Why does REIN consistently rank Kitchener Waterloo #1 ?

Here are the Top 9 Reasons You Should Invest in Kitchener Waterloo Real Estate

#1 – consistently ranked as the top spot to invest in real estate in Ontario, and #2 in Canada as per REIN

#2 Low Interest Rates – It is now more affordable to borrow money, making it a great time to buy investment real estate

#3 Great Prices

For the complete article, click here: Top 9 Reasons You Should Invest in Kitchener Waterloo Real Estate or watch this video:

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Large Apartment Building Sold in Cambridge Ontario

Last week we looked at Two Waterloo Region Apartment Buildings that Sold For $45+ million.

Here is a video with some more information on the sale:

To recap, the investment property in Cambride, Ontario was purchased at a 5.7% cap rate.

Between both apartment buildings there are 225 units, and the average rent is above $1500 per month.

High valuation, but the properties generate premium income, are prestigious assets, and are very recent (6 years and 1 year) construction.

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An excerpt of each article is included.  Click the title to read the full blog.

Google moves offices from Waterloo to Kitchener’s Tannery

Big news for downtown Kitchener: Google is moving it’s offices from Waterloo’s Tech Town (in the U of Waterloo research and technology park) to the Tannery District in downtown Kitchener.

This is great for downtown Kitchener, and will prove to be especially profitable for our clients who own investment condo’s at the Kaufman Lofts (one block adjacent) and other downtown Kitchener Condos.

Ontario Rent Increase Guideline for 2011 is pretty low

0.7%  to be exact, the lowest it’s been since the government of Canada implemented guidelines around the amount that real estate investors could increase the rents in their investment property each year.

From The Record:

The guideline is the maximum amount a landlord can increase the rent of most sitting tenants without seeking approval of the Landlord and Tenant Board.

The 2011 guideline applies to rent increases that occur between January 1 and December 31, 2011.

The calculation is based on the Ontario Consumer Price Index.

New Kitchener Condo development splits local opinion

Fresh off our discussion of the new Condos, Hotel, and Commercial real estate coming toWaterloo -  the Barrel Yards, here is some information about a new development going in donwtown Kitchener at 30-40 Margaret Ave.

I happen to think it’s a great addition to the area!  Read the article from today’s Record, and leave a comment below!

News on the Barrel Yards Development in Waterloo, Ontario

The Record has an article in this morning’s paper about a major development underway in Waterloo, Ontario – The Barrel Yards – which will bring the Kitchener Waterloo real estate market some very high quality product over the next few years

When completed, the Barrel Yards – located at the corner of Erb Street and Father David Bauer Drive in uptown Waterloo, Ontario – will be home to a hotel, condos, rental apartments, commercial real estate (office & retail space)  and townhouses

Kitchener Waterloo Earthquake!!!

There was just an earthquake in South Western Ontario, felt in Montreal, Ottawa, Toronto, New York, and here where I am, in Kitchener Waterloo.  That is a rather large span.  No words on aftershocks yet.

REALTORS discuss HST & Real Estate in Ontario

From The Kitchener Waterloo Real Estate Board blog:

On Thursday June 17^th, 2010, 16 leaders from Waterloo Region’s real estate industry, including REALTOR® members of the Kitchener-Waterloo Real Estate Board (KWREB), Cambridge Real Estate Board, staff, and a representative of the Waterloo Home Builder’s Association met with Ontario PC Leader Tim Hudak at KWREB’s offices to discuss how the HST will impact the real estate industry and to explore ways in which to help moderate its impact.

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Two Waterloo Region Apartment Buildings Sell For $45+ million…

…$46,710,000 to be exact

Killam Properties has announced the purchase of 225 recently built residential units in Cambridge, in two river front apartment buildings. This is one of the largest recent Multi-Family transactions in the Kitchener Waterloo area.

“Killam has acquired 100 and 200 Eagle Street North in Cambridge, Ontario, in the Kitchener-Waterloo Region. The luxury apartment buildings are of newer concrete construction and include spacious units ranging from 1,000 to 1,400 square feet, modern features and five appliances. The buildings’ amenities include a fitness centre, guest suite, air conditioning and underground parking.

100 Eagle Street, constructed in 2008, has 119 units with 9-foot ceilings, including 3 one-bedroom units, 59 two-bedroom units and 57 two-bedroom units with a den. The average rent is $1,523 per month. 200 Eagle Street, constructed in 2004 and located directly beside 100 Eagle Street, has 106 units, including 25 one-bedroom units and 81 two-bedroom units. The average rent is $1,351 per month.

