This week I wanted to jump back into my ‘Hotelie’ roots and highlight trends of the Canadian Hospitality Industry. Though not discussed as frequently, the lodging industry in Canada makes up a large part of the commercial real estate transaction volume in our country. In fact, 2016 and 2017 saw roughly $4.1 Billion and $3.5 Billion, respectively, in total transaction volume, the highest numbers in over ten years!

On October 4, 2018, the International Olympic Committee invited Calgary (Canada), Milan/Cortina d’Ampezzo (Italy) and Stockholm (Sweden) to become Candidate Cities in the path to host the 2026 Winter Olympic Games. Ironically, there are quite a few similarities between what Calgary was going through in the early 1980’s (during the previous bid), and what Calgary is going through today. However one thing is for certain, the announcement that Calgary had won the bid for the 1988 Winter Olympic Games had the effect of overnight providing an air optimism and confidence back to the City.

Around the world, a new stream of relatively passive revenue is benefiting the Landlords of commercial buildings. Read about one method that is mutually symbiotic in benefiting both the environment, and the bottom line, as countries around the world continue to take efforts toward transitioning the consumer’s reliance on energy to new renewable sources.

Canadian oil and gas production has long since become the scapegoat of the modern energy contradiction.  That is, many around the world are demanding a switch to green, renewable energy, calling for a complete elimination of the oil and gas industry, yet the data shows that global fuel usage from oil continues to grow year after year. 

Month after month, we discuss the effects of automation and advancing technologies on the changing landscape of the commercial real estate industry.  Whether it's the billions of dollars being invested globally into distribution chain robotics and drones for logistics networks, or the rise of beacon technology emanating from our smart phones to create enhanced and tailored retail experiences, technology is changing the way we do business, and in fact, how we experience life as a whole. 

For many years, Edmonton has been considered by neighbouring metropolitan cities, a second-tier destination, a "working-class" town.  When individuals and businesses from around the world think of Canada, they always first spout out - Toronto, Vancouver, Montreal, Calgary...  And while we have primarily been a blue-collar City, this does not mean that our business owners are shy of investment capital, nor does it mean that our City lacks innovation, diversity and opportunity.

The commercial real estate industry continues to transform, creating new opportunities and challenges for users and service providers alike. These trends are affecting the commercial real estate sectors individually (Industrial, Retail, Office, Hospitality and Multi-Family), as well as the industry as a whole. Being knowledgeable and able to adapt to these changes will create opportunities instead of threats for those [so lucky] to be involved.

If you've driven past or to the Edmonton International Airport (EIA) lately, you'll likely have noticed that it is a changing and growing landscape.  The EIA innovatively came up with a Master Plan for the future of the land surrounding the Airport that involved making available much of the Airport's under-utilized land for the purpose of commercial development by private companies.

This past week at the Edmonton Real Estate Forum, the Industrial Panel took a run at some of the huge challenges faced by industry in the Edmonton market due to the ever increasing property tax rates and reimbursement expectations from our Councillors.  With over 1.5 Million square feet of industrial product under construction this past quarter (Q1 2018) and the majority being located outside of Edmonton, what more can we say.

Did you know that in the past eight years since 2010, USA has built the equivalent of ten Keystone pipelines?  Meanwhile, we're facing daily protests and delays for the Trans Mountain pipeline, a 980 km (610 mile) expansion project.

The question facing energy companies today is where best to invest their capital to get their product to market.  Should they be investing to build upgraders and refineries here in Alberta to convert bitumen into diesel and gas products locally, or should they continue investing in pipelines to ship heavy product to other markets like Texas where these refineries already exist?

The cannabis industry has proven to be a game changer in states that have already gone through recreational legalization, and from what we are currently witnessing locally, there's no doubt that it is already having a tangible effect on our commercial real estate market here in Edmonton. 

While the industrial and commercial markets in Alberta have been far from a pretty picture, The North American industrial market as a whole has experienced a record-setting run, registering some of the strongest leasing tallies and tightest market conditions on record.  In particular, the industrial market in the United States, largely due to the huge growth in e-Commerce, has been unstoppable.   

The Butterfly Effect perpetuates that "something as small as the flutter of a butterfly's wing can ultimately cause a typhoon half way around the world" - Chaos Theory.  Although the oil & gas market is more of a behemoth than a butterfly, the trends that it maps out have an enormous ripple effect on nearly all other industries, especially in our "diversified" province of Alberta.  See my latest video where I discuss this effect here...

The strength of Edmonton's industrial market has a lot to do with the strength of the many surrounding markets that further support the City's industries and connect the communities as a whole.  Have a look at this video clip where I discuss the strength of Edmonton's peripheral markets.

It's safe to say that we are finally coming out of the trough of this current market cycle.  However, we have been witnessing something interesting happening within our industrial market, particularly between the multi-tenant and single-tenant product classes.  Click here to find out more.

Are we surprised? Not even a little. 

It was only a matter of time before Amazon found the final piece of the logistics puzzle to allow them to consolidate and manage ALL the steps from the moment an order is placed online, to the the moment the package efficiently arrives in the hands of the consumer.

It's like a flashback in time right now, a City and its prized NHL team at odds over the future of their athletic program and critically, the home that they will play in.  Fortunately for Edmontonians, it's not groundhog day in this Town, but rather, this is occurring in our Sister City of Calgary just three hours south.

When we think of innovation and trends leading us into Edmonton's future regarding our commercial developments, a few words must now come to mind... Simons Londonderry Mall.  Not likely the general public's first thought, but since Londonderry Mall announced their $130 Million renovation and redevelopment plan in 2014, this has come to fruition, notably due to the largest solar system in Edmonton that now swathes the new Simons development.

It's no secret that Amazon released a Request for Proposals last week to determine the location of their new headquarters - HQ2.  Every major City is jumping at the opportunity to have a company of this magnitude enter their market, to say nothing of the billions in capital expenditure and thousands of jobs created.   Take a look at what their top decision drivers are here.