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Real Estate Weekly Newsletter (from KPMG)

December 18, 2006

The following information was obtained from newspaper articles appearing in the Globe and Mail and the National Post for the week ending December 17, 2006:

RioCan REIT has signed a memorandum of understanding with Michigan-based Ramco-
Gershenson Properties Trust to buy and develop shopping centres across the U.S. The two
partners intend to create a joint venture that will begin with about US$450-million in property now owned by Ramco-Gershenson and plan to develop an additional US$1-billion in properties. The joint venture would be 70% owned by RioCan and 30% by Ramco-Gershenson. RioCan will also purchase a 4.5% stake in Ramco-Gershenson for US$36.39 a share, an investment worth about US$27-million, and the Canadian REIT will hold warrants for an additional 4.5% interest with a strike price of US$43.15.
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RioCan REIT will reportedly purchase the Yonge-Eglinton Centre in midtown Toronto for $220-
million. The property includes a 300,000-square-foot mall and a 700,000-square-foot office tower.
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RioCan REIT and Chartwell REIT’s development arm, Spectrum Seniors Housing Development LP, are teaming up in a $30-million joint venture deal that will involve the construction of a six-storey, 144-unit seniors apartment building at an existing strip mall in Mississauga’s Lorne Park area. The redevelopment project will include about 14,000 square feet of retail street-front space.
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Brookfield Properties Corp. plans to raise about US$1.2-billion by issuing 30 million shares.
Parent company Brookfield Asset Management will purchase 11.25 million of the shares issued,
which would reduce its stake in Brookfield Properties to 48% from 51%. The company will use
US$420-million of the cash to repay debt incurred to finance the purchase of an equity stake in its purchase of Trizec Properties Inc. and another US$437-million will be used to take a larger
equity interest in the office fund Brookfield created to buy Trizec. The balance of the proceeds will go for general corporate purposes, repayment of lines of credit and help to facilitate acquisition and development opportunities.
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The Casino Windsor will reopen as the Caesars Windsor in 2008 after a $400-million expansion
that will include a new 22-storey hotel and a 5,000-square-foot entertainment centre. Harrarh’s Entertainment Inc. is licensing the Caesar’s brand to the Ontario Gaming and Lottery Corp., which is renaming the casino, and Harrah’s will manage the casino.
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According to CB Richard Ellis Ltd., the total value of investments in real estate in Canada is
expected to reach $23-billion in 2006, up from $19.7-billion in 2005.
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Lasalle Investment Management recently attracted $309.5-million to its Canadian Income and
Growth II funds, which will use the funds for the acquisition of three-quarters of a billion dollars in industrial, office, retail and multifamily properties.
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According to CIBC World Markets, the unweighted average compound return for the Canadian
REIT sector is 18% over the past 11 years, compared with 11% for the Standard & Poor’s/TSX
Composite Index.
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According to Statistics Canada, the average price for a new home nationally increased 0.2% in
October from September. In Calgary, the average price dropped 0.5% from September. Prices
also fell 0.5% in Victoria, 0.1% in Toronto and 0.7% in Windsor. New-home prices increased in 11 of 21 major metropolitan areas, with increases of 2.2% in Edmonton, 0.6% in Winnipeg and 0.5% in Vancouver. Contractors’ selling prices have risen 11.4% over the past year in Canada, with gains of 53.5% in Calgary and 41.1% in Edmonton.
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According to the Canadian Real Estate Association, sales of existing homes nationally increased 1.5% to 27,630 units in November from October. Sales for the first 11 months totalled 318,612 units, on par with levels last year. The average sale price increased 9.4% to $298,094 from a year ago. The average price in Edmonton rose 42.5% to $282,434. In Vancouver, sales volume fell 21% in November from November, 2005, and so far this year, volume is down nearly 13% from a year ago. The average price increased 20%.
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According to Royal LePage Real Estate Services, the average price of a standard condominium
increased 16.5% to $218,015 this year from 2005. The price of a detached bungalow rose 16.2%
to $304,271, while the cost of a standard two-storey house was up 13.4% to $366,839. Housing
prices are expected to climb 10.5% across Canada in 2006 and 6.5% in 2007, with volume down
about 3% next year. Prices are projected to rise 38% in Calgary for 2006 and 10.1% in 2007.
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The median value of a house in Canada appreciated by about $75,000 between 1999 and 2005,
according to Toronto-Dominion Bank and the Canadian Centre for Policy Alternatives.
