The Leduc-Nisku EDAtorial
Leduc Blog
Seizing Opportunity: 2017 Leduc Regional Real Estate Forum
May 11, 2017
Barbara McKenzie
On April 17, the Leduc-Nisku Economic Development Association hosted the Third Annual Leduc Regional Real Estate Forum. A full morning of presentations and information sharing engaged 75 regional municipal leaders and administration, realtors, developers and business attendees.
 
The program included four key presentations providing information on the real estate industry and the current state of development in the region.
 
Morning Keynote: Jim McKinnon – Lizotte & Associates Real Estate
Jim McKinnon of Lizotte & Associates Real Estate gave a comprehensive overview of the state of development in the Leduc region. Jim addressed the impact that the recession has had on the Leduc region, the amount of movement and change in the region over the last three years with vacancies and business closing.
 
However, he also outlined the increased activity being noticed in the region. With about
1.7 Million square feet of available space, there is significant opportunity in the region. Jim highlighted the maintenance, repair and operations activity taking place at many businesses for the oil and gas services industry, and business like National Oilwell Varco, which are reopening their shops after being shuttered for 12 months.
 
The growth of the corridor is supported by access to the QE II from both 41 Ave SW and the Highway 19 High Load Corridor, and manufacturing businesses prefer the Leduc/Nisku area to south Edmonton due to this transportation access.
 
Current market conditions are pricing lease rates at between $12 - $14 per square foot and building sales around $165 - $175 per square foot. On top of that, speculative building has stopped and land sales are down.
 
In April 2017, there was activity with new buildings being purchased, expansions happening, and the demand for smaller bays increasing as entrepreneurs are coming back into the market. Finally, Jim highlighted the industry diversification that is occurring in our region with the addition of Aurora Cannabis, Rosenau Transport, HempCo and others in Agri-food and Food Processing.
 
Mayors’ Panel
Our first ever Mayor’s panel provided insight into key projects and issues that our seven regional municipalities are working on in 2017. In attendance were the Mayors of Leduc, Leduc County, Beaumont, Warburg, and Calmar, the Deputy Mayor of Thorsby and Director of Economic Development for Devon. Each highlighted the opportunities within their community.
 
Mayor Krischke, City of Leduc, identified the ongoing growth in the region and how, through the Alberta Aerotropolis project, this will continue for many years as we diversify our industrial base.
 
Mayor Berube, Town of Beaumont reviewed the new commercial and industrial development occurring in Beaumont, and how the town is working with the local developers to build great neighbourhoods.
 
Calmar and Thorsby highlighted their small-town values as well as access to industrial land close to the airport and other transportation corridors. Thorsby identified their water treatment plant as a key asset.
 
Mayor Van Assen of Warburg discussed the opportunity for the growth to Hemp industry as a key long-term driver for Warburg’s economic sustainability.
 
Devon focused on their work on becoming a clean tech hub and net-zero community and how their new land would add to that value in the long term.
 
Mayor John Whaley of Leduc County highlighted the opportunity in the Agribusiness sector, new developments at Saunders Lake, and the ongoing partnership with City of Leduc on many projects.
 
Regional Projects Overview Panel
Our next panel generated a rousing discussion on the current opportunities in the real estate industry: how to operate in the new normal; interest from new industries; and, how there is real talk about new diversification projects. Additionally, sustainability and green building is becoming a key cost consideration when deals are being done in the region. Investment is no longer being thought of as a short term play where companies will pay anything for a space just so that they can full fill a contract, but more of a long-term capital investment for the success of them business.
 
Economic Outlook – Emerging Trends in Real Estate – PwC Canada
Finally, we were pleased to welcome Richard Probert from PwC to provide an update from their emerging trends in real estate report. This report identified six key trends in the real estate market: a decline in affordability; how technology disruptors hold a competitive advantage; the ongoing challenges of the oil and gas industry; renting is becoming a long-term play; how global uncertainties are weighing on the mind; and, how industry is waiting to complete deals. Richard identified the best opportunities for real estate investment in 2017 as being urban mixed use developments, purpose built multi-family rentals, industrial property, and seniors housing and retirement homes. The report is available at http://www.pwc.com/ca/en/industries/emerging-trends-in-real-estate.html
 
Richard closed by identifying some key themes in the Alberta Real Estate market. He identified increased collaboration with P3 opportunities. Another trend is the sharing economy and how this will affect the real estate market and how the industry access and leverage that disruption. He also identified the power of data, cyber security, and succession planning as key business trends. Finally, when talking about the economic downturn, while we are still in it, there is optimism looking forward as we are moving out of it.
 
Following the formal program, attendees were able to select a tour of the region or an optional roundtable with the Leduc Downtown Business Association as add-on activities.