CAM November 2019

Page 1

Apartment CANADIAN

VOLUME 16 / NUMBER 5 / NOVEMBER 2019

SMART ENERGY MANAGEMENT IMPROVING BUILDING PERFORMANCE THROUGH ARTIFICIAL INTELLIGENCE

plus

TECH TRENDS

MARKET PM#40063056

WATCH

RENTAL NEWS

PA R T O F T H E

SHOW ’20 June 10 & 11, 2020 P A R T

O F

T H E


Coast to coast commercial expertise

Canada’s Real Estate Finance Experts Founded in 1974, CMLS Financial is one of Canada’s largest independently owned mortgage services companies with offices across the country. Some of Canada’s most respected banks, investment managers, insurance companies and pension funds rely on CMLS Financial for a variety of critically important mortgage services. Consult with a CMLS Financial Real Estate Finance Expert and see how our competitive rates and range of solutions can be put to work to meet your commercial financing needs.

Customer Forward Thinking.™

1.866.426.2657 | cmls.ca


STABILITY AND BALANCE

AT THE TOP!

As a sister company to ACE Painting, Cranfield General Contracting was formed in 2004 to further meet the remodeling demands of all our clients. Delivering superior quality and cutting edge solutions Cranfield provides major renovation services to include interior, exterior, in suite and common area upgrades.

UPGRADES | ELECTRICAL PLUMBING | MILLWORK

W W W. A C E G R O U P G TA . C A

ACE

GROUP OF COMPANIES

ACE

GROUP OF COMPANIES


EDITOR’S NOTE>>

Apartment CANADIAN

MODERNIZING THE INDUSTRY

/cammediaedge /cdnapartmentmag /mediaedgecam

Like it or not, technology is changing everything. Whether it’s contending with home sharing sites like Airbnb, Machine Learning to identify patterns in operational data, or introducing chatbots to simulate human conversation, the real estate sector is buzzing with new challenges and opportunities, most of which didn’t exist ten years ago. In this issue of Canadian Apartment, we look at some of the latest trends in proptech—specifically at AI-driven Energy Maintenance Platforms (EMPs). As technology advances and smart systems become more viable for property owners looking to conserve energy, even our boiler rooms are modernizing at a startling rate. Artificial Intelligence is making it possible to collect data about a building’s energy use and learn from it, helping to identify and address opportunities for improved efficiency. Even the most skeptical of building owners would be hard-pressed to argue against an investment like that. Also in this issue, we look at some of the latest apartment transactions and new developments adding much-needed supply to our cities. Housing affordability is a subject near and dear to our hearts, and now with the federal election behind us, it will surely be a topic worth following even closer. Please feel free to reach out via Twitter, LinkedIn or Facebook if you have thoughts, comments or industry insights to share. In the meantime, we hope you enjoy this issue, and wish you nothing but warmth in the cold months ahead.

Editor

Erin Ruddy

Senior Designer

Annette Carlucci

Production Manager

Rachel Selbie

Contributing Writers

Brad Pilgrim Barbara Carss Jiri Skopek Chris Seepe Graeme Huycke Andy Schwartze

National Sales

Kelly Nicholls Melissa Valentini

Digital Media Director Steven Chester Circulation

Anthony Campbell For sales information call (416) 512-8186

Canadian Apartment Magazine is published six times a year by:

5255 Yonge St., Suite 1000, Toronto, Ontario M2N 6P4 E-mail: info@mediaedge.ca

President Kevin Brown Group Publisher Sean Foley Copyright 2019 Canada Post Canadian Publications Mail Sales Product Agreement No. 40063056 ISSN 1712-140X Circulation 416-516-8186 ext. 234 circulation@mediaedge.ca

Sincerely,

Subscription Rates: Canada: 1 year, $50*, 2 years, $90*, US $75 International $100, Single Copy Sales: Canada: $12* * Plus applicable taxes Requests for permission to reprint any portion of this magazine should be sent to Erin Ruddy.

Erin Ruddy @CdnAptEditor

Authors: Canadian Apartment Magazine accepts unsolicited query letters and article suggestions.

rent trends

Manufacturers: Those wishing to have their products reviewed should contact the publisher or send information to the attention of the editor. The opinions expressed are those of the authors of articles and do not necessarily reflect the views of Canadian Apartment Magazine. This information is general and is not a substitute for legal advice.

2019 GLOBAL DIGITAL OVERVIEW

source: www.datareportal.com

Sworn Statement of Circulation: Available from the publisher upon written request. Although Canadian Apartment Magazine makes every effort to ensure the accuracy of the information published, we cannot be held liable for any errors or omissions, however caused. Printed in Canada.

TOTAL POPULATION

UNIQUE MOBILE USERS

INTERNET USERS

ACTIVE SOCIAL MEDIA USERS

MOBILE SOCIAL MEDIA USERS

7.676

5.112

4.388

3.484

3.256

URBANISATION

PENETRATION

PENETRATION

PENETRATION

PENETRATION

56%

67%

57%

45%

42%

BILLION

BILLION

BILLION

BILLION

BILLION


Our Business is to Make Yours Shine! Whiterose is an Industry Leader with a long list of condos in the downtown and surrounding areas Whiterose Janitorial Services Ltd. believes in servicing its customers with professionalism, communication and appreciation. The Key to our success is service, quality and value. We clean beyond the surface! Quality management begins behind the scenes prior to commencing a job all employees are evaluated and or training to the whiterose standard given special attention to health and safety policies. Whiterose Janitorial Services is a full service company and a member of ACMO and CCI. Specializing in cleaning and live in & live out Superintendents for the past 30 years. Spectrum of Cleaning Services: • Facility assessment • House keeping and general cleaning services • Customized cleaning service plan • Customized cleaning schedules • Window cleaning (Exterior high rise) • Garage cleaning • Marble restoration & Polishing • Carpet cleaning

Visit our website or call us today for your no-obligation quote! WhiteroseJanitorial.com 1-877-253-3648 / 416-850-9676

Spectrum of Superintendent Services: • Building audit • Check Hvac • Perform generator tests • Cooling towers • Chillers • Compressors • Sprinkler system • Fire pump • Hot water tanks • Booster pump • On call 24/7 for emergencies

COMMITTED TO EXCELLENCE SINCE 1986


Apartment CANADIAN

VOLUME 16 / NUMBER 5 / NOVEMBER 2019

FEATURE 14 A lberta Won’t Rescue Energy Efficiency Programs Provincial budget confirms no new source of funding forthcoming by Barbara Carss

COLUMNS 8 Transactions Apartment Market Outlook 10 CMHC A Look Ahead by Graeme Huycke 22 Newsworthy Industry Hot Topics 26 Maintenance Smart Transitions by Jiri Slovek 28 Insurance The Damage Continues by Andy Schwartze 32 P erspective The Landlord and Tenant Board by Chris Seepe

COVER STORY

DEPARTMENTS

18 Increasing Energy Efficiency Plugging into AI-driven Energy Management platforms by Brad Pilgrim

4

Apartment CANADIAN

Editor’s Note

ON THE COVER:

