The Most Important Real Estate Themes For 2024

[00:00:00] Welcome to the Canadian Real Estate Investor, where host Daniel Foch and Nick Hill navigate the market and provide the tools and insights to build your real estate portfolio.

[00:00:10] Welcome back to the Canadian Real Estate Investor podcast. Today we have a wonderful report episode which one of my favorites to do.

[00:00:20] And if you've been listening for a while you know friends of the show Urban Land Institute who we cover a lot of their events, we'll be continuing to cover a lot of their events.

[00:00:31] We have, we typically read their reports on the show and they do this annual report which is called the emerging trends in real estate.

[00:00:39] And it's quite literally just that. So it talks about the trends that are emerging in real estate and it's more from it comes from professionals in the industry who are paying close attention to this stuff and then like they conduct a survey where like a bunch of real estate investors, developers provide their opinion on what they think is going to take place.

[00:01:00] Yeah, I love a lot of the stuff that you will I put so Dan you and I've been both been going to U.L. events for, I don't know, a decade at this point, stoked to be going to.

[00:01:11] And why see it later this year for their annual spring meeting, which is which is always a great time and actually we've got a it'll just be you and I for probably about the first 30 minutes here Dan and then you jump out and do a quick interview with the wonderful woman from U.L.

[00:01:31] So yeah, so let's talk a little bit about their report. Yeah, so the report outlines what they are calling the great reset and an era and new era in real estate.

[00:01:44] So kind of exciting stuff and the findings come from as you mentioned, Dan interviews with 209 Canadian real estate executives who buy in large weren't as optimistic.

[00:01:58] As those who contributed the previous years report which would have been emerging trends for transfer 2023 so very different sentiment even by the 209 real estate executives and professionals going into this year.

[00:02:12] Yeah, so a prevailing theme was that companies will be cautious and moved slowly with some pauses and investment development over the next year to until they see more certainty in the market and and one of the big big ones is capital availability as well.

[00:02:25] Yeah, we get we get into that here that a year where everyone wants needs money but before we do that I do love this quote from the report the greatest uncertainty creates the greatest opportunity.

[00:02:38] Yeah, we agree with that totally definitely cool quote something you're going to apply in your own life too life is uncertain we cannot predict the future.

[00:02:45] Therefore we live with the uncertainty on what happens next which is why uncertainty can always provide the greatest opportunity and I like the kind of like the worst case needs a plan the best case does not need a plan.

[00:02:58] And that concludes your philosophy segment for the Canadian real estate investor show. Yeah, I mean I love that too, Dane right it's basically like if for me it's kind of like everything happens for a reason.

[00:03:10] Yeah, for sure and it has been a pretty big roller coaster for the last few years in terms of cost escalation rising interest costs labor shortage impact on housing affordability and the effects of higher interest rates in the scarcity of capital.

[00:03:24] So it's obviously become it as a real estate investor you've needed a lot you needed to be paying attention to a lot of things more than probably than you ever have.

[00:03:33] Yeah, and a lot of those things were usually things for the last three decades that probably didn't really play too much of a role in your real estate investing strategy or your investment thesis such as.

[00:03:45] You know labor costs through the roof lack of of labor and then going into stuff like with the banks bank of can is monetary policy right it seemed we saw glimpses of optimism early on but then after the tightening the sentiment shifted back and forth we've seen.

[00:04:02] Really, you know going back to roller coaster we've seen a roller coaster of sentiment gets really been all over the place and now in this digital world.

[00:04:10] I feel like a media and maybe specifically social media is is having a much larger presence and kind of guiding that consumer sentiment more than ever before you've really put away the bull hat for.

[00:04:25] This year I man spending a year and a half talking about real estate with you in this podcast has changed and right in my rubbing off I'm still a bull I'm still a bull and I'm just saying like there they're.

[00:04:35] There may be false hope for the future now because there's a multitude of challenges for Canadian real estate in the future but again with these great challenges comes great opportunities so again back to the bull.

[00:04:50] Fair enough so many are even thinking that interest rates could stay higher for longer we've heard a lot you know I think.

[00:05:00] I can remember which central banker was the bank candidate but she mentioned that interest rates would be higher forever and and higher doesn't mean that they're going to say where they are but it just means that they're not going to come down as much as I think a lot of people.

[00:05:11] I mean they might need them to make their thesis is viable and yeah so I mean this could like rates are going to have an effect on the development and investment over all transaction volume well into 2024 and beyond and so.

