Postcard from Montreal – SIOR Global Spring Conference 2023
Our MD, James Mulhall was in Montreal last week attending the SIOR Spring Global Conference. Read his postcard below.
“Firstly, Montreal is a superb, forward thinking historical city. Travelling to these international events is important. It provides me with different perspectives on what is shaping the CRE industry at present. Typically, what happens in the US/North America & Europe has a follow on effect in Ireland (average lag = 6 months).
Here are my Key Take Aways from talking with some leading SIOR’s and listening to the conference speakers
1. Industrial still the poster child in the US
The lack of supply (of every grade and size) coupled with sustained demand from e-commerce and manufacturing industries has led to a 100-200% increase in North American rents in the last 3 x years. Note: Amazon no longer taking space.
2. Montreal has embraced building height to help solve its housing shortage
This is another example of a city where 50 x storeys+ high rise residential developments sit alongside 300+ year old heritage buildings. Why? They need these “condos” to solve housing among young people. The added bonus? It injects life into the Downtown which has become a ghostly quiet most days during the week with the great office worker retreat.
3. CRE Loans – Genuine Concern
Short sellers are betting against US CRE & US CRE loans in particular. Where loans are being sold (due to a risk at maturity), current discounts are somewhere between 30c-80c on the $ depending on the asset, location etc.
4. US Office Vacancy Rising…sharply
Capital Values currently 8-10% off peak but worryingly the current trend is mirroring the 07-09 decline graph. All CRE brokers agree that the office market is in for a tough 12-18 months. Unlike Dublin, rents on Grade A stock falling to “dealing level” in an effort to entice Professional & Corporate Occupiers to take space.
5. A.I – Buckle Up!
It’s landed, it’s in training, it’s getting more powerful, more useful but also potentially more dangerous (as it is not monitored or controlled by anyone but itself!).
6. The World – Great Powers are acting badly
US/China political relations at an all-time low….worryingly so. Also, might be an idea to remove that video dancing app from your phone. They are listening.
7.Canadians help get you on the property ladder
If you do not have 20% equity to fund your mortgage, you can apply to the Government to insure your mortgage federally. Seems like a simple solution to hard working folks who cannot afford to save while renting! Note – all applications are not approved but it’s a possible solution.
Merci beaucoup to the SIOR Canadian Chapter for hosting a great conference & all SIOR Europe colleagues attendees. Roll on Chicago conference in October.”
