Colliers International advises its Vancouver clients on the commercial real estate market
While North American markets appear to be the most stable globally, Kirk Kuester, managing director of Colliers’ brokerage team in Vancouver, advises clients and industry players to be vigilant around cash flow. “Secure cash flow wherever you can,” he says. “High occupancy in properties is essential; lock down leases where possible. Invest heavily in your buildings because tenants are becoming very knowledgeable and demanding. It’s imperative to maintain and upgrade your buildings where you can in lobbies and common areas, as well as improve amenities.”
While Vancouver’s unique geographical advantage renders the city a commercial real estate investment destination, Kuester believes domestic and foreign investors proceed cautiously when economic instability is a factor. “There is always an alternative in terms of investment,” says Kuester. “Stability is essential to a point, and then every investor will need growth. Growth is where I see a near-term challenge for Vancouver.”
Land constraints and limited inventory also restrict Vancouver investment flow, but the present stable level of liquidity in the market is good news for Colliers. “There just doesn’t seem to be any end to the investor that is interested in Vancouver,” says Kuester. “However, they’ll only go so far from a pricing standpoint.”
Looking ahead to the second half of 2013 and the challenges the commercial real estate industry faces, Colliers’ strategies are clearly defined based on the strengths and depth of its specialists. Kuester is certain of many factors and knows wherein Colliers’ biggest focus lies:
• The big challenge revolves around economic and political uncertainty.
• Demand for quality real estate from an investor and occupier standpoint remains high.
• Transit is changing the market. Colliers is working with owners who may be affected.
• Transaction volume is slowing because of uncertainty.
• Tenants aren’t moving and making relocating decisions as quickly as they used to.
• Real estate owners are not selling with the same velocity as in the past because of reinvestment issues.
Competition remains brisk around the few transactions that present themselves, and Colliers’ key objective is to establish its positioning around those opportunities. “From our perspective, we have made a massive commitment to training and specialization, and developing market experts that can distinguish themselves with very clearly articulated value propositions,” says Kuester.
The demographics of Colliers’ business are changing rapidly. Consequently, the company will hire and train a staggering number of brokers over the next ten years to achieve their growth targets. “As a result,” Kuester says, “Colliers University and the training and development the local offices have put into place are absolutely critical. We’ll ensure every client experience with us is memorable. We look forward to establishing long-term relationships, which will lead to repeat business.”