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According to Canada Mortgage and Housing Corp., resale home prices are expected to increase 3.1% for both Ontario and Quebec in 2007. Resale prices are projected to climb 12.6% in Alberta, following a 29.4% gain in 2006. In British Columbia, prices are projected to increase
7.7% in 2007, compared with 17.2% this year and 14.9% in 2005. The number of new houses
starting construction is expected to drop to 210,900 in 2007 from about 227,900 in 2006. The
national rental vacancy rate is projected to reach 2.7% this year and move up slightly in 2007.
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According to Canada Mortgage and Housing Corp., the national rental vacancy rate dropped to
2.6% this year from 2.7% a year ago. Calgary and Victoria had the lowest apartment vacancy rate at 0.5%. In Edmonton, the vacancy rate plunged to 1.2% from 4.5% in 2005 and 5.3% in 2004. In Vancouver, the vacancy rate is 0.7% and a two-bedroom apartment rents for $1.045. The vacancy rate is 10.4% in Windsor and 6.8% in Saint John. In Toronto, the apartment vacancy rate is 3.2%, while the condo vacancy rate is 0.4%. A two-bedroom condo rents for an average of $1,487 a month, compared with $1,067 for an apartment. Rental rates climbed 19.5% in Calgary to $960 and 9.9% in Edmonton to $808 over the past year.
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According to Canada Mortgage and Housing Corp., from January to October of 2006, there were 13,469 condominium housing starts in the GTA, accounting for 39.3% of all starts. During the same period there were 13,593 detached starts, representing 39.7% of starts, while semidetached houses accounted for 5% and townhouses represented 10% of the total. In 2004,
condos represented 30% of starts and detached houses accounted for 46.5%. The average price of a new detached home in the GTA rose 10.1% to $450,483 in the January-to-October period from 2005. The average price in 2004 was $363,118. In Halton, the average price of a new detached home is $507,920, compared with average prices of less than $400,000 in Durham and Peel.
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According to Canada Mortgage and Housing Corp., construction began on a total of 3,381 homes in the GTA in November, representing a seasonally adjusted annual rate of 39,100 units. New home construction is down 9.5% for the first 11 months of 2006 from the same period last year.
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According to the Greater Toronto Home Builders’ Association, new home sales rose 5% in
November in the GTA from 2005. Sales of high-rise condominiums climbed 13% in November,
while low-rise sales were down 2%. Condo sales soared 123% in Peel Region and rose 38% in
York Region. Sales are expected to top 40,000 units in the GTA for the year.
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According to the Knight Frank Global House Price Index, Canada had an annual house price
increase of 9.8% in the third quarter, compared with 11.8% in the third quarter of 2005. The U.S. led the global slowdown in house prices with annualized price growth of 5.7% in the third quarter, down from 12.7% in the third quarter of 2005. Hungary, Portugal, Japan, Hong Kong and Germany had negative price growth of between 1% and 3%. Latvia had a price gain of 39.2%, while prices were up 19% in Bulgaria and 17.8% in Denmark.
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Weyerhaeuser Inc. and Texas-based Temple-Inland Co. reportedly may seek to convert their
timber interests into REITs.
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Fortress Investment Group LLC will purchase most of the properties that DB Real Estate
Investment GmbH owns in Germany for €2.1-billion ($3.2-billion).
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Real estate developer Ziel Feldman has purchased control of Israeli holding company Polar
Investments Ltd. and plans to invest US$1-billion over the next two years in properties in Israel, Europe, India and North America.
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Sunlight REIT, a property trust spun off by Hong Kong’s Henderson Land Development, has
reportedly raised US$402-million in an IPO. The REIT priced its 1,045 billion units at about US39 cents each.
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Hilton Hotels Corp. plans to add about 120,000 hotel rooms over the next three years, with a
focus on international expansion. Hilton will expand its luxury hotels from 22 to 50 by 2010. The hotel operator plans to open as many as 10 Waldorf-Astoria hotels, including one that it may develop on the Las Vegas Strip.
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Six Flags Inc. is reportedly seeking to sell Magic Mountain in California and eight other theme
parks, though not necessarily as a single package.
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MGM Mirage has formed a joint venture with Mubadala Development Co. of the United Arab
Emirates to develop hotels and resorts without gambling in Abu Dhabi, Las Vegas and the United Kingdom. MGM Mirage is also holding talks to form a joint venture with Diaoyutai State
Guesthouse in Beijing aimed at developing luxury hotels and resorts in China.
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Press Release!