[00:05:24] I mean it's really it's a guessing game at this point where it's like do you think that. Transactions going to come back to.

[00:05:32] 2022 highs while probably not if until unless rates get to 2022 lows right or 2021 lows so what and you like I would I would literally just do a percentage okay if rates are going to come down 30% from here right they're still X amount higher than 2021 so you know.

[00:05:49] Pro rated and that that's what like that's how I'm thinking about things and then what does that do on that that weighted justice scale of hosting prices right like this tip the skills the other way.

[00:06:00] And it's with with with thoughts like that that a lot of investors developers and real estate professionals are like are approaching this new world that we're in right this new era real estate with a fair amount of caution.

[00:06:14] And Canadian real estate companies are focusing on things like value creation and then this is hilarious because this again this is right out of the UI report but this is stuff that you and I've been saying for quite some time.

[00:06:25] So again Canadian real estate companies are focusing on things like value creation by optimizing existing assets so this goes to show again great value within assets but also make sure that your existing assets are performing at their highest in best use.

[00:06:43] They're also investing in digital transformation and addressing such trends as generative AI ESG performance and housing affordability but they're facing challenges as well, but I mean.

[00:06:56] You know, the name we just didn't episode on prop tech and these were some of the same themes that the venture capitalists, the real estate professionals as well as the prop tech founders were all looking at right like how do we use these this new technology to.

[00:07:12] Effect affordability how can we use such things as as AI or new building products to to increase that affordability and to transform what is again a kind of a more archaic practice and real estate construction.

[00:07:25] And bring it into that new era right there's a lot of talk about this new era well new era should mean new things new practices new new best practices right so I'm excited to see.

[00:07:36] Yeah, yeah I am as well and it seems like those hoping for opportunities to get into stress deals might be disappointed sellers aren't really in a hurry to transact if the bids don't match their expectations and so.

[00:07:46] It's definitely a slow remark even though there are opportunities arising it's like there's not I think it just takes a lot longer for things to materialize the most people would expect it's not like bang you know the bottoms here you got to everybody's got a month to go buy or ever.

[00:08:00] I'm up to climbing to the bottom. It's like somebody never rested like okay we're at the top like there's a base camp we will spend time there to a climate us yeah and I think especially like the reason I find this report especially relevant to Canada is because like commercial real estate debt.

[00:08:14] In the US resets quickly like Canadian real estate like Canadian residential debt does like you're not on 30 year terms like in the like US housing market is like so insulated right now because you have a bunch of people in 30 year.

[00:08:27] So we've got people here with like with those same rates but they've got a year and a half left yeah and so that so we so both US commercial real estate and Canadian residential real estate are kind of facing the same like ticking time bomb.

[00:08:45] And so from my perspective like the sense of urgency isn't it doesn't appear immediately like it all appears slowly over time as people start to come up for renewals and realize because like it's not not only is it just a good opportunity or good time to to like a refie when you're up for an oil because you don't have to pay a.

[00:09:04] So there's a big, the big elephant in the room is office properties obviously and you know investment funds winding down transactions could be more likely.

[00:09:25] And it's not just limited to deals like construction costs and labor shortages have added a lot to complexity which the report says and I think.

[00:09:31] Again, it's just like as a real estate investor right now you have to be paying attention is so many factors yeah like if your modeling construction are you modeling it based on the prices from a year ago or two years ago to expect those to go up or down.

[00:09:44] Yeah, modeling it into these prices or six months. Yeah, because if you're saying oh yeah I you know I have a sweet coming up for a new one six months like well yeah you can you can guess what you can go get a quote today and it's going to be different six months.

[00:09:56] Because between five and twenty five thousand dollars tax and that'll affect your margin and it's not just you know guys like us like another small cabin investors that are kind of having these thoughts.

[00:10:07] And it's it's according to the survey here a lot of CEOs lot of real estate CEOs are either delaying deals or or changing them due to the economic challenges and the the volatility at their facing 56% real estate CEOs who said they had either delayed deals or considering doing so in response to economic challenges and volatility.

[00:10:30] So that's more than half of the decision makers out there in the market that are drastically pulling back or putting a stop to things all together.

[00:10:38] Yeah, and it's it's definitely I think one of the big consequences of this and you see it a lot in the states because it's like a balance sheet recession very much there where banks are contracting the size of their balance sheets they're not lending out money.