The purchase price for the two river-front properties of $46.7 million ($207,600 per suite) was satisfied with a combination of the assumption of a 20-year mortgage for $10.1 million at 5.15%, a new mortgage for $16.0 million at 4.5%, and the balance in cash.

“We are pleased to report progress on our apartment acquisition program in Ontario” noted Philip Fraser, Killam’s President and CEO. “Closing these two Cambridge assets increases Killam’s apartment ownership in Ontario to 362 luxury apartment units. We have continued our acquisition focus on newer, high quality assets. These two assets meet this standard and are among the highest quality assets in Cambridge. The cap rate on the acquisition is approximately 5.7%, reflecting the buildings’ age, location and quality of construction.”

Both the cap rate and the price per suite are rich for the region, reflecting the quality of the asset, as well as the cheap financing that REITs and other institutional investors have access to right now. (CMHC is happy to loan on Multi Family properties, as it is a secure asset class. Rents continue to come in, in both good and bad economic times.)

We have many qualified real estate investors looking to buy apartment buildings now – if you own one, contact us to arrange for a quick sale. You’ll likely be pleased with what buyers are willing to pay for a quality building!

The Globe Advisor expands on the lack of available supply of apartment buildings in Canada:

Apartment buildings - there are about 100,000 of them across Canada, with the majority of them clustered along the Windsor-Quebec City corridor – may not return as much to their investors as shopping centres or office buildings, but they offer a lower-risk way to own income-generating properties.

They held their value through the recession for one main reason – there were no distress sales because owners could refinance their debt inexpensively through Canada Mortgage and Housing Corp. This ensured them access to credit at a time when other property owners found debt markets completely closed.

And with mortgage rates almost certain to move higher in coming months, buyers are scrambling to make purchases while rates sit near all-time lows. RealNet Canada, which tracks sales, shows first-quarter sales volumes actually decreased in most of the country at a time when other commercial sectors were showing sharp signs of recovery.

It has nothing to do with a lack of confidence in the sector, but rather illustrates how reluctant sellers are to part with their income-generating properties.

“What’s happening is people who own them are quite happy and those who want to buy really have to spend a bit more than they may like,” said RealNet president George Carras. “The most dominant owner profile in the sector is the private investors, and they tend not to want to trade.”

…

“You can get money at ridiculously low rates and the big challenge is just finding quality product,” Mr. Greer said. “There is no low-balling, and when something comes around, you see a ton of interest.”

Halifax-based Killam Properties started the year with a goal to spend up to $150-million on Ontario apartment buildings, and passed the $100-million threshold with the Cambridge deal earlier this week.

Chief executive officer Philip Fraser said it has become increasingly difficult to find relatively new buildings that met the company’s criteria, and indeed there were never any “for sale” signs planted on the front lawn in Cambridge.

If you have a building, and you have thought of selling in the next ten years, I strongly reccomend we talk today; with interest rates as low as they are (but heading up fast!) you will likely get more for it today then when rates are higher.

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Hi Ben, I hope this message finds you and Sarah well and enjoying married life.

I’m sold on the value of Real Estate investing. We are generating positive cash flow from every property plus I just received my mortgage statements from last year. My tenants paid my mortgages down by over $25,000 in one year. Not including the cash flow or appreciation.

We are proceeding to build an addition onto 1234 Cedarbrae and by Sept.1st we will have two extra rooms available to rent. I owe you the credit for that property. You saw the value when I didn’t. Now I will gain over $100k in post-construction value plus the extra cash flow will pay for the construction in less than 5 years.

I am tinkering with my properties, trying to maximize the value. The property at 1234 Weber St. was purchased as a duplex for $222,000. I am considering trying to convert this into a triplex, with three 2 bedroom units. Would you be able to give me a rough ballpark as to what the value might be post-construction? This will help me in my decision process.

Thanks in advance, Larry

For information on how Larry and his wife have built their portfolio, contact me today. I’d love to serve you the way we’ve served Larry’s family over the years (yes, we help more than one generation of his family

You know where I am – Benjamin@BenjaminBach.com or call me at 519 772 4376

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Earlier this week we looked at the strength in the investment, student (Student Rental Market Update – Waterloo, Ontario) and commercial real estate (Commercial Real Estate Market Update – Kitchener Waterloo & Cambridge) markets in Kitchener Waterloo, Ontario. 

It’s not just KW – the commercial real estate (CRE) market is gearing up all over.  Let’s take a look at a few stories from the Canadian CRE world.

On Thursday, the New Brunswick Business Journal had a story about Kilam Properties Inc (listed on the TSX as KMP) looking to acquire up to $150 million in new properties this year. Kilam is a major owner of apartment buildings in Atlantic Canada, and is looking to potentially expand into areas including Kitchener Waterloo, Ontario

Fraser said the plan for Killam is to spend up to $150 million on acquisitions in each of the next five years.

