CPM March/April 2022

F O R B U I L D I N G O W N E R S , A S S E T A N D P R O P E RT Y M A N A G E R S

VOL. 37 NO. 1 • APRIL 2022

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VOL. 37 NO.1

APRIL 2022

Editor-in-Chief

Barbara Carss barbc@mediaedge.ca

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TEL: (416) 512-8186 • FAX: (416) 512-8344 Published and printed six times yearly as follows: March, April/May, June, Aug/Sept, Oct/Nov, Dec

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Sworn Statement of Circulation: Available from the publisher upon written request. Although Canadian Property Management 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

editor’snote THE ROLLOUT of the hybrid work model is now underway as more employees return to formal office settings for part of the week. After two years of conjecture, will it turn out to be as anticlimactic as Y2K or the legalization of cannabis?

Perhaps not for the commercial real estate sector, which will have to adjust its operations in step with evolving times, but the larger public has repeatedly shown that it adapts to change and embraces it as the norm with relatively little upheaval.

For commercial real estate owners, managers and investors, there’s arguably just a thirst to get on with it and see what happens. Speaking in various online forums while Omicron ran its course this winter, industry insiders generally reaffirmed that industrial prospects are flourishing, but office and retail have been hit hard and recovery schedules could stretch longer.

“Clearly, we have enough data to know COVID is not good for real estate,” Paul Mouchakkaa, Managing Partner and Canadian Head with BentallGreenOak, observed as part of the panel discussion with the release of the 2021 Canada Property Index results. We provide insight from both the results and the discussion in this issue.

Mouchakkaa foresees successful investment in office properties is going to get trickier than picking up a Class A building in a city with a thriving economy. A confluence of financial and regulatory responses to climate threats will likely only increase the complications. We also examine some of those emerging trends.

Meanwhile, offices would seem to be one of those venues where the great experiment in learning to live with COVID is going to play out. Ventilation and indoor air quality controls have certainly emerged more prominently in workers’ consciousness and tenants’ demands over the past 24 months. We look at how the industry has been responding and balancing new pressures with ongoing concerns about energy management.

In the macro economic picture, there’s reassurance that we’re more prepared for another variant with a predominantly vaccinated population, advancement in COVID treatments and two years of relatively nimble adaptation to draw on. Nevertheless, Benjamin Tal, Deputy Chief Economist with CIBC World Markets, suggests much will depend on the easing of COVID-related inflationary forces and avoidance of sudden, sharp increases in interest rates that could be particularly detrimental to the housing market.

He theorizes, too, that consumers are sated with acquiring things and now want to spend on experiences. It’s a shift from goods to the service economy that’s less fraught with supply chain disruptions, and will help to reanimate urban spaces.

This issue also includes the annual Who’s Who in Canadian Real Estate survey.

Thank you to our capable, diligent and good-humoured project manager, Gerald Ngan, who expanded the list beyond 200 companies this year, and to all who responded to his prompting for information.

Barbara Carss barbc@mediaedge.ca

Canadian Property Management | April 2022 3

contents

Focus: Real Estate News & Context 6

Financial Reconsiderations: Urgency of climate change is altering how investors, lenders and appraisers view real estate assets.

12 Premium Office Rents: Priciest space in Toronto, Montreal and Vancouver ranked among 127 global markets.

16 Industrial Gains: Investors enjoyed soaring returns in 2021 and anticipate ongoing rent and value growth.

20 Multifamily Steadies: Dips in net operating income deemed a temporary pandemic-related blip to be recovered in 2022.

26 Gauging CRE Trends: Major players in the Canadian market assess influences and share expectations.

27 Who’s Who in Canadian Real Estate: 27th annual survey of players and portfolios in the office, industrial, retail and multifamily sectors.

40 Green Lease Update: REALPAC’s Version 1.05 aligns with broadening demand for ESG reporting and performance outcomes.

44 Diversity, Equity & Inclusion: Seven prominent commercial real estate associations from around the globe launch benchmarking initiative.

48 Post-pandemic IAQ: Spotlight is on ventilation as workers return to their offices.

Departments 3

Building Science & Structural Engineers Building Envelope Assessment & Remediation Structural Restoration Due Diligence/Pre-Purchase Assessment Property Condition Assessment Structural Engineering Roof Consulting

RJC Engineers

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Brighton Block | Edmonton

Editor’s note

PHOTOGRAPHY COURTESY OF EZIO MOLINARI

Membership matters For over 100 years, BOMA Toronto has been at the forefront of the CRE Industry, proactively advocating for and protecting the interests of its members.

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investment

REFRAMING FINANCIALS Business Case Analyses Consider Climate Risk and ESG

By Barbara Carss

BUSINESS CASE assumptions for mass timber construction appear to be evolving as more real estate players begin to account for embodied carbon in their greenhouse gas (GHG) emissions profiles. Paul Morassutti, Vice Chair, Valuation and Advisory Services with CBRE Canada, foresees investors and lenders will increasingly focus on the physical and transitional risks of climate change, in turn upending some conventional views of costs and value.

“Our criteria for what makes a great asset is changing,” he observed earlier this winter during the online release of his firm’s 2022 Market Outlook report. “Consider the amount of carbon sequestration in these [mass timber] buildings together with the carbon avoidance you get from not building with steel or concrete. Then layer on the fact that tenants love these buildings.”

Discussing some rapidly emergent expectations for the environmental, social and governance (ESG) performance of real 6 April 2022 | Canadian Property Management

estate portfolios, Morassutti and other industry insiders, called on to share their views as part of the online presentation, not e d t he broaden i ng scop e of sustainability efforts in step with an expanding field of interested parties.

Objectives and targets are shifting from operational savings via energy and water efficiency to more comprehensive strategies to achieve GHG reductions and, ultimately, net-zero emissions.

Accordingly, asset managers will have to respond to changing valuation criteria and reporting demands, and will need new instruments to allow them to do so.

SUSTAINABILITY FACTORS EMERGE Among the top ESG trends for 2022, Morassutti cites some looming weighty influences. For example, all of Canada’s major banks have now signed on to the Partnership for Carbon Accounting Financials (PCAF), a global alliance of

more than 230 financial institutions that have agreed to apply standards for measuring and reporting the GHG emissions of their loans and investments.

In complementary global initiatives, Montreal was recently chosen as one of two host cities, along with Frankfurt, for the International Sustainability Standards Board (ISSB), which is tasked with developing disclosure standards for climaterelated risks and opportunities intended to guide investors and the capital markets.

“Today, GHG emissions have no discernable impact on the availability or cost of financing, but that is set to change,” Morassutti advised. “Lenders will have to report on and include GHG emissions for the assets on which they lend. The price and availability of debt will reflect this.”

That’s also expected to come with new approaches to valuation as appraisers account for what Morassutti terms “green premiums or brown discounts”.

investment

Commenting on that emerging demand during on an online event jointly sponsored by PwC Canada and the Toronto chapter of the Urban Land Institute (ULI) last fall, Colin Johnston, President, Research, Valuation and Ad v i s o r y w it h A lt u s C a n a d a , acknowledged that he and his peers are still grappling with how some of the qualitative aspects of ESG translate into capital value. However, he pointed to some tangible metrics, like building certifications and performance scores, which are already taken into consideration.

“It’s easy for me to think about a LEED Platinum office building. I can see that it can generate higher net rent. I can see that it has a shorter lease-up horizon, and then I can see that translating into value,” Johnston explained. “I cannot, at this point, tell you necessarily that that building’s getting a quarter-point better cap rate, but I can tell you that it’s driving better income.”

“Today, GHG emissions have no discernable impact on the availability or cost of financing, but that is set to change.”

Looking to the brown discount or climate risk side of the equation, Bryan Reid, MSCI’s Executive Director of Real Estate Research, outlined some of his firm’s efforts to model physical and transitional climate impacts during this winter’s online forum to release the Canada Property Index 2021 investment returns. Drawing on data from the MSCI subsidiary, Real Capital Analytics, he

traced the significantly differing risk profiles of three industrial assets — located in New York, Maryland and Arizona — that transacted with an identical 5.2% cap rate in the fourth quarter of 2021.

“Maybe there is the potential for market pricing to start to adapt and reflect some of these risks as climate risk becomes a little bit more well understood and a little bit more consistently measured and priced,” Canadian Property Management | April 2022 7

investment COVID-RELATED INFLATION PROJECTED TO RELENT Inflationary pressure is expected to subside over the coming months with the easing of COVID-related triggers, but residential rent could still be peaking. Speaking during an online presentation sponsored by CBRE Canada, Benjamin Tal, Deputy Chief Economist with CIBC World Markets, contrasted the steep ascent of home prices since the pandemic began with a more wavering trajectory for rents.

“Rent inflation will be in the system for the next two years to basically compensate for the gap between home prices and rent,” he said. “That’s coming in Canada and the U.S. and it’s long-lasting — therefore, a more permanent inflationary pressure that we will have to deal with.”

In other pricing categories, Tal predicted a relaxation of supply chain constraints as consumers shift spending from goods to services, and he outlined some of the labour market attributes that should insulate Canada more than the United States. Meanwhile, with central bank actions exacting a more immediate toll on effective interest rates and the debt that mortgage holders carry, he warned a rapid upward rate adjustment could derail the housing market and push the economy into recession.

Two of the most dominant drivers of rising prices are COVID’s forceful prompt for consumer spending — which Tal diagnoses as “demand shock” — and supply chain impediments. However, Tal theorizes the spending is most likely short-term anomalous behaviour, and price dynamics will stabilize as public health controls are removed and services regain a larger share of the market.

“The increase in spending on goods in the U.S. in 2021 is equivalent to a situation in which overnight you parachuted 75 million people into the U.S., and the minute they got there, they started to spend. Even a normally functioning supply system would not be able to deal with that,” he submitted. “The shift to services will be deflationary relative to the supply chain pressure we’re seeing now.”

Wage growth patterns appear more muted in Canada than the United States due to fewer labour force exits and more incoming replenishment from a higher immigration rate. Thus far, statistics suggest the so-called great resignation is still largely a great contemplation on this side of the border.

“In a recent survey, people said that they are thinking about quitting in Canada. So in the U.S., they are quitting; in Canada, they are thinking about quitting — very, very Canadian,” Tal quipped.

Also indicative of the two countries’ differing cultures, he suggests market watchers have higher expectations of interest rate increases in Canada. That includes his own prediction that the Bank of Canada will raise interest rates to 2%, surpassing a more moderate move on the part of the U.S. Federal Reserve Board.

Noting that the Bank of Canada has a more immediate impact on mortgage rates than in the U.S., where lenders are less responsive and mortgage terms are longer, Tal urges decision-makers to stretch the increase out over a longer time period. He suggests that will be a simpler course to follow if COVID-triggered inflationary pressure eases as envisioned.

“At the end of the day, it’s about the cost to bring inflation back to 2%. We are not going to see inflation of 5, 6, 7% forever. We are going to see interest rates rising to fight that inflation.

We need higher interest rates, but the enemy is rapidly rising interest rates,” he asserted. “If you remove COVID from the equation, 60, 70% of the inflation that we’re seeing now due to supply chain issues should disappear, and that will mean now the Bank of Canada will move slowly, meaning the recovery is still with us without the risk of a recession.”

Reid mused. “Undoubtedly, it’s something we’re seeing investors allocate a lot more time and effort to, so definitely something that we will be keeping an eye on.”

“It’s very interesting data, this progress on transition risk,” agreed Michael Brooks, Chief Executive Officer of REALPAC and special advisor to the United Nations Environment Programme Finance Initiative (UNEP FI) through its Property Working Group. “There are powerful forces at work in the real estate market and big issues for investors.”

8 April 2022 | Canadian Property Management

COSTS PRECEDE PAYBACKS Asset managers participating in the PwC/ ULI-sponsored panel discussion last fall generally suggested they’re in a transitional period. While projecting they’re on the cusp of reaping higher returns from investments in sustainability, they’re facing some pressures in the interim, whether that’s added costs or the complications of proving performance.

“The reality, at least now, is there is a cost to this and it will be reflected in your returns,” said Ashley Lawrence, Managing

Director and Head of Canadian real estate with Brookfield Asset Management. “Over time, as it becomes more prevalent and more standardized, or everyone is doing the same thing or trying to achieve the same thing, I think you’ll see that lift.”

Andrew Duncan, Chief Investment Officer with RioCan Real Estate Investment Trust, confirmed that has been his company’s experience over the past five to six years since embarking on an ambitious sustainability program. That’s seen the REIT gain recognition as a top performer in GRESB, the ESG assessment and benchmarking program for commercial real estate portfolios, and Green Lease Leaders (see story, page 40), among its industry achievements.

“In 2016, the issue was: this is table stakes from an investor’s standpoint and it may not save us, but cost us money at this point,” he recounted. “We are starting to see savings and we are starting to see returns on investment, but you’ve got to have the stomach to commit to it.”

“It’s really easy to integrate environmental sustainability into new builds and there is a business case associated with it,” added Jaime McKenna, Managing Director and Group Head of real estate for Fengate Asset Management. “The biggest challenge we have is legacy assets — getting to older assets and building an economically viable business case.”

Meanwhile, booming industrial demand may provide further momentum to curb emission intensity as asset managers build new facilities and realize revenue gains to help underwrite some of the envisioned improvements.

“We are figuring out how to put in rooftop solar and other technologies — what we call behind-the-meter — so that we can be off the grid and we can share that benefit with our occupiers,” Michael Turner, President of Oxford Properties, reported during the recent CBRE-sponsored online presentation.

Rippling through to the economic impact of such spending, Benjamin Tal, Deputy Chief Economist with CIBC World Markets, reiterated that investments in productivity can be a hedge against inflation.

“If I give you a 10% pay increase and you are 10% more productive, that’s not inflationary. So if you can enhance productivity, you really can protect from inflation even if wages go up,” he maintained. “We see a situation in which companies are starting to react. We see companies investing in technology.” ❚❚

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Modernizing payments for Canada’s commercial property industry Canadian property managers have a lot to gain from making payments faster, easier, and more transparent. In a post-pandemic economy, many Canadians are reducing their use of cash as a payment method and are relying instead on digital payments. In fact, a recent Interac survey revealed that two thirds of Canadians believe businesses that fail to adapt in order to allow digital payments will struggle.

The demand for digital payment options from businesses will only increase and property managers will need to accommodate this shift in consumer behaviour. With every dollar counting more than ever before given the challenges faced by businesses during the pandemic, efficient ways of paying and managing finances in ways that improve cash flow is now paramount. Improvements to accounts payable, accounts receivable, and methods of payment cannot be overlooked in this recovery-focused environment.

