EDMONTON REGION INVESTMENT YEAR END MARKET REPORT RE/MAX COMMERCIAL CAPITAL Edmonton Region Investment Sales Summary Categories Year End 2016 Year End 2015 Year End 2014 #Sales Amount #Sales Amount #Sales Amount Office Downtown 3 $24,075,000 0 $0 2 $4,650,000 Suburban 32 $55,706,000 17 $71,835,000 29 $273,464,591 Condominium 74 $50,046,484 63 $48,732,502 53 $39,240,674 Subtotal 109 $129,827,484 80 $120,567,502 84 $317,355,625 Retail General 50 $140,455,164 29 $60,924,000 44 $84,447,821 Condominium 29 $26,161,580 23 $12,936,188 32 $20,242,614 Shopping Centre 24 $378,235,882 18 $112,194,238 17 $234,603,268 Subtotal 103 $544,852,626 70 $186,054,426 93 $339,293,703 Industrial Condominium 94 $53,298,236 87 $47,857,035 147 $85,578,370 Owner/User 125 $624,293,339 95 $292,791,958 98 $357,752,691 Multi-Bay 16 $135,106,860 20 $85,114,000 34 $228,396,028 Single Tenant 19 $190,551,878 10 $94,871,985 11 $60,119,775 Subtotal 254 $1,003,250,313 212 $520,634,978 290 $731,846,864 Apartment High-Rise 3 $115,268,000 3 $60,750,000 2 $52,751,800 Walk-Up 61 $465,268,294 53 $302,539,785 62 $226,460,500 Townhouse 2 $45,000,000 2 $10,140,000 3 $22,241,200 Subtotal 66 $625,536,294 58 $373,429,785 67 $301,453,500 Land Commercial 61 $130,958,498 69 $233,711,828 55 $159,798,335 Industrial 36 $46,869,724 91 $187,433,536 155 $366,121,857 Urban/Agricultural 36 $120,867,042 86 $301,401,920 134 $618,248,508 Multi-Family 50 $127,932,187 47 $144,455,759 84 $205,837,037 Institutional 2 $6,950,000 3 $8,426,221 2 $2,910,400 Subtotal 185 $433,577,451 296 $875,429,264 430 $1,352,916,137 Hotel/Motel 0 $0 5 $88,809,000 4 $60,139,999 Special Purpose* 27 $241,207,273 10 $55,039,121 23 $106,848,994 Grand Total 744 $2,978,251,441 731 $2,219,964,076 991 $3,209,854,822 * Auto dealerships, churches, schools, restaurants, mobile home parks, service stations, storage faciilties etc. Data courtesy of The Network. The quarterly update is published by RE/MAX Commercial Capital. Reproduction in whole or in part is prohibted without prior written permission. The information in this report is deemed to be correct, however we cannot guaranteed its accuracy. RE/MAX Commercial Capital T 780.757.1010 / 780.488.4000 www.rcedm.ca
Market Summary RE/MAX Commercial Capital is pleased to provide our quarterly newsletter highlighting all land and building sales within the Edmonton region. In addition, we provide our Fast Facts section highlighting key economic indicators as well as the top transactions for the year. The story at the end of 2016 and looking into 2017 is the rise and stabilization of oil prices over the $50 per barrel mark as well as the positive announcements of the 3 pipelines approved (Trans Mountain, Line 3 and Keystone). Let s not forget the Edmonton Oilers playoff contention in 2017! The real estate sales markets performed relatively well in 2016, despite the recessionary provincial economy and depressed oil prices. Just shy of $3B worth of sale transactions surpasses 2015-year end figures by approximately $800M but just shy of 2014 when there was $3.2B worth of activity. Strong sale sectors in 2016 included shopping centers, industrial owner/user buildings and apartment walk-ups. Land sales suffered in 2016 with only $400M worth of sales, basically half the volume of 2015 and a third of 2014. Not a surprising statistic land typically is a lead/lag indicator, however deals were still being completed in all land sectors. Downtown Edmonton is flourishing with new office, retail, institutional and residential construction. However risks to owners include the reality of increased vacancy in the apartment, industrial and office sectors with a potential of a slow down in retail sales. Capitalization rates have been rising moderately to reflect this increased risk. Overall 2017 should see GDP come back into positive territory with the Edmonton region forecast to lead the province in growth. Mortgage and capitalization rates are favorable for most asset classes, with capital readily available. CAP Rates Office 5.50% - 8.50% Retail 5.00% - 7.00% Industrial 5.50% - 6.50% Apartment 4.50% - 6.50% Hotel/Motel 8.00% - 10.00% Quote of the Year Year s end is neither an end nor a beginning but a going on, with all the wisdom that experience can instill on us. - Hal Borland