VOLUME 16 / NUMBER 5 / NOVEMBER/DECEMBER 2019

Appartements-Boutique in Montreal, photo courtesy of BentallGreenOak

SMART ENERGY MANAGEMENT IMPROVING BUILDING PERFORMANCE THROUGH

34 Smart Ideas

ARTIFICIAL INTELLIGENCE

plus

TECH TRENDS

MARKET PM#40063056

WATCH

PA R T O F T H E

PA R T O F T H E

SHOW ’20 June 10 & 11, 2020 P A R T

O F

T H E

P A R T

O F

T H E

RENTAL NEWS

upcoming industry events DEC 4, 2019

DEC 5, 2019

JUNE 8, 2020

THE BUILDINGS SHOW Metro Toronto Convention Centre

MAC AWARDS GALA Metro Toronto Convention Centre

RENTAL HOUSING CONFERENCE Westin Nova Scotian, Halifax


Over 25 Years’ Experience in Renovating Apartments and Condominiums

COMMERCIAL • INDUSTRIAL • RESIDENTIAL • INSTITUTIONAL General Renovations

Kitchen Renovations

Painting

Cleaning of Units

Plumbing*

Flooring

Bathroom Renovations

Electrical*

Fire and Flood Restoration

Custom Cabinetry

Drywall and Crown Molding

Fencing

* Use a Licenced Plumber and Licenced Electrician (ESA)

91 Pippin Road, Concord, ON L4K 4J9 Tel: 905-660-2353 / 905-669-8888 Toll Free: 1-888-660-2353 Fax: 905-660-8390 / 1-888-660-8390 sales@multitech2000.com

www.multitech2000.com

Municipal Licence No. T85-4186258


Apartment Market Outlook As 2019 winds to a close, rental demand continues to outpace supply The mature phase of Canada’s multi-suite residential rental sector cycle continues to unfold, punctuated by strong fundamentals and continued rent growth. Rental demand remains high, driven by a healthy labour market, moderate economic growth, demographic trends and above average immigration. “Investors have been rewarded with stable occupancy, rental growth and rising values,” said Morguard’s Keith Reading. “Investment returns have been strong at 11.7 per cent over a 12-month period ending June 30th. Cap rates have

gradually compressed and competition for investment grade properties is fierce.” Looking ahead, Reading says the sector will continue to outperform. Rents will steadily rise, despite the introduction of increased new supply. Tenants will be hard-pressed to find available units to rent in most of the country’s major urban centres.

RECENT Transactions: Address

City

#of Units

Sale Price (Millions)

Sale Price/Unit

Purchaser

1.

Wyndwood Apartments

Vancouver

29

$11.5

$396,552

Starlight Investments

2.

5160 Gatineau Ave

Montreal

54

$10.8

$200,000

InterRent REIT

3.

85 & 95 Gamble Ave

Toronto

175

$59.9

$342,357

Q Residential

4.

Surrey Gardens

Vancouver

223

$43.5

$195,067

Primex Investments

5.

380 Gibb St

Oshawa

132

$33.2

$251,515

Starlight Investments

6.

18 Steeles Ave E

Toronto

91

$27.8

$304,945

Starlight Investments

8 | Canadian Apartment | Part of the REMI Network |


TRANSACTIONS >>

Surrey Gardens In October, Colliers International announced it had completed the sale of the Surrey Gardens Apartment Portfolio, a 5.9 acre property comprised of three rental buildings and an 11,000 square foot retail strip. After running a competitive bid process that achieved 10 bona fide offers from local private Investors, foreign investors and REITs within one month, the winning bid (by Primex Investments) was negotiated. According to Colliers, the transaction represents an acquisition of a 100% freehold interest in one of Metro Vancouver’s largest multifamily transactions ever in Surrey.

October: a busy month for Starlight The month of October was a busy one for the team at Starlight Investments. Along with the completion of several apartment acquisitions, the company also received approval to proceed with plans on a new purpose-built rental building located in Barrie, Ontario. The proposed 11-storey Barrie development will be in addition to an existing 11-storey building located at 37 Johnson Street. When complete, the new building will offer 215 residential suites of varying sizes and feature an array of amenities. Located in a vibrant neighbourhood and steps from Simcoe Plaza, the property is in close proximity to the shoreline allowing tenants easy access to Johnson’s Beach, Shoreview Park, Nelson Park and Parkview Community Centre. Meanwhile, on October 28, the company announced it had successfully completed the construction of Park Village Townhomes. An in-fill project comprised of 96 one- and twolevel stacked townhomes located in Burlington, Ontario, the new development complements Starlight’s existing rental community located at 2067-2077 Prospect Street. In terms of October acquisitions, Starlight has added the following properties to its portfolio: four multi-residential concrete buildings located at 500 – 560 Proudfoot Lane in London, Ontario; a 132-unit concrete multi-residential building located at 380 Gibb Street in Oshawa, Ontario; a multi-residential building located at 155 19th Street East in North Vancouver, B.C.; and a multi-residential building located at 1205 Rudlin Street in Victoria. The busy month kicked off on October 1st with the purchase of a multi-residential building, located at 1110 Caven Street in Mississauga, Ontario. “This acquisition further enhances Starlight’s portfolio in the city of Mississauga,” said Daniel Drimmer, Starlight’s President and Chief Executive Officer, at the time of the purchase. “Our strategy remains to strengthen our rental offering in the Greater Toronto Area with well-positioned assets in sought-after neighbourhoods.”

MOBILE FRIENDLY

| www.REMInetwork.com | November 2019 | 9


CMHC REPORT >>

A LOOK AHEAD Insights from CMHC’s 2020 Housing Market Outlook CMHC`s national housing outlook calls for both multi-unit and single detached housing starts to stabilize over the next two years following two years of declines. The report also forecasts that income and population growth will support a rebound in home sales and prices. “Housing starts are projected to stabilize in 2020 and 2021 at levels in line with long-run averages,” said Bob Dugan, CMHC’s Chief Economist. “This follows two years of declines from elevated levels in 2017. Resale activity and house prices are expected to fully recover from recent declines.” Housing starts to stabilize in 2020 and 2021 Housing starts are expected to register a second consecutive annual decline in 2019 before stabilizing in 2020 and 2021. Starts for singledetached and multi-unit housing types will remain below the peaks observed in 2017 (for single-detached starts) and 2018 (for multi-unit starts). This will reflect a balance between off-setting economic and 10 | Canadian Apartment | Part of the REMI Network |

demographic developments. In particular, GDP growth is expected to soften in 2019 but to recover at or above its potential pace in 2020-2021. However, the support to new residential construction from the expected improvement in economic activity and incomes will be offset by the projected slowing in household formation over the forecast horizon. Mortgage rates are predicted to gradually increase over this horizon, but will remain at low levels. Consequently, their expected contribution to our housing outlook is negligible. Home sales to strengthen Existing home sales are forecast to stay near their 2018 level in 2019,


CMHC REPORT >>

below the historical peak observed in 2016. However, home sales will increase in 2020 and 2021, offsetting the declines observed since 2016 by the end of the forecast horizon. This reflects expectations of household disposable income growth. The average MLS price is expected to decline for a second consecutive year in 2019 from the recent high registered in 2017. However, positive price growth is expected to resume in 2020 and 2021, driving the average price above its 2017 level by the end of the forecast horizon. This is expected to reflect household disposable income growth and rates of household formation that will remain supportive of price growth despite moderating from higher rates in recent years. Over the forecast period, favourable economic and demographic conditions in British Columbia will support relatively strong growth in housing starts in the province when compared to other regions, while Ontario and the Prairies will see growth in starts, but at levels below recent years. Housing starts in Quebec and the Atlantic region are expected to trend lower over the forecast horizon, reflecting moderating demographic conditions. Existing home market With respect to the existing home market, Ontario and British Columbia’s outlook for sales growth is relatively strong in 2020 and 2021 when compared to other regions, consistent with growth in real disposable income that is forecast to exceed the national average over this time period. Ontario will also lead price growth in 2020 and 2021, with Quebec also showing relatively strong price gains in both years. British Columbia will see modest recovery in price growth in 2020 from a decline in 2019, but rise to the second highest rate of price growth after Ontario in 2021. Other regions will generally see modest gains over the forecast horizon in comparison to Ontario, Quebec and British Columbia. Recent measures of overvaluation for the major markets of Vancouver and Toronto as well as for those in their vicinity indicate a general easing of vulnerabilities, as prices have been gradually aligning more with fundamentals in recent quarters. The current outlook for renewed growth in home prices over the forecast horizon does not imply that overvaluation and/or price acceleration measures will necessarily worsen, since growth in fundamentals over the same time period can be sufficient to support stronger resale market activity and price growth. Amongst the risks to our outlook, we continue to see vulnerabilities related to international trade tensions. Global trade tensions have continued to rise and impact business and investor confidence, tempering economic conditions and increasing the risk of slower

economic and housing market activity. In addition, high household indebtedness remains a vulnerability because it increases the risk of economic and housing market instability. For example, if interest rates or unemployment were to rise more than expected, heavily indebted households could face greater budgetary constraints, leading to downward pressure on the economy and housing activity.

