MONTRÉAL COVID WILL BRING CHANGE, GOOD & BAD, BUT REMEMBER THE CITY ENTERED THIS ON A HIGH NOTE

Roger Plamondon President, Real Estate Broccolini

Looking at the real estate market today, it’s like we’re frozen in space. No transactions are happening. No one can truly assess the value of an asset right now because nobody knows.

In my own business, we remain confident and bullish on the industrial sector, which happens to be among the first where governments are allowing people to return to work. Governments, both federal and provincial, have certainly voiced that they want to bring manufacturing back home. As for the state of the office sector, it will depend on people’s ability to return to work. How the Canadian economy will look when we come out of the COVID-19 pandemic will depend on one question that looms large: how many people will have lost their jobs, and for how long? If unemployment stays anywhere near the record levels that it’s at today, in the coming year government will be under an incredible amount of pressure to try and get those people back into the workplace. As a result, we can likely expect a drastic drop in immigration numbers – a sobering thought given that immigration has been the big motor driving the housing sector.

As everyone waits to see what will happen next, pension plans are weighing the value of their portfolios. Some may be trying to rebalance their assets. Will there be “prior sales” or “distressed sales” in the marketplace? What will happen to interest rates?

One thing that seems clear is that GoCs are quite low, but spreads are higher. If GoCs go up, spreads may come down, so perhaps the rates will stay somewhat stable for a while. It’s impossible to know for sure.

We at Broccolini have been in contact with trade associations and are trying to relay the message to governments that measures that were in place pre-COVID will be somewhat different post-COVID. Regarding laws that would have been coming into place now, we are asking governments if they could put those on pause, defer, and see if we can adjust later. www.realestateforums.com This is a good time to review important documents. Some of us might find that our construction contracts, insurance policies and leases already contain pandemic clauses as a result of Ebola or other pandemics, but some will not. What is on your quarantine bedside reading list? If there is a silver lining, it is this: There are always some great things that come out of any pandemic. The sewer systems and sanitary conditions enjoyed by recent generations throughout the developed world are the direct result of past pandemics. Expect an even cleaner future after this one. One more saving grace today is technology. It has not only softened the blow of physical distancing in these trying times, but could also contribute to innovative solutions. Case in point, this Real Estate Forum which, though it looks and feels nothing like past events, offers the essential elements of sharing information and ideas, broadening horizons, and some much-needed hope, inspiration and connection with peers.

On a personal note...

My wife has been keeping me sane. She is an amazing person. Also, I’ve never eaten as well as I am now. There is breakfast, a 10:00am break, lunch, a 3:00pm break, supper... and I even get delivery, right to my office!

On a more serious note, we have one daughter who works for the federal government in Ottawa and is an acute asthmatic. While following everything that’s going on, I’ve been feeding her every piece I find of interest that may help her, to make sure that in her work environment she can then voice that health measures have to be put into place. We certainly don’t want to risk her catching the disease.

Finally, my motorcycles have been like a godsend. In the initial part of the confinement, it was cold outside, you didn’t really feel like going out, so it wasn’t that bad. As time wears on and now it’s nice and sunny, I can hop on the motorcycle or on the electric bike or go for a run. I’m not contributing to the greenhouse effect – speaking of which, the views downtown are amazing. Everything is clean and crisp. That’s a positive.

■ Michelle Morra