Cacoeli’s CEO Jedidiah Liu joined other real estate experts at the Canadian Association of Alternative Strategies and Assets’ (CAASA) Roundtable on Tuesday, October 26, 2021. Institutional real estate asset managers, student housing specialists, and private equity real estate professionals came together to discuss “What’s Around the Four Corners?”
Mediated by Martha Tredgett and hosted by James Burron, Jedidiah along with Sanjil Shah of Alignvest Student Housing, Shael Soberano of Konfidis, and KC Dayan of Clifton Blake Asset Management explored the future of the real estate industry as the world returns to pre-pandemic conditions.
If you were unable to listen in on the discussion, here’s a brief excerpt of the topics discussed and key take-aways.
What is the new normal?
Multi-family assets being a safer and more secure investment vehicle, highly desirable asset class
An increase in pricing of assets in primary markets, causing more individuals to look into secondary markets
Affordable housing and profitable returns don’t have to be mutually exclusive and there is more emphasis from the development and investing community on the coexistence of affordable housing, investing, and profits
Younger populations, particularly students, are seeking quality as they are increasingly focused on health, hygiene and safety
A return to downtown is taking place with an uptake in commercial leases
Residential leases are achieving higher rates than last year
What Can We Expect?
The significant increase in immigration has implications on the supply and demand fundamentals
Immigration as a federally regulated policy forces us to take a critical lens to who (provincial and local governments) regulates zoning and approval process and how these are to respond to uptakes in demand as a result of immigration
Key demographic changes impacting real estate include: an aging population, down-sizing, moving into urban centres with closer proximity to essential services and millennial cohorts with different lifestyle preferences, such as working from home
What key challenges is your industry facing?
Striking a delicate balance between affordable housing allocation and profits within a given project to create the all important coexistence among these factors in real estate development and investing
One of the biggest hurdles to development are the development charges
In what ways is tech impacting the industry?
Technology plays an important role in accessing scale and efficiency in unlocking a certain asset class
Provides data that helps create a better understanding/estimate of market rental rates and informs important issues to developers and investors
Higher demand for increased/reliable internet bandwidth is causing developers to create a more technology inclusive tenant experience
New portals are coming into existence to engage partners, tenants, and other related actors virtually
What is the role of ESG in this industry?
Asset managers are changing their approach in purchasing older building with deeper investigation into building selection and potential to be retrofit to incorporate new, improved, and higher quality green technologies into the building
Overall, there is a heavy emphasis on the E (environmental) aspects, but the industry needs to put more effort into the S (social) and G (governance) aspects
ESG and affordable housing are hot topics in the industry and are expected to become more popular in the future