Commercial First Blog
biv.com - Record volume. Purpose-built rental apartments are a hot topic these days as politicians continue to seek to be seen to be doing something about housing affordability.
Prince Rupert: Canada's northern gateway for Asia-North American trade
WesternInvestor.com - The port town of Prince Rupert serves as hub for trade and transportation in B.C.'s northern region, with building permits more than doubling year-over-year.
New contaminated-land rules complicate mixed-use projects
biv.com - A movement to mix residential buildings into the redevelopment of old commercial and industrial sites has become more challenging after B.C.’s contaminated-site regulations were recently updated. The new rules came into effect November 1, 2017, and cover any B.C. development that has not achieved a certificate of compliance from the B.C. Ministry of Environment.
There were 652 commercial real estate sales in the Lower Mainland in Q3 2017, an 8.8 per cent decrease from the record 715 sales in Q3 2016, according to data from Commercial Edge, a commercial real estate system operated by the Real Estate Board of Greater Vancouver (REBGV).
The 652 sales in Q3 2017 are 10.7 per cent above the five-year Q3 sales average for the region (589).
The total dollar value of commercial real estate sales in the Lower Mainland reached $3.270 billion in Q3 2017, a 16.1 per cent increase from $2.815 billion in Q3 2016.
“While there have been fewer commercial sales this year compared to 2016, activity remains in line with the long-term average for the region,” Jill Oudil, REBGV president said. “On the pricing side, dollar values for commercial properties have climbed about 16 per cent in the last year. This growth can be attributed, in part, to the extended economic growth we’ve been experiencing across a variety of sectors in our province.”
Q3 2017 activity by category
Land: There were 278 commercial land sales in Q3 2017, which is a 4.5 per cent decrease from the 291 land sales in Q3 2016. The dollar value of land sales was $2.100 billion in Q3 2017, a 35.3 per cent increase from $1.552 billion in Q3 2016.
Office and Retail: There were 225 office and retail sales in the Lower Mainland in Q3 2017, which is up 0.9 per cent from the 223 sales in Q3 2016. The dollar value of office and retail sales was $578 million in Q3 2017, a 6.1 per cent increase from $545 million in Q3 2016.
Industrial: There were 128 industrial land sales in the Lower Mainland in Q3 2017, which is down 21 per cent over the 162 sales in Q3 2016. The dollar value of industrial sales was $400 million in Q3 2017, a 15 per cent increase from $348 million in Q3 2016.
Multi-Family: There were 21 multi-family land sales in the Lower Mainland in Q3 2017, which is down 46.2 per cent from 39 sales in Q3 2016. The dollar value of multi-family sales was $192 million in Q3 2017, a 48.1 per cent decrease from $371 million in Q3 2016.
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The report analyzes commercial and residential tax rates in 10 Canadian cities.
Vancouver's commercial tax rate of $12.44 per $1,000 of assessed property value compared to the residential property tax rate of $2.55 per $1,000 of value results in a ratio of 4.87 – the highest in Canada.
Taxes on a commercial property with an assessed value of $1 million would total $12,440. In comparison, taxes on a residential property worth $1 million would total $2,550, according to Bob Laurie, a commercial REALTOR® for forty years and the former co-chair of the Vancouver Tax Coalition.
Vancouver has a history of serious tax imbalances between residential and business property taxes explains Laurie.
“The bottom line is that businesses, especially small businesses which create jobs, have to move away when the commercial tax rate gets this high,” said Laurie.
Businesses can write off property taxes as a legitimate expense, so the commercial tax rate should be greater than the residential rate. But over the years, businesses have shouldered an unfair burden.
Making a commercial property sustainable can seem daunting. Where to begin? Here are some simple ways to improve the environmental impact of your buildings, and help both your properties and your tenants go green.
1. HVAC maintenance
Energy efficiency experts at BC Coastal Energy recommend regular maintenance to ensure your commercial property’s HVAC systems are reducing energy waste — which also saves money.
Replacing an old HVAC system is an opportunity to invest in new designs that reduce energy waste. You might even be able to get a smaller and less costly system, and cut down on energy consumption by up to 10 per cent by using a computer system that adjusts for occupancy and building use.