[00:10:54] They're not issuing new loans a year and like nobody really. Taking on new debt and you're hearing that a lot in Canada as well. I mean you work in the debt markets far more than I do.

[00:11:05] But when you talk when you hear about the stuff that you're doing with John and you know and land bank you take a new deal to a lender who would have been keen to take on to take to be taking on new new client to bring in new client into their business.

[00:11:21] In 2021 now everyone's like no we're only servicing existing clients rather not well even that that story I was telling you offline before where we had a private mortgage common and. You know, we take it to six different privates before one person jumped at it.

[00:11:38] You know not stuff not behavior that you saw in the last few years and and that's why capital in the survey here was identified as one of the key things for the future.

[00:11:50] This is I'm going to read this from the report here. A key trend and issue is the outlook for capital availability in 2024.

[00:11:59] A significantly higher number of survey respondents expect various types of debt and equity capital to be under supplied compared to 2023 and previous years which will add to the financing challenges facing real estate companies.

[00:12:15] And their impact to their investments strategies and their development plans in 2024. So pretty much saying exactly what we did right it's you know if you don't have capital.

[00:12:27] You're not doing the stuff that you're that you want to be doing whether it's putting a basement so we didn't find a duplex or building that new office tower yet and and that came from the real estate leader at Pwc Canada.

[00:12:40] And he went on to say that this year was all about capital 2023 was all about capital. There's compelling data to show that scarcity of capital has impacted investment volumes.

[00:12:50] However, this creates opportunity as we saw many new private debt funds established that that take advantage of this unique moment in time. I mean you know my mom used to say when the going gets tough the tough get going. So the hell originals.

[00:13:07] Yeah, I know that just and she was the first work she invented that one. Mom, thanks so much of your listeners. I know she listens to every episode of what it's actually.

[00:13:16] So again, just a one more piece here from the report that I'll read directly and then we can get back into it then there are many factors holding back industry activity including interest rates which are predicted to stay higher for longer rising financing costs and less capital.

[00:13:33] So that's a bad combination. You've got higher interest rates rising financing costs and less of that capital available to even pay higher interest costs on this provide real estate players with an opportunity to consider ways in which they can add long term value whether it's the adoption of transform of technology and construction process changes and innovation and the adoption of generative AI which seems to be a reoccurring theme here.

[00:14:00] So enough of AI dam bring us back to the human world here.

[00:14:05] Yeah, so if we think about the human side of things I mean one of the big things that we're hearing about in Canada and it does seem to be changing a little bit given the massive increase in temporary form workers that we've seen although we have discussed how not a lot of that is related to real estate labor.

[00:14:20] Barely any I believe. Yeah, pretty much none. But labor shortages are a big concern right?

[00:14:26] So the construction workforce is aging I think 20% of the construction wage labor forcing Canada is expected to retire in the next 10 years which is like that's crazy right if you really think for that is 8% of the work.

[00:14:38] 8% of the total workforce is in construction in Canada 20% of that's going to retire and we have to replace that somehow because we it's not like we need less housing.

[00:14:46] No and I mean you know I spent a lot of use has been a lot of time on construction sites whether it was housing or condos I did institutional level stuff and I remember when I was a young project manager young project coordinator in my early mid 20s and I'd have to go and tell these the steam fitters or plumbers or carpenters with ever pick a trade.

[00:15:07] And you guys are always double or even some cases triple my age right and I'm up there trying to project manage you know five guys in their mid 50s and they're like who the hell is this kid.

[00:15:18] And that was like 10 15 years ago yeah you know construction you go to a construction site and there's there's more guys with white hair then then there are you know guys with with sweet haircuts you know like you yeah a little broccoli style on top kind of thing we need.

[00:15:33] We need the younger generation of us in the past we need the bus and buses in there to start you know bus in their ass and start getting some work that you can't put a hard hat on the permits.

[00:15:43] It's on top don't you understand that's extra safety padding makes sense actually anyway so it's not hard they don't even need though let's get back to it so yeah so CBC put a report that estimated at least 300,000 construction workers will retire in the next decade that's a huge number.

[00:15:59] And yeah and remember out of near half a million new Canadians only 455 were still workers so steel contract construction workers now I think 3% of the temporary four workers are 3% of non-perman residents were. Worked in construction but so that's I mean it's just like compared to 8% of total.