GDP: CPI: Fast Facts The impact of lower oil prices on the Edmonton economy saw growth slow sharply in the second half of 2016. Real Gross Domestic Product (GDP) for 2016 was -0.3% for the City. Oil prices have recently recovered to $50-$55 per barrel. Rebuilding in Fort McMurray will also help Alberta s GDP for 2017. After two years of contracting GDP, Edmonton, the Edmonton Region and Alberta are all forecast to head into positive growth through 2017. The City and Region s year-over-year inflation rate slowed sharply in 2016. Housing, clothing and food prices continue to move up and the inflation in 2017 is forecasted for to rise toward 2.0%. Employment (Edmonton CMA) Early 2017 expect continued growth in the labour force within the Edmonton CMA. Unemployment (Edmonton CMA) The unemployment rate (seasonally adjusted) in the Edmonton CMA was 7.4% in December, up from 6.8% in November and 6.9% in October. Edmonton s jobless rate in December 2015 was 6.3%. Due to gains in the labour force the unemployment rate is forecast to increase through the first half of 2017. Average Weekly Earnings (Edmonton CMA) Statistics Canada`s average weekly earnings (AWE) in the Edmonton CMA increased in November by 3.5% year-over-year to $1,138. During the first 11 months of 2016, AWE levels in the Edmonton region were up by 3.6% on average. Alberta Net Migration Continued strong in-migration from outside of Canada translated into a net gain of 6,594 newcomers in total during the third quarter of 2016. However, Alberta posted inter-provincial migration losses in the 3rd quarter of 3,850 persons, the largest decline since July to September 1988. Overall net migration will continue to be positive through 2017. Building Permits Following a surge in October, residential and non-residential building permit values (combined) in the Edmonton CMA increased in November 17% year-over-year to $457.4 million. After 11 months in 2016, total permit values (res. & non-res.) were down by 8% to $5.2 billion. Housing Starts Single and semi-detached starts combined declined in 2016 by 22.2% from all of 2015 to 6,327 units. After 12 months in 2016, row and apartment starts declined by 58% to 3,709 units. Residential Sales & Prices The number of homes sold on the MLS in the Edmonton area declined in 2016 by 6.5% from all of 2015 to 16,170 units. The annual average sale price of homes sold by realtors in 2016 up by 0.2% from the previous year to $372,772. A higher proportion of sales in the detached home segment helped to bolster the overall average. Sources: Statistics Canada, CMHC, UDI, City of Edmonton - John Rose
Top Transactions for 2016 Shopping Centre 9530-170 Street Edmonton Sold for $97,100,000 $377 per sq.ft. Shopping Centre 9450-117 Avenue Edmonton Sold for $75,900,000 $330 per sq.ft. High-Rise Apt. 12220 Jasper Avenue Edmonton Sold for $66,250,000 $290,570 per unit Urban/Agr. Land Hwy 643/RR 222 Sturgeon County Sold for $59,999,800 $27,168 per acre Industrial 12810-170 Street Edmonton Sold for $57,344,574 $114 per sq.ft. Walk-up Apt. 5000 Clover Bar Rd Sherwood Park Sold for $46,109,313 $221,679 per unit Shopping Centre 2004-38 Avenue Edmonton Sold for $45,877,882 $298 per sq.ft. Mobile Home Park 1505 Jubilee Dr. Sherwood Park Sold for $40,600,000 $80,555 per pad Walk-up Apt. 2703 James Mowatt Tr. Edmonton Sold for $37,035,000 $185,175 per unit Townhouse 8310-93 Avenue Edmonton Sold for $37,000,000 $144,531 per unit Walk-up Apt. 3005 James Mowatt Tr. Edmonton Sold for $33,260,500 $182,750 per unit Industrial 14404-128 Avenue Edmonton Sold for $33,000,000 $106 per sq.ft. Walk-up Apt. 908-156 Street Edmonton Sold for $30,153,750 $182,750 per unit Industrial 10030-34 Street Edmonton Sold for $30,000,000 $126 per sq.ft. Walk-up Apt. 18120-78 Street Edmonton Sold for $29,605,500 $182,750 per unit Urban/Agr. Land 20411-118A Avenue Edmonton Sold for $28,205,850 $21,444 per acre
The RE/MAX Commercial Capital Investment Team Commercial Sales & Leasing Business Brokerage Development Services Scott Hughes, MBA, AACI, CCIM, SIOR - Broker/Owner Direct: 780.915.7895 Email: scott@rcedm.ca Jeff Grobman - Associate Direct: 780.908.3842 Email: jeff@rcedm.ca Steven Pearson - Associate Direct: 780.993.7501 Email: steven@rcedm.ca Chris Stachniak, BBA - Associate Direct: 780.916.0163 Email: chris.s@rcedm.ca Chris Davies, B. Sc., MCNE - Associate Direct: 780.905.7562 Email: chris@rcedm.ca Tenant & Landlord Representation Property & Asset Management Joint Venture Opportunities RE/MAX Commercial Capital The Edmonton Region s exclusive RE/MAX Commercial brokerage. Locally, our agents have been working in the Edmonton commercial market for over 25 years achieving results for our valued clients and maintaining the highest educational standards within our industry. We re proudly an Alberta owned company, with a portion of every transaction supporting the local Stollery Children s Hospital in Edmonton. Our office is part of a worldwide RE/MAX, CCIM and SIOR network, with affiliation in major and minor submarkets throughout the globe. In addition our local office is aligned with AACI, ARLA, BOMA, CCIM, ICSC, NAIOP, SIOR and UDI. Brandon Hughes, CCIM (Cand.) - Associate Direct: 780.966.0699 Email: brandon@rcedm.ca Karim Bensalah - Associate Direct: 780.729.4382 Email: karim@rcedm.ca Terry Campbell - Administration Main: 780.757.1010 Email: terry@rcedm.ca Brandi Guerrero - Administration Main: 780.757.1010 Email: brandi@rcedm.ca Priyakna (Pri) Parasram - Administration Phone: 780.757.1010 Email: pri@rcedm.ca