Learn more about HVAC energy tips.
2. Seal in energy savings
Whether it’s a new building project or an existing structure, insulation plays a big role in energy efficiency. Poor insulation contributes to wasted energy on heating and cooling. Better (and more) insulation is one of the most affordable ways to reduce energy — with one of the highest benefits to the environment.
- Did you know that nearly half of the total energy consumption of commercial and industrial buildings in Canada is used for heating and cooling spaces, accounting for 42.9 per cent of the total greenhouse gas (GHG) emissions.
3. Invest in green appliances and equipment
When it comes to outfitting your office, retail space, or multi-family building with appliances and other equipment, the Business Development Bank of Canada (BDC) recommends that commercial property managers purchase certified energy-efficient models whenever possible.
ENERGY STAR has strict certification requirements, and products must be in the top 15-30 per cent of their class for energy savings, according to Natural Resources Canada. Energy benchmarking and achieving a high ENERGY STAR score is highly recommended for commercial buildings by the Government of Canada — and can help toward LEED certification.
Here’s a list of ENERGY STAR certified products for commercial spaces in Canada.
4. Upgrade commercial property lighting and signage
Lighting can consume 25-30 per cent of the energy used in commercial buildings, according to ENERGY STAR. Switching to compact fluorescent lights (CFLs) for interior lighting and LED lighting for exterior signage can yield huge energy savings — between 70 and 90 per cent! Many of these products can also last up to 15 times longer than non-green products.
Encourage tenants to use energy-efficient bulbs and turn off lights at the end of the day. You might also invest in an automation system that powers lights off at set times or uses motion sensors to control lighting.
5. Obtain sustainable building certification
If you’re making all of these green changes in your commercial building, you’re working toward earning a sustainability certification.
An official sustainability certification assures tenants and those using commercial spaces that the building is healthier for humans to inhabit, and that it’s putting less stress on the environment through utilizing energy- and other resource-efficient practices. For commercial real estate owners and managers, sustainable certifications translate to the bottom line: increased building value, lowered operational and utility costs, and potentially higher lease rates.
Leadership in Energy and Environmental Design (LEED) is the most used green building rating system in the world. The LEED certification categories include:
- building design and construction
- interior design and construction
- building operations and maintenance
- neighbourhood development
Similarly, the Building Owners and Managers Association of Canada offers sustainability certification through its http://bomacanada.ca/bomabest/ program. BOMA BEST is Canada’s largest environmental assessment and certification program for existing buildings, and is geared toward offices, shopping centres, open air retail plazas, light industrial buildings, and multi-unit residential buildings.
Sustainability and the future of Vancouver commercial real estate
Sustainability is going to matter more to Vancouver commercial real estate practitioners, owners and managers in the years to come. According to the Vancouver Economic Commission, “green building design and construction is the second-largest sector under Vancouver’s Green Economy umbrella”, and is linked to Vancouver’s goal to become the world’s greenest city by 2020. Furthermore, the City of Vancouver will require all buildings constructed from 2020 onward to be carbon-neutral in operations.
Vancouver currently boasts over 300 LEED certified building projects, and is ranked number one in North America for green building codes. The City has even developed a green building toolkit for property developers and designers to facilitate passive energy designs and water wise landscapes.
Visit the City’s requirements, forms, and checklists for green commercial buildings.
If you’re looking for sustainable commercial properties in Metro Vancouver, click here to visit Commercial First. This exciting new platform is your resource to list, search, and promote commercial real estate, and to connect with colleagues and clients.
With eCommerce giant Amazon reporting record Canadian sales from Amazon Prime Day 2017, plus major Canadian retail store closures including Sears, Reitmans, and Le Chateau, it might seem like customers are drifting away from the in-store experience. But in reality, reports like ‘The State of Brick & Mortar 2017’ clearly show that shoppers still crave physical stores in which they can look at, feel, and try on products. It’s how businesses use their storefronts that makes all the difference.