Pre-pandemic, day-to-day financial management

often involved processes that were paper-based, cheque-driven, and manual. These are typically slower and less efficient ways of working and require businesses to spend valuable resources processing and reconciling payments. The pandemic, alongside changing consumer preferences, has naturally reinforced the need for digitization and moved businesses to lessen their reliance on manual processes to boost overall operational efficiency.

Eighty-three per cent of finance professionals surveyed by Interac affirm this notion, saying that applying digital transformation to their function is now a priority .

These needs are fuelling demand for innovative business payment solutions, such as Interac e-Transfer® for Business. As an enhancement of the existing Interac e-Transfer service, new features were built to meet the needs of Canadian businesses through higher transaction limits, fast money transfers with instant confirmation and rich remittance data, allowing businesses to reconcile

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transactions with less paperwork. In other words, it can help streamline accounting processes and accelerate a paperless office strategy.

For a property manager or landlord, this could mean being able to accept or request payments directly from tenants with immediate access to funds, paying contractors and invoices for work specific to the property with greater ease and retaining payment confirmations. Further, property managers and landlords could send a reminder for rent payment via request-to-pay capability and easily reimburse tenants for costs incurred on behalf of the property manager or for payment returns.

Receiving payments instantly in this way can also be a game changer if a manager is largely reliant on cheques, eliminating any uncertainty around when one will arrive in the mail or whether it will clear. With Interac e-Transfer for Business, property managers can receive payment instantly, reducing the number

of cheques and cash they receive, eliminating the risk of late payments, and gain easy visibility into what the payments are for using structured data.

Eight in 10 (80 per cent) business decision makers surveyed agree that moving from traditional payment options to digital ones will be essential to post-pandemic growth . Assessing how a business can revamp its payment processes and financial management to become more efficient and effective with tools like Interac e-Transfer for Business can help to equip the commercial property industry as it embarks upon growth and recovery plans.

Those interested in using the solution are invited to learn more by visiting Interac.ca/business, In The Know and to discuss the offering with their financial institution.

Interac and Interac e-Transfer are registered trademarks of Interac Corp..

(1)Interac commissioned Hill+Knowlton Strategies to conduct a national survey of adult Canadians. A total of 1,000 adult residents of Canada were surveyed online in April 2021. The sample was randomly drawn from a panel of potential survey respondents. An associated margin of error for a probability-based sample of this size would be ±2.5%, 19 times out of 20.

(2)Interac commissioned Phase 5 Consulting to conduct an online survey of 152 financial decision-makers in Canadian midsized businesses with 100-499 employees. Participants were recruited via an online research panel. Fieldwork was conducted in English and French in May 2021.

(3)Interac participated in RFi Group’s online commercial banking and payments syndicated survey of decision makers at 363 commercial enterprises with revenues between $10M and $100M. Fieldwork was conducted in English and French in June 2021.

Note: Finance transformation describes any strategic initiative meant to create new opportunities for the finance function to add value to the business and align with overall company strategy.

SPACE AT THE SUM Nothing Average in Premium Office Rent Data

THERE ARE NO averages to be found in JLL’s premium office rent tracker report, which ranks global markets on the basis of the highest achievable rent for space in the premier building within the city’s or submarket’s most prestigious office district.

The resulting picture may reveal more about the nature of premium tenancies than their host markets, but JLL analysts conclude pinnacle prices are generally in line with trends in Class AAA and Class A markets.

“Rents for premium buildings have fallen slightly in major office markets since 2020 by an average of 0.8% in local currency terms. This compares to a decline of 0.7% in net effective rents for the broader grade A office market,” the report notes. “Rental movements are also aligned within global regions, with the Americas showing growth in rents for both the premium office segment and the broader grade A market, 12 April 2022 | Canadian Property Management

while both Asia Pacific and EMEA (Europe, Middle East and Africa) have seen decreases in rents.”

The three Canadian entries in the 2021 list of 127 priciest spaces fall well down from the leaders — Central Hong Kong and Midtown New York, which are tied with a premium rent of USD $261 per square foot (psf).

However, the summits of the Toronto, Montreal and Vancouver markets are steeper than in dozens of surveyed cities scattered throughout North and South America, Europe, Africa and Asia Pacific.

TORONTO, MONTREAL, VANCOUVER Toronto and Montreal are ranked among 37 markets defined as “mid-level” on JLL’s scale, with premium rents in the range of USD $99 to $61 psf. Vancouver is lumped with the larger and much more wide-ranging group of 66 “value” markets with premiums

rents of USD $60 or lower psf. An elite group of 24 markets commanding rents of USD $100 or greater psf are categorized as “high-end” premium spaces.

Toronto is highest ranked of the Canadian markets with a premium rent of USD $77 (CAD $98.50) psf, in lock step with the premium rent in Washington, DC. Montreal is next at USD $66 (CAD $84.50) psf.

That’s sandwiched between Chicago at USD $67 and Hong Kong’s Kowloon East district and Edinburgh, both at USD $65.

Vancouver’s priciest rent, at USD $55 (CAD $70.40) psf, sits under the bunched pack of Leeds, Glasgow and Dallas, all at USD $56, and just above Auckland, at USD $54 psf.

Within the top five markets, premium rents drop sharply from the twin frontrunners to Beijing’s Finance Street at USD $196, London’s West End and USD $191 and Silicon Valley at USD $174 psf.

sectorsnapshot

Toronto and Montreal are ranked among 37 markets defined as “mid-level.” Vancouver is lumped with the larger and much more wide-ranging group of 66 “value” markets.

Austin may be most surprising market to outdistance Toronto. Priciest space in the Texas capital goes for USD $89 psf, on par with Berlin and a notch above Geneva.

Detroit at USD $28, Minneapolis at USD $34 and Charlotte at USD $37 psf offer the best bargains on U.S. premium office space. Looking east, premiums for the thrifty in Europe can be found in: Bratislava (USD $19); Bucharest (USD $23) and Prague (USD $28).

MMIT Beijing’s central business district, Tokyo’s Marunouchi district, New York’s midtown south, Shanghai’s Pudong district and Beijing’s Zhongguancun district round out the top ten.

The United States is home to seven high-end markets, followed closely by China with six. Japan has four; Hong Kong, the United Kingdom and India each have two; and Singapore is a standalone member of the high-end group.

Paris tops the mid-level rankings with a premium rent of USD $97 psf; San Diego is the last entry at USD $61 psf.

Of the 26 U.S. markets surveyed, 10 boast premiums that surpass Toronto’s, while 11 cities are ranked below Vancouver.

Premiums in Washington DC, Chicago, San Diego, Los Angeles’ central business district and Dallas are most comparable to those in the three Canadian markets.

TENANCY TRAITS The offices commanding the highest rents typically boast sustainability certification; house financial, technology, legal or professional services occupancies; and are more likely to offer flex space than is the market norm. JLL analysts note that flex space, such as co-working areas or serviced offices, can be particularly attractive for tenants currently dealing with pandemic-related uncertainties about their future space needs, but the demand is expected to outlast the pandemic.

“Flexible space adoption is set to accelerate substantially as demand shifts from fixed long-term commitments to more agile and hybrid options,” the report projects. “Moving forward, flexible workspace is likely to grow from a low proportion of the overall market to a critical and mainstream element of commercial real estate.”

High-end premium office buildings appear somewhat ahead of the curve, with 63% providing some form of flex space versus 38% at mid-level and 39% in the value range. That may also be reflective of the higher quotient of technology-based tenants in high-end premium spaces.

Overall, technology firms — both online platforms and hardware/software specialists — occupy 15% of the premium office space, but they account for 21% of occupancy in high-end premises. Notably, online platforms are much more conspicuous, filling 17% of high-end premium offices versus 8% of total premium space surveyed.

In contrast, mid-level premium space accommodates a smaller fraction of technology tenants, at just 3%, and a disproportionately larger share of banking and financial service tenants, at 68%. Legal services are more evident in the value premium space, representing 15% of tenancies versus just 4% of high-end and 3% of mid-level premium space.

Interestingly, 100% of high-end premium offices are located in buildings with sustainability certification such as LEED or BRREAM. However, the percentage of offices in buildings with wellness certification, such as WELL or Fitwel, is higher at mid-level — at 16% versus just 8% of high-end premises.

Across the entire list of markets, 84% of premium office spaces can be found in buildings with sustainability certification compared to 13% with wellness certification, but JLL analysts suggest momentum is growing for the latter programs.

“Owners and occupiers are placing greater emphasis on healthy building credentials, which should lead to more certifications in the coming years,” the report posits. ❚❚ The complete Global Premium Office Tracker report can be found at www. u s . j l l . c o m / e n / t re n d s - a n d - i n s i g h t s / research/global-premium-office-renttracker-q4-2021.

Canadian Property Management | April 2022 13

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FREE BUILDING ENERGY WITH AI There’s free energy to be harnessed from every building. The trick is taking advantage of thermodynamics through artificial intelligence (AI).

It may sound like science fiction at first, but the idea has been around for decades. Since the 1970s, academic researchers have been fine-tuning the process of using a building’s natural thermal mass to influence internal temperatures. And today, one company out of Halifax is bringing the benefits of that research to help building operators achieve more efficient, eco-friendly, and cost-effective HVAC operations in the form of an AI solution.

That company is EcoPilot Canada | USA, a proud “carbon crusader” that uses AI-driven software of the same name to optimize HVAC systems in real-time to deliver the greatest energy efficiency possible.

“Think of it as a brain that can be added to any building automation system to unlock this free energy that’s always been there,” says Jennie King, Commercial Director with the Halifax-based company.

HERE’S HOW IT WORKS Ecopilot®’s program constantly monitors a building’s static (e.g., thermal mass) and fluid elements, the latter

of which include internal heat sources (e.g., people, computers, and lighting) or external weather (e.g., temperatures, wind speed, humidity, solar incident radiation, etc.). Every two minutes, the AI then analyzes these factors along with predictive data (e.g., weather forecasts) to calculate the variable balance point temperature of a building.

Pinpointing that specific balance point temperature is step one. Next, Ecopilot® shares that number with the building’s existing BMS system, where it is used to align prescribed HVAC set points so that they react with the real-time balance point temperature. Doing so reduces HVAC fluctuations and eliminates unnecessary system overlaps, such as heating and cooling an environment in the same day or at the same time.

“Essentially, Ecopilot® uses all this real-time data to continuously re-commission the HVAC system every two minutes,” explains King. “The result is that these systems start running far more efficiently, use less energy, and reduce their carbon emissions – all while keeping people a lot more comfortable.”

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Implementing AI into MINTO’s BAS seemed like a leap at first, she adds, but the outcomes have alleviated any doubt: “As we move towards low-carbon technology and attempting to minimize greenhouse gas emissions, it becomes more important to operate the equipment as efficiently as possible. Smart building technologies bridge the gap between design and actual operating efficiency.”

Success stories like MINTO’s are adding up. Over its 13plus years, Ecopilot® has seen its system installed in over 1,200 buildings worldwide, improving building efficiencies by up to 40% annually with a three-year ROI.

PROVEN IN THE FIELD Ecopilot® has spent over a decade bringing its AI tech to property stakeholders across Canada and the world. And while King admits there can be some upfront hesitation to bringing AI into building operations, those that make the upgrade are quick to reap the rewards.

In June 2018, for example, Crombie REIT’s Cogswell Tower, a 50-year-old concrete office building in Halifax implemented Ecopilot® to help save energy across its 14-storey, 200,000 sq. ft. asset. Doing so reduced energy costs by 26.5%, generating a return on their investment under two years. Moreover, Pat Poirier, Manager of Engineering and Sustainability, reported they had reduced energy consumption by over one million kWh, exceeding their expectations for their entire campus of buildings.

More recently, MINTO PROPERTIES implemented the tech at a multi-unit residential property at 150 Roehampton Ave in Toronto. Speaking to early reservations, Joanna Jackson, Director of Sustainability & Innovation at MINTO PROPERTIES, recalls: “We were concerned about not achieving the expected energy savings. However, Ecopilot®’s minimum savings guarantee ensures that the project will be successful from a financial perspective.”

Fast forward to now, and Jackson reports that the Ecopilot® system has succeeded in optimizing the building’s operations and reducing its electricity and natural gas consumption, noting, “The system also identifies if the equipment is not operating properly. That allows us to react faster to maintenance issues and improve residence satisfaction by minimizing system down-times.”

UNLOCKING THE ENERGY WITHIN AI and smart machines are recoding virtually every facet of property management. Ecopilot® is among the innovations merging established building science with cutting-edge tech to create future-ready assets.

Learn more about Ecopilot. Visit www.ecopilotai.com.

UPBEAT INDUSTRIAL PROSPECTS

Investors Confident Annual Gains will Surpass Historical Averages

By Barbara Carss

INVESTORS ARE expressing confidence in sustained industrial rent growth. More than 95% of respondents to an online poll conducted in conjunction with the release of the Canada Annual Property Index 2021 results agree that annual gains of at least 5% are needed to justify current cap rates, and there’s broad consensus that threshold is achievable.

Coming off a year when industrial assets in the index delivered a 31.6% total return, including a 26.4% increase in capital value, neither market analysts nor portfolio managers foresee new supply will catch up with rampant demand any time soon.

Looking at a breakdown of even higher reported capital growth in the western and northern suburbs of the Greater Toronto Area, Eric Plesman, Head of Global Real Estate for the Healthcare of Ontario Pension Plan (HOOPP), cited evidence in his own portfolio.

“We have some assets in the Caledon area. We started last year with rents around $9 [per square foot] and all of sudden we saw leases being done at $14, $15, $16 by the end of the year,” he recounted. “That’s massive increases in a given year.”

“Those numbers that we put into the polling question about future rents weren’t just plucked out of the air: 2% is the historic long-run average for rental growth for 16 April 2022 | Canadian Property Management

industrial in Canada; 2.5% is the long-run growth in the U.S.,” advised Simon Fairchild, Executive Director with the index producer, MSCI. “So everybody is expecting the market is fundamentally different.”

On average, industrial assets in the index registered an 8.2% increase in net operating income (NOI) in 2021, on top of a 1.2% gain in the previous year. In 2020, industrial assets were the only property sector in the index — which in 2021 encompassed 2,367 assets in 46 portfolios, collectively valued at $171.6 billion — to post an increase in NOI. However, Fairchild underscored the much greater share of capital growth attributable to cap rate compression in markets like Toronto, Vancouver, Ottawa and Montreal.

“The exception is, of course, Alberta,” he noted. “What’s interesting there is actually the fundamental growth in NOIs is pretty comparable [to other Canadian markets], but it just hasn’t benefitted the strong investor demand pushing up values.”

