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Optimizing commercial real estate space | REM

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The concept of real estate optimization is hardly new. While its definition varies somewhat, most real estate professionals agree that at its core, optimization is all about maximizing the efficiency and productivity of a commercial property – in effect, creating a space that contributes to, rather than detracts from, a company’s bottom line.

While real estate optimization traditionally has been about fitting more people into less space, that notion has changed over the past decade as businesses increasingly have recognized the importance the workplace experience plays in employee productivity, satisfaction and retention.




This year real estate optimization will take on even greater significance. Changes in reporting requirements mean that businesses must report the cost of their lease (and thus the full extent of their real estate-related debt) on their balance sheets, rather than in the footnotes of financial reports. Because this rule change will provide investors with even greater visibility into the companies in which they have a stake, businesses face greater pressure than ever to demonstrate the way in which real estate is working for them … and to make changes when the numbers suggest their plans are off the mark.

To meet these often-competing needs, businesses increasingly are turning to technology. Sensors, for example, can now enable a company to measure the occupancy and usage of its real estate, demonstrating conclusively whether it is being used effectively. This approach has led many businesses to reassess spaces that often go unused, such as board rooms or larger conference rooms. When paired with a modular design, such spaces can be quickly and easily reconfigured to meet day-to-day needs, increasing their functionality and ultimately making for a more effective use of existing space.

Sensor-based technology can also play a key role in allowing companies to test the effectiveness of a new space design or even a new furniture installation before committing to implementing it companywide. This is particularly important for businesses that have multiple locations.

Increasingly, such workplace data is playing a key role in both mid- and long-range corporate planning. Businesses are better able to plan for future growth if they can also factor in real data about space needs and effective use beyond current occupancy. Similarly, companywide renovations or even future acquisitions can be informed by occupancy and usage data, ultimately resulting in cost savings.

While technology can provide immediate insights into the use and effectiveness of a company’s workspace, it can also empower employees to do their best work in the kind of space that is best-suited for that work. Although sensors track work activity and not specific employees, they nevertheless provide managers with greater insights into the ways in which work teams are accomplishing specific tasks. That data subsequently can be leveraged to adjust the workspace in a way that better supports both the workers and the work product now, while permitting configurations to shift as needs change.

Creating this agile workplace takes real estate optimization to a significantly deeper level. Because it is no longer static, such workplaces become living, breathing entities that support and reflect the individuals who work there, as well as their work product.

This becomes especially important when you consider the attitude toward work exhibited by millennials and Generation Z. Generally, these younger workers, who now dominate the workforce, care more deeply about the setting in which they work, how work fits with their personal lives and whether employers are involved in their communities or other “worthy activities” versus strictly material rewards (salaries, bonuses, job titles).

Because these workers want more than simply “a job,” they look for workplaces that suit their lifestyles. They want surroundings that offer everything from quiet spaces where they can lounge comfortably, sip coffee and concentrate on their laptops to team spaces that allow them to interact and brainstorm ideas with fellow workers. As a result, desks and cubicles have given way to open spaces, distraction-free zones, lounges and on-site cafes. Increasingly, companies are also demanding their workers have ready access to health and fitness facilities, a variety of restaurants, entertainment and even cultural activities.

Quality of light is also playing a key role in real estate optimization. Recognizing that employees’ access to natural light can boost well-being and reduce stress (not to mention serving as another enticement to attract and retain workers), companies are moving enclosed spaces – file rooms, copy rooms – to the interior core and positioning open space and even private offices and meeting rooms around the perimeter of each floor.

Bottom line? True real estate optimization must take into account the health of the overall building, because it will impact the health of the workers who occupy it. And ultimately, it is both the physical and mental health of those workers that can spell the difference between corporate success and failure.

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Real Estate

Montreal real-estate prices climbing much faster than Toronto or Vancouver: study

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MONTREAL — The cost of housing per square foot has skyrocketed in Montreal while other cities saw little change over the last year, according to a new national survey.

The study found that condominium prices in downtown Montreal are up 13.5 per cent from last year to, on average, $805 per square foot.

