Realtor will strive to bridge the gap between the Developer and the Seller. At Squarefoot, we let the Seller know what to expect from the land buying process. Knowing what a Buyer faces when looking to purchase land, from de-risking (completing required studies) to development, allows our Seller to make an educated response to any offer.

Significance

In Ontario, developing any parcel of land requires a long list of approvals and permits. If the municipality is in favour of a development concept, the next step requires the Developer to carry out a significant number of studies before a permit is even considered. Completing all the required studies is not only an expensive and protracted process, it’s an added risk, because completing them doesn’t guarantee a development permit. In fact, the results may illustrate that the land may not be as suitable for development as initially believed.

The bottom line is that approvals and permits are issued only after completing the required studies, which is time and money that the Developer risks, without a guarantee. The studies and reports required depend on the type of development being considered and may include (but are by no means limited to):

  • Affordable Housing Report
  • Agricultural Assessment
  • Arborist Report
  • Archaeological Assessment
  • Architectural/Cultural Heritage Report
  • Environmental Impact Study
  • Erosion & Sediment Control Plan
  • Functional Servicing Report
  • Geotechnical & Hydrogeological Investigations
  • Planning Justification Report
  • Transportation and Traffic Impact Study
  • Shadow Study
  • Tree Inventory - Analysis & Preservation Report
  • Tree Preservation Plan
  • Odour/Dust/Nuisance Impact Study
  • Servicing Feasibility/Capability Study
  • Stormwater Management Report
  • Noise/Vibration Impact Analysis
  • Urban Design Report
  • Wind and Microclimate Study
  • Parking Study

If these studies and reports suggest that the land is less suitable than initially believed, the Developer must make a tough decision: continue with the development based on revised feasibility calculations, or abandon the Purchase Agreement and walk away from the enormous amount of time and money that’s already been invested.

As you can see, anticipating and mitigating risks before purchasing land is paramount. This is why it’s important for sellers to understand the complexity, time and expense of the due diligence process, or “de-risking” process, and allow a reasonable amount of time to conduct it.

If you’re in a rush to sell, you can be proactive and engage the many QPs required to complete the necessary studies to make your property “shovel-ready,” but this will cost you time and money. Either you pay to play, or you accept that the Developer will need time to complete the process.

Developers will NOT, as a general rule, buy land without first de-risking the property; however, Speculators may do so because their interest begins and ends with holding the land.

Solutions

The most successful agreements occur when both sides understand and compromise. Understanding the process, the cost and the risk allow the Seller to make an informed decision. That’s why Squarefoot Commercial Realtors believe in explaining the process to the Seller.

Understanding the land, the location and the parties involved in the Agreement are critical to creating a fair and balanced Agreement of Purchase and Sale. Squarefoot Commercial Realtors will provide insight into all of these components, as well as any local policies that may have an impact on the development of the land. The Developer then has the confidence to submit an offer knowing the Seller will be reasonable about expectations, terms and timelines.

Results

Squarefoot Commercial Realtors guide Sellers through the process and provide information they need to make an informed decision about the sale of their land. Developers are confident knowing we will work to achieve fair terms to allow for due diligence to be completed.

Squarefoot Commercial Group is specialized in commercial and industrial real estate, and serves Barrie, Simcoe County and some of the fastest-growing cities in Ontario. We believe in honesty, integrity and the power of community, and together we have more than 60 years of experience in commercial real estate.

Contact Squarefoot Commercial Group to learn more about what we specialize in and how we can help you.

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The Struggle for the Market to Rise & Lack of Funding from the Federal Budget

Across Canada, the post-Covid housing market defied all odds, increasing demand and limited supply have pushed housing prices to record highs. However, the commercial markets, which vary by location/geography and asset class, are a different story. In the urban core of many big cities, office real estate vacancy rates and softening of rents are still significant issues. 

The decline in office leasing is most pronounced in Toronto. Other major markets, including Calgary and Edmonton, which struggled before the pandemic, have shown further declines. With lockdowns in the major city centers of Canada, the office vacancies grew slowly during the pandemic. Land development within the commercial market has also been hit hard. 

However, the Vancouver office market showed resilience throughout the pandemic. Leasing volume was up 33 percent in the third quarter of 2021, compared to the average for the same quarter from 2018 to 2020. Why is Vancouver doing better? Carl Gomez, chief economist and head of market analytics at CoStar Group Canada, believes it’s because of the number of small- to medium-sized tech companies located in Vancouver’s urban core..

Contrary to all of this, there is good news in commercial real estate. Industrial real estate, especially suburban warehousing space, has leasing volumes rising across Canada. E-Commerce also continued to drive the rise of industrial real estate across the country. Retail leasing volumes, although not as rapidly,  started to grow and recover after the second quarter of 2020, with vacancy rates forecasted to be satisfactory. 

Long-Term Commercial Real Estate Forecast

The Canadian commercial real-estate Market is expected to register a Compound Annual Growth Rate of more than 11% during the forecast period (2022 – 2027), which is solid news.

In 2022, the Canadian economy is predicted to continue to recover from the pandemic-driven downturn, with output recovering by 4.0-5.0% on an annualized rate. Following substantially higher expansion in the goods production sector in the early phases of the pandemic, the services sector will be the main driver of growth in the coming years. In 2022, retail spending and housing market activity will boost economic growth, bolstering the commercial real estate sector’s mostly positive performance trends.

The Canadian Government

On April 7, 2022, Finance Minister Chrystia Freeland introduced the 2022 Federal Budget. Included in the Budget were ample provisions for residential real estate, such as First Time Homebuyers Incentives and CMHC and Co-Operative Housing Funding. However, this budget did not present anything that would benefit the commercial real estate market. 

Although the Canadian government recognizes the current challenges in the commercial real estate sector, long-term solutions will require the federal government to work with provinces, territories, and municipalities to ensure a full recovery. This includes developing policies that will benefit the commercial real estate industry, including land development for increasing residential density and industrial warehousing and distribution. At Squarefoot, we’re looking forward to analysing the next 12 months’ activity. During this time, we’re focused on what we do best, providing educated and experienced guidance and advice to our clients, and assisting them in finding the ideal solution for their unique commercial real estate needs.