SUPPLY SHORTAGE Other industry insiders tasked with providing context for the 2021 index results looked at projected sources of industrial rent growth, as both traditional warehouse users and the e-commerce sector jostle in increasingly tight markets everywhere. Jim

Costello, MSCI’s Chief Economist and the Director of its Real Capital Analytics subsidiary, reiterated that new development is still vastly lagging demand, and warned that cap rates could continue to shrink, particularly until the market share for e-commerce levels out.

“Fundamentally it comes to the change in consumer behaviour and just how quickly the market can adapt to that. Prologis calculated that every dollar spent for consumption activity generates three times as much need for industrial space on the part of the people who ship these goods around.

So the real unknown is how much longer does it [e-commerce] go up at an exponential weight?” Costello submitted. “Until we get to that point where it’s clear we’ve made enough of an adjustment, there is still going to be pressure in the space market.”

“Industrial has become a consumption-oriented class in addition to its traditional, trade movement of goods orientation,” agreed Paul Mouchakkaa, Managing Partner and Canadian head with BentallGreenOak. “You have sort of a combination of great tailwinds.

First, an increasing demand on the e-commerce side, but also on the movement of goods side. The traditional industrial segment is still a growing part of the economy.

Then you combine that with low availability

sectorsnapshot rates across Canada and a very old inventory in Canada.”

In reference to the latter, many assets managers are concluding it’s a good time to cull their portfolios and reinvest the windfalls. Plesman suggested portfolios with new facilities under development could be well positioned to “take advantage of the pricing environment”, while Jaime McKenna, Managing Director and Global Head of Real Estate with Fengate Asset Management confirmed her company is doing exactly that.

“It’s one thing to value your industrial, but anybody who has transacted in industrial over the last 12 months probably got paid significantly more than they actually had on the books,” she observed.

After some dispositions to “clean up” its industrial portfolio, Fengate is typically opting to build new projects rather than trying to acquire facilities that can meet current market demands. Turning to envisioned prospects for 5% annual rent growth, McKenna sees plenty of room to manoeuvre.

“You have to look at industrial rents from the perspective of affordability for the tenant. If you look at a residential rent, it can make up 30, 40 or 50% of the renter’s income, whereas the industrial rent can be 5 to 10% of the tenant’s income so it’s a much smaller factor,” she maintained. “We’re still bullish for industrial.”

asset mix, I think, that’s the biggest contributor to the difference between us and the U.S., where I expect there is a lot smaller retail component,” Plesman said.

Looking to the future, institutional investors are expected to adjust their portfolios accordingly. Plesman notes that institutions are already “proactively” selling some iconic office assets and predicts that trend will continue. Mouchakkaa foresees more focus on office properties’ asset-level

strengths and weaknesses with less emphasis on picking winning markets.

“In a systematic world you were really betting on a given metro’s GDP wealth for the future. That has traditionally really been a big driver in office rents,” Mouchakkaa explained. “Going forward in this pandemic world, in the next three to five years, investing in the office space will be really micro and a stock digger’s type of strategy.” ❚❚

INDEX PERFORMANCE DRIVER Industrial returns are identified as a factor in the Canada Property Index’s performance in 2021 — with an average total return of 7.9% — relative to the Canada Property Fund Index, which delivered a net fund level return of 14.6% and a direct real estate return of 11.4%. The fund index represents nine non-listed open-end core real estate funds collectively holding 1,026 assets in 2021.

“One of the reasons these funds have been so strong is because they have a lot more industrial than you see in the main index.

They carry about 10% more industrial assets and that’s having a meaningful impact on the fund performance,” Fairchild reported.

“Historically, if you didn’t have big office and super-regional malls, you didn’t perform at the same level. Well, guess what?, the institutions own most of that,” Plesman mused. “The funds picked up a lot of the assets that they could aggregate, and they have been the favourite asset classes through COVID.” He sees similar underpinnings in the gap with the U.S. Annual Property Index, which posted a 2021 total return of 18.2%. “It’s Canadian Property Management | April 2022 17

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A TECH-SAVVY APPROACH TO SMARTER BUILDING ACCESS Q&A with Preston Grutzmacher, SALTO Systems The work-from-home revolution, rise of online deliveries, and other resident trends have created a buzz at multifamily buildings. With this increased activity comes heightened considerations for building security and access control that property operators are wise to address.

Ahead, Preston Grutzmacher, Residential Business Leader with SALTO Systems, shares insights into multi-residential access control trends and technologies.

How has the pandemic and work-from-home shift increased the need for “smarter” entry solutions in residential buildings?

The pandemic has driven the adoption of multifamily technologies for both residents and building operators. And while the original drivers for these technologies may have been safety-related, they’re now becoming more about enhancing the overall resident experience.

For example, the way residents book fitness rooms, grant guests access, or even check into their vacation rental has become more convenient and safer. Before the pandemic, a resident would likely have had to visit their gym in person to see if a machine was available so they could start exercising. In recent years, though, the introduction of occupancy limits and social distancing in response to COVID gave rise to new solutions where residents can instead log onto their building’s app and reserve a timeslot in the gym remotely. This approach is not only safer but leads to an improved resident experience because residents can quickly check to see if there is space for them or if their favourite machine is available without leaving their unit.

Also, guest access was a manual or in-person process before the pandemic. Where residents once might have had to ask their property manager for a guest keycard or mechanical key, now we

have the tech to let residents open up their building’s app and grant visitor access to their friends or service providers. There’s no need for a resident to visit the building’s front desk staff, property manager, or pay a deposit for additional mechanical keys.

Here’s another example. In years past, it was common for potential renters to schedule a time to visit a building for a showing. The potential renter had to coordinate schedules with the leasing agent - typically during business hours - and then tour the building alongside the leasing agent. Because of the pandemic, though, many properties implemented selfguided tours using digital keys to limit staff and renter contact.

Self-guided tours were created as a safety procedure but quickly improved potential renter experiences. Another benefit with self-guided touring is that potential residents can view apartments after business hours with family or friends without an accompanying leasing agent.

Lastly, we’ve also seen the growth of “aparthotels” which is where multifamily building owners have a single building with both traditional 12-month leases and furnished units that are specifically for vacation rental purposes. Hospitality guests prefer aparthotels because they receive a PIN code and go directly to their room; there is no need to see a hotel concierge, wait in line, or potentially be exposed to COVID. All of these solutions and enhanced resident experiences require smarter access control and often smart electronic locks.

Similarly, how has the rise of online order deliveries driven demand for smart door solutions?

Residents aren’t going out to eat or visiting brick-and-mortar stores as much as they did prior to the pandemic. They are, however, ordering food from local restaurants and items from online stores constantly. Of course, both food and package

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delivery providers need a convenient way to get into buildings, and this has sparked a transformation at the front door of many multifamily buildings.

In today’s multifamily buildings, a video entry panel, package delivery or locker solution, or smart lock are essential devices.

Residents expect to be able to remotely let in delivery drivers via a mobile device. Locked front doors and mechanical keys just don’t cut it anymore.

How are smart access control solutions evolving to address these trends?

We’re seeing the emergence of a new ecosystem of hardware and software specifically designed for the multifamily market.

These platforms can be focused on the resident experience, in-unit IoT control, vacation rental guest management, package delivery, video entry panels, virtual concierges, or selfguided touring.

At SALTO, for instance, we’re focused on doing what we do best, which is producing the latest in access control technology and smart electronic locks. We have smart locks designed for every door type, unit locks, deadbolts, common areas, perimeter doors, main entrances, back of house, exit devices, elevator control, overhead garage doors, padlocks, aluminum storefronts, and much more. Moreover, our state-of-

the-art technology makes managing these devices simple and obtainable with minimal infrastructure.

Because SALTO’s solutions on their own don’t meet every multifamily operator’s needs since we focus on access control, we also partner with leading multifamily technology platforms to make buildings more efficient, easier to manage, and improve the resident experience. This enables our platforms to either be standalone for access or integrated into other leading platforms to deliver a comprehensive building management solution.

Overall, it’s our opinion that residents and building owners win when systems are open and have strong technology partnerships with best-in-class platforms.

How do these solutions save property owners/managers costs?

Many multifamily owners and managers are facing labor shortages. There is simply more work to be done than staff can complete, and this means building teams have to become more efficient.

That said, smart access solutions make managing buildings easier. Property managers can remotely open doors, instantly grant guest access, issue digital credentials, and make changes to access permissions quickly. And, when access control is integrated with other systems, it means that property managers may only need to manage a single database of users, dramatically lowering data entry requirements. Removing the margin by property managers makes buildings more secure.

Overall, trading mechanical keys for smarter, faster, and more efficient smart access control is the true key to making buildings easier to manage, more efficient, and more secure – all while boosting the resident experience.

Preston Grutzmacher is a Residential Business Leader for North America with SALTO Systems. Learn more about smart access solutions for all buildings at www.saltosystems.ca.

RENT SLIP DEEMED BLIP

Institutional Investors Expressing Confidence in Multifamily Sector

By Barbara Carss

CANADA’S institutional investors typically view multifamily rent slippage as a pandemic-related blip that was never expected to be lasting. The 2021 results from the Canada Annual Property Index reveal that multifamily assets posted the largest year-over-year decline in net operating income (NOI) among the four main property sectors — a 5.8% drop from 2020 — while delivering a 7% total return on investment for the year.

Speaking as part of an industry insider panel tasked with providing on-the-spot feedback alongside the online release of the results, Jaime McKenna, Managing Director and Group Head of Real Estate with Fengate Asset Management, advised that an uptick in rents in the fourth quarter of 2021 will begin to flow 20 April 2022 | Canadian Property Management

through more obviously in 2022. Last year’s data is considered more reflective of 2020 trends.

“What’s happening in the marketplace is always about six to 12 months ahead of what’s happening with the returns,” she maintained. “What we did see for the first six months of COVID is that nobody moved. People stayed in place or those who moved were exiting the rental market. So we saw vacancy grow and we came into the new year [2021] either in decline or, at best, holding.”

“The concessions that were probably offered on the front end [of 2021] to bring renters back in, that’s also making its way to this data,” added Eric Plesman, Head of Global Real Estate with the Healthcare of Ontario Pension Plan (HOOP).

CAPITAL GROWTH REGISTERED In the big picture, multifamily assets were the second best performers in the index — which encompasses 2,367 directly held standing assets in 46 portfolios, collectively valued at $171.6 billion — last year. Industrial topped the scale with a 31.6% total return, while office and retail offered more modest matching total returns of 2.8%.

Looking at the components of the total return, industrial assets saw a whopping 26.4% cent increase in capital value, following a 7.8% gain in 2020. Multifamily recorded 3.8% capital growth, outperforming a 2.2% increase in 2020. Office and retail properties posted another year of eroding value, but at a more muted

sectorsnapshot

“Close to three quarters of the transactions last year were in the multifamily and industrial space. Historically, it’s closer to 40 to 50%.”

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level — at 1.8% and 1.5% respectively — than in 2020.

Across the entire index, NOI fell by about 15% between Q1 2020 and Q1 2021. In analyzing how that influenced capital appreciation or decline, Colin Fairchild, Executive Director with the index producer, MSCI, outlined some varying impacts according to sector.

“Not all of that fall was eating into capital values because valuers didn’t expect that to continue into the future,” he advised. “They expected a recovery and, indeed, it’s happening so that would seem to have been the correct assumption.”

In retail, a 17.4% year-over-year jump in NOI has had little impact on capital value because it’s still only a partial climb back from a 30% drop in 2020.

Policy makers could thwart their own best intentions if they scapegoat multifamily investors for rising housing costs. Commenting during the online launch of CBRE Canada’s annual commercial real estate outlook report, Paul Morassutti, the firm’s Vice Chair, Valuation and Advisory Services, warned rental housing supply and affordability prospects will worsen if market interventions divert institutional capital elsewhere.

“Debates about affordability and the financialization of housing are taking place in major cities everywhere. The gist of the argument is that homes and apartments should be for people to live in, not financial assets for investors to speculate on,” he recounted. “To be clear, rents are not high because of institutional ownership. Canada has a structural housing shortage.”

For now, some trends bode well for chipping away at that shortage. A recent uptick in purpose-built rental production is linked to strong market fundamentals, including the appeal of Canada’s socioeconomic stability and world-leading pace of immigration for both domestic and foreign investors. For example, it’s predicted that a substantial chunk of Akelius’ €9 billion (CAD $12.5 billion) payout from the recent disposition of European assets will be redeployed in Canada.

Meanwhile, Canada’s strategy for attracting permanent residents and new citizens from its pool of international students enabled it to achieve a target for 400,000 immigrants in 2021 despite the complications of the COVID-19 pandemic. Benjamin Tal, Deputy Chief Economist with CIBC World Markets, noted that Canada’s immigrant intake was six times greater per capita than in the United States last year, with approximately 70% of the new arrivals already in the country and simply requiring a change in their status from previously holding shorter term visas.

“Basically, you get international students, you educate them and then you provide them with the option to stay in Canada,” he summarized. “This means that they are younger; they are more educated; they speak the language; and they have some job experience. They are more employable and more likely to buy a house, or at least they will do it faster than the regular arrival. That’s very, very important for economic growth.”

In contrast, Morassutti suggests policy makers have failed to pair that immigration strategy with a plan for — or even appropriate signals to prompt — delivery of the housing that a growing population will need. He sees mounting calls for rent control measures and/or moves akin to the recent Berlin referendum endorsing the seizure of 240,000 private housing units for public ownership as an ominous brake on development momentum.

“If there is one concern that we have about multifamily, it is government intervention in a manner that helps neither owners nor renters,” Morassutti affirmed. “Taxing owners more, curbing excessive profits — whatever that means — will only dissuade capital from building more units, and more units are what we desperately need.”

Canadian Property Management | April 2022 21

sectorsnapshot “On the other side of things, obviously valuers and investors have a positive view on residential. They’ve almost discounted the current fall in NOIs,” Fairchild noted.

Si m i l a r ly, P a u l Mo u c h a k k a a , Managing Partner and Canadian head with BentallGreenOak, observed that wou ld-b e apa r t ment buyer s a r e unlikely to fi nd any COVID-triggered bargains. Plesman concurred with

22 April 2022 | Canadian Property Management

McKenna that rents are beginning to rise again, and described an uneven pandemic fallout in HOOPP’s portfolio.

“I was surprised when I saw the number [for declining NOI]. We haven’t been hit as tough as this with our own portfolio,” Plesman reported.

“I think part of it is the mix of suburban versus urban. Our urban assets got hit a lot more than the suburban assets. It was just stickier [in

the suburbs] and we didn’t see the same declines.”

