In reference to the ever popular claim, "Commercial real estate is the next shoe to drop" - which, in my opinion, is the most over-hyped and over-used sensationalist claim in modern business reporting history - Walt Rakowich, CEO of Prologis says:
"...the shoe has dropped....that's old news..." - emphasis addedTime to start looking at the next part of the cycle folks.
Facing a 13 per cent population growth and only a four per cent employment growth, he (Jeff Leal, MPP) says reflects the City's demographics, with many retired residents here and more on the way.I can't believe I agree with Coucillor Peeters, but:
MPP Leal points out it also shows increased commuters using services like the Go buses.
The City's director of Utility Services, Wayne Jackson, says it is up to councillors to determine what is too congested for a road. Is an extra 15 minutes in a commute acceptable?
"Time is money for businesses," he says of possible economic impacts.
He highlighted Mayor Ayotte's comments about people heading down residential side streets if the roads get too busy. This leads, he explains, to angry residents.
Good alternatives need to be found, he adds, whether it means expanding or altering current roads to allow more traffic to be handled or to entice people use different roads.
Councillor Patti Peeters has a simple answer -- build The Parkway.This is something I've been vocal about in the past. Click here for my letter to the editor, and here for a response to that letter about the Parkway. Councillor Peeters is absolutely right, we need the Parkway and it should have been built 50-odd years ago when the land was assembled. Roads identified in the print edition of the paper as congested or in danger of congestion included: Monaghan Road, Parkhill Road, and Fairbairn Street. Sounds suspiciously like the route one would take if the Parkway existed...
"Why are we still talking about The Parkway?" she asks. "Because we need one."
Great video from CNBC on the state of commercial real estate according to Barry Gosin, CEO of Newmark Knight Frank.
Of particular interest to me were his words, "The market has, for the most part, capitulated." This is important because it reflects the words of some of my clients - they have been looking for this 'capitulation' so that they can get back into the market and start buying again.
Do I agree with them that they needed to wait for this point of capitulation? Not at all. A good deal is a good deal is a good deal regardless of what everyone else is doing and it's always the right time to buy if the fundamentals of that particular deal make sense.
Why am I happy to hear this kind of talk then? It means that the market is catching up with common sense and we can get back to business! Don't wait any longer to look at investing in commercial real estate. Let's get back at it!
If you're ready to get started, call me.
Today, a review of the 28 things that commercial brokerage clients look for when choosing, working with, and firing(!) agents. Over the last week or so you've seen these lists in several posts, but I thought it would be a good idea to gather all of these ideas into one resource page that can be accessed easily.
The Lists:
Top 7 Skills and Qualities Investors Look For in a Broker:
1. Direct solicitation of potential buyers.
2. Quality communications and follow through.
3. Accuracy and quality of financial analysis.
4. Negotiation skills.
5. Quality of investment package.
6. Quality of research.
7. Team assigned to their transaction.
The Top 7 Things Tenants Look for in a Commercial Real Estate Broker:
1. Understanding of their business.
2. Open communications and accessibility.
3. A relationship built on trust and concern.
4. Financial/analytical skills and structuring advice.
5. Collaboration and a team approach to their needs.
6. Understanding of the market and opportunities.
7. Accompaniment on building tours.
The Top 7 Things Clients Look for When Selecting a Commercial Real Estate Broker:
1. Relationship with Broker.
2. Prior experience/performance.
3. Reputation of firm/brand identity.
4. Understanding of their business/objectives.
5. Personalized approach/solutions.
6. Fee structure.
7. Knowledge and advice.
The Top 7 Things That Frustrate Brokerage Clients:
1. Lack and poor quality of communications.
2. Lack of accessiblility to their broker.
3. Sloppy work, inaccuracies and poor research.
4. Feeling that they are just a commission source.
5. Brokers not knowing when they are "over their heads".
6. Lack of interest in their business needs and goals.
7. Lone Rangers and "listing-only" solutions.
So, you say, what's the point? Well, looking at each of these in turn and thinking about what they mean to existing and potential clients, we can see that there a number of solutions and, more importantly, opportunities presented in them.