[00:16:18] I'm not just to a whopping 3.1% yeah yeah yeah 3.01% I think 0. right exactly and and then the industry is feeling the effects right it's not just the shortages but also the reduced productivity and the instances of you know not so great work being done right we've got.

[00:16:37] I mean there you've seen reports and videos and stuff like this from across the country of new construction it's called a deficiency list so if you walk through a new construction unit you'll usually do that with your real estate into someone from the building group.

[00:16:52] And they will have little pieces of green painter state and you'll go around and put that on anything that's not perfect.

[00:16:57] And like some of these rooms just look green at the end of it like what is going on here so it's not just the lack of work but the lack of.

[00:17:07] Skill to work right I mean and that's not to say that the people that are building aren't skilled that's just to say that there's less of them doing more work with less time remember those three circles right cheap fast and good you're not going to hit that.

[00:17:20] Yeah it's definitely become a challenging landscape and there there does seem to be as a result of these challenges like you mentioned you know kind of I guess necessity is the mother of invention right so there are some strategies that seem to be emerging.

[00:17:32] Yeah and liquidity seems to be one of those strategies get liquid the ability to generate liquidity puts companies in a better position and navigate uncertainties and pursue. Through these emerging opportunities that the 299 survey professionals at you will I have identified.

[00:17:53] Yeah and it's not just about liquidity it's also being agile and creative and structuring deals so we've heard a lot about it like I really think this year is going to be the year of the VTB.

[00:18:02] Yeah we definitely have to do an episode on VTB's again revisit it we you know I just mentioned we did like an awesome last I guess last week's coffee shop for the realist.ca course on the community and if anybody's interested in joining that check out realist.ca I think we're going to be increasing the price on it and.

[00:18:19] I think we've got to do three years of this year but.

[00:18:24] Yeah so check out check it out we'd love to have you on board and anyway so we did a lot of VTB and I think that's one of the ways that you're seeing a lot of structuring get MLIs select is another one and anybody reach out to neck if you're interested in MLIs select financing we've had a lot of people connect with us from the show about.

[00:18:40] I'm a live. Yeah yeah there's a lot of different forms of commercial debt a lot opportunity in the market for things like preferred equity and medicine and financing as debt basically being.

[00:18:54] That we talked about this but you know the part of the capital capital sack that somewhere between the equity or preferred equity if you have a joint venture partner that you're preferred equity it's almost like a second mortgage on commercial.

[00:19:04] Yeah and just to build off that you're right then you know finance is getting interesting we're starting to see debt funds gain popularity offering opportunities to provide credit.

[00:19:14] And liquidity to others struggling with existing financing costs and it seems like 2024 maybe the year of the VTB but it also maybe the year of the debt fund.

[00:19:25] Yeah it is interesting because you're seeing a lot of that taking place in the U.S especially with a lot of these debt funds happening.

[00:19:31] From my perspective in Canada like I think we went through a period where we had a lot of debt fund formation mix especially and I think for us it's a little bit like I would say you're going to see contraction and lending for a lot of mix Simone and I actually talked about this quite a bit on I did another annual.

[00:19:47] Yeah on the Canadian investor podcast but about how I think you could see a bit of a redemption crisis in mixing Canada and a lot of mix are going to be raising money looking for capital to redeem existing investors rather so I don't think their loan books are going to be expanding but.

[00:20:01] So debt funds I think probably tapped out as a major source here but I think like monolines and like more creative types of financing and then in.

[00:20:10] In the U.S. you're seeing like tons of opportunity in the debt funds base because banks aren't like I mentioned earlier banks just aren't lending like they're like they can't because they don't want to go SVB or I'm wearing a hat right now if you're watching the recording on YouTube it's signature bank which is the they were doing tons of multi-family stuff right so there yeah so I would say that that's definitely gaining popularity.

[00:20:30] And as long as they're optimized assets and favored sectors like you know the biggest one I think in the U.S. right now is QSR actually quick service restrooms which is. Awesome yeah actually wait till we start getting all those concepts in Canada.

[00:20:44] Well I don't know if you saw this or not but shake shack is a. I did see a storm for on there so no need to go to California anymore everybody yeah.

[00:20:53] Well that's in an I don't know sorry shake shacks all the way please but yeah shake shack delicious anyways you're right.