The Halifax-based company is already one of the country’s largest residential landlords, with 118 apartment buildings in Atlantic Canada’s six major urban centres.

The company also runs 55 so-called manufactured home communities across Canada, with the majority of those trailer parks located in Ontario.

Overall, Killam owns and operates 18,150 units in 173 properties, representing total real estate assets of roughly $720 million.

But in 2009, the company’s pursuit of new properties came to a halt, largely because of the sagging economy.

On Wednesday, Fraser again said the company is examining the Toronto, Ottawa and Kitchener-Waterloo markets for buildings to pull under the Killam banner.

“We continue to see opportunities for Killam to grow in Ontario by focusing on high-quality properties, including newer buildings and more established properties in prime locations,” he said.

Thursday’s National Post has a story about $500 million worth of Real Estate Investment Trust (REIT) IPOs coming to market this year, including one by a landlord with significant holdings of apartment buildings in Kitchener Waterloo, Transglobe:

It’s been four years since the real estate investment trust sector last saw an initial public offering on the Toronto Stock Exchange but that is about to change, with IPOs worth about $500-million expected in coming weeks.

The Financial Post has learned TransGlobe Property Management will be the latest private company to go public, with an IPO estimated to be worth between $200-million to $250-million, in a deal led by CIBC World Markets. The TransGlobe deal will likely wait in the wings as the market consumes a $150-million IPO from Northwest Healthcare Properties that has already filed with regulators.

There are a couple of interesting tidbits about Transglobe throughout the article, including: “It’s not clear whether all of its buildings would be included because some of its properties may have too much leverage to be palatable for a REIT.” 

This has caused some people to say:

“We will sit down and listen to the story and see what happens, but these really are not of the quality I am looking for,” said Sandy McIntyre, chief investment officer of Sentry Select, about the current deals on the table. BPO Properties is another story. “I’d rather see a big industrial portfolio or office portfolio come forward. The BPO conversation could be used as an opportunity by Brookfield to sell down its position.”

Looking at why we’re seeing these offerings come to market now, and why the public will likely show alot of interest in them:

As it stands now the S&P/TSX 60 has no real-estate companies, something Mr. McIntyre figures could change.

“As we go into the next decade, real estate with yield is going to be a beneficiary.”

For now, the sector will have to be happy with some mid-priced initial public offerings.

The NorthWest deal, which includes 45 health care-related buildings, has been priced to yield 7.25% to 8.25%.

LeisureWorld is being priced in the 8%-to-9% range. Investment banking sources say both deals are attracting plenty of interest.

It’s not hard to understand why there would be demand for REIT product, when you consider the dearth of IPOs. Crombie REIT was the last TSX offering, in early 2006.

…

“I think real-estate investment trusts proved their worth in this dry spell. They kept their vacancy rates [low] and most of them continued their distribution,” said John O’Bryan, vice-chairman of CB Richard Ellis.

Also in the news:Tim Horton’s is renovating and expanding many of its stores, as well as adding new-format locations:

The iconic Ontario-based company known for its coffee, doughnuts and light meals says it expects 900 new stores of various formats by 2013.

They would include 600 stores in Canada where Tim Hortons already has more than 3,000 locations under its banner.

Up to 60 locations in Canada will be converted to include the Cold Stone Creamery concept in partnership with an American ice cream chain.

The restaurant operator says it plans to spend $180 million to $200 million this year to support its growth initiatives.

That’s a pretty big investment in commercial real estate infrastructure!

If you have questions or comments on the commercial real estate market, leave a comment below, or email me at Benjamin@BenjaminBach.com, or call me now at 519-772-4376

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– a client who wanted to invest in a condo this weekend (2nd unit in this complex that sold inside 3 days too)

Homes and condo’s are moving very quickly in KW these days – our clients are involved in a multiple offer situations fairly regularly on smaller properties (condos, 5 bedroom student rental houses etc), and we’re even seeing multiple offers on apartment buildings that are in good shape, well rented and fairly priced.

So far in 2010, 56 homes have sold in 3 days on market or less, 144 residential properties have sold in less than 7 days, and 357 have sold in inside of two weeks (note: these Days on Market times include days where the property was tied up with a conditional offer, and due diligence periods).

That means over 32% of homes sold in 2010 were listed on the MLS for less than 14 days (note: a small % of these homes may have been relisted)

The Record has some more insight:

It appears that homebuyers are trying to get a jump on the Harmonized Sales Tax (HST), which goes into effect July 1 and will boost the cost of buying a home. But the biggest factor sparking the surge in sales is historically low interest rates, said Ted Scharf, president of the Kitchener-Waterloo board.