I give you, The Profile of a Customer-Centric Brokerage Company. *Insert cheesy dramatic music here*
Many thanks to CEL&Associates Inc. who actually gathered the data and did the research to come up with all of these lists and the following outline of a customer-centric brokerage company.
A Customer-Centric Brokerage Company should:
So far we've looked at what investors value most in their broker, what tenants value the most in their broker, and what clients value most when selecting a broker. Today, the other side of the coin, the things that really make clients blood boil.
Warning! If you are a commercial real estate broker and you do any of these things, even occasionally, you're sabotaging your business in ways you probably can't even imagine!
The List:
As part of an ongoing look at what consumers want from their real estate broker, today I'm looking at what tenants value the most when choosing a broker to represent them.
Tenant representation is a very specialized field and one that doesn't get the respect it deserves, in my opinion. From a brokerage perspective, it just isn't very sexy. The deals aren't as visible, the commissions (generally) aren't as big as investment deals, and the broker is often seen as just another cost in the transaction rather than bringing the real value that they do add to the process.
So what do tenants look for in a commercial real estate broker? Here are the top 7:
“We’re in the third round of a five round boxing match, but in the first two rounds nobody threw a punch. At some point somebody’s gotta throw a punch.”
Source: REALpac / FPL Canadian Real Estate Sentiment Survey, Fourth Quarter 2009, Released November 3, 2009
I'm sensing a recurring theme on this blog about getting into the game. The time is right to get back into the investing game. Money is flowing, and the economy isn't floundering as badly as some had thought it might still be. Granted, the past 12 months haven't been all peaches and cream, especially in the brokerage world, but contrary to popular perception, the sky hasn't fallen on the Canadian commercial real estate market.
In fact, REALpac just released their Q4 Canadian Real Estate Sentiment Survey and found that, overall, investor sentiment is improving in Canada. It shows that overall sentiment about the market has improved, on their index, from 50 to 68 from Q3 to the beginning of Q4 2009. An impressive improvement to say the least.
So why doesn't the overall market reflect this survey? At least in my corner of the world, Peterborough, Ontario, transactions are WAY down relative to 2008. I did a quick bit of research and found some interesting results.
I compared all MLS® sale transactions recorded by the Peterborough and Kawarthas Association of REALTORS® from January 1 to November 4, 2008 vs. the same period in 2009 (it's an odd time frame, I know, but it seemed like a good idea at the time!). I only looked at transactions over $150,000 in order to weed out the business sales that did not include real estate, and leases that sometimes get recorded as sales.
2008 Number of sales: 39
2009 Number of sales: 26
2008 AVerage sale price: $494,437
2009 Average sale price: $357,385
2008 Average sale to list price ratio: 88.46%
2009 AVerage sale to list price ratio: 73.93%
Of note, there were four transactions over $1M in 2008, including one that was over $2M and only one transaction above $1M in 2009. (Remember, this is a small market with a combined city and county population of only about 135,000 people.)
So what do I see in these numbers?
First, there is an obvious trend toward fewer and smaller deals, including a drastic reduction in transactions over $1M. Secondly, and this is my subjective opinion, there isn't really a lack of interested buyers, rather there's been a significant lack of faith in the market in general on the part of would-be buyers. The perception has been that there ought to be more 'good deals' out there, and that by waiting it out, these 'saavy' buyers will be able to cash in on the distressed assets that must surely be just about ready to come onto the market.