REGIONAL OUTLOOK: Vancouver Housing starts in Vancouver trended lower in October 2019 compared to October 2018, driven by a 15 per cent decline in the multiunits sector. However, the year-to-date multi-units starts, mostly concentrated in the City of Vancouver and the City of Surrey, was up 31 per cent compared to the same period last year, contributing to an increase of total starts between 2018 and 2019. Kelowna Housing starts in the Kelowna CMA were up significantly in October, relative to the same month last year, as some new large multiunit projects got underway. In particular, a large number of rental apartment units got underway representing 73 per cent of the overall number of multi-unit starts in the month of October. The number of rental units that have gotten underway in October represents the first meaningful increase in rental housing starts in over a year. Edmonton Total housing starts increased in Edmonton in October 2019 as multifamily unit construction more than doubled compared to the same month last year. This increased occurred across all multifamily housing types, with the largest increase occurring in apartment units. Year-to-date, new housing construction continues to increase, despite elevated inventory levels. | www.REMInetwork.com | November 2019 | 11


CMHC REPORT >>

“PEI housing starts were 146 per cent higher this October compared to October 2018. This is due to the ongoing surge in new apartment construction in response to the island’s near zero vacancy rate.” Regina Total housing starts in Regina trended higher in October after builders increased the pace of single-detached construction. Despite the increase in the six-month trend, actual residential starts have declined by 57 per cent, year-to-date, from the same period in 2018. The reduction is due to a number of factors including elevated new housing inventory, moderate economic conditions, higher construction costs and weaker new home demand.

Toronto Total housing starts trended slightly lower in October due to lower multi-unit home starts. Strong pre-construction sales of condominium apartments over the past two years continue to break ground at a varying pace throughout this year. Pre-construction sales of single-detached homes trended higher towards the latter half of 2018 and these units have started to break ground over the past several months, thus reflected by their higher trending starts.

Thunder Bay The trend for overall housing starts in the Thunder Bay CMA increased considerably in October due almost entirely to an increase in the trend for apartment starts. Notably, the trend measure for apartment starts reached its highest level in nearly two years due to October rental apartment construction. Supporting this increase has been growth in the population aged 65 and over, the fastest growing segment of the population, and a group with a relatively high propensity to rent.

Hamilton In Hamilton, overall housing starts trended up due to greater activity in both single-detached and multi-unit homes. The increase in the latter was mostly the result of a higher number of apartment starts over the past six months. A shift in homeownership demand towards lower priced homes and persistently strong rental demand have both supported the high level of apartment construction in Hamilton. Gatineau In October 2019, housing starts in the Gatineau region reached their highest level in almost 50 years, reinforcing the significant growth observed since the beginning of the year. This significant gain is mainly attributable to the increase in housing starts destined for the rental market. The aging of the population and the low vacancy rate continue to stimulate rental housing starts in the Gatineau region. Sherbrooke Since the beginning of the year, residential construction activity has been particularly strong in the Sherbrooke CMA. From January to October 2019, housing starts recorded in the region increased by 44 per cent over the same period last year. The increase in activity comes mainly from the rental segment, with the launch of traditional rental housing projects and residences for seniors. Overall, residential construction in the region continues to be supported by rising full-time employment, migration and an aging population.

VISIT US AT

Prince Edward Island (PEI) PEI housing starts were 146 per cent higher this October compared to October 2018. This is due to the ongoing surge in new apartment construction activity in response to the island’s near zero vacancy rate and affordable rental needs. So far this year, starts are 68 per cent higher than 2018. This trend reflects primarily increased capital project spending and solid growth in population, income and employment. CONTACT Michael Gnat Phone: 416-635-4835 Email: mgnat@midnorthern.com

12 | Canadian Apartment | Part of the REMI Network |

As Canada’s authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry.


ASPHALT PAVING CONCRETE PAVING LANDSCAPE CONSTRUCTION BUILDING RESTORATION WINTER SNOW SERVICES INTERLOCKING STONE SITE SERVICING

diversified construction 24 hour emergency service 416.524.3000 Email: estimating@forestgroup.ca

forestgroup.ca


FEATURE >>

Alberta won’t rescue energy efficiency programs Provincial budget confirms no new source of funding forthcoming by Barbara Carss

14 | Canadian Apartment | Part of the REMI Network |


FEATURE >>

It’s hard to miss Energy Efficiency Alberta’s message in the wake of the recent cancellation of provincially funded energy efficiency programs. The move concludes the process begun five months ago when the newly elected United Conservative Party (UCP) government repealed the carbon tax and eliminated the funding source for the incentives, but the provincial agency stressed a critical qualifier as it delivered the news. “Rebate programs now closed; Energy-saving opportunities still available,” proclaims the announcement, released after the Alberta budget was tabled on October 24.

F

or some landlords and facility managers with projects in progress, the dictum comes with tighter deadlines for finishing the work or, for those who have hired an on-site energy manager, a diminished subsidy that will cover only one year of his or her salary. Meanwhile, energy efficiency advocates remain hopeful that the savings realized since incentives for residential households, businesses and not-for-profit organizations became available in mid-2017 will help sustain burgeoning momentum in a province that was one of the last jurisdictions in North America to introduce such programs. “Our continued focus will be to deliver excellent service to Albertans with approved applications and work toward the designing of new programming,” Energy Efficiency Alberta states. “We’re excited about the province’s energy efficiency potential.” That said, the agency’s response to presumed Frequently Asked Questions arising from the shutdown, notes: “New energy efficiency programs for the commercial and industrial sectors have not been confirmed.” Focus switches to carbon capture technologies The Alberta budget reiterates the government’s previously announced intention to focus greenhouse gas (GHG) reduction spending on carbon capture and technologies that can be directly applied in the production of fossil fuels. Research and development initiatives will be supported via the Technology Innovation and Emissions Reduction (TIER) fund, drawn from levies charged to large industrial emitters with an output of more than 100,000 tonnes of carbon dioxide equivalent (CO2e) annually. “Between 2000 and 2017, the emission intensity of oil sands operations has dropped by 28 per cent. This is the result of made-inAlberta technologies and is a real outcome

in the effort to reduce global emissions,” Alberta Minister of Finance Travis Toews stated, as he introduced the budget. “TIER builds on this success and keeps the focus on large industrial emitters responsible for half (estimated elsewhere in the budget at 48 per cent) of the emissions in Alberta.” While also offering incentives aimed at curbing the energy intensity of industrial and resource extraction processes, Energy Efficiency Alberta’s distinct but compatible mandate targeted the other 52 per cent. The agency’s 2018-19 annual report, released earlier this year, estimates programs have thus far generated $692 million in energy savings, stimulated $850 million worth of economic growth and resulted in avoidance of 5.7 million tonnes of GHG emissions.

smart building analytics firm, Energy Profiles Limited. “I think the appetite was even better than was initially anticipated.” Deadlines for in-progress projects Now the final slate of proponents, preapproved in late April, must submit proof the work has been completed no later than October 31 in order to claim the rebate. That aligns with the six-month timeline that has always been in the program’s rules. “This deadline had previously been communicated with all Business Energy Savings participants and represents the natural end of their pre-approval. It was posted on the website as a reminder,” affirms Ameera Shivji, manager of media and public relations with Energy Efficiency Alberta.