PRESS RELEASE

December 11, 2006

RealCash Bancorp is excited and happy to formally announce that they will be participating with Durham Region Real Estate Board as a Gold Level Advertiser! Karim Kanji, Manager of Client Services with RealCash says, “We see this as a natural step in our process to further enhance our reputation as a grassroots organization. We want to be where our clients are and the Durham region continues to grow by leaps and bounds. We hope to be able to offer our services to Durham real estate professionals as they continue to succeed and grow in their businesses!”

RealCash Bancorp Inc. is honored to be Canada’s favorite and most affordable source for cash-flow solutions and commission advances for real estate professionals. RealCash has fifteen years of experience in serving our Canadian clients. It is our policy to give the best in quality and service to our customers who can be assured that our commitment to excellence will be our priority in service.

As agents continue to succeed in their real estate business we hope that they will consider RealCash for their cash-flow solutions and commission advances.

Why?
A business relationship with RealCash gives AGENTS financial control and flexibility.

How?

For years, agents have played “cat and mouse”. More often than not, they rushed to get listings, hurried to find the right buyer and then finally, waited for their commissions. Many times it takes months before those commission payments came in. RealCash eliminates this by creating consistent cash flow – the key to staying competitive and profitable!

Better control of cash flow allows sales representatives to manage their personal and professional lives more efficiently. As a business tool, clients use this service several times per year in order to level off their income stream and free up funds for advertising and marketing programs to help grow their business.

For more information on our company and our services please feel free to call Karim Kanji at 1.800.265.2694 416.444.7790 or visit us at www.RealCashCanada.com and http://CommissionAdvances.BlogSpot.com .

Thank you for your time and have a great day.

Karim Kanji
Manager – Client Services
RealCash Bancorp Inc.

Please visit us at www.RealCashCanada.com and http://CommissionAdvances.BlogSpot.com

KPMG Weekly Newsletter

Thanks to KPMG for the Following:

December 11, 2006

The following information was obtained from newspaper articles appearing in the Globe and Mail and the National Post for the week ending December 10, 2006:

