In 2019, Marcus & Millichap further expanded our presence in the Canadian commercial real estate market with the establishment of our new Edmonton, Alberta, Institutional Property Advisors (IPA) office, and the acquisition of Form Real Estate Advisors Inc., a leading commercial real estate services firm specializing in retail transactions and advisory services based in Vancouver, British Columbia. This expansion builds on two key acquisitions by Marcus & Millichap in 2018, with McGill Commercial in Montréal and Primecorp Commercial Realty in Ottawa, which have now had more than a full year in operation under the Marcus & Millichap banner. All told, these acquisitions and developments have significantly shored up our presence in Canada, at a time when commercial real estate activity is thriving across most of the country and projected to keep pace through 2020.
In 2019, investor confidence was very high in the multifamily, industrial and office segments of the Canadian commercial real estate market as demand outpaced the supply of properties in these asset classes. Strong employment and a tight housing market is driving demand for apartment rentals. Industrial and office space is at a premium, fueled by heavy investment in Canada’s growing tech sector, with the exception of Alberta, where a lagging energy sector is keeping vacancy rates higher than most other areas of Canada. Mid-tier retailers continued to be squeezed by online shopping, but discount retailers are thriving, as are savvy high-end retailers who are gearing operations toward offering unique retail experiences. Hotspots for Canadian commercial real estate activity are in Toronto and Vancouver, followed by Montréal and Ottawa:
Vancouver and Toronto had downtown office vacancy levels below 3 per cent, among the lowest in North America [in 2019]. Montreal and Ottawa have had a strong office year as well, buoyed by the tech sector that also elevated Toronto and Vancouver. Calgary and Edmonton continued to be saddled with high office vacancies, thanks to the stagnant energy sector… For 2020, most analysts think the commercial real-estate market will continue strong as long as external events, such as Brexit and U.S. trade issues, don’t lead to recession. – Globe and Mail
The growing corona virus outbreak, coming out of China, is starting to affect global supply chains, putting downward pressure on world markets and could further impact domestic operations, depending on how hard Canada is hit. Canada’s internal economy is further hampered by a string of rail blockades, which at least appear to be inching closer to resolution. However, commercial real estate tends to weather short term turbulence better than many other types of investments, due to its potential for growth over the long term. At Marcus & Millichap, we’ve experienced the long term growth potential of the Canadian market consistently and directly, since our entry 7 years ago.
In 2013, Marcus & Millichap went public on the New York Stock Exchange. That same year, we launched our first Canadian office in Toronto. Since then, our Toronto office has doubled its sales volume year-over-year, leveraging our propriety platform, vast industry experience, commitment to service excellence and hyper-focus on the clients and markets we serve. In an interview last year with leading Canadian Commercial Real Estate Magazine, RENX, Mark Paterson, Vice-President, Toronto Regional Manager and Broker of Record, emphasized the competitive advantage Marcus & Millichap brings to the Canadian Market:
Paterson said Marcus & Millichap is the only brokerage firm in Canada exclusively involved in real estate investment sales, generally in the price range of between $1 million and $20 million. “We’re buying and selling commercial real estate, period, in Canada. Our tools, our training and everything is really specialized.” The private market client base in Canada is quite fragmented, according to Paterson, which he says works to Marcus & Millichap’s advantage. – RENX.ca
In August 2019, Marcus & Millichap announced a definitive agreement to buy substantially all the assets of Form Real Estate Advisors Inc., based in Vancouver British Columbia. Form Real Estate Advisors, founded in 2010, has become a leading firm specializing in all aspects of retail real estate brokerage and advisory services, with a highly respected brand and top-tier team of eleven real estate professionals, including the company’s partners David Morris, Derick Fluker, Jon Buckley and Jack Allpress.
Form’s guiding principles of integrity, intelligence and teamwork helped the firm grow to become a market leader in Western Canada in less than 10 years. Form’s list of clients include many of North America’s top retailers and its highly innovative team has also expanded into a number of real estate disciplines. In less than a decade, Form has completed more than 4 million square feet of lease transactions on behalf of Canada’s preeminent retailers and landlords, and more than $1.2 billion in sales transactions on behalf of real estate investors and developers.
