The future for commercial real estate looks strong – provided there’s no sudden or dramatic increase in interest rates in the near future.
That’s the view of Andrew MacLeod (pictured), senior vice president, valuation advisory services, Avison Young and panel host at the upcoming Canadian Mortgage Awards. He told Mortgage Broker News that the resilience of the sector had surprised many over the past 12 months.
“To date, a lot of businesses have been able to hang on,” he said. “The low interest rate environment has been propping things up, and if it continues to stay that way, then we might navigate this.
“If interest rates climb in any sort of significant way, it’s going to have a big impact on the transaction volume, which will then have an impact on value, and flow through the whole spectrum.”
The beginning of the pandemic saw fears surface that a market meltdown to rival the 2008 financial crisis was in the offing. However, those concerns proved unfounded, with the past year having witnessed little of the turbulence that befell the market during that crisis.
“I think the surprising thing has been how well real estate has performed across both residential and commercial,” said MacLeod. “There was so much uncertainty around COVID and what the impact was going to be.
“I think everyone felt like it was going to just crater things, and it didn’t really do that. This is different from the financial crisis in 2008 because you can’t meet with your clients the same way – at least you could back then – but the financial crisis was more tangible in terms of how it impacted things.”
MacLeod said that those low mortgage interest rates had been a significant driver of growth in residential and commercial real estate, representing a significant advantage for brokers looking to secure the best deal for their clients.
“From a mortgage broker perspective, one of the greatest tools that they have today is accessing cheaper money,” he noted. “That’s really been a driving factor in both residential and commercial real estate across Canada.”
The future trajectory of that commercial space, and how brokers can maximize their potential in it, will be among the topics of discussion as MacLeod hosts a virtual panel ahead of the eagerly-anticipated Canadian Mortgage Awards, set to take place on April 29 this year.
Tying in with the Avison Young Award for Broker of the Year – Commercial, the panel will explore a number of questions including participants’ plans to grow business in the coming years, their methods of setting themselves apart in the age of COVID-19, and the qualities every broker should have in order to become successful in the industry.
For MacLeod, the panel is an important opportunity to hear from some of the commercial space’s biggest players about their approach to the challenges and opportunities posed by the pandemic.
“What’s important in this discussion is how these top commercial brokers can share a bit of their wisdom to help others in the industry,” he said. “Another big takeaway is how COVID-19 is changing their approach.
“We’ll be looking at how that has impacted them, and how the panelists – who are some of the most successful commercial brokers in the industry – have pivoted to remain successful.”
One of the most intriguing topics up for discussion, MacLeod said, would centre around what’s in store for retail leasing: whether the pandemic had dealt it an irreversible blow, or if a significant rebound is likely in the near future.
That’s likely to lead into a conversation on the future of the office space, with MacLeod remaining confident that it’s likely to see a post-pandemic revival.
“I think when this is all said and done, people are going to be looking forward to getting back to the workplace,” he said. “There is nothing that can replace face-to-face collaboration in the office.”
The big day is getting nearer. Make sure to register in advance for the Canadian Mortgage Awards on April 29, and stay turned to Mortgage Broker News for all the buildup and news ahead of the mortgage industry’s biggest event of the year.