[00:20:57] It's not a one size fits all approach guess what real estate never is a one size fits all approach business never is a one size fits all approach companies and individuals need to be carefully planning their moves and be strategic now more than ever and this all goes back to your investment thesis doesn't work in these new market conditions in this new era that.

[00:21:20] You will I in PWC are ushering us into through this report if it doesn't it's time to pivot and adjust and find one that does now damn before we jump into your interview here.

[00:21:33] Let's just have a quick there's a bunch of charts in here that just want to kind of quickly touch on yeah so.

[00:21:39] The equity capital for acquisitions they're expecting to be under supplied majority of those surveyed expected to be under supplied whereas last year they felt it was more balanced.

[00:21:48] That capital is 74% believe it'll be under supplied and which is more one to 74 yeah and the majority the majority felt it was balanced last year.

[00:21:58] That capital for refinancing same thing 77% felt it was under supplied and compared to 43% last year and the remaining plus 30% jumps in some of these right. Yeah this show you well it's just like I think it really shows you how bad capital contractions.

[00:22:12] And I mean and then again just consumer sentiment based off of that capital contraction rightly again though don't forget these are.

[00:22:19] These percentages are from real people and their opinions on what's happening right there's nine survey respondents here so yeah when you see a 30% jump you realize that consumer sentiment has shifted greatly.

[00:22:30] And then the last one is debt capital for development versus redevelopment which from my perspective I think in Canada this is this range true for Canada except for purpose belt rental where in the purpose belt rental side it's.

[00:22:43] I think it would be it's supplied sufficiently because of the MLS lacked in that bond we did it we didn't absolutely discussed how the government put 20 billion worth of bond bonds into the market.

[00:22:55] And so yeah like that that to me is probably sufficiently supplying the market with capital I hope so I mean I'm a risk rental I can see them I can see them having to fill that up again because as we say right it's going to it was only actually 10 because it was also subscribe 10 yeah.

[00:23:12] Three more charts I want to get through before we jump near interview here Dan and these are identified as issues that were deemed important for real estate in 2024 and.

[00:23:24] Good people at you will I'm PWC split these up in the three sections the first one being social and political issues the second being economic and financial issues and the importance they will have on real estate and the final being.

[00:23:37] The importance of real estate industry disruptors and I bet there's going to be some.

[00:23:42] AI mentioned there in an of course real estate development issues so let's quickly touch on these and then we'll we'll wrap things up here Dan the social and political issues housing costs and availability is.

[00:23:55] Of greatest importance is that a shock to anyone I don't think so you know we're going to weigh down climate change actually kind of makes an impact your 3.5 out of 5 as a level importance.

[00:24:09] Federal uh provincial and local government budgets and federal government budget deficits those are interesting again to me again not to try to get political here but.

[00:24:20] We've seen government incentives and and government fiscal kind of the geocvers the BOC which we've talked a lot about you know the budgets there are our out of whack and I think we need to really.

[00:24:36] We're going to bring those in and and reallocate some of those funds to certain things because we see if you go up that list immigration policy is a great importance as well. You know I feel like government budgets and immigration policy are directly intertwined at this point.

[00:24:51] These things are like you can say oh yeah we don't want to be political but like the whole thing is like basically a commentary on how like how important people are ranking a lot of political issues so political extremism is next on the list and geopolitical conflicts are next on the list after that so.

[00:25:06] Those actually both beat out income inequality which is an interesting and higher education.

[00:25:11] So I think it's you know I mean it says a lot about I mean it is social political issues that's the police is so it says a lot about what developers are paying attention to right now.

[00:25:19] The next is economic and financial issues in 2024 so interest rates and cost of capital is leading capital availability is number two which is obviously what the report shows and then job in income growth is next on the list.

[00:25:31] And then you've got inflation global economic growth provincial local taxes federal taxes I thought taxes would be higher but anyway I think obviously inflation and then. The bottom of the list which no one seems to care about currency exchange rates where there goes my forex yeah for 24 years.

[00:25:46] Yeah for getting to DMs to. Fairly I'm sending them yeah so last is a disruptors and then we'll jump into the interview here.

[00:25:53] Yeah so disruptors which again is is cool because it's a theme we've seen in a lot of the reports that kind of came out in Q3 and Q4 of this year. Construction cost being the number one disruptor for real estate in 2024.

[00:26:08] The construction cost simply need to come down because labor is rate, but rate beneath them labor and construction cost make things extraordinarily hard to to get done. Again higher up in the list we got artificial intelligence and machine learning which could have a great positive impact on.

