Analysts Widely Agree That Edmonton Boasts The Best Opportunities For Investing In Commercial Real Estate
Canadians and investors worldwide are opening their cash hoards and readying to plow into new investments in 2013. Is it that the fear and uncertainty is finally over or something else, which is driving the new rush, and does a new surge in commercial real estate investment really mean that every opportunity, is a good one?
The Globe and Mail recently ran an article on ‘The End of Fear’ highlighting how many are unlocking their cash stashes and are preparing to make bold new investments in the months ahead. It is certainly true that there is a brighter outlook for many commercial real estate markets and vehicles but there is definitely more than this which is motivating a new stampede.
Some may have decided that nothing can prevent the new upward real estate swing; not elections, not fiscal cliffs, new mortgage rules or weak foreign economies. There may be some partial truth in this, as real estate markets decidedly turn on their own timeframe. However, more than shedding fear, desperation to find yields and safety for capital is surely behind this new surge as well. Many are tired of playing it too safe and still missing out and they are ready to make moves and calculated risks to get results.
Still, this doesn’t mean that investing wildly is the way to win. Following the herd can still be dangerous if the proper fundamentals are not lined up. Those still investing in Toronto are a great example of this. By next year there will be more office space in Toronto than New York. There might be a couple of first class tenants like Google hungry for downtown space but as many bail as the residential market falls apart there could be vast areas of vacant apartments and office space, with those that can find tenants seeing rents and yields fall.
For many sophisticated, heavy weight investors 2013 is a year for repositioning. Current strategy is focused on shedding unwanted units in those markets not key to their long term plans and which are not positioned to deliver good returns over the next 5 to 10 years.
Economists and analysts are now widely in agreement that many of the best opportunities for investing in commercial real estate and where the best gains and returns are to be found is increasingly in secondary markets like Edmonton, Alberta.