But there haven't been that many distressed properties in Canada. I beleive that a lot of the poor sentiment is spill-over from the US media coverage of the severe slide they've seen in their market. In a recent article on globeinvestor.com, Kirk Kuester, managing director of Colliers was quoted as saying,
"There hasn't been that much distress [in the Canadian market], and if companies do find themselves in a bit of a pinch, it's not that difficult to raise equity on the market."From the same article:
Brookfield Properties Corp. and its partners have an unexpected problem: They have $5-billion to spend on commercial real estate, but markets have recovered so strongly that they can't find the juicy deals they hoped would lead to 20-per-cent returns.In fact, in the hunt for deals, many Canadian REITs have gone out and raised warchests to buy distressed assets that haven't materialized thus creating the real potential of reducing their stock prices. From theglobeandmail.com:
The stock market's resurgence from March lows has allowed many of the world's most challenged real estate companies to issue stock or sell bonds to solve financial issues brought on by lower rents and higher vacancies. Meanwhile, the sector is showing signs of recovery in Canada, further encouraging landlords to hang on to buildings that had caused concern through the recession.
"There really hasn't been that much out there," said chief executive officer Ric Clark. "When we first started thinking about this, we had many companies on the list as potential targets - the public markets have been so efficient that many have been able to solve their problems."
Brookfield set up a $5-billion real estate investment fund in September with Brookfield Asset Management Inc. and dozens of major institutional investors. The plan was to buy malls and office towers from owners that were struggling to keep tenants and pay mortgages.
While the U.S. market is still going through a historic upheaval (7.9 per cent of lease holders are behind on their payments and one in 10 shopping mall stores sit empty), things have stabilized enough that the consortium is rethinking its ability to score its targeted 20-per-cent return on any investment.
But what if the market isn't all that distressed? Third-quarter statistics from RealNet Canada Inc. hinted that a rebound is taking hold in Canadian commercial real estate markets after 18 months of contraction. If there aren't deals to be found, the REITs may have watered down their shares without giving shareholders any reason to hope for better payouts in the future.I know I'm starting to sound like a broken record, but why aren't investors, large and small, private and institutional, looking at the cost of NOT investing? What is the real cost of inaction and hence lost opportunity? Waiting for the market to become more active and therefore more competetive means that there will only be even higher prices and reduced opportunities in the future.
"Most REITs have taken advantage of the open capital markets," said Mark Rothschild, an analyst at Genuity Capital Markets. "Most management teams have expressed confidence this capital will be used to take advantage of distressed opportunities - we believe that there will not be many extremely accretive acquisition opportunities and ultimately many of the recent offerings will prove dilutive."
Canadians Bullish for First Time Since 2007, Nanos Poll Shows
Interesting article on bloomberg.com about our (Canadians) feelings and perceptions about the economy of this country. Of note:
The share of Canadians who say they believe the economy will strengthen over the next six months rose to 45 percent, according to an advance copy of Nanos’s quarterly economic survey provided exclusively to Bloomberg News. That’s more than twice the 18 percent who predict the economy will weaken.
The results are consistent with recent data that suggest the economy has emerged from its recession this quarter, helping to fuel rallies in the country’s stock market and currency. Canadian wholesale sales, manufacturing sales and the index of leading indicators rose more than forecast last week, according to government reports, while home prices have risen to records this year.
and
Real Estate Seen Rising
Confidence is strongest in Ontario and the prairie provinces of Alberta, Saskatchewan and Manitoba, and weakest in Quebec, according to a regional breakdown of the data.
The poll also found that Canadians are three times more likely to say the value of their real estate will increase over the next six months than say it will decrease.
“A key driver for the optimistic mood relates to perceptions of real estate,” Nanos said.
While I agree that there seems to be a more upbeat attitude around town these days, there's still a ways to go. What we need are a few big commercial real estate deals to happen to show those still sitting on the sidelines that there are good deals to be had and that there's no time like the present to invest.
According to this article on netgainrealestate.com, it might be.
Using historical statistics, the current climate can be dissected to some extent. Net Gain describes a recession as a manner of alleviating surplus. There have been 20 prior recessions since the start of the 20th century, all of which have made a full recovery. Statistics show that the length of time between peaks of a recession determines the level of excess, which indicates the severity of the next recession.