[00:26:24] Construction and then finally kind of in the middle of the list here we've got smart buildings and automation. Those have been around for for a while and are just getting better but then at the very end very bottomed in read me these last two years.

[00:26:39] We've got was it three printing and blockchain.

[00:26:44] Yeah I thought three printing would have had a bit more of I mean three printing had its like heyday all those like we can build this three printed house but I don't know if anyone actually wants to live in them and then blockchain you know I remember seeing stuff on Instagram where you could buy.

[00:26:57] You could buy this house in Bitcoin and of course it was a con to my amy so interesting stuff there another great report put out by.

[00:27:06] I am PwC they they've go through a ton more stuff here so I encourage everyone to go check out the port they talk report they talk about housing affordability.

[00:27:15] They talk about investment prospects and markets to watch in Canada and they've got a rating system for those they've got development opportunities in Canada. And then we've got to ask the country and then more economic forecasting indicators.

[00:27:29] Yeah we'll put a link to the report in the show notes make sure you check it out and if you're able to come to any of the UI events.

[00:27:36] The UI Toronto chapters amazing it's one of the bigger chapters in U.L.I would love to see you there.

[00:27:42] And so let us know if you want to link for tickets or anything and then also the UI spring meeting in New York City so close to Toronto we should.

[00:27:50] Yeah yeah well hey if you want to put together a bus and bring down a bunch of people who get a lot more happy to do it. That'd be hilarious.

[00:27:57] Yeah it's definitely worth checking out so we'd encourage everybody to check out U.L either great friends of the show and I've learned.

[00:28:03] Most of the things that I've learned about real estate came from them and they kind of really set me on a good path and all the days to volunteer there all the time. And yeah so we'd love to see you out there at their events.

[00:28:14] Perfect and now with a further ado Dan let's get into your interview here.

[00:28:18] All right hi Anita thanks for joining us here on the Canadian Real Estate Investor podcast as our listeners know and as you might know we are big fans of U.L.I. The Urban Land Institute.

[00:28:27] We were fortunate enough to be present at their first Canadian event in since the 80s and really enjoy the spring and fall meetings.

[00:28:36] And one of the things that we really really like that U.L.I. puts out is the emerging trends in real estate reports so that's what you're here to talk to us a little bit about today as well as sort of the role of U.L.I. in the real estate industry for our listeners.

[00:28:48] So if we could just start off quickly having you introduce yourself, you're role in the real estate industry and sort of your history there and then what you do with U.L.I. as well. Sure my background before I joined U.L.I. is as a market analyst.

[00:29:04] And I had the great experience of having both public and private clients across the country in full range of property types.

[00:29:14] That's that was my initiation into the industry and my depth in the industry at U.L.I. I run a center called we have centers for different topics and I run the Center for real estate economics and capital markets.

[00:29:31] Awesome man, I appreciate that. So within that center what is sort of the scope of the research that you're doing and because I'm a big fan of your work so I know but I think and a lot of our listeners.

[00:29:45] And one of the more active analysts in the Canadian market as well. So a lot of our listeners come to hear about the data side of the industry and so just curious sort of what kind of things you're researching right now and and what you're finding as the big themes in the in the real estate industry.

[00:30:03] And so what you know is that all that we're interested in is a lot of the people who are membership is which is a broad swath of all the different kind of food groups in the industry.

[00:30:15] my research really cleans their knowledge and collects what they know and and and and turper it and analyzes it and makes it available to the to the broader membership and industry. So emerging trends is a great example. It's based on three

[00:30:35] types of research. One is one on one interviews with those senior members of the industry from all types of perspectives. So developers, owners, builders investors, advisors, the full range of active participants in the industry. Those interviews are one of three but they're a types of research but they're

[00:31:02] so major because we're really listening to how people are thinking what they're thinking and really trying to kind of parse out the new types, the new thinking and the new directions. So that gives us really a strong, strong

[00:31:20] foundation for understanding what the emerging trends are not just what's going on or recently gone on or will go on tomorrow. The other two types of research within four emerging trends. One is an extension of those one on one

[00:31:36] interviews at our district council levels. Those are our local chapters across the country. They bring together their experts in their market and they respond as a group and discuss a range of questions, similar to what we ask

[00:31:52] and I want to one and introduce and provide that feedback to us so we get the depth of individual markets. And the third is a very extensive and this one participant told me, grueling survey, online survey. I think it is probably