“Our continued focus will be to deliver excellent service to Albertans with approved applications and work toward the designing of new programming.” - Energy Efficiency Alberta

Landlords, facility managers and condominium corporations have made most use of the Business Energy Savings program, which provides up to $25,000 per building annually for the installation of designated energy-efficient products, including lighting, lighting controls, HVAC and domestic hot water equipment and load-sensing plug strips. “When the incentives were first rolled out, there was such pent-up demand in the market, even for something as simple as light bulb retrofits, because Alberta had really lagged on this front,” says Graham Halsall, Calgary-based manager for the

A smaller number of commercial and multifamily building owners/managers along with facility managers in the health care and education sectors are navigating the shutdown of the Custom Energy Solutions program, which was introduced later in 2018. Some members of that group now face a November 23 cut-off for completing engineering studies, scoping audits and re/ retro-commissioning (RCx) investigations required as a first step for pre-approval. Those already at the next step will have one year from their pre-approval date to submit proof of project completion in order to claim the incentive. | www.REMInetwork.com | November 2019 | 15


FEATURE >>

Although more complicated to undertake, custom programs came with a cash injection powerful enough to influence capital spending decisions. Commercial real estate operators, typically falling into the category of emitters producing less than 10,000 tonnes of CO2e annually, could secure up to $250,000 per year for upgrades in a single building or up to $500,000 for upgrades in multiple buildings, based

on a dollars per resulting tonne of GHG avoidance formula. Larger emitters (10,000+ tonnes CO2e annually) could obtain up to $1 million for a single facility or up to $2 million for multiple facilities. Energy management specialists commend the program’s intent — suggesting that it’s in sync with the evolution of strategies elsewhere, which typically begin with measures to capture relatively

ARE YOU CONTEMPLATING THE SALE OF YOUR APARTMENT PROPERTY? Consider the following: • Who will represent your best interest? • Who will give your property maximum exposure? • Who will deliver the highest value for your property? With over 25 years of experience, tens of thousands of units sold, and hundreds of clients represented, we have consistently delivered superior results. Through our local and national coverage, we create maximum exposure, ensuring maximum value for your property.

33 & 77 Falby Court Ajax, ON 422 Suites - $274,882 Per Suite SOLD FOR $116,000,000*

25 Cougar Court Toronto, ON 236 Suites - $258,475 Per Suite SOLD FOR $61,000,000*

16 Towering Heights Boulevard St Catharines, ON 135 Suites - $222,589 Per Suite SOLD FOR $30,049,508*

55 Forty Second Street Etobicoke, ON 26 Suites - $282,692 Per Suite SOLD FOR $7,350,000 * ADJUSTED FOR CAPITAL EXPENDITURES

CBRE Limited, Real Estate Brokerage National Apartment Group – Toronto DAVID MONTRESSOR** | Executive Vice President (416) 815-2332 | david.montressor@cbre.com ** SALES REPRESENTATIVE

16 | Canadian Apartment | Part of the REMI Network |

Please visit our website: www.cbre.ca/nag-canada

easy energy savings and then must become more sophisticated and capital-intensive in pursuit of more intractable consumption and emissions. Now, with the program halted at its embryonic stages, it’s difficult to gauge its traction in the market. “When the rebate programs were announced, that was a no-brainer. You could do the math and figure out that your payback would go from two-to-three years down to one year. From the more conceptual side of things, like incentives tied to emissions reductions, you don’t yet see that metric on a utility bill,” Halsall reflects. For the proponents who may now be scrambling to make the new deadlines for claiming incentives, Energy Efficiency Alberta suggests they should also consider inherent returns on the investment. “Scoping audits, engineering studies and RCx investigations provide valuable data to companies to support energy efficiency decision-making,” it advises. “We hope that participants see a value for the benefits of the study outside the program and continue to complete the work.” Continued advocacy and guidance The Alberta budget is largely silent about energy efficiency goals, but Schedule 21 in the Fiscal Plan chapter indicates that 34 staff positions at Energy Efficiency Alberta will be retained for 2019-20. In addition to administering in-progress projects, the agency will continue to promote green loan funds and financing schemes. That includes urging municipalities to adopt PACE (property assessed clean energy) financing strategies that provide low-cost loans for energy upgrades that are repaid, incrementally, via a surcharge on property tax bills. It will also continue to offer incentives for technical training and guidance for developing skills and strategies that support energy savings. For now, Albertans who have been thinking about purchasing smart thermostats, energy-efficient clothes washers, refrigerators or furnaces still have a few days to qualify for a rebate. Purchases that occurred by November 7 will be honoured if receipts for the designated eligible products are submitted by December 24, 2019. Barbara Carss is editor-in-chief of Canadian Property Management.


Yes, we can! Since MetCap Living established itself as a leader in property management, we have routinely been asked one, simple question; “Can you help us run our property more effectively?” And, for well over thirty years, the answer has remained — Yes, we can! Our managers are seasoned professionals, experienced in every detail of the day to day operations and maintenance of multi-unit rental properties. From marketing, leasing, finance and accounting, to actual physical, on-site management, we oversee everything. We concentrate on revenue growth, controlling expenses, and strategic capital investment in your property to maximize your profitability over the long term — when you’re ready to discuss a better option; we’ll be there. You can count on it. Kazi Shahnewaz Director, Business Development Office: 416.340.1600 x504 C. 647.887.5676 k.m.shahnewaz@metcap.com

www.metcap.com

| www.REMInetwork.com | November 2019 | 17


INCREASING

EFFICIE

Plugging into AI-driven Energ Management Platforms


COVER STORY >>

NG PROPERTY

ENCY

gy

By Brad Pilgrim, CEO, Parity, Inc

The apartment rental landscape is changing. Utility costs are rising and inflated home ownership costs are driving increased rental demand. As a result, reports suggest apartment rental units are filling up across the country. And while more tenants occupying more units might suggest more profitable investment returns for owners of apartment buildings, the growing costs of utilities is an ongoing challenge to building management bottom lines.

| www.REMInetwork.com | November 2019 | 19


COVER STORY >>

In the coming years, for instance, electrical costs in Canada are forecasted to increase dramatically. A report from the Canadian Gas Association suggests national Canadian energy costs will increase by approximately $580 billion and $1.4 trillion between 2020 and 2050. Inflation like this applies significant pressure on both apartment building owners and their operational budgets. We know that buildings, especially multifamily dwellings, consume a tremendous amount of energy. In fact, all of Canada’s buildings make up approximately 33 per cent of the country’s energy use. We also know that the cost of energy consumption can make up 30 – 40 per cent of an apartment building’s operating budget. This energy (electricity and gas) is primarily consumed by the building’s heating, ventilation and air conditioning (HVAC) equipment. Given the forecasted increases in energy costs, traditional means of managing energy consumption and costs will quickly become unsustainable. This is a staggering amount of a building’s operational budget being consumed by electricity, gas and water. Maintaining profitability will require more efficient energy solutions. When current property management practices intersect with emerging technologies, we have the potential for significant energy savings, improved comfort and enhanced mechanical service response. Property technology Using information technology (IT) to increase property efficiency and tenant engagement is known as property technology— otherwise known as proptech. It’s a new approach to more traditional, manual building operations and tenant engagement methods. In this case, proptech is modernizing apartment building boiler rooms and streamlining manual monitoring of apartment energy use, temperature control and equipment performance.

