Sleeping Better

I´ve been up in Canada over the past week, and it´s obvious Americans could learn a few things from our neighbors to the north. Canada´s economy appears to be (really) stabilizing after a comparatively mild downturn and commercial real estate markets should follow suit-value declines have been in the 10-20% range in contrast to losses in the U.S. headed on average well above 40%. Housing markets in Canada suffered mild buffeting, but prices in prime neighborhoods have more than held their own, and appear to be increasing again. Foreclosures, defaults, and dislocation aren´t part of the local landscape anywhere from coast to coast.

Vancouver ranks as the top North American commercial property market after Washington D.C. on the Emerging Trends survey. Toronto suffers from increasing office vacancy-a result of new development in the downtown core. But deep-pocket institutional owners are well positioned to ride out any market softness. This global gateway has also grown into North America´s largest condo market, as more people look to settle in and around its attractive urban core. Hot growth Calgary suffers from overbuilding and hopes natural gas prices ratchet up to bail it out. Elsewhere the real estate scene shows few signs of any distress. On the property sector front, the U.S. automaker morass drags down the Southern Ontario industrial belt and hotels suffer from markedly reduced business and tourist travel from the U.S.