SHIFTS IN PORTFOLIO WEIGHTING Last year saw approximately $703 million of net new investment in multifamily properties within the index. That’s a 6.5% boost to the $660 million inflow in 2020, yet well back of the cascade of new investment in industrial properties, which surpassed $2.4 billion.

An 87% increase in industr ial investment for the year also occurred in the context of a $913 million, or 30.6% year-over-year reduction across the index as a whole. Furthermore, Fairchild noted that a disproportionate share of the “other” category, which received more than $1.5 billion of new investment, is development land destined for industrial projects.

“This is really a very strong tilt in terms of net new money going into these portfolios,” he said. “The flipside of that is disinvestment from retail and offices to the tune of about $1.6 billion.”

The sell-off in the two sectors, which Fairchild reiterates “have been the bedrocks of institutional investment in Canada for decades”, augments evidence of the shift in weighting of asset types that is occurring in commercial real estate portfolios.

Mouchakkaa traced that change in both directly held and listed portfolios, while Bryan Reid, MSCI’s Executive Director of Real Estate Research, illustrated how investors are now seeing the widest divergence in returns based on property type rather than, as has conventionally been the case, the region where they are located.

“Close to three quarters of the transactions last year were in the multifamily and industrial space. Historically, it’s closer to 40 to 50%. About 20 years ago, multifamily and industrial combined were about one eighth of the private market index in Canada, so roughly 12%. Today that portion is now one third,” Mouchakkaa observed. “That’s not a fluke. That’s really a change, both in investor preference and in value.”

“Historically, the spread of returns has been greatest across countries and cities, and property type has actually played a much smaller role in diversification or the alpha story,” Reid said. “Really, in the last two year’s we’ve seen this blowout in sector spreads. I think this is why a lot of people look at allocations to sectors and think: this is potentially going to be quite a significant driver of returns going forward.” ❚❚

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Setting the path for better building performance and operation by facilitating continuous improvement in all aspects of the built environment.

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ROOFTOP SAFETY TRENDS – RAISING THE BAR ON ROOFTOP SAFETY & COMPLIANCE

T

he building design process includes many considerations for how it will serve the occupants working or living within it. And often, the technology required to optimize building safety, comfort, and efficiency ends up being installed on the roof.

These components may be necessary, but any piece of equipment added to a roof poses a degree of risk for those who may need to work in that space. And with rooftop footprints and configurations in constant flux, considerations for safety cannot fall through the cracks.

“Like every building component, roof footprint, features, and conditions can evolve over time; these changes can introduce challenges with accessing equipment,” says Vernon Ghinn a roof access and safety specialist at Skyline Group. “That’s why rooftop safety isn’t

a set it and forget it responsibility; it is something that should be reviewed and improved upon quarterly to ensure you’re staying in compliance and keeping everyone safe.”

EVOLVING HAZARDS Working at height comes with numerous risks. More and more, those risks include having to navigate access points (e.g., ladders or hatches) or rooftop equipment (e.g., HVAC systems, ducts, solar panels) that’s been installed throughout the space and – more frequently - near roof edges.

For example, says Ghinn, “At times, rooftop units are installed at the edge because that happens to be the quickest and easiest location for the installers to place the unit. The challenge lies in servicing those units, however, as a safety solution will be required to create a safe perimeter and working environment.”

Roofing layouts can also pose risks.

For instance, flat roofs can become

slippery to walk on when wet depending on the roofing membrane.

Added to these traditional hazards are the ones that appear over time. For example, building upgrades that affect the roof structure and design can also impact its elevations, requiring new safety equipment and considerations.

“That’s why it is important to understand the future state of your roof and how the roof is being accessed,” says another safety rep with Skyline. “Corridors are provided inside the building for safe access, so the same consideration should be given to the safety personnel required to keep the building running while accessing the roof.”

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Another trend impacting roof safety is that rooftops are becoming more crowded. As land prices rise and available space in populated areas decreases, organizations are optimizing their investment by making more use of their available space. Some of that focus is being turned to rooftops, where building operators are turning their rooftop into a publicly accessed space (e.g., a garden or patio) or investing in energy-efficient technologies (e.g., green roofs or solar panels). The result is a packed environment that requires safer access to all roof areas and increased awareness of potential fall hazards.

“Ultimately, it is important that your roof access and safety solutions stay up to speed with your roof as it goes through different transformations,” adds Skyline’s rep.

STAYING COMPLIANT AMIDST REGULATION CHANGES As building envelopes adapt, so do safety compliance obligations. This is also true of roof and height safety standards, which are constantly adapting to reflect emerging hazards.

“The number of roof fall-related injuries is alarming, so it’s only natural that local and national standards are getting stricter,” says the Skyline safety rep, explaining, “Today, more and more third-party service providers have their own safety guidelines that prevent employees from working on roofs unless the right safety equipment and protocols are in place.”

Aligning with such standards is a necessary challenge, especially since failing to keep a building compliant or ensure an installation is done to local safety guidelines can lead to serious injuries and costly liabilities. As such, it’s important to recognize hazards as they emerge and never lose sight of one’s safety responsibilities.

“It’s about accessing the roof safely, while working in a hazard free environment, in order to get back down from the roof safely,” says Ghinn, adding, “The fact is that the number of roof fall-related injuries is alarming, meaning there is room to improve on safety. The good news, though, is that the risks we’re seeing out there today can be mitigated with the right partners and height safety solutions that are readily available.”

RISING TO THE CHALLENGE WITH THE RIGHT SAFETY EQUIPMENT No doubt, modern rooftop hazards require modern safety solutions. For example, says the Skyline rep: “We see too many access ladders that are cut short at the bottom, requiring an extension ladder to gain access to the actual roof access ladder itself. This is often done to restrict access to the public, but climbing a small ladder to grab the roof access ladder to then climb onto it is just simply dangerous.

That’s why we developed a lockable gate to block the first five feet of steps and restrict unwanted access.”

The ability to manufacture ladders, guardrails, walkways, and various other rooftop safety solutions in modular sections is also proving to be a benefit for today’s contractors. These solutions can be transported to the roof via a service elevator versus renting a crane, while also being installed in a fraction of the time. All while offering the capability to customize a solution that best fits the needs of the roof and local guidelines.

“The savings become quite substantial for all parties,” says Skyline’s rep, explaining, “Our non-penetrating permanent guardrail system, for example, is designed to be lightweight and modular, making it quick and simple to install without needing to fasten into the existing roof frame. This eliminates the need to reseal the roof membrane for old or newly warrantied roofs after an installation.”

Protecting workers and staying in compliance means understanding your rooftop hazards before heading up onto the roof, while having a solution in place to mitigate the risks as they unfold.

After all, adds Ghinn, “Nobody should discover safety by accident.”

Skyline Group is a leader in roof access and safety compliance and contributed to this article. For more information on their rooftop safety solutions and their complimentary lunch & learn program, visit www.skylinegroupintl.com.

industryissues

WATCHFUL AND WARY

Canadian Real Estate Players Gauge Influential Trends CLIMATE CHANGE is more ominous than the spectre of regulations and taxes for a small majority of commercial real estate leaders responding to REALPAC’s recent survey of their expectations for the next decade. An overwhelming majority — 94% — also indicates that the industry is well positioned to reduce greenhouse gas (GHG) emissions.

Those findings are among more than two dozen projections gleaned last fall when industry strategists and decisionmakers were asked to identify societal and organizational challenges and opportunities, and to assess their preparedness to respond. Drawing on REALPAC’s membership comprising many of Canada’s most prominent commercial real estate companies and investment managers, insight comes from 33 highly placed players who collectively represent more than 16,500 direct employees and more than CAD $220 billion in assets under management.

More than 50% of respondents see climate change and regulations/taxes as significant business challenges, with a slightly higher margin (55% vs 52%) assigning concern to the climate. Talent attraction and retention ranks as the next most pressing challenge, with 30% of respondents deeming it significant.

When viewed through the lens of potential policy constraints, taxation is rated considerably more threatening (71%) than ESG (environmental, social, governance) policies (32%). Policies related to affordable housing (43%) are also viewed as more daunting than potential ESG regulations, while deficit spending (29%) is less off-putting.

In addition to 94% consensus that real estate can be a societal leader on climate action, respondents also suggest the industry has a role in: affordable housing (73%); equity, diversity and inclusion

26 April 2022 | Canadian Property Management

(55%); health and wellness (30%); and accessibility (18%).

Capital improvements and retrofits are the most frequently named options for reducing GHG emissions (37%), while equal quotients of respondents are looking to new technologies or investment and financing strategies (26%).

Nearly three quarters (73%) of respondents will rely on investment criteria to navigate the physical risks of an extreme climate, while 38% expect to augment resilience measures within buildings. There is less certitude in new technology for climate change adaptation, with only 8% of respondents ranking it as a trending tactic.

ESG EXPECTATIONS Looking to investors’ expectations and evolving performance criteria, 82% of respondents agree that investors will demand ESG strategies and 70% expect those demands will be explicitly stated in mission statements and directions to the board. Also aligned with climate action, 13% of respondents foresee heightened emphasis on risk management.

Those are themes that REALPAC Chief Executive Officer Michael Brooks likewise underscored in early November during the online presentation of the 2021 Canadian results of the GRESB assessment and benchmark of ESG performance in commercial real estate portfolios.

“One of the things we’re going to see is climate competent boards. Not just one person; the whole board needs to be trained on what’s happening in this space,” he predicted. “There’s also convergence of major standards occurring. The new Value Reporting Foundation, for example, is all about the integration of sustainability in financial reporting. There are more groups popping up and everybody is converging on the same goal, and that’s going to continue to push ESG.”

In addition to overarching ESG policies, 36% of respondents predict investors will specifically scrutinize equity, diversity and inclusion, and 30% anticipate companies will reflect commitment through performance metrics, mission statements and/or board composition. Respondents also recognize equity, diversity and inclusion as a foremost expectation of employees and as a key means to attract and retain staff.

Interestingly, after equity, diversity and inclusion (71%), respondents were most likely to cite flexibility (61%) as an employee expectation. However, a flexible work environment (34%) was considered less critical to attracting and retaining staff than compensation (52%), positive corporate culture (41%) or equity, diversity and inclusion (38%). Similarly, although a positive corporate culture is ranked as the number two lure for attracting or retaining employees, only 14% of respondents see it as an employee expectation.

Meanwhile, tenants’ ESG demands are deemed less pressing. Across the four main commercial real estate functions — office, retail, industrial and multifamily — respondents only discern expectations from office and multifamily tenants, and, in both cases, ESG is slotted fifth in the top five considerations.

Flexible space (48%) is ranked the top tenant expectation for office tenants, while multifamily tenants are considered to place most emphasis on amenities and services (68%). Industrial and retail tenants are both tagged to favour strategic locations.

However, respondents see that as a more clear cut choice for industrial (70%) compared to retail (38%), where demands for e-commerce support (33%), amenities and services (33%) and technology (24%) are also noted. ❚❚ For more information, see REALPAC’s website at www.REALPAC.com.

WHO’S WHO 2022

PRESENTED BY:

SPONSORED BY:

SPONSORED CONTENT

HOW CAN TECH HELP QUELL CRE AMBIGUITY?

by Peter Altobelli, Vice President and General Manager, Yardi Canada Ltd.

The current tumultuous times have produced mixed economic news. Inflation hit a three decade high of 5.1% in January, but the focus of consumer behaviour is expected to shift from goods to services as more provinces ease public health measures. In fact, CBRE’s 2021 Canada Real Estate Market Outlook predicts that commercial real estate (CRE) investment could exceed $58 billion in 2022, $600 million more than the previous year. As Canadians begin to rediscover their social skills in familiar surroundings, the present business environment offers reasons to be optimistic as well as cautious.

Amid this uncertainty, forward thinking and technology-driven organizations will achieve the most success in preparing for the next phase of normalization this year.

Preparing for future CRE demands Redesigning analogue operations to meet digital expectations is a common pain point for property management companies.

To simplify operational processes and create frictionless experiences, CRE leaders will need to implement technology that supports interconnection.

Examples of CRE tech include online portals that reduce barriers and enable tenants to communicate with landlords, create maintenance requests and submit payments from anywhere.

Other advanced software suites offer solutions that align with evolving market strategies such as the space-as-a-service business model. These flexible tools leverage powerful automation and gather data from across a portfolio into one cohesive system.

This functionality empowers businesses to seamlessly manage accounting, leasing, deal flow, capital projects, employees, facility maintenance and coworking from a single connected solution.

Constructing a single source of truth will provide the insights needed to confidently expand team productivity, enhance the tenant experience and elevate NOI. Boosting investor confidence Sustainability investing will continue to gain momentum in 2022, and leveraging comprehensive technology rather than 28 April 2022 | Canadian Property Management

piecemeal solutions will satisfy investor demands for detailed operational data. Best-in-class technology will also aggregate ESG performance information and reporting into one dashboard that investors can access for fast answers to complex inquiries.

On the broader investment front, advanced investment management software will continue to provide clarity into holdings, identify risks, track deal progress and terms, and calculate returns and compare them to benchmarks. Integrating all investment operations in a single platform enables the highest degree of portfolio transparency.

Achieving results Success in today’s real estate management and investment environment requires accommodating demands for easy online and mobile platform accessibility, transparency in the full scope of operations from full portfolio performance to tenant- and property-level operational details, and flexibility in the fledgling shared space and remote work environment. Using an all-inone platform for marketing, leasing and managing commercial properties carries strong potential for creating differentiators for property managers, satisfaction for tenants and expected returns for investors.

Visit Yardi.com to learn more about tech options that can revitalize your business.

TOP

TEN OFFICE OWN & MANAGE

MILLIONS OF SQ. FT.

Manulife Investment Management

15.40

Brookfield Asset Management

14.703

OWNED & MANAGED IN CANADIAN REAL ESTATE

RETAIL OWN & MANAGE

MILLIONS OF SQ. FT.

APARTMENT OWN & MANAGE MILLIONS OF SQ. FT.

Choice Properties REIT

42.390

Starlight Investments

55.714

RioCan REIT

32.015

SmartCentres REIT

31.868

Canadian Apartment Properties REIT

42.677

First Capital REIT

19.657

Boardwalk REIT

28.888

Homestead Land Holdings Limited

24.197

Realstar Management

23.520

QuadReal Property Group

12.80

Allied Properties REIT

12.467

Cominar REIT

10.886

Cadillac Fairview Corporation Limited

17.005

Oxford Properties Group

9.838

Crombie REIT

16.907

Cadillac Fairview Corporation Limited

9.727

Ivanhoé Cambridge

14.419

Starlight Investments

8.607

Cominar REIT

9.409

Plaza Retail REIT

8.712

Oxford Properties Group

7.558

INDUSTRIAL OWN & MANAGE MILLIONS OF SQ. FT.