That’s not as high as other cities, but it’s catching up — and Montreal’s rate of growth is outpacing other major Canadian cities.

Toronto’s condo prices grew to $1083 per square foot, an increase of just under 10 per cent, according to the study. In Vancouver, where you can find some of Canada’s most expensive condo prices, rates are down 4 per cent to $1192 per square foot.

To make the comparisons, Canadian real estate giant Century 21 collected data from real estate boards across the country to calculate the home costs per square foot.

“It’s important to compare apple to apples,” said Todd Shyiak, the company’s vice president of operations.

Montreal’s rise was even more explosive for detached homes and townhouses.

Detached houses in Montreal’s downtown and southwest rose to $958 per square foot, 40 per cent up from last year.

“It’s wild,” said Century 21 broker Angela Langtry. She says the pandemic raised demand.

“People had a lot of time to figure out they don’t like the home they’re in,” she said. “They all want pools.”

There was a big spike in sales, she noted, following a pause in brokerage during the spring, at the peak of the pandemic.

Experts say the pandemic will push people into the suburbs as they search for affordable housing and home office space.

“A huge portion of our society’s housing needs changed overnight,” said Shyiak. People “no longer need to be 10 minutes from the office.”

He says that could mean less demand for condos in the future. “People want their own front door,” he said.

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Carttera buys prime downtown Montreal development site

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Carttera has acquired a prime downtown Montreal site at 1455 De La Montagne St. which will mark its third development on the thoroughfare.

“We think it’s probably one of the best, if not the best, locations in the whole city,” Carttera founding partner Jim Tadeson told RENX. “We’ve had great success on De La Montagne.”

The two earlier projects are: L’Avenue, a building with 393 residential units, 84,000 square feet of office space and 34,000 square feet of retail that was developed with Broccolini and occupied in 2017; and Arbora Residences, a two-phase development with 434 rental and condominium units in three buildings being built in partnership with Oxford Properties.

Thursday’s latest acquisition, for $48.5 million from 630745 Ontario, is a 31,750-square-foot surface parking lot with flexible mixed-use zoning on the corner of De La Montagne and De Maisonneuve Boulevard West.

The site is near the Vogue Hotel Montreal Downtown, the new Four Seasons Hotel Montreal and high-end retail.

“It’s zoned for up to 203,000 square feet of density, which we’re going to take advantage of,” said Tadeson. “Our vision for the site is a condominium project with some retail.”

Since there is no demolition required and no heritage issues to contend with, Toronto-based Carttera plans to move ahead quickly with the luxury project.

It’s in the concept design phase and Tadeson said it could take six months or more before it’s prepared to make a submission to the city.

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Real Estate

Montreal Has the Hottest Real Estate Market in Canada Right Now

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If you thought Toronto’s real estate market was on fire, it’s time for a second take, because the market in Montreal is the hottest in all of Canada right now.

A newly-released annual report from CENTURY 21 Canada reveals that, following an early-spring decline due to the COVID-19 pandemic, sales numbers are bouncing back and house prices across the country are maintaining their strength. The study compared the price per square foot of properties sold between January 1 and June 30 of this year, compared to the same period last year.

In Toronto and Vancouver, unsurprisingly, prices remain high. But while regions across the country are seeing varied stories when it comes to their housing market fluctuations, Montreal stands out — there, prices have increased dramatically since 2019. While the numbers remain lower than Toronto and Vancouver, that housing market is proving to be the country’s strongest right now.

In Quebec’s largest city, prices have increased significantly since last year, particularly in the downtown detached house and townhouse markets. For example, the price of a detached house in Montreal’s downtown and southwest rose 42.14% to $958 per square foot, while townhouses went up 44% to $768, and condos, 13.55% to $805. Comparatively, in Toronto and Vancouver, prices saw more modest increases or, in some cases, even declines.

“Even though real estate in Quebec was not considered an essential service, we have seen strong demand and a jump in prices in 2020,” said Mohamad Al-Hajj, owner of CENTURY 21 Immo-Plus in Montreal.

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