Colliers Annual International Conference is being held in Chicago from October 12 - 15, 2006. Guests include Colliers brokers as well as developers, landlords and investors from across the globe. I have managed to attend the last 4 conferences and look forward to sharing some of the global topics on our blog as the event unfolds.
When searching for a real estate brokerage service provider to help you reach stated objectives, you typically encounter "one person bands", "chief, cook & bottle washers", "lone rangers", etc. The main reason for someone hiring said service provider is to save time, save money & mitigate risk…very difficult for one of the above to accomplish. Our reccomendation is that you seek a team with a minimum of 4 - 6 dedicated people with complimentary but vastly different skills. One of the skills required is Transaction Management. The following is an article I came across that has been written by Vik Bangia who is in the brokerage business in the United States. His definition of Transaction Management is terrific. Warning - the article is longer than one of our typical posts.
"The term Transaction Management is so confusing for most people that I thought it appropriate to add a little clarity. It seems simple to me (only because it’s part of my DNA), but many people mistakenly consider brokerage and transaction management one and the same. Some have described transaction management as brokerage on steroids, others call it managed brokerage, but each of these descriptions lacks certain foundational truths. So, what is transaction management?
First, the overarching textbook definition: transaction management is a consistent, repeatable, reportable, measurable process to coordinate multiple transactions in multiple markets and oversee the field execution of real estate deals. Let’s look at the three dimensions of transaction management. First Dimension: Consistency. Managing brokerage resources from various real estate firms alone can be difficult. Now imagine taking all the input from these disparate resources and trying to make them look uniform. It is next to impossible. However, it is the job of a transaction manager to provide the client with a consistent process. This requires two things. First, it requires frequent interaction between the transaction manager and the client to define what’s needed. More important, providing a consistent process requires the use of standardized management tools. These tools can include formal broker-engagement letters, standard listing agreements and scope-of-services templates, uniform market report formats and financial analyses. With these tools, the transaction manager can ensure that the field broker hits the ground running. Moreover, the TM can then continuously improve the process in place, making sure it remains viable for the client. Second Dimension: Coordination. Accountability for successful transaction management does not lie solely with the TM. Rather, it requires the management and oversight of several key contributors including the client corporate real estate department, the end user, legal department and field broker, among others. No matter how tactically astute a TM is, it is ultimately his ability to herd the cats that sets him apart from the also-rans. It is more than a typical project management mentality, and in this case you have to coordinate the efforts of individuals for whom real estate is akin to visiting the dentist. At my company, we give out internal recognition awards for accomplishments in this area. We know it is difficult. Third Dimension: Communication. Even if you can herd cats, spin plates and chew gum at the same time, it is the value you bring to the client that will make or break you as a service provider. However, communicating value has two parts. The first is measuring your performance against a set of criteria. Most service providers do this reasonably well and with good reason; their bonuses are tied to it. Where most service providers miss the mark is in giving their clients proof of value that they can communicate upward to their senior management. To be sure, there is a lot of self-promotion when selling the service but relatively little done on a daily basis after the account has been won. Without it the old saying, "what have you done for me lately?" comes into play. Fourth Dimension: Time. And the time is yours. To make effective use of your time, you need to consider the service provider’s professionalism. Transaction management is about hiring the right team with the right resources and the ability to free up your time for more strategic concerns. When evaluating transaction management services, consider whether their process will save you time or require you to micromanage their efforts. Consider whether the designation of responsibilities is clear or whether you’ll be called in too often to arbitrate a disagreement among the provider, the broker and your own staff. Consider whether the service provider is willing to live or die by the ability to save you time and money. Let me know what they say.
On October 3rd, Dr. Sherry Cooper (among the brightest economic minds on the planet) who is the Chief Economist for BMO Capital Markets, will speak about where the Canadian economy and interest rates are heading.
Location: Metro Toronto Convention Centre - North Building
Time: 7:45 - 9:00 a.m.
RSVP: 416-777-9377 ext 299
Cost: Complimentary
The construction of large industrial buildings are not a regular occurance in the GTA's East end. Belrock Construction is bucking the trend by building a 600,000 square foot (sq. ft.), 3 building development in Oshawa, Ontario. The first phase of the project of 375,000 sq.ft. will be completed in the spring of 2007. Two other buildings will then be constructed by 2008 and will total 150,000 sq.ft. and 75,000 sq.ft. respectively.
The occupant will be Pival International, an automotive logistics group providing just in time shipping to GM who are headquartered in Montreal, Quebec. The site is 41 acres, next to the the new GM plant being developed for the New Camaro.
The site was originally purchased for $100,842 per acre with GI or General Industrial zoning.
The lack of supply of serviced industrial lands have directly effected the pricing on serviced and zoned lands. A summary of recent serviced industrial land transaction pricing (approximate) in the Greater Toronto Area are as follows:
Vaughan, Ontario - $600,000 - $675,000 per acre
Brampton, Ontario - $475,000 - $650,000 per acre
Oakville, Ontario - $375,000 - $425,000 per acre
Mississauga, Ontario - $550,000 - $625,000 per acre
Although heavily weighted to Ontario due to the concentration of manufacturing operations, we continue to see manufacturing closures across Canada. Wolverine Tube has announced the closure of their plant in Montreal East. These facilities closures present tremendous opportunities for the industrial redevlopment sector to bring in-fill product to alternate uses. Many developers are looking for in-fill properties within established areas due to many factors including skyrocketing land prices for new development.
Oakville North Secondary Plan is one step closer to fruition due to a settlement occurring on June 15th, 2006 between the Town of Oakville and major landowner group regarding the Natural Heritage System (NHS). The land owners have agreed to donate to the Town of Oakville, free of charge, all lands identified in the NHS. This key step in the planning process will both accelerate the current OMB hearing process and as a result accelerate the increase in land values. Current owners of effected lands should develop a disposition strategy that will align their property with the OMB hearing timeliness, effectively positioning their property for the greater after tax returns.
There are many that have said that the large industrial transactions undertaken by Procter & Gamble and Ferrero Roche in Brantford, Ontario were one-off's and flash in the pan. Those people clearly are living in a world of scarcity.
Brantford is continuing to attract credible developers and tenants that will fuel the growth of the city located West of the Greater Toronto Area (GTA). Have a look at an article that appeared in the Toronto Star about a developer named King & Benton that is planning a $500M industrial and commercial park in Brantford. For real estate entreprenuers/developers/investors serious about seeking opportunities in the outlying GTA, Brantford is worth genuine consideration.
Eric Cohen has tendered his resignation as Chief Financial Officer of H&R REIT and Larry Froom, H&R REIT's Vice-President, Finance, will be assuming the role of Chief Financial Officer