In assessing the past 20 recessions, the average number of months between peaks is 59 with the most recent lasting 81 months. The average length of time between peak and bottom is 14 months. Based on this information and fact that the current recession is in its 20th month, investing in income property at this time would be a wise decision.
I've tried in the past to look at various indicators of the 'right' time to buy and have always come up short. I've always felt that if a deal creates cash flow that meets your investment criteria and the risk inherent in the deal isn't higher than the return warrants then it's always a good time to invest in commercial real estate.
That said, if you do need an outside indicator, the one proposed by netgainrealestate.com is probably one of the better methods to follow. Since history tends to repeat itself (no matter how many times we fool ourselves into thinking that, "This time it'll be different. No really! ...why does everybody laugh when I say that?"), taking a look at previous recessions and the inevitable recoveries that followed is as good, or better, a method of market timing as any other.
Found via www.squarefeetblog.com. Square Feet is a commercial real estate blog providing information, market data, as well as commentary on news and happenings which have an impact on the Silicon Valley commercial real estate market.
2 Men Arrested In Pleasanton Cab Driver Assault Full story from CBS Channel 5.
Pleasanton police have arrested two men suspected of verbally and physically assaulting a taxicab driver Thursday.How is this a real estate story?
Units responded to report of a battery in progress at a 7-Eleven store on Valley Avenue at around 1:10 a.m., according to the Pleasanton Police Department. Jaswinder Bangar, a local taxi driver, was found suffering facial lacerations and a broken tooth.
Bangar told police he had picked up two men at the Redcoats British Pub and Restaurant in Pleasanton who, on the way to Danville, began calling Bangar derogatory names and punched him in back of the head.
Bangar said he pulled into the parking lot at 7-Eleven to call police, but the two men, later identified as Jacob Billingsley, of Alamo, and Danville resident Michael Goldstein, grabbed the cell phone and broke it.
A subsequent investigation into leads led officers to Goldstein's home in Danville, where both men were found hiding.
NYT - Inland Real Estate Dives Into Troubled Commercial Market
G. Joseph Cosenza, president of Inland Real Estate Acquisitions of Oak Brook, Illinois, is on the right track. At a time when the majority of property investors either have their heads in the sand waiting for the storm to blow out or are standing around with bewildered looks on their faces, muttering to themselves about cap rates and falling values, Mr. Cosenza is buying.
He's buying a LOT of real estate. Since early in 2008 he's been on a buying spree, spending about $4 billion on acquisitions across the US.
He is happy to be swimming against the tide — buying while others watch from the sidelines. “I say to them, thank goodness and just get out of my way,” Mr. Cosenza said. “We’re not looking for trophies; we’re buying solid income-producing real estate that is not in default.”
Some observers say that Mr. Cosenza and other intrepid investors stand to profit handsomely. “For the opportunity fund with the resources, it’s time to make a killing,” said David L. Funk, director of the Cornell University Program in Real Estate, a master’s degree curriculum. “In 10 years, people will look back at 2009 as the year fortunes were made.”
He (Mr. Cosenza) says he intends to keep buying. “I have another six to eight months when people will be frozen in their tracks,” he said, “and I’ll have a clear field.”The smart money is getting back in the game now - when will you?
Inland Diversified intends to use the proceeds from this offering primarily to acquire a diversified portfolio of commercial real estate. Potential commercial real estate assets will include: retail, office, multi- family, student housing, industrial/distribution warehouse, lodging, medical office/healthcare related facilities, public infrastructure assets and triple- net single use properties.Read more...
What's causing the slow motion commercial real estate crash?