OTHER OWN & MANAGE

MILLIONS OF SQ. FT.

Dream Industrial REIT

43.047

StorageVault Canada

10.772

Pure Industrial Real Estate Trust

26.60

Comfort Property Management Inc.

7.20

Summit Industrial Income REIT

21.060

BentallGreenOak (Canada) Limited Partnership

3.660

21.022

NorthWest Healthcare Properties REIT Oxford Properties Group

0.910

QuadReal Property Group

17.588

Concert Properties Ltd.

0.584

Choice Properties REIT

16.860

Allied Properties REIT

0.510

Cadillac Fairview Corporation Limited

0.335

Gitalis Group Inc.

0.276

Mainstreet Equity Corp.

0.116

I.M.P. Group International Inc.

0.086

BentallGreenOak (Canada) Limited Partnership

8.247

Morguard

7.593

Cominar REIT

15.252

Oxford Properties Group

12.990

Manulife Investment Management

11.70

Prologis

11.0

Hazelview Investments Inc.

20.096

Skyline Apartment REIT

19.025

Killam Apartment REIT

16.817

Mainstreet Equity Corp.

13.928

Cogir Real Estate

11.957

WHO’S WHO 2022 * JUNE ISSUE

SPONSORED BY:

TOP

TEN OFFICE OWN ONLY

MILLIONS OF SQ. FT.

Healthcare of Ontario Pension Plan Inc. (HOOPP)

11.770

H&R REIT

7.349

Crestpoint Real Estate Investments Ltd.

OWNED IN CANADIAN REAL ESTATE

RETAIL OWN ONLY

MILLIONS OF SQ. FT.

APARTMENT OWN ONLY

MILLIONS OF SQ. FT.

CT REIT

24.943

North American Development Group

7.60

8.340

Healthcare of Ontario Pension Plan Inc. (HOOPP) H&R REIT

7.591

Globe Capital Management

6.840

Oxford Properties Group

1.606

Southwest Properties Ltd.

1.425

5.706

Healthcare of Ontario Pension Plan Inc. (HOOPP)

7.960

CPP Investments

5.593

H&R REIT

6.075

Ivanhoé Cambridge

3.445

I.G. Investment Management, Ltd.

3.012

Crestpoint Real Estate Investments Ltd.

4.083

Westcliff

1.215

Nicola Wealth

1.848

Automotive Properties REIT

2.70

1.053

Northam Realty Advisors

1.20

Ivanhoé Cambridge

2.678

Lanesborough Real Estate Investment Trust

0.950

0.634

2.320

Sabjoy Inc.

North American Development Group

Choice Properties REIT SmartCentres REIT

2.216

I.G. Investment Management, Ltd.

0.948

Concert Properties Ltd.

0.385

I.G. Investment Management, Ltd.

1.948

Crestpoint Real Estate Investments Ltd.

0.896

INDUSTRIAL OWN ONLY

MILLIONS OF SQ. FT.

OTHER OWN ONLY

MILLIONS OF SQ. FT.

Crestpoint Real Estate Investments Ltd.

14.680

Globe Capital Management

7.140

Healthcare of Ontario Pension Plan Inc. (HOOPP)

12.910

Morguard

2.411

H&R REIT

8.561

Ivanhoé Cambridge

1.782

Nicola Wealth

0.678

QuadReal Property Group

0.673

CT REIT

0.278

Canadian Net REIT

0.212

Shelter Canadian Properties Limited

0.127

Ivanhoé Cambridge

8.310

I.G. Investment Management, Ltd.

7.512

CT REIT

3.884

Nicola Wealth

3.765

Imperial Equities Inc.

1.104

Concert Properties Ltd.

0.921

Northam Realty Advisors

0.762

Lanesborough Real Estate Investment Trust

8TH ANNUAL WHO’S WHO

A ranking of the Canadian condo industry’s major players and portfolios PA R T O F T H E

* June Issue P A R T

O F

T H E

0.088

SPONSORED BY:

30 April 2022 | Canadian Property Management

TOP

TEN

MANAGED IN CANADIAN REAL ESTATE

OFFICE MANAGE ONLY

MILLIONS OF SQ. FT.

RETAIL MANAGE ONLY

MILLIONS OF SQ. FT.

APARTMENT MANAGE ONLY

MILLIONS OF SQ. FT.

BGIS

104.405

BGIS

78.475

MetCap Living Management Inc.

18.481

CBRE Limited

47.658

CBRE Limited

57.582

Cogir Real Estate

16.916

Colliers Macaulay Nicolls Inc.

33.495

Colliers Macaulay Nicolls Inc.

11.730

Greenwin Inc.

15.854

GWL Realty Advisors

17.804

Epic Investment Services

7.384

The DMS Group

15.50

Morguard

6.744

Triovest Realty Advisors

15.172

Oxford Properties Group

6.247

Sterling Karamar Property Management

14.134

Canderel/Humford

14.851

McCor Management (MB) Inc.

4.910

13.914

BentallGreenOak (Canada) Limited Partnership

Briarlane Rental Property Management Inc.

10.070

Triovest Realty Advisors

4.776

Devon Properties Ltd.

9.232

Avison Young (Canada) Inc.

4.453

Tribe Management Inc.

7.632

BentallGreenOak (Canada) Limited Partnership

4.442

GWL Realty Advisors

7.293

Berkley Property Management Inc.

6.413

Epic Investment Services

9.428

Warrington PCI Management

8.770

Avison Young (Canada) Inc.

7.248

INDUSTRIAL MANAGE ONLY

MILLIONS OF SQ. FT.

OTHER MANAGE ONLY

MILLIONS OF SQ. FT.

CONDO MANAGE ONLY

MILLIONS OF SQ. FT.

CBRE Limited

37.607

BGIS

36.780

Triovest Realty Advisors

21.009

CBRE Limited

26.072

FirstService Residential Management Canada

103.784

GWL Realty Advisors

17.451

Harvard Developments

2.543

Crossbridge Condominium Services Ltd.

86.109

Colliers Macaulay Nicolls Inc.

16.40

The DMS Group

1.580

Del Property Management Inc.

69.30

BGIS

14.439

Avison Young (Canada) Inc.

1.167

Wilson Blanchard Management Inc. 50.141

Realspace Management Group Inc.

8.573

0.711

45.893

7.344

Downing Street Property Management Inc.

Rancho Management Services

BentallGreenOak (Canada) Limited Partnership

36.108

6.317

0.572

Pacific Quorum Properties Inc.

Morguard

Real Estate 360 Property Advisory

ICC Property Management Ltd.

34.846

Apollo Property Management Ltd.

0.464

Icon Property Management

26.10

Taft Management Inc.

0.435

Tribe Management Inc.

25.543

0.425

AWM-Alliance Real Estate Group Ltd.

22.388

PA R T O F T H E

P A R T

O F

T H E

Compass Commercial Realty LP

4.909

Avison Young (Canada) Inc.

4.896

Shelter Canadian Properties Limited

SPONSORED BY:

Canadian Property Management | April 2022 31

CANADIAN PROPERTY PROPERTY MANAGEMENT MANAGEMENTWHO’S WHO’SWHO WHO2022 2021 OFFICE TOTAL SQ. FT. MANAGE (MILLIONS)

OWN

INDUSTRIAL BOTH

MANAGE

OWN

RETAIL BOTH

MANAGE

BGIS

234.099 104.405

14.439

78.475

CBRE Limited

168.919

37.607

57.582

FirstService Residential Management Canada

103.784

Crossbridge Condominium Services Ltd.

86.109

Choice Properties REIT

69.750

Del Property Management Inc.

69.30

Colliers Macaulay Nicolls Inc.

67.751

Starlight Investments

64.321

47.658

OWN

APARTMENT BOTH

3.60

33.495 10.070 1.055

0.320

0.090

16.860

16.40

BOTH

2.690

2.320

42.390

0.50 3.372

2.754

8.247

55.714 7.344

21.022

0.174

4.442

6.295

2.498

50.141

Oxford Properties Group

49.725

6.80

9.838

12.990

QuadReal Property Group

46.975

2.992

12.80

17.588

GWL Realty Advisors

46.715

17.804

Dream Industrial REIT

43.047

Morguard

43.004

1.283

3.245

2.627

0.028

45.893 50.141

17.451

6.247

7.558

1.606

3.856 4.166

3.776

0.910

9.066

0.673

7.115

2.411

7.293

43.047 4.797

Canadian Apartment Properties REIT

42.747

Triovest Realty Advisors

41.328

Healthcare of Ontario Pension Plan Inc. (HOOPP)

40.240

Pacific Quorum Properties Inc.

39.127

0.349 0.240

7.593

6.317

1.120

6.744

21.009

0.117

4.776

6.090

0.056 15.172

0.054

12.910

0.151

37.605 35.547

Ivanhoé Cambridge

35.054

3.445

ICC Property Management Ltd.

34.958

0.010

RioCan REIT

34.837

7.60 2.577

0.252

0.384

10.886

2.216

15.252

4.108

8.310

31.868

36.108 0.154

0.177

2.678

14.419

2.490

0.135

1.782

0.036

Tribe Management Inc.

33.774

0.146

0.302

0.151

Cogir Real Estate

33.534

0.416

0.392

1.407

2.445

Cadillac Fairview Corporation Limited

32.530

3.318

2.145

17.005

Manulife Investment Management

32.50

Canderel/Humford

30.169

15.40 5.563

34.846

32.015

9.727

7.349

0.222

25.543

16.916

11.957 0.335

3.40 3.943

2.0

0.758

8.561

6.075

3.884

24.943

0.046 7.591 0.278 28.888

Pure Industrial Real Estate Trust

26.60

AWM-Alliance Real Estate Group Ltd.

26.597

26.60

Icon Property Management

26.10

Crestpoint Real Estate Investments Ltd.

25.365

Epic Investment Services

24.268

Homestead Land Holdings Limited

24.197

24.197

Realstar Management

23.520

23.520

1.020

0.670

1.588

0.931

22.388 26.10

5.706 9.428

14.680 4.283

0.066

0.554 7.632

11.70 4.786

0.050

9.409

2.268

14.851

42.677 0.048

7.960

0.043

SmartCentres REIT

0.819

0.013

11.770

Cominar REIT

28.888

OWN

26.072

11.730

Wilson Blanchard Management Inc.

Boardwalk REIT

MANAGE

36.780

8.607

61.948

29.105

MANAGE

69.30

52.275

29.576

BOTH

86.109 0.980

BentallGreenOak (Canada) Limited Partnership

H&R REIT

OWN

OTHER

103.784

Rancho Management Services

CT REIT

MANAGE

CONDO

4.083 7.384

0.896 3.173

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CANADIAN PROPERTY MANAGEMENT WHO’S WHO 2022 OFFICE TOTAL SQ. FT. MANAGE (MILLIONS)

Hazelview Investments Inc.

23.431

Summit Industrial Income REIT

21.060

Percel Inc.

19.670

First Capital REIT

19.657

Greenwin Inc.

19.547

Skyline Apartment REIT

19.025

The DMS Group

18.941

Apollo Property Management Ltd.

18.728

OWN

INDUSTRIAL BOTH

MANAGE

OWN

1.70

RETAIL BOTH

MANAGE

OWN

0.235

APARTMENT BOTH

MANAGE

1.40

0.160

0.123

0.128

0.168

0.404

15.854

0.178

1.137

0.546

15.50

0.780

0.246

0.628

2.282

4.896

4.453

0.522

Warrington PCI Management

17.904

8.770

3.859

3.482

0.646

Crombie REIT

17.861

0.954

Sterling Karamar Property Management

17.566 16.817

KDM Management Inc.

16.359

Briarlane Rental Property Management Inc.

16.027

0.171

Goldview Property Management Ltd.

15.563

0.076

SolutionCondo/Rentalys Solution

15.158

Concert Properties Ltd.

15.036

Brookfield Asset Management

14.703

14.205 14.044

Shelter Canadian Properties Limited

13.60

I.G. Investment Management, Ltd.

13.420

Nadlan-Harris Property Management Inc.

12.60

InterRent REIT

11.621

McCor Management (MB) Inc.

11.328

Northview Canadian High Yield Residential Fund

11.321

Prologis

11.0

0.772

14.134

0.088

2.053

0.921

0.362

13.914

0.360

0.097

15.030

0.196

14.962

8.490

0.080

0.167

12.467

0.025

2.355

0.584

1.258

0.031

0.30

6.840

0.510 7.140

0.005

14.20 13.928

0.029

0.818

0.127

3.012

1.729

0.40

7.512

0.011

0.178

5.306

1.948

0.539

0.116 3.910

0.425

0.127

0.948 12.60 0.423

3.366

1.80

4.910

11.198

1.019

0.001

1.132

0.233

10.189 11.0

10.518

0.057

Berkley Property Management Inc.

10.488

0.250

Westcliff

10.399

0.150

Medallion Corporation

10.016

9.727

1.580

0.040

10.638

Devon Properties Ltd.

1.153

14.703

Nexus REIT

9.979

1.167 1.147

16.907 1.419

0.385

Drewlo Holdings Inc.

9.849

0.464

16.359

10.772

Realspace Management Group Inc.

1.580 14.328

16.817

StorageVault Canada

Park Property Management Inc.

2.711

18.481

Killam Apartment REIT

Mainstreet Equity Corp.

BOTH

19.025

7.248

GPM Property Management Inc.

OWN

19.670

18.481

14.329

MANAGE

19.657

18.285

14.280

MANAGE

21.060

MetCap Living Management Inc.

Allied Properties REIT

BOTH

OTHER

20.096

Avison Young (Canada) Inc.

Globe Capital Management

OWN

CONDO

10.772 0.098 0.323

0.147

0.401

8.177

0.050 0.866

0.621

1.191 0.040

0.088

0.241

10.540

0.223 6.413 7.118

0.180 1.215

0.099 10.016

0.735

8.573 0.050

0.670 1.50

0.369

0.048 0.126

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8.251 9.232

3.555

CANADIAN PROPERTY PROPERTY MANAGEMENT MANAGEMENTWHO’S WHO’SWHO WHO2022 2021 OFFICE TOTAL SQ. FT. MANAGE (MILLIONS)

OWN

INDUSTRIAL BOTH

MANAGE

OWN

RETAIL BOTH

MANAGE

OWN

APARTMENT BOTH

MANAGE

Colonnade BridgePort

9.703

3.614

4.355

1.169

0.565

Downing Street Property Management Inc.

9.589

1.190

3.223

0.958

0.066

Minto Properties Inc.

9.469

0.911

North American Development Group

8.974

Crown Property Management Inc.