For both new and tenured property managers, exploring property technology that can help improve building operations financially and mechanically can seem intimidating at first. Where do you start? What is the best investment for your tenants and the age and style of your building? Retrofits are costly, solar panels are a big investment and not practical, and installation of some solutions can potentially be intrusive for tenants. Artificial intelligence (AI) and big data have made their way into many aspects of our lives. Energy management platforms (EMPs) are no different. EMPs attach to existing HVAC equipment, collecting data about a building’s energy use and the AI “learns” about the building, helping to identify and address opportunities for improved efficiency. Even dated boiler rooms and equipment can typically accommodate these smart systems. How do EMPs work? During an initial assessment building experts can identify what energy capacity a property currently has, where inefficiencies exist and, with the correct software implementation and efficiency equations, what opportunities there are for a property to realize energy and energy cost savings in the future. Once the assessment has been completed and reviewed with the apartment building owner, installation can begin. Installation involves attaching smart sensors and controllers to current equipment, all of which requires very little capital investment in comparison to a full equipment retrofit. With new sensors collecting the building’s operational and energy use data, information is sent to the cloud. There, it uses advanced algorithms to calculate the best HVAC settings for the building under various conditions. A lean hardware automation system is all that is needed to carry out dynamic changes that can be generated from the cloud. The changes in the building can typically be undertaken in less than a month with virtually no disruption in building operation.

20 | Canadian Apartment | Part of the REMI Network |


COVER STORY >>

Greater visibility Like anything that’s learning to perform better, a report card on performance can demonstrate areas where there have been significant improvements made. EMPs can produce a monthly savings report that illustrates savings and energy performance. Keeping tabs on building operations manually is both inefficient and impractical. Ensuring management has a pulse on a building’s internal nervous system is key to smoothly operating a contemporary property, ensuring focus can be redirected to more immediate resident needs. Having greater visibility into a building’s energy performance offers managers peace of mind. Improved operational efficiency can also mean an overall better value rating for your property. Assessing the value of your apartment building and measuring it against your current operational budget might reveal how much value can be gained by making smart business investments into technological modifications. As 2020 nears, apartment building owners are faced with revaluating budgets for the upcoming fiscal year, and evaluating what areas of investment are worth time and money. Incorporating smart, AI-driven technology into your future operational plans can help produce better financial returns. Going into 2020 with better savings projections is certainly an attractive way to ring in both a new year and a new approach to efficient energy management. Established in 2016, Parity focuses on using data and AI to reduce the carbon emissions in multi-residential buildings. Visit www.paritygo.com for more info.

Proptech: What’s Next? A new wave of proptech opportunities is upon us, and some experts predict it will disrupt the very foundation of the real estate and residential sectors as we know them. According to PwC, the proptech industry in Canada and the U.S grew from a $4.6 billion (USD) in 2016 to $7.3 billion by 2018—and it only keeps climbing. While the first wave of proptech startups delivered numerous online listing portals (such as Zillow), making it easier for home buyers and renters to search out potential dwellings on their smartphones, the second wave gave us the ability to complete entire sales transactions remotely and without paper. Today, it encompasses all facets of smart building technology, from heating and lighting automation to chatbots and EMPs. Some of proptech’s new and emerging technologies include: Blockchain - an alternative, secure infrastructure for signing contracts, exchanging data, and making monetary transactions related to property maintenance, sales and leasing. In theory, it is not only safe but fast, with the potential for remarkable savings and efficiencies. Blockchain was invented in 2008 as a payment platform for the first digital currency, bitcoin. Artificial Intelligence (AI) – the simulation of human intelligence processes by computer systems. Intelligence Augmentation (IA) – an alternative conceptualization of artificial intelligence that focuses on AI’s assistive role, emphasizing the fact that cognitive technology is designed to enhance human intelligence rather than replace it. Machine Learning (ML) – a method of data analysis that automates analytical model building. It is a branch of artificial intelligence based on the idea that systems can learn from data, identify patterns and make decisions with minimal human intervention. Deep Learning (DL) – a subset of Machine Learning in artificial intelligence that has networks capable of learning unsupervised from data that is unstructured or unlabelled. Big Data Analytics – the complex process of examining large and varied data sets, to uncover information. Computer Vision – an interdisciplinary scientific field that deals with how computers can be made to gain high-level understanding from digital images or videos. The Internet of Things (IoT) – systems and appliances enabled with sensors and assigned their own IP address that connect them to the internet, thus creating a world where devices and machines can communicate with each other.

| www.REMInetwork.com | November 2019 | 21


NEWSWORTHY >>

Industry Hot Topics Kingsett’s 700 Bay St. rental tower rises in Toronto

O

n October 24, representatives from KingSett Capital and PCL Construction gathered to celebrate the completion of 700 Bay’s concrete structure with the workforce that is making the residential addition and renovation a reality. “KingSett, on behalf of our core strategy income fund is delighted to celebrate this important milestone with our construction partners,” said Jon Love, KingSett Capital CEO. “Once completed in June 2020, this work will greatly improve the existing resident experience at 700 Bay and add a further 275 rental suites with the top two floors dedicated to leading amenities including an infinity pool, fitness centre, library, lounge areas, an outdoor patio including a dog park, garden, pavilion, outdoor movie theatre, and green roof.” The multifaceted renovation and expansion project involves a new 32-storey residential apartment tower adjacent to an existing office, retail and residential building, the addition of six new floors above the existing structure, including the two dedicated amenity

22 | Canadian Apartment | Part of the REMI Network |

floors, a new mechanical penthouse, as well as structural upgrades throughout the existing building. The completed project will offer a total of 495 apartment residents premium rental living. “Construction of 700 Bay at Gerrard has required precise methodology to expertly tie renovations into a new tower, while minimizing impact to tenants and properties along Toronto’s hospital row,” said Kelly Wallace, PCL Constructors Canada Inc. (Toronto) vice president and district manager. “PCL is honoured to share this milestone with

our partners, subcontractors, suppliers and over 400 workers who have all played a role in bringing KingSett’s vision for this project to life.” For this project, KingSett and PCL partnered with indus.ai, an innovative construction intelligence platform to enhance construction efficiency. The platform uses video streams and time-lapse images, leveraging the data collected with AI technology to create actionable insights empowering construction professionals to more effectively manage site activity and mitigate costs and schedule risks. With sustainability top of mind, the project is being built to Toronto Green Standard Tier II and is targeting LEED® Platinum certification. The building is tying into the EnWave District Steam Heating and Chilled Water-Cooling system, providing leading-edge energy efficiency. The ground floor retail spaces and original structure are set to be re-clad, and the property will feature new hard and soft landscaping. Occupancy is expected for summer 2020, with the leasing launch coming this spring.