Form’s reputation for service excellence and highly successful track record got the attention of Marcus & Millichap’s top brass as a natural next step to further our expansion into Western Canada:
The acquisition of Form will advance a dual goal of expanding our reach in Canada, particularly in a global market like Vancouver and deepening our expertise and client reach in the retail segment. We were attracted to Form because of their sterling reputation in the market and their core values of integrity, collaboration and a client-centric model. We believe being part of our platform will facilitate growth for their existing business and support our overall expansion in Western Canada. – Hessam Nadji, President and CEO of Marcus & Millichap
The deal with Marcus & Millichap was also viewed as a mutually beneficial fit, by Form’s leadership team, to expand their market reach and take their business to the next level:
We’ve accomplished a great deal since founding Form in 2010 and are looking forward to taking our business to the next level with Marcus & Millichap. The Form team prides itself on reputation; delivering excellent advice and service to our clients has been a hallmark in building our business. We are excited to find a like-minded partner in Marcus & Millichap and are motivated to join forces and bring our clients a portfolio of new services and opportunities across Canada and the United States. – David Morris, Founding Partner of Form Real Estate Advisors; Senior Managing Director Investments, Marcus & Millichap
Earlier in 2019, Marcus & Millichap expanded into Western Canada with the establishment of a new Edmonton office for our Institutional Property Advisors (IPA) division, part of network of senior-level investment advisors located throughout the United States and Canada. IPA is focused on meeting the needs of institutional and major private investors through a combination of real estate investment and capital markets expertise, industry-leading technology, superior support services and acclaimed research.
In the spring of 2019, our new Edmonton IPA office was spearheaded by a team of industry veterans, formerly of CBRE Ltd., including Bradley Gingerich, Paul Chaput, Bradyn Arth, and Jane Woertman. This established team of Edmonton-based multifamily investment advisors brings a proven track record and extensive relationships with major investors in the industry, and were attracted to IPA’s specialized focus and collaborative platform:
We were drawn to Marcus & Millichap’s IPA division by the level of specialization the firm brings to the marketplace and strength of its collaborative investment sales platform… The company’s recent acquisitions of respected firms in Eastern Canada further demonstrates the commitment to grow across North America. We feel fortunate to have the opportunity to grow a dominant platform in new markets. – Bradley Gingerich, Senior Managing Director, IPA
The new Edmonton Team was promptly welcomed by IPA senior executives as a tremendous asset to shore up IPA’s presence in Western Canada:
The addition of this experienced team of multifamily investment specialists deepens the firms’ North American presence and expands our platform to key markets across Western Canada… This team is known throughout Canada as one of the top multifamily investment sales teams in the country; their caliber and reputation truly compliments our growth initiative. We see great opportunity in cross-border capital flows, collaboration and synergies with our existing multifamily force in the U.S. and Canada. – Jeffery Daniels, Senior Vice President, IPA Multifamily
Buoyed by the new additions of the Edmonton Team, Institutional Property Advisors has had considerable success facilitating several multi-million dollar transactions over the course of 2019, nationwide, especially in at the multifamily sector, such as a sale in April of a 520-unit multifamily portfolio with 4 properties in the National Capital Region for $57 million:
Private and institutional clientele continue to show strong interest in Canadian multifamily assets and although opportunities are limited at times, our deep reach and strong client relationships give us the edge in completing transactions. – Aik Aliferis, Senior Managing Director, IPA
Marcus & Millichap has made tremendous inroads in all sectors of the Canadian commercial real estate market in 2019, and we show no signs of slowing down through 2020. If you are an owner, or investor, seeking to facilitate a commercial real estate transaction in Canada, simply contact us to get the power of our industry leading platform and vast network of highly experienced brokers and agents working for you!
Created by George M. Marcus and William A. Millichap in California in 1971, Marcus & Millichap has steadily grown to become the largest commercial real estate brokerage firm in North America, with over 2,000 investment sales and financing professionals in over 80 offices who provide investment brokerage and financing services to sellers and buyers of commercial real estate, along with market research, consulting and advisory services to our clients. Marcus & Millichap closed 4,485 transactions for the six months ended June 30, 2019, with a sales volume of approximately $22.8 billion USD.
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