Retail spaces reside in an ever-evolving landscape, shaped almost entirely by the growing demands of your customers. Shoppers expect to be dazzled by visual merchandising and delighted by in-store experiences, all without compromising the speed and efficiency of finding and purchasing items.
In short, it’s a customer-centric world.
“You must be completely obsessed with your customers and with their specific needs and wants so that you can communicate and serve them in an authentic way,” said Diane J. Brisebois, President and CEO of the Retail Council of Canada , in a new research paper titled ‘Customer-First Retail’.
Attracting, retaining, and converting customers requires close attention to trending behaviours and interests. Here are our picks from the top retail space trends of 2017.
Eco-Friendly Sustainable Retail Design
With Vancouver aiming to be the world’s greenest city by 2020, it makes sense that commercial property owners and managers are looking to sustainable designs for retail spaces. Eco-friendly retail design goes beyond using LED lighting and recycled supplies in-store. Businesses that embrace the green trend are tapping into future-friendly decor ideas like using upcycled furniture, recycled material or cardboard display units, and bringing live plants into shops.
Here are some great eco-friendly retail design ideas .
Driven by the Millennial desire for rich experiences, retailers are striving to create those lifestyle experiences in stores. Storytelling extends beyond marketing and into visual merchandising, interior design, in-store tech, and even store layouts. Similarly, ‘retail-tainment’ and hybrid spaces are on the rise, with shops adding layers to the in-store experience such as interactive demos, drinks and dining, and even yoga.
Beyond individual stores, entire shopping centres are getting on board. “There will be some of what I would call conventional retailers… but most of it will be what we call 'experiential retail,' which means it's an experience just to go there," said Ed Sonshine, CEO of Canada’s largest mall owner RioCan Real Estate Investment Trust, in an interview about the future of Canadian mall developments.
Open-Concept Shop Design
While open-concept design has long been utilized in office and residential spaces, it’s now making waves in retail spaces. Businesses are opting to remove the barriers between operations, staff, and customers, which facilitates a feeling of transparency and community.
Great spaces to utilize this trend are coffee shops and restaurants.
“Stores are not getting less relevant and digital is not getting less relevant. They’re both going to work together to stay relevant,” said Mark’s Associate Vice President, eCommerce and Digital Marketing, in the ‘Customer-First Retail’ report.
Online shopping has increased, but eCommerce retailers are shifting to open storefront locations. Similarly, surveys have shown that customers feel better about online shopping if they can do returns or even pick-ups in a physical store. As an added bonus, customers coming in to do returns are exposed to more merchandise.
Technology in Retail
It’s no surprise that tech is driving the strongest and most memorable brand experiences in retail. From in-store running shoe and sport-specific demos to IBM’s Mall of America chatbot navigation assistance, it’s all about creating an immersive yet highly personalized experience. There are even virtual reality malls!
Retailers that take advantage of the latest tech for POS units, displays, and other shopper customizations are leading the way in customer experience.
Art Gallery-Themed Display Units
If your local lingerie or shoe store is reminding you of a museum, it’s thanks to the rise of gallery-themed display units. Stores like Victoria’s Secret use dim lighting, illuminated displays, and unique wall arrangements to turn their wares into desirable art.
Awe-inspiring visual merchandising has become a major part of experiential shopping.
Temporary storefronts, commonly known as pop-ups, are retail trend that generates excitement in customers. The urgency created by the short-term life of the store is an undeniable thrill. From clothing and accessories to food, drink, and services, almost any business can open a pop-up shop.
Although they’re nothing new — businesses have had seasonal or event-specific temporary stores since the olden-days markets of the 1200s — the term “pop-up shop” was made popular in the early ‘00s. Now the pop-up is a popular way to do a quick burst of sales, generate brand awareness and interest, to test new locations, and for eCommerce retailers to engage customers in a brick-and-mortar space.
Online retail giant Shopify has even created a guide to picking the perfect pop-up location.
On the hunt for a retail or other commercial property in the Greater Vancouver area? Visit commercialfirst.ca. This exciting new platform is your resource to list, search, and promote commercial real estate, and to connect with CRE colleagues and clients.