8.80

GWL Residential

8.791

Harvard Developments

8.720

0.351

0.201

0.634

0.870

4.60

4.20

1.916

0.775

0.884 1.126

8.712 0.424

0.675

0.018

0.132

Compass Commercial Realty LP

8.279

1.557

4.909

1.341

0.472

Davpart Inc.

8.043

1.478 3.406

0.692

1.851

7.844

2.770

0.178

7.592

0.118

0.136

7.337

Artis REIT

7.226

2.194

2.889

2.143

Comfort Property Management Inc.

7.209

Nicola Wealth

7.072

1.848

CPP Investments

6.724

5.593

0.005

6.30 6.192

Skyline Commercial REIT

6.128

MF Property Management Ltd.

6.125

BTB REIT

6.037

Slate Office REIT

5.730

Shindico Realty

5.727

0.160

Northam Realty Advisors

5.656

0.996

Bayshore Property Management Inc.

5.468

Dream Office REIT

5.438

Canreal Management Corp.

5.353

Osgoode Properties

5.298 4.80

Meritus Group Management Inc.

4.590

0.267

7.640

0.138

7.065

1.062

0.005

3.765

7.20

0.263

0.519

0.678

1.131 6.60

M&R Holdings

4.680

0.711

BOTH

7.135

6.429

A.A Property Management & Associates

Skyline Retail REIT

0.797

3.652

Menkes Property Management Services Ltd.

True North Commercial REIT

3.441

OWN

8.712

Strathallen Capital Corp.

6.60

MANAGE

2.543

8.451

6.429

MANAGE

2.361

Equium Group

Granite REIT

BOTH

OTHER

8.340

Plaza Retail REIT

Whitehill Residential

OWN

CONDO

6.30 0.077

1.247

0.356

0.183

4.329

6.128 6.125 2.823

1.822

1.392

5.666 0.128 1.20

0.063 0.330

2.114

0.762

0.232

0.514

0.521

3.097

0.276

0.098

0.203

0.006

0.086

0.659

0.722

4.746

5.438 0.217

3.711 0.136

1.424

0.058

5.104

4.80 4.680 4.590

Prospero International Realty Inc.

4.536

0.229

Hines Canada

4.504

2.846

0.485

1.069

0.477

2.659 0.027

Real Estate 360 Property Advisory

4.343

0.356

0.029

0.207

0.70

Blackwood Partners Corporation

4.274

1.652

1.847

0.722

0.052

Kevric Real Estate Corporation

4.053

3.915

Dayhu Investments Ltd.

3.873

0.010

Shape Property Management Corp.

3.871

0.361

0.094 0.791

0.363 2.478

0.139 3.747

0.072 3.303

0.044 0.207

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0.572

CANADIAN PROPERTY MANAGEMENT WHO’S WHO 2022 OFFICE TOTAL SQ. FT. MANAGE (MILLIONS)

OWN

INDUSTRIAL BOTH

Old Oak Properties Inc.

3.810

0.155

Aspen Properties

3.80

3.80

Kelson Group

3.750

Canadian Urban Limited

3.742

Hollyburn Properties Ltd.

3.734

Richmond Community Management Services Corp.

3.679

NorthWest Healthcare Properties REIT

3.660

Melcor REIT

3.485

1.603

Canlight Management Inc.

3.397

0.414

Automotive Properties REIT

2.70

OWN

BOTH

MANAGE

0.629 0.004

0.102

0.090

3.380 3.561

0.010

0.208

1.397

0.274

0.010

3.10 0.40

0.277 0.037

0.298

0.40

2.0

1.345

0.338

Atlantis Realty Services, Inc.

2.495

0.179

1.469

0.298

0.550

0.011

2.382

Dove Square Property Management Inc.

2.321

Greenrock Property Management Ltd.

2.275

Centurion Asset Management Inc.

2.268

Royal/Kente Property Management

2.257

Taft Management Inc.

2.177

O’Shanter Development Company Ltd.

2.151

Lameer Management

2.150

Provincial Property Management Limited

2.120

State Building Group

2.10

Brilliant Property Management Inc.

2.075

Melchior Management 777 Corporation

2.013

WJ Properties

1.892

Lionheart Property Management Inc.

1.890

Skywater Property Management

1.890

Equitable Real Estate Investment Corporation Ltd.

1.828

0.065

0.017

0.009

0.708

0.925

0.604

1.266

0.052

0.140

0.080

0.266

0.041

2.224

0.038

2.169 0.130

0.010

2.204

0.002

0.450

1.80

0.216

0.077

1.293

0.035

0.50

0.002

1.695

0.004

0.210

0.10

0.397

0.204

0.005

0.059

0.314

1.837

1.260

0.495

0.435

1.620 1.0

1.0 2.075

0.607

1.349 0.143

0.057

1.750 0.360

1.530 1.890

0.290 0.426

1.604

0.409

0.156

0.002

Harden

0.502

1.279

0.052

0.450

1.828 1.745

0.561

0.067

0.032

1.807 1.605

0.091

0.117

Axwood Enterprises Inc.

Southwest Properties Ltd.

0.173

2.187

Guardian Property Management Services Ltd. BlueStone Properties Inc.

2.30

2.70 0.081

The Enfield Group Inc.

0.054

0.009 0.150

0.761

2.391

BOTH

0.069

0.175

0.055

Realterm

OWN

3.545 3.60

2.631

2.475

MANAGE

0.394

2.525

2.403

MANAGE

3.670 1.893

Lawrence Construction/Grant Management

Brown Group of Companies Inc., The

BOTH

OTHER

3.532

Gulf Pacific Property Management Ltd.

Arnon Corporation

OWN

CONDO

3.660

3.561

3.109

MANAGE

0.010

3.645

2.950

BOTH

0.123

0.083

Williams and McDaniel Property Management

Richmond Property Group Ltd.

OWN

APARTMENT

0.080 0.826

HighPoint Property Management

KRP Properties

MANAGE

RETAIL

0.936 0.475

0.252

0.048 0.040

0.199

0.554 0.436

0.005

1.80

0.215

0.615

0.915 1.425

0.080

0.086

0.180

1.439

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CANADIAN PROPERTY MANAGEMENT WHO’S WHO 2022 OFFICE TOTAL SQ. FT. MANAGE (MILLIONS)

OWN

INDUSTRIAL BOTH

MANAGE

OWN

0.268

RETAIL BOTH

Westcorp Property Management

1.593

Huntington Properties Ltd.

1.584

0.105

Antrev & Associates Inc.

1.416

0.496

BUSAC Real Estate

1.363

1.194

I.M.P. Group International Inc.

1.307

0.030

1.191

0.415

0.120

Tower Building Management

1.275

Gillin Engineering & Construction Ltd.

1.240

0.647

Madison Group of Companies

1.228

0.635

Twin City Management Ltd.

1.178

Canadian Net REIT

1.169

CaraCo Property Management Ltd.

1.161

Lanesborough Real Estate Investment Trust

1.141

York Heritage Properties

1.106

Imperial Equities Inc.

1.104

0.135

0.250

0.026

0.10

1.050

0.050

1.010

0.10

0.986 0.945

Gitalis Group Inc.

0.928

Bedford Properties & Estates Ltd.

0.810

0.503

BOTH

MANAGE

OWN

BOTH

0.719 0.419

0.170 0.086 0.355 0.017 0.223

0.576

0.370 0.005

1.057

0.10

0.212 0.066

0.935 0.088

0.103

0.185

0.176

0.011

0.031

0.071

0.184

0.339

1.063 0.10

0.10

0.540

0.370

0.30

0.60

0.90

0.050

0.950

0.986 0.40

0.385 0.240

0.036

0.161 0.276

0.10

0.276 0.810

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36 April 2022 | Canadian Property Management

MANAGE

1.104

Concorde Group Corp.

Tillyard Management Inc.

0.062

OWN

0.756

Niot Investments Holdings Ltd.

Marcarko Ltd.

0.609

MANAGE

OTHER

1.053 0.250

1.10

1.0

0.311

0.060

1.063

1.0

0.110

BOTH

CONDO

0.957

Armadale Property Management Inc.

Rathcliffe Properties

OWN

0.041 0.950

0.090

Preston Group

Sabjoy Inc.

MANAGE

APARTMENT

CANADIAN PROPERTY MANAGEMENT WHO’S WHO 2022 OFFICE TOTAL SQ. FT. MANAGE (MILLIONS)

Merkburn Holdings Ltd.

0.757

Fana Group of Companies

0.750

Northland Properties Inc.

0.736

Parkit Enterprise Inc.

0.734

Melcor Developments Ltd.

0.553

Condominium Living Management Inc.

0.518

NexLiving Communities Inc.

0.494

Aldgate Group

0.485

Summa Property Management

0.473

OWN

0.045

INDUSTRIAL BOTH

MANAGE

0.304

0.084

OWN

RETAIL BOTH

MANAGE

0.286

OWN

APARTMENT BOTH

0.240

0.496

0.081

0.341

0.075

0.020

0.430

0.344

0.201

0.143

CLV Group

0.320

0.180

0.241

Gulf & Pacific Equities Corp.

0.229

Atlas Properties

0.141

Sluis Properties

0.111

Emergia Inc.

0.101

0.024

0.014

0.015

0.014

0.131

0.329 0.014

0.019

0.325

0.140

0.081

0.170

0.250

Regency Group MetCap_CPM_WhosWho_Supplement_2017.pdf 0.099 0.007 Oak Bridge Properties Inc.

0.208

0.092

Edie & Associates

0.245

BOTH

0.035 0.052

0.021

Leimerk Developments Ltd.

OWN

0.494

0.004

Canahahns Company Limited

MANAGE

0.518

0.426

0.251

MANAGE

0.734 0.057

0.350

0.250

BOTH

0.750

Glenview Management Limited

Gistex Inc.

OWN

OTHER

0.038

Goodwood Property Investment Ltd.

R.W. Commercial Property Management Inc.

MANAGE

CONDO

0.046

0.067

0.132 0.241 0.229

0.016

0.125 0.111

0.054 1

0.047

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0.004

0.013

0.027

0.049

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HELPING IMPROVE ENERGY EFFICIENCY OF BUILDINGS AND REDUCE THEIR ENVIRONMENTAL IMPACTS Buildings are significant producers of greenhouse gas (GHG) emissions. According to Natural Resources Canada, energy consumption of homes and buildings accounted for 17% of GHGs in 2014 . Improving buildings’ energy efficiency is an important component of Canada’s plan to reduce GHG emissions by 40% by 2030 (compared to 2005 levels). The need for new solutions for the building sector in Canada is also outlined in recent federal initiatives, such as the PanCanadian Framework on Clean Growth and Climate Change . Moreover, such solutions can bring significant cost savings to building owners and occupants.

There are many energy-efficient solutions and practices that can be implemented in the design and construction of new buildings. Repairs, renovations, retrofits, and recommissioning can further increase energy efficiency of existing buildings. While buildings use most of the energy for space heating, air conditioning, and lighting, other systems, from elevators to water heating, also contribute to overall energy consumption. A growing number of building owners and building managers are implementing energy management and smart control strategies to improve efficiencies across all energy-using systems holistically.

CSA Group standards support these efforts.

building commissioning, thermal bridging, and standardize energy modeling methodologies. They purposefully tackle both new and retrofit construction and various building types. Currently, some of these complex system standards are being considered for incorporation by reference into the National Energy Code of Canada for Buildings (NECB) and provincial energy codes such as the BC Energy Step Code.

Effective commissioning can help save energy While buildings have to meet the requirements of the national and provincial codes and standards, it is also important to ensure that, once in use, the energy systems operate as they were designed. Effective commissioning of these systems can save 5 to 15% of energy annually .

CSA Z5000-18, Building commissioning for energy using systems and CSA Z5001:20, Existing building commissioning for energy using systems, provide protocols, best practices, and recommendations for commissioning of the energy and water system components in new and existing buildings, respectively. Consistent with current building

Leading the way toward system-level standards CSA Group’s Energy Efficiency program has a long track record of developing discrete performancebased standards for use and application in buildings.

These standards address buildings’ lighting, HVAC and refrigeration systems, as well as residential and industrial products. Many of these standards are referenced in Canada’s federal and provincial energy efficiency regulations and harmonized with the United States. While the development of this type of standards continues, there is a strong need for broader, system-level approaches.

Under the oversight of a new Technical Committee on Building Energy Systems, CSA Group launched several initiatives considering the interaction of various building components and subsystems to derive an overall system efficiency. These new system-level standards address

Natural Resources Canada, Canada’s Building Strategy, http://www.nrcan.gc.ca/energy-efficiency/buildings/canadas-building-strategy/20535 (accessed February 2022) 2 Government of Canada, Pan-Canadian Framework on Clean Growth and Climate Change, http://publications.gc.ca/collections/collection_2017/ eccc/En4-294-2016-eng.pdf (accessed February 2022) 1

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National Energy Code of Canada for Buildings (NECB) reference CSA Group Building Energy Systems Standards

New Buildings

Existing Buildings

C873 Series: 15R(2020), Building energy estimation methodology

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CSA Z5000-18, Building commissioning for energy using systems

X

CSA Z5001 1:20, Existing building commissioning for energy using systems CSA Z50 10:21, Thermal bridging calculation methodology

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CSA Z5020, Building energy modeling standard (in development)

X

CSA C510:21, Ideal state benchmarking and application of benchmarking energy factor for data centres

Part 3 (simple buildings)

Part 3 (complex buildings)

X

Part 9 Larger NonResidential Buildings & MURBs

X

X

X

X

X

X

X

X

X

X

X

X

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Part 9 Residential Housing & Small Buildings

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Figure1: Summary of CSA Group Building Energy Systems Standards currently published or in development

management practices, these Standards can help you reach optimal performance and efficiencies of energy systems to conserve energy and reduce costs.

Both CSA Z5000-18 and CSA Z5001:20 are available for no-fee view access on the CSA Store.

methodology you can use to calculate thermal bridging in buildings and estimate its energy impact on building envelope heat loss and gain.

CSA Z5010:21 is available for no-fee view access on the CSA Store.

Addressing thermal bridging to help reduce heat loss As space heating and cooling consume a significant portion of energy in Canada’s commercial, institutional, and residential buildings, the building envelope’s thermal performance plays a critical role in reducing heating loads.

Thermal bridging occurs when a building component extends out of the conditioned space, allowing for heat transfer. Disregarding thermal bridges can result in underestimating the total heat loss through walls by 20 to 70%. If major thermal bridges are not addressed, adding insulation may not significantly reduce the overall heat loss through the walls.

