25 Key Takeaways from the Counselors of Real Estate 2023 Annual Convention in Vancouver, B.C.
By Robert J Pliska, CRE, CPA
The Counselors of Real Estate had their Annual Convention in Vancouver, British Columbia, Canada from October 1, 2023 to October 4, 2023. The theme of the conference was “Navigating the Currents of Change”. The conference represented a great opportunity to receive input, update, analyze, discuss and network with top real estate professionals on all the current changes impacting real estate.
1. Vancouver is noted for its national beauty nestled between the sea, mountains and a collection of rivers and lakes. It has a diverse economy with a strong tech sector. It is a great place to have a convention/national meeting. .
2. Vancouver is located on the traditional homelands of various Indian nations. It has a population approximating 630,000 and a metro area of 2.25 million. Established in 1886.
3. The Counselors of Real Estate unveiled their annual Top Ten Issues Affecting Real Estate determined through polling, discussion and debate among Counselors. Since 2012, the report has identified the current and emerging issues Counselors expect to have the most significant influence on real estate. See the Counselors website cre.org.
4. There appears to be a growing demand in many cities like Vancouver to improve commitments to net zero goals, climate risk assessments, long range capital planning and integration to acquisition and disposition analysis
5. Many Vancouver downtown modern buildings are architecturally well done and look like office but many are actually multifamily. This is similar to many larger central business district areas in the U.S. and Canada.
6. Many new developments, including Vancouver, are structured for live, work, play. Makes for convenience and less commuting.
7. Interest rates, inflation, devaluation and obsolescence are causing issues across the real estate spectrum here and across the world
8. Political unrest, the global housing crisis, labor shortages are impacting real estate in Vancouver and across the world..
9. Artificial intelligence (AI) is having an impact on commercial real estate. What properties, for example, should be acquired, exited or held.
10. The gap between income and housing and more generally, living costs, have been growing for decades is now exacerbated by inflation, interest rates and growth in demand.
11. There are challenges and accomplishments that are being addressed by government officials in all our communities.
12. The gap between owning and renting continues to increase. Owning has become increasingly unaffordable.
13. Office continues to have a long-term issue usage issue as work at home and hybrid home/office continues to play itself out. Flexibility, agility, productivity, efficiency, time and safety are among many issues being considered.
14. Valuations are being impacted by the substantial increase in interest rates. As interest rates rise, cap rates rise, values decline.
15. Infrastructure needs refurbishment in most communities. The staggering costs to repair and upgrade are well documented.
16. Politics is having a substantial impact on real estate. There is no shortage of issues.
17. The retail product type seems to be working out its issues better than other product types. Online is not having as great an impact as originally expected. Experiencing is now a key factor.
18. In retail, it is not a “space issue” causing the major issues, but primarily a “capital issue”. Tenant leasing continues to be strong.
19. Major world disasters have been more frequent – from an average of 82 days per event down to 18 days per major event.
20. Insurance costs are on the rise due to the major events occurring more frequently– fires, hurricanes, etc.
21. Highest and best use is an important consideration in valuation and should be considered. An office, for example, may not now be the highest and best use for that location.
22. Working remote also causes an erosion of tax basis for municipalities due to valuation of buildings declining.
23. Workers now hunt for locations first vs looking for jobs first – causing a migration issue.
24. Housing affordability is impacting the movement of talent adds to the migration issue.
25. Vancouver has become one of the most expensive housing markets in the world. Minimum income to purchase a home in Vancouver is currently around $250,000. Affordability is an issue in most cities in various degrees.
The Counselors of Real Estate, established in 1953, is an international consortium of credentialed real estate problems solvers who provide expert advice on complex real property and land related matters. Experienced, innovative and credentialed problem solvers. Counselors practice in 22 countries and offer expertise in more than 60 real estate disciplines across all asset classes. Invited to membership by their peers, Counselors have earned the prestigious CRE designation.
25 Key Takeaways from the Counselors of Real Estate 2023 Annual Convention in Vancouver, B. C.
