Sales, leasing recession-proof

December 28, 2009
Winnipeg Free Press
Written by: Murray McNeill

Largest sales and leasing transactions completed in 2009

Winnipeg's commercial real estate market shrugged off the global recession and pounded out an average to above-average volume of sales and leasing transactions in 2009, preliminary figures show.

More than $292.5 million worth of sales and leasing deals have already been finalized this year, with several more expected to close before the end of this week, said Don White, co-manager of the National Investment Team with Colliers Pratt McGarry and chairman of the WinnipegREALTORS commercial division.

White said the average yearly dollar-volume total for Winnipeg is about $300 million, "so I'll be very surprised if we don't blow through the average."

And that's no small feat given what was going on in the North American and global economies, he added.
"There was a raging recession everywhere and clearly, a ton of bad stuff going on. Yet, look at the deals we did. It really is impressive stuff," White said.

He also noted that two other major deals -- the $24-million sale of the city-owned Winnipeg Square Parkade at 360 Main St. to Crown Realty, and the $30-million sale of the Canada Post building at 266 Graham Ave. to the city -- aren't included in this year's dollar-volume total because they don't officially close until the first quarter of next year. So they'll be included in the 2010 tally.

The year-to-date figure of $292.5 million included $100.5 million worth of transactions in the office sector, $80.4 million in the retail sector, $71.4 million in the industrial sector, $21.2 million in apartment-building deals, $17.6 million worth of land deals, and $1.3 million worth of transactions that fall under the "other" category.

White said 2009 had a slow start due to the uncertainty about how severe the global recession would be and how badly Manitoba would be affected.

"But somewhere around mid-year, people woke up and realized the world wasn't going to fall apart and people got busy in the second half of the year," he said. "So... it ended with a flourish."

He said out-of-province institutional investors showed greater interest in Winnipeg this year, thanks in part to some high-profile developments taking place here. They include the recent launch of the CentrePort Canada inland port development, Manitoba Hydro's generating-station projects in the north, the start of construction on the new Canadian Museum for Human Rights, and the ongoing work on the city's new airport terminal.

"We're finally seeing some tangible growth in Winnipeg," White said, "and people from outside our city now want to talk about us."

On the leasing side, the office market was the only segment that didn't have a good year, says Wayne Johnson, a commercial and leasing specialist with Royal LePage Dynamic Real Estate and author of the semi-annual Johnson Report on commercial sales and leasing activity in Winnipeg.

Johnson, whose 2009 year-end report will be released next month, blamed the sluggish office-leasing activity on downsizing by some national and international firms with branch offices here, and on the high cost of renovations, which discourage tenants from moving.

"On the industrial and retail side, there was still healthy activity," he added.

White noted a lot of this year's leasing activity involved renewals of existing leases.

"It was not a great year for new deals," he said. But hopefully that will change in 2010 as the North American economy recovers and companies start feeling more comfortable about expanding or moving to other premises.

murray.mcneill@freepress.mb.ca

ING Winnipeg Industrial Portfolio
Address: Winnipeg, MB
Type of transaction: sale
Type of property: industrial
Size: 721,119 sq. ft. (13 properties)
Buyer: ARTIS Real Estate Investment Trust
Seller: ING Real Estate Services
Purchase price: $42,700,000
Selling & listing agents: Colliers National Investment Team (Brian Taillieu and Don White)

Winnipeg Square Parkade*
Address: 360 Main St.
Type of transaction: sale
Type of property: parkade
Size: 560,000 sq. ft.
Buyer: Crown Realty Partners
Seller: City of Winnipeg
Transaction value: $24,000,000
Selling and listing agent: Bob Downs, Shindico Realty

Kenaston Place & Kenaston Village Mall
Address: 530 Kenaston Blvd. & 1851-1895 Grant Ave.
Type of transaction: sale
Type of property: retail/office
Size: 103,154 sq. ft.
Buyer: N/A
Seller: Lanesborough REIT
Purchase price: $18,350,000
Selling & listing agents: Colliers National Investment Team (Brian Taillieu and Don White)

St. James Station
Address: 710 St. James St.
Type of transaction: lease
Type of property: retail
Landlord: Alloway Investments Ltd.
Tenant: Hudson's Bay Co., operating as Home Outfitters
Size: 34,286 sq. ft.
Transaction value: $9,475,000
Selling and listing agent: John Pearson, Shindico Realty

Wawanesa Insurance Building
Address: 200 Main St.
Type of transaction: lease
Type of property: office/retail
Landlord: Wawanesa Mutual Insurance Company
Tenant: Assiniboine Credit Union Ltd.
Size: 62,625 sq. ft.
Transaction value: $9,000,000
Selling and listing agent: John Pearson, Shindico Realty

Chancellor Gate
Address: 919 Chancellor Dr.
Type of transaction: sale
Type of property: multi-family residential
Buyer: N/A
Seller: Lanesborough REIT
Size: 48 suites
Purchase price: $7,970,000
Selling & listing agent: Colliers National Investment Team (Brian Taillieu and Don White)

Cavalier Square
Address: 1600 Regent Ave.
Type of transaction: sale
Type of property: retail
Buyer: N/A
Seller: N/A
Size: 55,000 sq. ft.
Purchase price: $4,645,000
Selling and listing agents: Murray Bonk and Jamie McPetrie, Avison Young

Lindenridge Shopping Centre
Address: 1765 Kenaston Blvd.
Type of transaction: lease
Type of property: retail
Landlord: Lindenridge Shopping Centre Ltd.
Tenant: The Brick Warehouse
Size: 32,180 st. ft.
Transaction value: confidential
Agent: Derrick Chartier, CB Richard Ellis

Madison Square
Address: 1600 Ness Ave.
Type of transaction: lease
Type of property: retail
Landlord: Fairweather Properties
Tenant: Canada Safeway
Size: 55,000 sq.ft.
Transaction value: Confidential
Agent: Derrick Chartier, CB Richard Ellis

Vacant land
Address: northwest and southwest corners of Kenaston & Sterling Lyon Parkway
Type of transaction: sale
Type of property: retail
Area: undisclosed
Sale price: confidential
Buyer: IKEA (Winnipeg) JV Crop.
Seller: Tuxedo Yard Development Corp.
Size: 55,000 sq.ft.
Transaction value: confidential
Seller: Derrick Chartier, CB Richard Ellis.

879 Keewatin
Type of transaction: lease
Type of property: Industrial
Size: 100,285 sq.ft.
Transaction value: confidential
Landlord: Morguard Investments
Tenant: Brock White
Agents: Trevor Clay, CB Richard Ellis

Richardson Centre
Address: 1 Lombard Pl.
Type of transaction: lease
Type of property: office
Landlord: Lombard Place Ltd.
Tenant: Darcy Deacon
Size: 28,000 sq. ft.
Transaction value: Undisclosed
Selling and listing agents: Wayne Sato/Mike Passingham

Canwest Global Place
Address: 201 Portage Ave.
Type of transaction: lease
Type of property: retail
Landlord: Creswin Properties
Tenant: Goodlife Fitness
Size: 15,719 sq. ft.
Transaction value: Undisclosed
Agent: Ken Yee

* Completed in 2009 but will not officially close until early 2010

Republished from the Winnipeg Free Press print edition December 28, 2009 B10