Definition of collapse:
col-lapse
[kuh-laps] verb, -lapsed, -laps-ing, noun
–verb (used without object)
Number 1 definition: to fall or cave in; crumble suddenly
e.g. "The roof collapsed and buried the crowd. "
Commercial real estate is not collapsing sounds like a crazy claim to make at this point in time, but I'm not convinced that it has collapsed. The meaning of the word collapse has a strong connotation to me. It bears the feeling of imminent and dangerous events. I feel that a 'collapse' in an industry means that it has been decimated if not outright destroyed. If the roof collapses, you'd expect to see bodies in the wreckage at worst, or a tangled mess of scrap at best. Strangely, I don't see that in this industry yet. As the article above alludes, the current commercial real estate meltdown is a 'slow motion collapse'.
Can there be such a thing? Perhaps, and I'm just spitballing here, but perhaps there isn't a collapse in commercial real estate.
*gasp!*
Maybe, just maybe, the economy was starting to look up and the media needed something nasty to report on. Could it be that opportunistic institutional investors latched onto this idea as a way to affect the market by driving prices down? Now, before you jump in and start calling me nasty names, no, I don't have my head in the sand and, yes, I can plainly see the size of refinancing and restructuring of debt that will need to take place in the next couple of years across North America (particularly in the US).
Activity in the commercial market has all but died in some areas, but others are starting to see some light at the end of the tunnel.
From the article above:
Even as the sector continues to struggle, capital has been flowing in searching for opportunities. In recent weeks, hotel chain Hyatt, mortgage modification ship Pennymac, and commercial REIT Starwood Properties Trust, have all filed for IPOs.and
One possible area of upside for commercial real estate, ironically, comes from the struggles in residential real estate. "The flavor-of-the-month asset is multi-family properties," Malka said. "With all the problems in the residential market, people are running back to apartments and renting," making for a favorable situation...Some of our clients are actively looking for new opportunities again. Particularly properties that have long term upside and that are considered risky right now. Properties like small and medium strips, and locations in secondary markets are risky, but the long term rewards are high.
What happens when a bunch of chum (commercial real estate investors) drops into shark infested waters (the marketplace) before you jump in? If you wait just a bit, when you hit the water, the sharks will be waiting for you. The commercial real estate market is nearing the bottom and those who jump in now will be able to eat the late arrivals alive!
UK CRE bottoming: Reuters article
"The strong appetite for prime assets appears to have broadened out sufficiently to allow a stabilisation and improvement in the wider market," Wylie said in a statement.NA CRE close enough: CPNOnline article
"Although concerns remain over the near-term prospects for secondary assets with weaker covenants, this month's figures seem to confirm that investors have awoken to what is now widely being seen as a once in a generation buying opportunity."
For the most part, the investment community has been holding back on commercial real estate acquisitions, waiting and waiting for the market to hit bottom. But according to a new report by CB Richard Ellis Investors, while the bottom may not be at hand just yet, it's close enough.Before you start writing nasty comments about the lack of funding for your projects, let me interject. I get it that money is tougher to get these days. I get it that investors are under a brighter light right now and it really is difficult to get financing for some deals.
So, now really is the time to buy; holding out for rock bottom may very well result in lost opportunities. "There's been so much focus on the downside, particularly over the last year, and there's been good reason to be mindful about buying properties," he said. "But much of the downturn has passed and much of the re-pricing has happened. You can still be in defensive mode, but you can buy properties on that basis. In the market now, there are more attractive opportunities, so you don't need to be an aggressive buyer to take advantage of those opportunities."
No transactions means no basis of comparison for cap rates: retailtrafficmag.com
The Problem
The point of the article is this: without numerous transactions taking place in an open market, determining the prevailing cap rate for a given property type in a given market is nearly impossible. Traditional wisdom says that buyers pay what other buyers are willing to pay for a similar asset. That price is usually based on the income stream generated by that asset and the risk associated with the source of that income, namely the tenant. As the world economy has contracted, and in particular as the American real estate business has imploded, buyers, even those that are well capitalized and have the ability to buy, have taken a wait and see attitude.
