Commercial real estate trends show opportunity | RENX

Eric Horie, Senior Vice President, Head of Origination, Canada, Trez Capital (Courtesy Trez Capital)

Many industries have struggled with the uncertainty of the past few years. The pandemic and its aftermath have impacted all commercial property asset classes, but have also shown that innovative solutions in the market have given way to opportunities.

The pandemic has put significant pressure on property types such as hotel, retail and office. As the return to normality continues to trend strongly in the second half of 2021, these and other property types of asset classes, especially multi-family, single-family and industrial properties, have strong metrics.

Trez Capital is a leading private real estate investment firm dedicated to building a brighter future across North America, using a process of creative solutions, rigor and diligence with every loan. Trez Capital tracks trends and opportunities to bring the visions of borrowers and developers to life while supporting the needs of those who live and work in the end products.

A return to urban living and working

With vaccine uptake in both Canada and the US, economies will continue to benefit from tailwinds for the remainder of 2021 and into 2022. With full reopenings happening in parts of the US and starting in Canada, there is a trend back to the office at least a few days a week and a return to the urban home. The states where Trez Capital is active in providing debt and equity solutions accounted for 68.2% of net employment growth in the US between 2010 and 2020, and future projections show that trend will continue.

Tenant demand for apartments is being supported across North America with improving economic conditions and new strength in the job market. Renting has been a long-accepted trend in Europe, but people in North America typically opted for their own home. An emerging trend is that many North Americans are no longer viewing renting as a temporary phase, but rather as a choice for flexibility. More than a third of Americans live in rental homes, and over 32% of Canadian homes are rental homes. The traditional definition of family rentals is changing. An example of this change is a recent Canadian loan from Trez Capital to finance the renovation and conversion of unused single-family homes in southern Ontario into affordable duplex and triplex rental options that will support a growing community.

Migration trends

People get back to their city life and work schedules in the office, but they don’t necessarily return to where they left off. Migration during the pandemic, especially in the US, accelerated the trend towards warmer climates that offer a business-friendly environment and low taxes. The states in which Trez Capital operates including, but not limited to; Texas, Arizona, Colorado, Utah, Florida, South Carolina, and Georgia account for 68.5% of the projected net population growth in the United States from 2021 to 2026.

In Canada, migration and immigration are increasing the country’s population in three major cities: Toronto, Vancouver, and Montreal, with more than 60% of immigrants choosing these major cities as their place of residence. Trends for 2022 show increased immigration to Canada, which will continue to increase demand for multi-family, single-family and leasing products. In Canada, immigrants are projected to make up 30% of Canada’s population by 2036, which will likely mean big cities will see exponential growth.

Demand for housing

Accelerated growth in the regions where Trez Capital operates is driving housing demand to unprecedented levels. Across Canada, demand for condominiums in the resale and new build sector increased in the third quarter of 2021. Record-low mortgage rates and shifts in housing preferences in both nature and geography will support developments in many locations in Canada and the United States in 2022 and above out. As the vacancy rate is falling from the highs during the pandemic, we are seeing upward pressure on rental prices again in many metropolitan areas.

With loans of up to $ 100 million and up to 36 months for first and second mortgages, Trez Capital tracks trends and lends in areas with high growth prospects in both employment and housing, increasing the demand for multi-family homes. and drives single-family homes.

Since 2015, Trez Capital has funded the development and construction of nearly 80,000 homes across North America. Strong and growing communities are also banking on other property classes such as industrial, self-storage, office and retail. Trez Capital has funded development of over 20,000 acres and over 75 million square feet across all asset classes. In 2021 alone, Trez Capital is on track to earn nearly $ 4 billion in loan commitments that will help build important communities across North America.

Use trends

More and more investors are looking for real estate as part of their investment portfolio. While mortgage funds have become more accessible to a wider range of customers, private equity real estate has not. Trez Capital Private Real Estate Fund Trust (TPREF) gives investors access to development properties in their investment portfolios.

After 18 months of development, the Trez Capital Private Real Estate Fund Trust (TPREF) was successfully launched on August 31, 2021. TPREF enables investors to invest in an open structure to show their exposure to core developments and long-term asset management. This means direct ownership of investment properties. It is difficult to invest in development projects without concentrated risk and Trez Capital offers Canadian investors an alternative.

About Trez Capital

Founded in 1997, Trez Capital is a diversified real estate investment firm and a leading provider of debt financing solutions for commercial real estate in Canada and the United States. Trez Capital provides strategies for private and institutional investors to invest in a variety of opportunistic, fully secured mortgage funds, syndications and joint ventures, and offers developers and owners quick approvals for flexible short to medium term financing.

With offices across North America, Trez Corporate Group manages over $ 3.9 billion in assets and has financed over 1,600 transactions totaling more than $ 13.5 billion since its inception. More information is available at (* Trez Corporate Group AUM comprises assets of all Trez affiliated companies as well as USD 2.7 billion Manager AUM (Trez Capital Fund Management Limited Partnership)).

* TPREF is best suited for clients with a long-term horizon – typically five years or more, depending on the asset class and fund duration. Please consult the offer memorandum.

Sources: Government of Canada: New Immigrants to Metropolitan Areas: Canada – A Comparative Profile. Based on the 2001 census, Trez Capital commissioned a research study from Residential Strategies Inc.