NEWSWORTHY >>

Toronto’s ‘Housing Now’ program officially kicks off

H

ousing Now, an initiative to activate City-owned lands for the development of affordable housing within mixed-income, mixed-use, transit-oriented communities, officially launched phase one of the program in mid-October. The first phase will include the market offering of 11 sites with the potential to create more than 10,000 new residential homes, including approximately 3,700 affordable rental units. “Through Housing Now we have accelerated the City’s efforts to increase the supply of new rental and affordable housing across Toronto,” said Mayor John Tory. “I am proud to see the progress on this first round of Housing Now sites, which will provide quality affordable homes in communities throughout our city.” The City’s real estate agency, CreateTO, announced in early October that it had retained CBRE as the broker of record to support the marketing of the first four Housing Now properties. Selected for their readiness for market and prime locations along transit lines, the sites include: 50 Wilson Heights Boulevard; 705 Warden Avenue; and 777 Victoria Park Avenue, and 140 Merton Street. “This is an exciting milestone in the delivery of the Housing Now Initiative,” said Deputy Mayor Ana Bailão, a member of the CreateTO Board and the City of Toronto’s Housing Advocate. “This program will stimulate the creation of complete communities with a range of new mixed-income housing in close proximity to commercial and employment areas and transit hubs, providing the opportunity for Toronto residents to live in these new mixed-income developments.” Housing Now is just one component of the City of Toronto’s Housing Action Plan intended to spur the development of affordable rental, market rental and ownership housing options throughout the housing-strapped city. As per the CreateTO website, all new affordable rental homes developed through the Housing Now initiative must remain affordable for 99 years, and satisfy the needs of households earning between approximately $21,000 and $52,000 per year. “The opportunity to acquire substantial development land parcels and unlock their development potential on transit-oriented sites in Toronto is exceptionally rare,” said CreateTO CEO Brian Johnston. “Rarer still is the opportunity for developers to participate in an offering process that provides the ability to develop large-scale mixedincome, mixed-use communities while incorporating much-needed affordable housing in Canada’s fastest-growing city.”

BentallGreenOak acquires Montreal property

O

n behalf of Sun Life Assurance Company of Canada, BentallGreenOak announced it has acquired Appartements-Boutique, a purpose-built rental complex situated within walking distance from historic Old Montréal, Griffintown and Montréal’s central business district. Appartements-Boutique includes 243 residential units across two buildings, along with 10,714 square feet of ground level retail and 10,964 square feet of ground and second level office space. The properties, located at 681-733 William Street, feature high-end suite finishes and a number of luxury amenities, including conference rooms, fitness areas, rooftop patios and pools. This acquisition further strengthens BentallGreenOak’s presence in Montréal’s urban real estate market, while underscoring the firm’s interest in high quality buildings connected to major public transportation corridors. “Sun Life continues to grow its real estate footprint in Montréal, with strategic investments that align to our favourable, long-term investment outlook for the region and a positive contribution to our overall Canadian portfolio,” said Christina Iacoucci, Managing Director, Portfolio Manager for BentallGreenOak. “Drawing on the buildings’ exceptional amenities, wellness features, and connectivity to the city, our property management and tenant engagement teams are eager to create an exceptional living experience for present and future residents.” “We view Montréal as a market in grow th mode with strong economic charac teristics that bode well for selec t multi-family asset in the core of the city,” said Michael Fraidakis, Co-Head of Canadian Investments, BentallGreenOak. “The newly construc ted Appar tements-Boutique is a high-quality asset in Montréal’s thriving downtown core with strong income-producing charac teristics, and an attention to the finer details that we believe make this a fantastic addition to the Sun Life por tfolio, and a rental living option of choice for residents in the city for the long term.” Appartements-Boutique is easily accessible via transit, with its central location in close proximity to the Bonaventure (Square-Victoria-OACI) metro station, Gare Centrale and Via Rail Station. The future completion of the Central REM LRT station will offer residents another important transit hub within short walking distance. In May, the firm acquired the Montréal landmark 1250 René-Lévesque, a 47-storey, a Class AAA office tower. BentallGreenOak is bolstering its investment position in the city amid an influx of immigration, increased business investment, infrastructure improvement and real estate development. | www.REMInetwork.com | November 2019 | 23


NEWSWORTHY >>

New mixed-use rental buildings coming to Ottawa

R

egional Group of Companies and Fengate Asset Management announced that they are partnering in the development of two new rental buildings located at the entrance of Regional Group’s master-planned waterfront community, Greystone Village, in Ottawa. Fengate is

managing the joint venture with Regional Group in the two buildings on behalf of the LiUNA Central and Eastern Canada Pension Fund. The buildings will include retail at the ground level and 245 units of high-quality rental housing. When complete, Regional

Building Science & Restoration Consultants ■ ■ ■ ■ ■

Property Condition Assessments Capital Planning Building Structure Parking Structures Building Envelope

CONTACT Philip Sarvinis | Bill Gladu | Michael Pond | Jeremy Horst (416) 977-5335

rjc.ca 24 | Canadian Apartment | Part of the REMI Network |

Group will be managing the properties on behalf of the investors. Building amenities will include roof-top terraces with gardens and dog areas, fitness facilities, state-of-the-art building security and mail rooms, underground vehicle and bike parking, storage, and gathering areas. Greystone Village is Regional Group’s LEED master-planned community of over 1,000 homes. It is located between the Rideau Canal and Rideau River, and is within walking distance to trails, parks, the new Ottawa LRT (Lees Station), and Lansdowne Park. “We are genuinely excited for the opportunity to partner with LiUNA and Fengate to deliver this much-needed choice of housing in Greystone Village and Old Ottawa East. This phase of the development will add vibrance, texture and life to Main Street and the community,” stated Dave Wallace, COO, Regional Group. “LiUNA is proud of our strategic investment to meet rental housing needs in the Ottawa-Gatineau region, creating hundreds of construction-related jobs and investing in the economic growth of the community,” said Joseph Mancinelli, LiUNA International Vice President and Regional Manager for Central and Eastern Canada. “This development is essential to meeting the rental demand in OttawaGatineau and LiUNA is proud to be at the forefront as an investor of this essential infrastructure build in partnership with Regional Group.” “We are very pleased to partner with Regional Group, such an innovative, forward-thinking and highly experienced partner, on developing much-needed purpose-built rental apartments in OttawaGatineau,” said Jaime McKenna, Managing Director and Group Head, Real Estate, Fengate. “Greystone Village is a unique and visionary community for the region, and we are pleased to be a part of this important development.” Since 1958, Regional Group has been shaping real estate in Ottawa and throughout Canada’s National Capital Region. Today, the company has evolved into a unique real estate platform with extensive experience handling every aspect of the real estate environment. They create, develop, manage, and assess real estate value for their clients, partners, and investors. For more information visit regionalgroup.com.


QUICK FACTS

CANADIAN

SMART LOCKERS

• Parcel volumes increa se between 17 - 28% pe r ye

ar

• It takes 10 mins per parcel for staff to manage • E-commerce will be the largest retail channel by • 92% of residents ex pect parcel acceptance

resident delivery management condominiums + apartments

• • • • • • • CANADA’S PARCEL LOCKER COMPANY s n a i l e l o c k e r s . c o m

Secure 24/7 self-serve convenience Automated pickup On-site, hands-on specialist for launch Canada-wide install, service + support Bilingual customer interface + support Currently in 12 Canadian cities

info@snaile.com

Integrated with:

and more...

2020

1 800-750-6538 x 100


MAINTENANCE >>

Smart Transitions Getting to next generation operations and maintenance by Jiri Skopek

Smart building operations differ from building automation systems (BAS) in the ability to self-analyze and diagnose problems from multiple data sources. BAS help facility owners save energy and optimize performance with controls that are based on things like scheduling, occupancy and maintaining set-points. Smart building operations represent a facility’s ability to learn from that data and change operations accordingly.