“Consumers are taking advantage of current interest rates now before they are predicted to rise this summer,” Scharf said in a news release.

The Bank of Canada plans to keep the key bank rate at 0.25 per cent through June. However, in the wake of a report Monday that the Canadian economy is growing more rapidly than forecasted, economists say borrowing rates may increase sooner and rise more aggressively than had been expected.

With the strong sales, there was another double-digit increase in prices last month. The average sale price in Kitchener and Waterloo rose 12.2 per cent to $276,891; in Cambridge, it rose 14.3 per cent to $280,996.

Strong demand for homes in higher prices ranges contributed to the increases. For example, in Kitchener and Waterloo there were 75 sales in the $300,000 to $350,000 price range, an increase of 150 per cent from a year earlier.

Leave me a comment below with any questions, and please contact me for more information at 519-772-4376 or via email at Benjamin@BenjaminBach.com

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3 properties on Bricker Avenue, directly across from Wilfrid Laurier University (WLU) sold for $8,450,000. There were 143 beds in the 3 properties, and per room revenues were lower than other comparably located properties.

A duplex on Hickory Street , very close to WLU, just sold at $630,000, after being on the market for 30 days.  The property is licenced for 10 students.

A 10 bedroom licenced lodging home on Regina sold for $550,000

Two detached 5 bedroom homes recently sold, both for above their asking prices. One sold at $333,500, the other traded at $336,000, 11K above the list price.  A client offered on one of these, but we felt the properties were not worth the above list price premium being paid.  You have to know when to walk away!

A few licenced condo units have sold recently. One traded at $228,000, another at $186,000

If you have any questions about how you can start investing in student housing, email me at Benjamin@BenjaminBach.com or call me at 519-772-4376

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We’re seeing some properties selling for $10,000+ above list price in multiple offer situations; 

There are units and buildings available that are good real estate investors, ranging from $125,000 to several million dollars.  Contact me for full details, and a cash flow & return on investment analysis

If you are looking to buy, sell or invest, send me an email or give me a call.

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During a closed-door meeting councillors gave their final authorization to staff for an agreement between the City of Kitchener and Brampton-based Andrin Homes for the redevelopment of Centre Block with 385 condominiums, four new buildings, underground parking, a boutique hotel-spa and a parkette.

“It has been a long time coming, obviously,” Mayor Carl Zehr said.

By 2000 the city had purchased almost all of the properties and buildings that wrapped around the western half of the block, which is bounded by King, Young, Duke and Ontario streets. So far the city has spent about $13 million on all of the costs associated with buying the land, buildings and businesses.

Andrin gets the 2.6 acre site and two heritage buildings for $3.1 million.

Many people wonder how the city got into the land assembly business.  Turns out, it’s an interesting story…

[Carl Zehr] has held the mayor’s chair for 13 years and Centre Block has been an issue for at least 10 of those years. Looking back on it now, Zehr said the city never wanted to get into the business of assembling the land and attracting a developer.

It started when someone called Zehr saying a cinema for porno flicks was about to open on the second floor of a building along the King Street stretch of Centre Block. City councillors quickly rezoned the land to prevent that from happening, and the owner sued. The settlement had the city buy the building and compensate the owner for the loss of his business.

He said the entire council deserves credit for taking the long-term view of Centre Block.

Under the terms of the development agreement, Andrin must take out building permits for the first phase by Nov. 30, 2012. The first phase includes an underground-parking garage, a condo building with about 240 units and a three storey building. Those buildings will be on King Street.

The second phase calls for another condo building, with about 140 units, at the corner of Young and Duke streets with another building that wraps around that section of the block.

The third and final phase includes the development of the Mayfair Hotel into a boutique hotel-spa. The city, development and some downtown property owners are looking for ways to advance the redevelopment of that corner.

…

The cost of the entire development is estimated at $95 million. Regier credits the city’s work to attract the University of Waterloo school of pharmacy and the Wilfrid Laurier University faculty of social work to downtown Kitchener in helping to secure Andrin as a developer for Centre Block.

“I think things are coming together right now, the real estate market in this region remains strong and people are excited about the downtown,” he said.

The city and the developer are hoping to repeat earlier successes with downtown condos. Andrin redeveloped the old Kaufman factory on King Street West into condos that sold quickly. Lofts on Mansion and the condos at the Kitchener Market also proved popular.

Are you excited for this development to come to downtown Kitchener?  Do you think it will be a great place to live? 

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