[00:32:11] where most surveys are getting shorter. I think ours have not getting longer have not been reduced but it's a wealth of information and we were able to cover to touch on the all even larger group. So altogether we are leaning

[00:32:30] knowledge from close to 2000 senior real estate people. And that would be yeah so that would be top executives at a lot of these organizations and funds and investors and developers awesome. Okay so I mean consider myself and the

[00:32:45] audience sufficiently intrigued them based on the people that we're getting this information from and from yourself. So what would be the key findings then in this research that you determined? Did you like that segue? It's

[00:32:59] pretty good. I didn't mention another product that is similar but I don't know whether you've about the R4 cast. Yes sure let's talk about a little bit about that. Is that included in this or is it separate? It's not but it but it is if

[00:33:16] you want to talk about our key. Yeah. The third that is an important product. We have another product called the real estate, the ULI real estate economic forecasts and that is although it sounds also it is also forward looking so kind

[00:33:32] of altogether the future of real estate would kind of describe what my center does. This one is metric oriented and it's ask we have I have a pool of leading real estate economist and analyst primarily from private companies and

[00:33:51] whose job itself in the whose own jobs are forecasting for their companies but we have on a group of them who have committed to answering and providing their forecasts twice a year on 27 different metrics real state, broad

[00:34:09] economic and real estate metrics. So that is and then we report the median and you know like any one person is important in their company but we have a typically you know close to 40 people 40 of them answering it at a

[00:34:24] particular time given time constraints. Yeah and that is something else that we provide to two our members. Awesome well maybe we can start with the forecast then since we're at the end of the year and we can say you know what what is

[00:34:39] the real estate industry seem to think is we should be expecting heading in the 2020. Yeah so I'd rather start with the merging trends. Okay let's do that and that's fine yeah we so we can start today what so what are the emerging

[00:34:51] trends and then yeah. So so we always well we have 10 I can't say we always have 10 but we actually always aim for 10 because that seems to kind of fall out given how much information and and with listen to and look that so this I

[00:35:10] would say I'm not gonna go through each each of the 10 but I would say overall there's clearly you know something that is in one way not surprising another way kind of finally has jelled which is the impact of hybrid work on the

[00:35:30] industry and that has touched so many of the trends and the trends kind of all together paint that picture. So the hybrid work has you think about it has reduced the use of office overall. Far more in the larger cities and once

[00:35:52] that are more tech dependent but also just quite large maybe you know traffic issues people want to avoid but that that so it impacts the building itself right the value of the building itself the neighborhood around the building

[00:36:09] the retail around the building the city revenues from from these buildings as declines the transit systems the portfolios of major investors that once depended so much you know thought of office as well as kind of the fortress

[00:36:30] mall. The two things have really had were once the main stay of the revenue producing core real estate so that has a whole package has just really turned into something that we just see as this is the way it is you know we're not

[00:36:49] looking for that you turn anymore and the pervasiveness of the change I think really stood out this year and what I just listed or kind of each in their own individual trends but tied together by that impact. So that seems to be sort of

[00:37:07] the overarching most prominent issue with with the industry focused on is it solving right now like or just I guess maybe addressing primarily yeah it's addressing I think it's recognizing and addressing so I should step back and of course overarching overarching of course is the the the higher

[00:37:31] interest for long yeah yeah and and slower growth together so can ignore that and that's gonna be in play for a while so these other issues will play out maybe more slowly over time. Okay thanks so much for listening everybody

[00:37:52] hope you got a ton of value out of Dan and myself going through the report and of course with the short interview from Dan and Anita at ULI again I encourage everyone to go check out ULI get involved it's one of these great organizations

[00:38:11] that puts on events and has a ton of resources so go take advantage of those if you have any questions comment concerns and why be concerned but if you have anything you want to say send it over to the email in the show notes and

[00:38:25] we love hearing from everybody out there so thanks again for listening and we'll talk to you soon. The Canadian real estate investor podcast is for entertainment purposes only and it is not financial advice Nick Hill is a mortgage agent with

[00:38:42] premier mortgage center and a partner in the G and H mortgage group licensed number one zero three one seven agent license M two one zero zero four zero three seven. Danil Fosha's a real estate broker licensed with rare real estate a

[00:39:00] member of the Canadian real estate association the Toronto real estate board and the Ontario real estate association.