T

he key is the data acquisition, analytics and diagnostics. Next generation smart operations and maintenance are about using smart Internet of Things (IoT) technology to ensure that buildings operate at close to 100% efficiency at all times. Smart building operations and maintenance capabilities cut energy consumption and carbon dioxide (CO2) emissions, reduce maintenance costs and extend equipment

26 | Canadian Apartment | Part of the REMI Network |

lifetime. Various systems offer actionable insights, driving fewer complaints from occupants, decreasing the need for unscheduled maintenance, saving energy costs and reducing carbon emissions. For some, the idea of a smart building may conjure the image of a building with complex IoT applications that only a cadre of highly trained professionals can understand and operate. It’s worth

remembering that the first generation of buildings equipped with BAS inspired similar apprehension. Yet today, it would be difficult to find a new larger building that does not have a BAS or an owner/ manager who doesn’t appreciate the significant energy saving and operational benefits it provides. For owners with robust BAS in their facilities currently, moving to a smart building


Empowered lenders make powerful borrowers It’s about getting to know you, your business and your goals so that our advice is grounded and specific. It’s about freely sharing our predictive tools and market insights to add another dimension to your planning. It’s about employing experienced experts who have the authority to innovate and act quickly. It’s about developing financing strategies – conventional and insured – that give you the best ROI. It’s about actively lending with confidence in all market conditions and across a range of property assets. Most important, it’s about empowering you with smart risk solutions so that your future is more lucrative than your past.

1.800.465.0039 | www.firstnational.ca Jeremy Wedgbury Senior Vice President, Commercial Mortgages Michael Williams Regional Vice President, Commercial Financing, Quebec Michael Yeung Regional Vice President, Commercial Financing, British Columbia

Ontario Mortgage Brokerage License No.10514


MAINTENANCE >>

need not be difficult. The transition to smart operations can be gradual and phased. The very first step is to install smart meters to collect near-real-time energy usage data about how much energy is used, when and, in some cases, at what price. This, on its own, has the advantage of improving a building operator’s insights on saving energy and reducing costs. The systematic tracking and optimization of building energy consumption along with visual dashboards can also help to change the behaviour of building occupants. BDA AND FDD The next step is to install sensors to monitor building performance in real time. The technology typically consists of a cloudbased analytical engine that receives and analyzes building data and communicates the diagnostic information, typically through a series of working orders. This is collectively known as Big Data Analytics (BDA) and Fault Detection and Diagnosis (FDD). These are the terms used to describe the process of tracking and analyzing building performance and energy efficiency

continuously and in real time of: heating, ventilation and air conditioning (HVAC) systems; lighting, for example daylight saving and shutting of lights in unoccupied zones; indoor air quality (IAQ) monitoring; smart elevators; and so forth. Collected data triggers alerts to building operators of faults or inefficiencies within the building systems. Algorithms can be employed to prioritize the most pressing work orders to ensure operators aren’t overwhelmed with too many notifications. Fault detection and diagnosis enables timely and targeted interventions in cases of faulty or under-performing building equipment. This equates to continuous commissioning. Smart building sensors go beyond energy usage problems to address other systems — for example, identifying water leaks or waste bins that need emptying. As more and more data is collected, the analytics will mature and lead to the discovery of patterns and feedback mechanisms that will enable the development of data-driven knowledge

Balcony Modernization Parking Structure Rehabilitation Roof Assessment & Replacement Window Upgrades Site Improvements Interior Upgrades New Amenities

.

Asset Transformation Consulting Engineers Project Managers Materials Testing & Inspection

DAVROC

© DAVROC & ASSOCIATES LTD.

Building Envelope Repairs

and operations. Similar to self driving cars, this may lead to self-operating buildings, but not many buildings are yet in that stage. In the longer term, BAS will become less important, as more and more equipment will be manufactured with integrated controls and sensors that can be wirelessly connected to the network and driven by a smart building software platform — like plug-and-play. PREDICTIVE MAINTENANCE The same integrated sensors that provide performance data — historical and in real time — support a more predictive maintenance program by detecting failures before they occur. For example, the data may show that a fan coil unit has been running at 100% output for more than one month, and therefore requires maintenance activities earlier than planned. A review of the work orders that have been issued for each piece of equipment will clearly identify the equipment that may soon need replacing. This may be included in the capital plan. Scanned parts within the facility inventory can automatically tell the system to order a replacement at the time they are taken out for use and/or inform a list of spare parts recommended to be kept on hand. Looking to the future, many buildings and their systems will be replicated digitally via a so-called digital twin, either as detailed graphic representations or in the form of data. Thus, whatever occurs in the building will be visible and controllable virtually and in real time. Until then, even incremental investments in smart building systems and their operation and management offer good returns. In the short term, the energy-savings potential of strategically chosen smart building features, which also keep track of service history and asset condition, bolsters the business case for smart buildings. This enables more efficient scheduling of maintenance activities and accurate maintenance logs to ensure that operators only pay for work that was actually completed.

& A S S O C I A TE S L TD .

2051 Williams Parkway, Units 20 & 21 Brampton, Ontario L6S 5T4 t (905) 792-7792

28 | Canadian Apartment | Part of the REMI Network |

DAVROC. CO M

Jiri Skopek is an architect, planner and advisor for smart, green buildings and sustainable communities who serves as chair of the board of directors of Sustainable Buildings Canada.



INSURANCE>>

The Damage Continues The never-ending impact of Climate Change on your insurance policy by Andy Schwartze Climate Change has been an ongoing topic of discussion in the insurance world for some time, and sadly, it’s showing no signs of fizzling. No matter who you are or where you live, there’s no denying the fact that we’re experiencing an increase in severe weather events.

O

n a recent two-hour drive from Lethbridge, Alberta, to the Calgary Airport, I was struck with the reality of just how severe things have gotten. Wind gusts had reportedly hit record highs of 150 kms, causing obscured visibility due to blowing sand, and numerous trailers to have been blown over sideways. In addition, a grass fire had gotten out of control to the west and the smoke was visible in the distance. Meanwhile, the state of California was 30 | Canadian Apartment | Part of the REMI Network |

contending with wild fires north of Los Angeles resulting in a mass evacuation. That’s a lot of climate “stuff” to experience in one two-hour drive. For the shareholders of insurance companies, this is scary. Insurers manage their businesses with a view to handling individual claims, one at a time. What they are now seeing more often than ever, are “events” that impact a large number of insurance customers at the same time. This results in excessive demands for claims

services, which may not always be readily available when so many are affected, and the inevitable drain on balance sheets that see large chunks of resources paid to policyholders. With previously reported claim payment increases and withdrawal of some reinsurance resources, this combination points very clearly to rising insurance costs for consumers and businesses. Now, let’s add something else into this not very positive picture. A recent report by BNN Bloomberg referred to a survey


INSURANCE >>

about Canadian debt realities, stating that nearly half of Canadians are facing a debt trap. Meanwhile, 47 per cent of respondents to a survey conducted on behalf of insolvency firm MNP said they don’t expect to be able to cover basic living expenses over the next year without taking on more debt. There are conclusions to be drawn here that hardly call for a degree in high finance. Policyholders who find themselves in a tight financial space will typically lean more on insurance than when times are good, and they willingly cover small damages out of their own pocket. Small claims are the most expensive claims that an insurer deals with. A claims adjuster’s fact finding responsibility is no different for a small claim than for a larger one. A growing number of small claims stresses the availability of adjusters, reduces the ability of insurers to provide good prompt service and, of course, frustrates

the customers. Toss in a few big weather events and you can well imagine the potential for chaos. So, we find ourselves in a changing insurance world—one which, as seen from the insurance broker’s lens is significantly more disciplined. Underwriting rejections have gone up significantly; it is not uncommon for certain types of insurance businesses to find only one provider willing to quote, and then on its own terms only. Renewals are being looked over carefully and, in at least 50 per cent of cases, being repriced by more than 10 per cent over the previous year. Since insurance companies need reinsurers to back them, and since these partnerships are renegotiated to January 1 each year, there is little relief to be expected until perhaps late spring of 2020. That assumes, of course, that

the combination of weather events and increasingly indebted consumers does not continue. The possibility of that kind of turnaround is, admittedly, a bit thin. As always, we keep an eye on this and will keep our readers informed. It is worth mentioning that the OFSI, the national regulator of the financial services industry, recently announced it would be deferring its plan to require property/casualty insurers to increase their unencumbered capital reserves by between $20 and $30 billion until 2020. The idea behind this is to force the further bolstering of the existing financial reserves in place, ostensibly driven by concerns about natural disaster claims. If this becomes a reality next year, the impact on the retail insurance buyer will inevitably be significant. We’re watching.