This has done a couple of things which have exacerbated the commercial real estate drop:
1) it has stopped the flow of transactions (bad news for those of us in the brokerage business!) and therefore has reduced the flow of money through the system which normally creates ancillary benefits like construction and renovation sales and land transfer taxes to name just two; and
2) a lack of transactions takes away the ability for those buyers who are ready to buy to make, what they deem to be, intelligent offers based on historical deals.
As to the first, there's not much we can do about the economic side benefits of real estate transactions until those transactions start flowing again. It's the second item that I'd like to discuss.
As I said, traditional wisdom is that buyers pay what other buyers are willing to pay for a similar asset in a similar geographic area. Geography matters because of the local employment climate, demographics of every location, and a host of other factors that can affect investment decisions and risks. What does all of this mean?
In the investment vacuum in which we find ourselves today, no body really knows what to pay for property because no one else is buying!
On an intellectual level, I understand this. This is what we were taught in CI 101. On a gut level though, I'm having a hard time with this. Here's why: if I expect to make a certain rate of return on my investment dollars, does it really matter what everyone else is paying for similar assets? Doesn't this kind of mentality smack of playground kids whining, "That's not fair! Jimmy got TWO popsicles, and I only got ONE!" If one popsicle was refreshing and you really only expected to get one in the first place, does it really matter that Jimmy got two? Similarly, if a 9% ROI was a sufficient rate of return last year or even ten or twenty years ago, why isn't it sufficient this year (assuming similar risk factors etc.)? If you have a clear set of investment goals and you can find a piece of real estate that will allow you to achieve that goal, does it really matter if a similar property might be purchased more cheaply? What is the opportunity cost of waiting until someone else buys property? What if, by waiting, you not only lose revenue today, but you wait too long and miss the market?
A Renewed Thought Process
I think it's time we stopped looking at what everyone else is doing. Let's use our heads and look at investments that have sound overall fundamentals. Make sure the tenant is solid. Ask questions about their ability to access cash, why they're moving or staying, who is their customer, how long have they been in business, is their industry growing or in decline. Insist that you have an opportunity to look at their financial statements if you're really concerned. Take a good look at the bricks and mortar of the deal. Make sure that the building and grounds have had appropriate capital reinvestments over time and plan for future expenses. Make intelligent decisions about which properties you buy, but stop worrying about what everyone else is doing.
When everyone else is selling, you should be buying. When everyone else is buying, you should be selling. Don't follow the crowd to dinner or you'll end up at the back of the line and all the really tasty food will be gone! All you'll be left with will be the scraps left by those who had the foresight to get moving now!
Invest for cash flow today, and let time do the rest.
Found on Reuters Blogs. I was beginning to wonder when opportunistic funds would show up at the party. American REITs are starting to show some initiative in the new commercial real estate market by setting up funds to buy up distressed properties and loans and to take advantage of drastic reductions in US CRE prices.
Essentially what’s happening here is that debt (in the form of CMBS) is being rolled over into equity (in the form of REITs). This is a good thing, and I hope we see much more of it.
This is a two-stage process, I think: first the REITs will buy up distressed CMBS at a discount, then they will wait for those CMBS to default, at which time the REITs will take possession of the collateral — the commercial real-estate securing the CMBS. In other words, the REITs — and the REIT investors — aren’t looking at yields, they are looking at property values. - Felix Salmon (Reuters)
Phil Wahba and Ilaina Jonas (also of Reuters) report:
Several large investment firms are creating new lending companies that plan to go public to raise billions of dollars to take advantage of the distress in the commercial real estate market, and more are on the horizon.
The planned IPOs, which include units of firms like Apollo Management and Alliance Bernstein, could be just the beginning of what some bankers expect to be a boom in Real Estate Investment Trusts (REITs) going public over the next few years.
