WHEN COVID HITS IN A RESOURCEBASED ECONOMY: THE ALBERTA CONUNDRUM

Dave Young Executive Vice President & Managing Director CBRE Limited While businesses across Alberta have taken a hit from the pandemic, companies across the province begin to focus on what will happen afterwards in an economy largely sustained by the energy sector. There’s no question the virus has exacerbated the situation, says Dave Young, Executive Vice President & Managing Director of the CBRE Edmonton office. Once companies are no longer artificially propped up by wage subsidies and rent relief, he predicts an inevitable fall-out. “One of our concerns is under-capitalized companies with mortgage renewals coming up in the next couple of quarters where an equity infusion may be required,” says Young. “If those companies don't have the capital and their revenues are off, what do they do?” Meanwhile, logistics and distribution industrial properties will emerge as the winners post-COVID – from both a tenancy and investor perspective. “Industrial properties that are focused on distribution will be the asset class of choice, followed by the multi-family market,” says Young. “While there will be short-term cash flow issues on the multi-family side, long-term, the apartment sector is a very defensive asset and we still need housing regardless of what market we're in. “In Alberta, the one challenge we are hearing from our investor clients is the lack

of growth. With rents flat for at least the near term, we’re still trying to determine how that impacts yields and value.” While Young predicts more people will be working remotely because it’s worked so well during the pandemic, he questions how employees will be onboarded in the future. “How do you create a corporate culture where the best and the brightest want to work for you? Social interaction is important and young professionals are yearning for that office environment,” he says. “Edmonton's different than Toronto or Vancouver, as we're fairly spread out. But there is that concern of how to get to work. Without a vaccine, will people feel comfortable taking public transit to work? Do we have enough PPEs and hand sanitizer on hand? How will social distancing and WFH implications impact the amount of office space a company needs? “There’s a whole bunch of new business parameters that everybody's learning on the fly.”

On a personal note...

I'm very regimented in what I do. I get up at the same time, I have the same schedule, and keeping focused on that routine has really helped. I'm also lucky that I’ve got family at home. My wife's here and my daughter's back from school, so it wasn't like I was on my own, not seeing anybody.”