The new National Standard of Canada, CSA Z5010:21, Thermal bridging calculation method, provides a consistent

Facilitating the deployment of new technologies New emerging technologies, from renewable energy production to thermal storage and connected devices, have the potential to further improve energy efficiency of buildings and reduce their environmental impacts.

New standards can help high-performance, intelligent buildings reach their full potential. CSA Group recently launched a project that will help standardize requirements for information and communication technology infrastructure and data management for buildings. One of the overarching purposes of this systems-level standard is to support the safe and secure interconnection and communication of intelligent building systems, such as HVAC, lighting, security, or elevators.

3 Natural Resources Canada, Commissioning for new buildings, https://www.nrcan.gc.ca/energy-efficiency/buildings/new-buildings/commissioningfor-new-buildings/20679 (accessed February 2022) 4 Natural Resources Canada, Recommissioning for existing buildings, https://www.nrcan.gc.ca/energy-efficiency/buildings/existing-buildings/ recommissioning/20705 (accessed February 2022)

ATTUNED TO

THE SIGNALS Updated Model Green Lease Reflects Emerging ESG Imperatives

By Barbara Carss REALPAC’S NEWLY updated model green lease for Canadian office buildings introduces measures aligned with the broaden i ng dema nd for E SG (environmental, social, governance) reporting and performance outcomes in commercial real estate, and also responds to some arising pressures landlords are facing in general lease administration. In this fifth formal revision since the inaugural 2008 effort, the document’s defining centrepiece has been renamed the “Sustainability Management Plan” to reflect some new 40 April 2022 | Canadian Property Management

considerations — such as accessibility and health and well-being — that aren’t expressly tied to the environment.

Even so, some of the most notable changes in version 1.05, which was released in December 2021, relate to reduction of greenhouse gas (GHG) emissions and climate change adaptation. The Canada Green Building Council’s (CaGBC) zero-carbon building standard and certification has been added to the list of referenced initiatives landlords can undertake; a new prerequisite requires

tenants to purchase power from onsite renewable generation where it is available; and landlords and tenants will have to work together to implement resilience plans, shaping preparations for a nd response to cl i mate-related calamities and extreme weather events.

That’s all attuned to signals from REALPAC’s membership — which includes many of Canada’s prominent real estate companies, investment managers and institutional investors — as well as expectations that regulators, lenders,

esg insurers and influential corporate tenants will increasingly be making similar demands. Version 1 offered a pioneering leasing template for the North American market a dozen years ago, and since then has become something of an industry standard in Canada and/or the building block for companies that have developed their own green lease programs. Prior to version 1.05, it was most recently revised in 2017.

“With sustainability and leasing in general, we don’t want to come across, as an industry, like we’re calling on tenants to appease us because we’re the service providers. We want it to be an approach of working together to push sustainability,” says Kris Kolenc, Manager of Research and Sustainability with REALPAC. As with the predecessor versions, the Sustainability Management Plan (previously known as the Environmental Management Plan) sets out a framework for how the building’s energy and water consumption, solid waste output, indoor environmental quality, and impact on the natural environment and occupants’ health and well-being is to be managed, stating the obligations of each party to the lease. This can then be adopted as a lease covenant or as a commitment to use “commercially reasonable efforts” to comply with the provisions of the plan.

SUSTAINABILITY MANAGEMENT PLAN The updated model green lease both refines and expands the list of general objectives for landlords. Among the new explicitly stated commitments, landlords will now be asked, within reason, to address: transmission of pathogens; management of asbestos, Legionella and radon and other identified hazardous substances; climate hazard mapping; light pollution and bird collisions; and opportunities and infrastructure to encourage public transportation, cycling and electric vehicles.

The Sustainability Management Plan includes a list of building standards and certification programs to which landlords may either currently subscribe or choose to adopt in the future, with a concomitant understanding that tenants will not undermine efforts to maintain or achieve compliance. Additionally, it stipulates that tenants must provide data related to energy/water use, solid waste output or other operational elements they control within their premises, which landlords may require to comply with those programs or to assess whole-building performance.

“We wanted to accentuate GHGs in this lease and include some language about net zero.”

In addition to the CaGBC’s zero-carbon standard or a credible equivalent, other standards newly referenced in version 1.05 include Rick Hansen Foundation Accessibility Certification (RHFAC), WELL, Fitwell and Passive House. Kolenc stresses this comes with flexibility to sign on to the programs that are most workable and relevant for a particular building, and with the recognition that guidance and standards are steadily evolving.

“The previous version of the lease was more focused on energy management, which is linked to the associated GHGs, but we wanted to accentuate GHGs in this lease and include some language about net zero,” he says. “We’re really referencing what we think is relevant in Canada currently, but it also states ‘or another equivalent framework’ so users of the green lease can choose what’s best for their circumstance.”

“As further guidance or standards are created for the net-zero pathway, we will address it in more detail,” Kolenc adds.

“Similarly, there is no definitive standard in Canada of what is a resilient building, but we do expect further guidelines to be produced and we will reference those standards as they are developed.”

MERGING AGENDAS Version 1.05 now requires that landlords and tenants designate staff representatives to discuss issues related to the Sustainability Management Plan. Tenants will also be expected to attend information or training sessions that landlords may organize, and Kolenc foresees the two parties’ sustainability agendas will continue to merge.

“Tenants are going to be increasingly demanding net-zero space because they have their own corporate targets and corporate commitments,” he observes.

“Increasingly, all companies are going to have the same targets. If the real estate footprint is a big part of their carbon footprint, potentially, they’ll want to make sure they’re leasing with a leader who understands this and who reflects this in the lease.”

Those complementary objectives are also reflected in a U.S. based recognition program, Green Lease Leaders, which describes its mission as “creating sustainable landlord-tenant relationships”. Canadian real estate companies have been among winners of the awards, which the nongovernmental organization, Institute for Market Transformation, and the U.S. Department of Energy jointly launched in 2014 to showcase collaborative lease agreements that support energy efficiency, cost savings, improved air quality and sustainability.

Most recently, in 2021, Dream Office REIT, First Capital REIT and RioCan REIT were landlord honourees, while Ivanhoé Cambridge, Alberta Investment Management Corporation (AIMCo) and their tenant, TD bank, were recognized in the team transaction category.

“To qualify as a Green Lease Leader, there are prerequisites that you have to meet and then there are optional credits. The REALPAC green lease aligns with that,” Kolenc explains.

Outside the Sustainability Management Plan, the model green lease is a template contract for all aspects of lease administration. Here, too, updates have been made, including the introduction of new se ct ions to add ress hea lt h emergencies, amenity facilities and density limits. Aligned with the various updates, the lease also now addresses allocation of operating costs for building resilience, health and wellness attributes, electric vehicle charging stations and health emergency situations.

Melissa McBain, a partner with Daoust Vukovich LLP, led the legal update. The lease is a model for office buildings, but ma ny of the components of the Sustainability Management Plan are viewed as easily transferrable to retail or industrial assets. ❚❚ The model green lease can be found on REALPAC’s website at https://realpac.ca/product/ realpac-office-green-lease-national-standardlease-for-single-building-projects/ Canadian Property Management | April 2022 41

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FOR SUSTAINABLE PROPERTY MANAGEMENT Ready or not, sustainability has become table stakes in property management. Tenants and investors are increasingly intent on partnering with operators who are committed to greening their operations and taking the lead on climate issues.

“The idea of sustainability has been around for decades, but the awareness around climate-related issues has evolved,” agrees Kim Saunders, RPA®|HP®, CLO®, BOMA Fellow, Property Manager with East Port Properties, adding, “Today, there’s a recognition that real estate accounts for a significant portion of the world’s energy usage – up to 40% according to the United Nations – and that property managers and operators have a big role to play in contributing to a healthier, more resilient planet.”

Prioritizing sustainability also makes business sense.

Assets that embrace energy-saving equipment and ecoforward practices are more resilient and cost-effective to run. It’s little wonder, then, that a recent Bloomberg report states Global ESG assets will surpass $53 trillion by 2025 to represent over a third of the world’s total assets under management1.

In short: It pays to put environmental, social, and

1

governance (ESG) strategies at the top of the property management agenda. And to do that, says Saunders, property managers need the training, skills, and support to lead the way.

“To be successful, [property managers] need to know a bit about everything when it comes to sustainability,” says Saunders. “They need to know what technologies or processes will make their buildings more efficient, and they have to be able to sell sustainable strategies and investments to owners and other stakeholders.”

Going further with BOMI Championing sustainability in property management takes more than good intentions. It requires additional training and resources to ensure impactful strategies take root. It’s for this reason that programs like BOMI’s High Performance (HP) Sustainable Buildings and Real Property Administrator Designation programs are designed to provide property managers with the tools, resources, and skills to rise above evolving climate change challenges.

“BOMI’s RPA® designation basically prepares you for anything that comes your way,” says Saunders. “It gives

www.bloomberg.com/professional/blog/esg-assets-may-hit-53-trillion-by-2025-a-third-of-global-aum

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you the additional skills and knowledge to take your job to the next level or even take steps towards your future career in property management.”

“I always tell my coworkers to plan for the job they want, and that’s what the RPA® course allows,” she adds.

BOMI’s RPA® program is complemented by the organization’s HP program, a designation source that offers a more granular exploration of this fast-evolving topic.

“The BOMI-HP® program is deep dive into the things you do as property managers, how they relate to sustainability, and how to get future ESG initiatives off the ground,“ Saunders explains.

“And that’s an important piece,” she continues. “To make any progress on sustainability, you need to know how to engage stakeholders and communicate both the financial and social benefits.”

Indeed, gaining buy-in for sustainable initiatives can be a barrier for property management teams. It is a skill that requires insight into how investments in cleaner, more efficient operations translate into long-term savings. And that’s not always an easy sell.

“I remember trying to implement daytime cleaning

among our tenants because I knew it would save energy,” Saunders recalls. “I got a lot of resistance at first until one of the tenants finally agreed to try it on a pilot basis. I kept track of the results and shared them with other tenants, and pretty soon everyone started seeing the benefits.

Soon after, they started asking me to sign them up.”

The good news is that it’s getting easier to sell property management stakeholders on sustainability – both in regards to the return on investment and the positive impact on tenant relations. The key, Saunders notes, is communicating the value: “Once people understand how sustainability benefits an operation, it’s easier to get that support and engagement. And now, because climate change is such a public issue, that buy-in is becoming easier to secure.”

The pressure is on property managers to go further with sustainability and ESG. For those in the industry, that means understanding what needs to be done and acquiring the skills to take action.

Learn more about BOMI’s RPA® (www.bomicanada.ca/ real-property-administrator) and BOMI-HP® Designation (www.bomicanada.ca/bomi-hp) courses.

DIVERSITY DISCLOSURE Commercial Real Estate Associations Scrutinize Global Workforce COMMERCIAL real estate’s demographic imbalance in favour of white men becomes increasingly apparent with rising seniority.

Recently released results from a global survey of the industry’s diversity, equity and inclusion (DEI) policies and practices show that a majority of respondents are intent on broadening the industry’s employee base, but white men still fill the decision-making echelon to a disproportionate degree.

For example, women account for 41% of the workforce in North American firms participating in the survey, and hold 29% of senior-level professional roles and just 20% of executive management positions. In the same companies, the proportion of white employees rises from 70 to 84% in the ascent from the mid-level to senior-level professional ranks, while proportional representation of Asian, Hispanic/Latino and Black professionals slips by as much as half in the senior-level gradient.

However, 92% of the 175 survey respondents — which collectively represent 44 April 2022 | Canadian Property Management

about 435,000 employees and have USD $2.4 trillion in assets under management — report that they are working to increase diversity and are re-examining approaches for evaluating merit and promoting staff.

The U.S. based research firm, Ferguson Partners, conducted the survey and accompanying analysis on behalf of seven prom i nent i ndust r y associations representing private and listed real estate companies, developers, investment managers and institutional investors throughout North America, Europe and Asia Pacific — and concludes that participants’ willingness to disclose potentially unflattering data is evidence of their commitment to change.

“Most firms are early in their journey in adopting sustainable policies that will make an impact, and even defining what is a successful DEI outcome is difficult,” the report’s executive summary observes.

“With this study acting as a benchmarking tool, we hope to provide a valuable shared

approach for the industry to keep itself accountable and measure progress on this critical issue in the coming years.”

DEI INITIATIVES UNDERWAY Survey participants were asked to describe their DEI programs and outline the metrics they use to measure program outcomes related to recruitment, employee retention, professional development opportunities, inclusivity and pay equity. They also provided a breakdown, to the degree that was possible, of the composition of their current workforces.

Much of the resulting data is drawn from firms with employees in North America.

About 40% of all participants conduct business and have staff in more than one global region so that, across the entire database, 89% are active in North America, 45% operate in Europe, 33% operate in Asia Pacific, 4% operate in Latin America and 1% does business in Africa and/or the Middle East.

humanresources A slightly larger share of respondents — 47% — report they have formal DEI programs, while 45% characterize their efforts as a looser assortment of initiatives and policies aimed at supporting diversity. One quarter of companies participating in the survey have a staff position solely dedicated to DEI. Just 8% have no DEI programs.

In addition to gender and ethnicity, 70% of firms with DEI policies also address sexual orientation.

“Other dimensions still needing to gain traction are physical disabilities, socioeconomic backgrounds, mental health and neurodiversity,” the report notes.

STALLED BELOW EXECUTIVE LEVEL As with the E in ESG (environmental, social, governance), regulatory influences tend to shape the DEI path European operators are taking, with a larger quotient reporting they have formal policies and that they collect data on the gender pay gap. Nevertheless, women currently have the lowest rate of representation in the senior ranks of European-based companies. They fill just 16% of executive management roles and make up just 14% of board of directors, while comprising 38% of the total workforce.

The data also hints that women in European companies are more likely to stall in the mid-level professional ranks, where they account for 53% of positions. Stepping up to senior-level professional roles, their presence shrinks to just 23% of positions.

Similarly, although women account for the majority of junior-level professionals in

North America, Europe and Asia-Pacific — at 52%, 55% and 54% respectively — there is no way to determine what reflects new hires versus the failure of mature workers to advance.

Across all survey responses, 56% of participants indicate they would like to see more women in executive management, suggesting that 44% are fine with the status quo. Meanwhile, a majority of respondents — 52% — sees no call to increase pay equity transparency.

Survey respondents were more likely to advocate the advancement of individuals from underrepresented groups, with 69% endorsing more varied ethnic representation in their companies’ leadership. Looking at the current data, non-whites are a small fraction of the commercial real estate workforce at every level of seniority in North America.