This could be part of a larger solution as billions of dollars in mortgages and securities in the commercial real estate sector come up for renewal over the next few years; possibly reducing the effect of so much capital evaporating all at once.
I'm excited to see some creative uses of equity at a time when so many seem certain that the sky is about to fall on commercial real estate. I've said it before, and I'll keep saying it, opportunity exists for those willing to take a good look around and take some calculated risks. Investment fundamentals don't change, just rates of return.
Over the last few years, different pundits of every stripe have advocated watching different commodities for signs of economic turbulence or improvement - depending on his/her point of view. I came across this article today in the Globe and Mail, and was amused, and somewhat surprised at the indicators discussed.
Take a look, it's a quick read and you might just get some new ideas - I know I did.
Take this for example:
Mark Zandi, chief economist at Moody's Economy.com, said he follows the price of titanium dioxide fairly closely: "It's stretching a little bit, but I think it has historically been a good barometer of broader economic conditions."
He noted that yesterday's U.S. figures matched other signals about the economy making a slow recovery.
"It's consistent with the idea that the economy is still soft. We are still in recession, but we're headed in the right direction," Mr. Zandi said.
...and this:
Mr. Yamarone, for example, said one of the most important indicators he tracks is the sale of women's dresses.
"The woman is traditionally the [chief financial officer] of a household. She sees when times get tough," he explained. "When things get tough, she postpones a 'self purchase.' And there is no greater self purchase for a woman than a dress."
Right now, his dress sale indicator "is still contracting."
Is there anything you look for in assessing an economic recovery or real estate recovery in particular?
Found via Sibdu.
Last week I wrote about the state of commercial real estate in the US and posted a video featuring Richard Lefrak. This week, another take on the situation in the US with a much more positive spin.
William Rudin, of Rudin Management, has a very upbeat and positive position as it relates to the future of commercial real estate. While he agrees that not all of the pain has been felt yet in terms of pricing corrections, he is seeing signs of renewed strength in the market. His firm is doing a lot of new leasing and is seeing a fair amount of sub-let space being taken off the market as firms move back into space that they had formerly vacated.
Here in Peterborough and central Ontario, we're seeing a fair bit of renewed energy in the market too as investors who had been sitting on the sidelines get back into the game. New money is coming into the market from outside as well; we're getting calls from the GTA and elsewhere inquiring about development opportunities again.
The good times aren't back yet, and likely we won't see a boom again for a while, but it looks like the worst might just be behind us.
The commercial real estate industry is "in the intensive care unit," according to real estate mogul Richard LeFrak, president of The LeFrak Organization.This video was brought to my attention by my associate, Harry Huffman. Harry runs his own blog - take a look here.
On Monday, June 15th, an article appeared on thestar.com titled, "Un-pave car dealer's lots to put up paradise" On the surface of it, this sounds like a glorious idea. Who isn't sick of all the pavement? Who wouldn't love to see more green space in our cities? Why shouldn't these sites, many of which are likely contaminated, be turned into something friendlier and nicer and greener than a vast flat parking lot with old ugly service shops on them?
While no one has any clear idea – most dealers aren't talking – some, including local architects and urban planners, are drooling over the possibilities of turning parking lots back into paradise.Well, let's take a look at the reality of these sites. I can think of a few hundred people who might be very upset about turning property that has been generating very large rates of income over the last few decades into sites with little or no economic value; the property owners themselves! Put yourself in their shoes - these aren't big bad corporations - they're hard working business owners who have employed thousands of Canadians for decades! Unless they really have a desire to give these sites away, or municipalities would like to buy these sites for market value (your money at work by the way), then these sites will have to be redeveloped under other car brands, as used car lots, or some other economic model that returns money on that money already invested in them.
"For planners, car dealerships are always opportunity sites," says Jennifer Keesmaat, of the Office for Urbanism, an urban planning and design firm, working on large-scale planning projects across Canada.
Community markets. Community gardens. A place for local festivals and celebrations.
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