Andy Schwartze, BSc., MBA, CIP, is an insurance broker specializing in property management and real estate. He can be reached at andy@takecover.ca.

| www.REMInetwork.com | November 2019 | 31


PERSPECTIVES >>

The Landlord AND TENANT BOARD Service delays putting more strain on landlords by Chris Seepe

The Landlord and Tenant Board, otherwise known as LTB (or “Loves Tenants Best”) has been the source of frustration for landlords virtually since its inception in 2007. That said, as a mid-size Ontario landlord, I recently discovered just how broken the LTB really is.

W

ith hearing dates for Above Guideline Increase (AGI) applications now taking over a year to be set, and orders thereafter an additional three to five months, many landlords have become frustrated to the point of abandoning their right to due process— and woe betide you if you complain. Case in point: in November of 2018, and March of 2019, my property management company filed its first two AGI applications for two GTA properties. Several months and follow-up emails later, we received a letter from the LTB Regional Manager in October 2019 stating that the “preliminary” hearings for our two AGIs would be set—the first, for one full year after our filing date. Making matters even more frustrating, the LTB only gave us 2.5 business days to deliver the 25page Notice of Hearing (NOH) to every tenant in the building. The NOH states: “Where a … Hearing is rescheduled as a result of the applicant’s failure to serve … the Board may consider costs against the applicant.” And, “Once service has been completed, you must file the Certificate of Service (COS) ... with the Board.” But no instructions were provided on how to do this. The COS states, “... Any tenants who were not served ... the application may be amended to remove those tenants.” If we’d not delivered the NOH within the 2.5 business days, I’d wager the LTB would 32 | Canadian Apartment | Part of the REMI Network |

have added three months because “we” delayed the NOH. Our paralegal, who focuses exclusively on AGI applications, wrote: “The practice of late is for the Board to provide as little advance time [as possible] for landlords to serve the tenants.” After sharing these observations in writing with several key people, the LTB’s only response came in the form of our first AGI hearing being rescheduled to a later date, putting it one year and two months after our initial filing. And it’s not just AGI applications that are giving landlords grief; simple cases involving landlord-tenant disputes and rent payment issues are taking far too long to resolve. After a hearing, the LTB typically renders decisions

in about 11 days, but lately it’s more like several months. For the property owner relying on that income, 11 days is already too long when a delinquent tenant is failing to pay, granting them two more weeks of free rent. And given the LTB sets the eviction date for a Friday, if that tenant doesn’t follow orders to vacate the premises, landlords can’t go to the sheriff’s office until the following week, losing yet another week of income. According to the LTB official website, the purpose and mandate of the Board is to resolve disputes between residential landlords and tenants in a timely and judicious manner. From my recent experiences, there’s nothing timely or judicious about it.

Chris Seepe is a published writer and author, ‘landlording’ course instructor, president of the Landlords Association of Durham, and a commercial real estate broker of record at Aztech Realty. Email cseepe@aztechrealty.com or visit him at www.drlandlord.ca

THE FOLLOWING NOTICE WAS POSTED ON THE LTB WEBSITE IN NOVEMBER: Over past months, parties have experienced service delays at the Landlord and Tenant Board (LTB). The LTB continues to work with the government to improve its services. A number of experienced adjudicators have recently been reappointed and recruitment is under way to fill other adjudicator vacancies. On January 1, 2019, the LTB became part of the newly created Tribunals Ontario organization. A review will be conducted of all tribunals, including the LTB, to identify areas for improvement to make services more streamlined, cost-effective and efficient.


Practice Effective Corporate Governance Are your apartment assets CRB-approved?

It’s a matter of standard!

Let your investors and shareholders know how commited you are to the apartment assets you manage...become certified

CRB-approved!

Living GREEN TogetherTM crbprogram.org

well-run

well-managed

well-maintained


Smart Ideas

SIGNED, SEALED AND DELIVERED Solutions for streamlining parcel management

A

n explosion in online deliveries has led to some unique challenges in the multi-residential space. Whether it’s dealing with resident complaints about missing or damaged items, fire code infractions, or a lack of resources to cope with the daily onslaught, the e-commerce boom hasn’t made life easy for frontline building staff.

SO, WHAT ARE THE SOLUTIONS? Short of banning parcel deliveries altogether, which wouldn’t be a popular option among residents, Patrick Armstrong, CEO of Snaile, says property managers should consider the following: 1. HIRE MORE FRONT-END STAFF TO DEAL WITH PARCEL MANAGEMENT Assuming the lobby is set up to handle the deliveries, this option would require hiring and training new reception staff to focus on the receipt and distribution of packages.

According to Pitney Bowes, the popularity of online purchasing has been rising gradually since 2014, only to increase sharply by 20 per cent between 2017 and 2018. Why is this happening? Because millennials make up the largest share of the Canadian population, and this cohort likes to online-shop. Canadian Internet Business says 67% of millennials prefer making purchases over the internet, while Forbes predicts that e-commerce in Canada will be the largest retail channel by 2020, surpassing the choice to shop in actual brick-and-mortar stores. The problem, of course, is that not all multi-residential buildings are equipped with a concierge, and those that are, aren’t necessarily set up to manage and stow these deliveries effectively. A recent survey conducted by Canada’s leading parcel locker company, Snaile, found that, on average, building staff are spending just under ten minutes on each parcel delivery. From accepting and signing on behalf of residents, to logging and storing items, there are many steps to the exchange. Adding another hitch: these days there are thousands of courier companies, many of which don’t always follow commercial delivery protocol. Tendencies include “buzzer bombing” when a resident isn’t at home — the random pressing of intercom buttons in order to gain access to the building. Subsequently, parcels are being left in the lobby where they can be stolen, damaged, or create tripping hazards, violating health and safety codes, and creating liability for the property owner. 34 | Canadian Apartment | Part of the REMI Network |

2. INSTALL CANADA POST PARCEL LOCKERS Property managers should keep in mind that these lockers only service Canada Post deliveries; meaning there would still be a huge number of parcels to accept, albeit at a slightly reduced rate. 3. INSTALL SMART LOCKERS The latest smart parcel management systems are accessible by all carriers and come in oversized lockers, meaning recipients can receive groceries and other large deliveries without difficulty. Automated parcel lockers are secure and convenient, with residents receiving a notification on their mobile phones when a delivery has been made. Aside from reducing the drain on manpower, these systems also reduce liability for building owners and administrators.

Find out more about smart locker systems for multi-residential buildings by visiting www.snailelockers.com


Affordable Housing Conservation Program

Comfy living for tenants. Comfy energy bills for you.

Visit uniongas.com/ affordablehousing to learn more

We’ll cover up to 50% of the cost when you upgrade to high-efficiency equipment The Affordable Housing Conservation Program provides financial incentives for high-efficiency space and water heating equipment, heat recovery, building automation systems and more.

uniongas.com/affordablehousing



Turn static files into dynamic content formats.

Create a flipbook
Issuu converts static files into: digital portfolios, online yearbooks, online catalogs, digital photo albums and more. Sign up and create your flipbook.