Non-whites are disproportionately bunched in junior-level professional roles, where they make up 40% of the ranks despite accounting for just 31% of North American staff. This suggests that they are a growing quotient of new hires, while accounting for 16% of senior-level professional positions and 15% of executive management. At the board level, their presence shrinks again, to 13%.

DATA INCOMPLETE An ethnic breakdown of workforce composition is not provided for Europe and Asia Pacific, where there is more emphasis on collecting data about age. This highlights

the need for more reporting with standardized metrics in order to track how stated DEI intentions flow through to outcomes.

It’s expected these first survey results will underpin a benchmark, helping companies to gauge their own performance and compare it against other industry players.

All sponsoring associations are encouraging their members to participate in the 2022 survey.

For now, upwards of 60% of survey respondents report they are engaging with diverse job candidates to ensure they are considered for openings, and are examining where biases exist in the hiring process and attempting to remove them. More than 9% already have or plan to implement communication strategies related to DEI within the coming year.

“The scale of engagement among our members, partners and stakeholders in this survey very clearly demonstrates the strategic importance of equity, diversity and inclusion in our industry, and the urgency of removing barriers to equitable opportunities,” says Michael Brooks, Chief Executive Officer of Canada’s REALPAC, one of the survey sponsors. “Through intentional action, we can celebrate diverse perspectives, significantly enhance our businesses and support economic prosperity.” ❚❚ More information about the 2021 global diversity, equity and inclusion survey can be found at www.fergusonpartners.com/globalreal-estate-dei-survey-2021.

LISTED COMPANIES ADD WOMEN TO THEIR BOARDS Real estate made gains in 2021 in the proportion of women serving as directors of its publicly traded companies. The annual overview of the MSCI ACWI index — encompassing 48 capital markets and 2,887 member constituents worldwide — found that women accounted for at least 30% of board membership at 31% of listed real estate companies. That’s up from 25% in 2020.

On the flipside, 19% of boards had no women membership. Sector-wide, women held 20% of all board positions, which is a lower quotient than the 22.6% index-wide average.

At the C-suite level, real estate slightly outperforms, with women holding 5.4% of Chief Executive Officer positions, versus the index average of 5.3%, and filling 19% of Chief Financial Officer roles, compared to the index average of 15.8%.

Despite the significant percentage of real estate boards with no women, none of the laggards rank among the 25 largest companies, in terms of market capitalization, in which women are absent. Two real estate entities are among the 34 companies — equating to 1.7% of the total index — for which women make up the majority of the board.

Those are: Land Securities Group, based in the United Kingdom; and Unibail-Rodamco-Westfield, based in France. In both cases, about 55% of their boards are composed of women. Of the 34 companies with women-dominant boards, seven are based in France, six in United States and four in Sweden. France also boasts the highest share of women in director positions, at 45.3%, among 58 surveyed countries.

Of the 92 Canadian entities listed in the index, 64% have boards in which at least 30% of directors are women and none have allmale boards. They slip below the index average with just 4.3% women CEOs, but nudge slightly above with 16.3% women CFOs. Across all 92 companies, women fill nearly 33% of the directors’ positions — an improvement from 31.3% in 2020 and a marked increase from less than 23% in 2016.

In comparison, U.S. stats are drawn from a larger complement of 585 listed companies. There, slightly less than 50% of listed entities have boards with at least a 30% quotient of women. Across all listed U.S. companies, women fill slightly less than 30% of board positions; 6% of the companies have women CEOs and 14.4% have women CFOs. MSCI’s 2021 progress report on women on boards can be found at www.msci.com/www/women-on-boards-2020/women-on-boardsprogress-report/02968585480 Canadian Property Management | April 2022 45

SPONSORED CONTENT

TAKING ADVANTAGE OF VIRTUAL STAFFING Finding back-office talent was a challenge for property management firms long before the pandemic. And while the crisis is beginning to fade, staffing issues will likely remain a top concern for many teams. Fortunately, one thing employers have learned throughout COVID’s working restrictions is that virtual staffing is more effective than ever at filling workforce gaps.

“The past two years have erased a lot of the concerns and misconceptions around hiring and working with remote talent,” says Akan T. Rajah, Managing Partner with Assetsoft. “A lot of employers realized that their team members didn’t have to be physically within the office to do their work effectively, and that was especially true for back-office functions like accounting.”

Employers are also turning to virtual staffing to solve a never-ending talent shortage. The reality is that back-office professionals are in extremely high-demand, and finding local recruits means offering more than the competition. With virtual staffing, however, employers can access qualified and experienced labour pools worldwide.

No doubt, virtual staffing is a modern solution for a modern challenge. And it’s one that Rajah and his team at Assetsoft bring to the property management community And whether his team is being asked to assume routine tasks or assist with more intellectual responsibilities, Rajah says the result is always the same: “Once they see how quickly we learn their business and integrate with their workforce, they start seeing us as part of the team.”

THE TRUTH BEHIND VIRTUAL STAFFING MYTHS There are quantifiable benefits to virtual talent handling back-office functions. Even still, there are myths and misconceptions that continue to hold employers back from making a decision that could save them manpower, money, and headaches. For example: MYTH: VIRTUAL STAFFING POSES DATA SECURITY RISKS

REALITY: Data security and privacy are always a prime concern when employees work remotely. In recent years, advances such as expanding internet connectivity, virtual machines, VPNs, and finegrained data control which enable secure access from anywhere, have put those anxieties to rest.

“During COVID, a lot of companies realized that Software as a Service (SaaS) platforms and virtual machines allow their employees to work securely with sensitive data from remote locations,” says Rajah. “At the same time, virtual staff providers like ourselves upped their data security capabilities to make sure their clients’ data was well protected.”

For example, he adds, “The team works from our premises with 24/7 video surveillance and physical access restrictions. As well, a ban on mobile phones in the work area, enterprise-grade firewalls, blocked USB and card ports, regular copyright training, and other data security practices also ensure that the data accessed by virtual staff is secure and never leaves the office.”

SPONSORED CONTENT

MYTH: VIRTUAL ACCOUNTANTS WON’T HAVE THE SAME LEVEL OF INDUSTRY KNOWLEDGE

MYTH: VIRTUAL TEAMS OUTSIDE OF CANADA MEAN DIFFERENT TIME SCHEDULES MYTH: VIRTUAL STAFFING MEANS LOSING CONTROL

MYTH: REMOTE EMPLOYEES WON’T FEEL PART OF THE TEAM COHESION

MYTH: IT’S TOO EXPENSIVE TO HIRE VIRTUAL ACCOUNTANTS

REALITY: Working in property management requires an innate understanding and proficiency in back-office systems (e.g., Yardi), accounting standards, Canadian Tax Laws, and specific property operations.

Today, these are all skills that today’s virtual accountants can bring to the table.

“Our people may not be in the office, but they’re experts in what they do, and they’re experts at learning a client’s operations and becoming part of the team,” adds Rajah.

REALITY: Many third-party service providers work around their client’s schedules and time zones, ensuring they’re accessible no matter their location.

REALITY: Virtual teams like Assetsoft may assume responsibility for accounting, rent collection, vendor management, lease audit/abstraction, bookkeeping, reporting, treasury management, or any number of tasks, but that doesn’t mean they assume control.

For example, Rajah adds: “Our virtual staffing model ensures the client has direct control on their business outcomes. Our client can establish their very own team without worrying about all legal, human resource, and technical requirements.”

REALITY: It can be odd to think of teams being split across Canada or overseas. Still, many companies, large and small, have done exactly that during the pandemic to considerable success. Now that employees are being welcomed back into the office, many continue to embrace a remote or hybrid working model, recognizing that employees don’t need to be physically in the same room to be an integral part of the team.

REALITY: It’s actually the reverse. Virtual staffing enables companies to offload all the hiring, training, onboarding, and staff management responsibilities to their virtual staffing partners, saving them the expense and time it would take to tackle these HR functions internally.

“We look after all the hiring and ongoing HR concerns, so they don’t have to,” says Rajah. “The whole idea is to provide the support that ultimately frees up client resources.”

Blame it on shifting attitudes. Pin it on pandemic disruptions. Whatever the cause, the “Great Resignation” has left employers struggling to find people who know what they’re doing and are willing to work. True, embracing virtual accounting partners may have been a challenge in years past, but the technologies, skills, and third-party partners are in place today to make it a welcome and beneficial part of any business strategy.

The Assetsoft team encourages any questions and inquiries. Email them at info@assetsoft.biz or visit their website at www.Assetsoft.biz.

COVID ELICITS

IAQ COMBOS

MERV 13 Performance Considered Baseline for Risk Reduction

By Barbara Carss COMMERCIAL building operators could use a combination of air exchange, filtration and purification to comply with the industry-leading guidance for arresting airborne spread of pathogens and contaminants. However, since MERV 13 performance is the baseline requirement — meaning removal of 90% of particles larger than 1 micron and up to 75% of 48 April 2022 | Canadian Property Management

particles that are 0.3 to 1 micron in size — one of the chief drafters of the guidance suggests a MERV 13 filter is the most straightforward and cost-effective measure in many scenarios.

Speaking during a webinar sponsored by the Building Owners and Managers Association (BOMA) of Canada earlier this year, Luke Leung, the team leader for

commercial buildings on ASHRAE’s Epidemic Task Force, provided data and modelling to demonstrate the risk of COVID-19 transmission in average office settings and to outline the comparative benefits of various approaches for ameliorating that risk. Thus far in the pandemic, epidemiological studies in both North America and Europe have found

post-pandemicoutlook lower incidence of infection in offices than in residential dwellings or other types of venues where people can interact, but that hasn’t necessarily translated into office workers’ perceptions.

“A lot of time when we talk about COVID, and especially in the HVAC context, it’s really about the risk level we want to tolerate,” Leung reflected.

“It isn’t just about being safe. It’s also about feeling safe,” concurred his co-presenter, Steve Horwood, Vice President, National Building Development, with the HVAC service provider, GDI Integrated Facility Services/Ainsworth.

Together, the presenters weighed in on four complementary approaches for addressing indoor environmental quality: ventilation; filtration; air cleaning or purification; and occupancy and space configuration considerations.

Pre-omicron research indicated that, on average, there was a 1.4% chance that one infected person could transmit the COVID virus to others within an office space that adhered to ASHRAE’s HVAC guidance if it was fully occupied and no one was wearing a mask. That likelihood fell below

1% with a lesser density of occupants wearing masks, but, even prior to the omicron variant, other variables could influence risk.

For example, there is some scientific evidence that a small fraction (approximately 2% cent) of infected people generate vastly disproportionate quantities of the COVID virus, making them more virulent transmitters.

“Your risk level could be significantly higher if you have a super spreader in your office,” Leung acknowledged.

TRADE-OFF ENERGY PENALTIES Beginning with outdoor air intake, ASHRAE’s core recommendations are simply that buildings maintain at least the minimum outdoor airflow rates specified in applicable codes and standards. That’s based on the evidence that 100% outdoor air would deliver a small increment of added risk reduction where MERV 13 performance is in place, but would typically come with a significant impact on energy use.

Even if there is no impact on energy use, Leung cautioned that operators will have to

monitor outdoor air quality. As well, he noted that a radiant heating/cooling system, which is coupled with a dedicated outdoor air system (DOAS) for ventilation, brings in far less outdoor air than conventional HVAC systems — an energy-saving design distinction that’s less adept in the context of omicron.

“Your risk level can be higher because there’s just much less air to circulate around,” he explained. “A MERV 13 filter on the fan coil unit will perform better than a dedicated outdoor handling system with a radiant ceiling.”

FILTRATION Leung pegged the “first cost” or required capital outlay for MERV 13 filtration at about USD $0.25 per cubic feet per minute (cfm) of air handled compared to about USD $1.3 per cfm for ultraviolet (UV) light technology or up to $5 per cfm for other air cleaning options.

Addressing concerns that MERV 13 filters restrain airflow to an extent that can cause a problematic drop in air pressure, Horwood reported he had seen some good results in a series of tests his company

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Canadian Property Management | April 2022 49

post-pandemicoutlook conducted to assess air pressure dynamics across the range of filters from MERV 8 to 13, and theorized that other aspects of product quality also come into play.

“Not all filters were made equal. In about half of the situations, we actually had worse performance from MERV 8 filters because of the material that was used,” he recounted.

“We did not see the pressure drop in airflow concerns (for MERV 13) that most people anticipated that we would see.”

That said, Leung advised pressure drops and associated operating cost repercussions would be unavoidable with more rigorous filtration in the MERV 14+ range. To achieve performance of that level, building operators could use a MERV 13 filter in combination with air purification technology.

PURIFICATION UV light is an established means for destroying pathogens and disinfecting solid surfaces, and Horwood reported it has shown good results as an air cleaner. To get those results, though, he stressed that the application must be suited to the HVAC system’s size and capacity.

“It’s not something that you can just pluck off the shelf. There needs to be a certain level of millijoules per square centimetre

through the full surface of the duct and the velocity of the air through the duct,” he explained. “Be cautious, particularly if you’re talking about large volume air and a (UV) system that is multiple smaller lamps.

Multiple smaller lamps increase the opportunity for failure and can increase the maintenance.”

Look i ng at other ai r-clea ning applications, Leung suggested ionizers could be a largely redundant precaution in elevator cabs. That’s based on the short duration of elevator trips and the assumptions that the elevator has an exhaust fan facilitating up to 70 air exchanges per hour and that passengers will be wearing masks.

Citing a Chicago study that estimated there’s 0.005% chance of becoming infected in those conditions, he expressed his own confidence in vertical travel. “I don’t feel particularly concerned if I get into an elevator and people are wearing masks,” he said.

OTHER RESOURCES While mask wearing is contingent on broad cooperation of office occupants, facility managers can play a role in risk reduction through awareness of directional airflow and the impact of office configurations.

Leung described localized airflow patterns as a quirk that can’t be foreseen in bigpicture recommendations, pointing, for example, to a well publicized case of airborne spread within a restaurant.

“Heavy air flowing in one direction with high velocity is part of the reason why the person got infected over 20 feel away from the source,” he noted.

A paper presented at ASHRAE’s 2022 winter conference examines how office furnishing can affect air circulation and best practices for furniture arrangement. “It can be a value-add for your tenant,” Leung said.

Turning to tools for building managers and operators, Horwood promoted the free online calculator his company has developed to help navigate ASHRAE’s formula for outdoor air equivalency.

“You just need nominal knowledge about HVAC systems. You can slot in your square footage, what height, what MERV filter you are using, if you’re using UVC, if you’re using HEPA, and it will demonstrate the benefits of using MERV 13 or using other devices, but with MERV 13 being the easiest,” he said.

“Nice. That’s equivalent outdoor air made easy by Steve’s team,” Leung quipped. ❚❚

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