How Will Increased Terrorist Activity Affect Commercial Real Estate Investment?
How will increasing global terrorism impact the direction and flow of investment dollars?
More importantly, how will terror attacks like the recent tragedy at the Boston Marathon affect real estate investment in Canada? Violent acts like these are pure horror. Unfortunately, the reality is that terrorism and violence only seems to be on the rise. It may appear that some long waged wars have been winding down but so many new issues continue to pop up around the globe. Adding to the millions of disenchanted youth that become caught up in this type of psychology. Just look to the troubles in Ireland and the U.K. over the last decade, where incidents like the one in Boston happened on a daily basis.
Whoever the Boston bombers represented or didn't, there are plenty of other threats facing the United States. From North Korea's nuclear ambitions to Asian cyber-attacks and America's own homegrown antigovernment movement, not to mention natural tragedies caused by nature. We are just coming around to the Atlantic Hurricane season again and the massive property damage from last year isn't even finished being cleaned up yet.
It doesn't matter how great the investment opportunity appears, the size of the promise of returns, trendiness of destination or how safe the investment is- if your properties are disintegrated, swept away by winds and flooding, or deserted by the local populations you could potentially lose everything. All tolled investing in real estate anywhere up the East Coast of the United States is like hitting the roulette wheel; it's taking a huge chance and the odds aren't that great.
Fortunately there is little fear of terror attacks or hurricanes hitting Alberta, Canada anytime soon. This only makes investment here more attractive on a global scale, and with so much money in the air looking for a home it is now a pretty clear choice. Calgary continues to capture plenty of attention. Investors demanding better cap rates, a better safety position, enticing yields and holding a minimum of a medium term outlook are picking Edmonton. Not only is Edmonton a safe haven in terms of physical location but there are now many other trends coming into play simultaneously that are elevating local commercial real estate.