Cominar REIT will purchase Alexis Nihon REIT in a $440-million transaction. Cominar will pay $17 a unit and Alexis Nihon unitholders have the option of receiving cash or 0.77 of a Cominar unit for every Alexis Nihon unit held. The merged company will be called Cominar
Nihon REIT. Paul Massicotte resigned as CEO of Alexis Nihon and Robert Nihon has been named executive chairman.
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Morguard REIT will purchase three Ottawa office towers and land for $210-million in a joint transaction with a pension fund, reportedly the Hospitals of Ontario Pension Plan. The land has density approval to build an additional office building of 339,000 to 390,000 square feet. The seller is reportedly Northam Realty Advisers, which represents German
investors. The office buildings are 99% leased, with most of the space filled by government tenants.
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King & Benton Development Corp. is proposing to build a $500-million commercial and industrial mega-complex on a 427-acre parcel of land at Highway 403 and Oak Park Road in Brantford, Ontario. The development calls for 4.7 million square feet of industrial buildings, an 800,000-square-foot commercial component containing several big-box stores and offices, a hotel and a shopping village.
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Primaris Retail REIT will issue $100.44-million worth of units at $18.60 each, with an overallotment option for underwriters of up to 540,000 units. Proceeds will be used to repay debt and to fund acquisitions and redevelopment projects at its existing malls. Primaris will also increase its distribution to unitholders to $1.18 per unit on an annualized basis
beginning in January, 2007.
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Construction of Toronto’s Trump International Hotel and Tower is expected to begin in the summer of 2007 and the development will be completed in 2010. About 70% of the suites have reportedly been sold.
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According to Statistics Canada, the value of building permits rose 6.1% to $6.03-billion in October from September. Non-residential permits climbed 9.1% to a record $2.4-billion, spurred by a gain of 35.6% in the commercial sector. Residential permits increased 4.3% with single-family permits down 1.7%.
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According to the Canadian Construction Association, non-residential building is expected to rise 7.2% in 2006, 3.25% in 2007, 2.2% in 2008 and 1.2% in 2009, compared with a 7.4% gain in 2005. Combined residential and non-residential investment activity is projected to
increase 3.4% in 2006 and 1.7% in 2007.
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According to Canada Mortgage and Housing Corp., housing starts increased less than 1% in November to 225,000 units annually from 223,200 units in October on a seasonally adjusted basis. Urban multiple starts rose 5.7% in November from October, while single family starts fell 4.2%. Urban starts climbed 21.4% in the Atlantic region and 26% in the
Prairie region, while urban starts were down 11.7% in Quebec and 7.8% in British Columbia.
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According to RealNet Data Services, the average cost of a high-rise condo suite in the GTA increased 11.5% to $350 a square foot in September, 2006, from September, 2005. In Vancouver, the average cost is more than $500 a square foot. Unsold units across the GTA increased to 12,433 suites in September from 11,808 in 2005. Sales between January and September, 2006, rose to 13,804 units from 13,388 in the same period in 2005.
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According to the Toronto Real Estate Board, sales of existing homes fell to 6,281 units in November from 6,646 in November 2005. Sales are expected to reach 80,000 units in 2006. The average price dropped to $355,727 from $356,423 in October, but was up 4% from $341,177 in November, 2005. Over the past year, sales of existing condos in the
Scarborough Town Centre area rose 30%, semi-detached homes in York South climbed 53% and detached homes sold in Richmond Hill increased 29%. Total sales in 2006 are expected to drop 1.5% from the record pace in 2005.
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According to the Realtors Association of Hamilton-Burlington, 972 homes sold in November, including 210 condo units. The average price increased 5% to $251,164 and the average condo resale price was $197,970. New listings are up 8% to 1,345. Unit sales are down 2% for the first 11 months of 2006, compared with the same period in 2005.
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SL Green Realty Corp. has made an offer worth about US$4-billion, or about US$45.70 a share, for Reckson Associates Realty Corp. Financier Carl Icahn’s American Real Estate Partners LP ended his bid for Reckson, after two partners dropped out and investors didn’t accept a revised offer that included less cash.
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Station Casinos Inc.’s management and Colony Capital LLC have offered to take the Las Vegas casino company private for US$4.7-billion, with a bid of US$82 a share.
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Seminole Gaming will purchase Hard Rock International Inc. from Rank Organisation PLC of Britain in a US$965-million transaction. The acquisition includes 124 Hard Rock Cafes, two Hard Rock Casino Hotels, four Hard Rock Hotels, plus rock venues and rock memorabilia. Excluded from the deal is the Hard Rock Casino in Las Vegas. Seminole
Gaming plans to expand its hotel and casino operations in the U.S. and internationally.
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Robotic Parking Systems is in talks to build automated parking garages at 30 sites in the New York City area. The parking spaces in automated garages cost about US$40,000 each to build, compared with US$30,000 for a space in a typical underground parking lot.
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Melco PBL Entertainment Ltd. has filed a preliminary prospectus with the SEC, indicating that it plans to sell 53 million American depositary shares, or 14% of its company, through an IPO on the Nasdaq. Gross proceeds could be as much as US$954-million. Melco PBL is a joint venture between Hong Kong’s Melco International Development Ltd. and Australia’s Publishing & Broadcasting Ltd. that focuses on the gaming industry in Macau.
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According to Bloomberg, more than US$26-billion in proposed U.S. casino deals have been announced in 2006, exceeding the combined total for the previous six years.
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According to the U.S.-based National Association of Realtors, an index of signed purchase agreements fell 1.7% in October from September. Pending sales were down 13.2% from October, 2005.
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IVG Immobilien AG will reportedly pay nearly £600-million ($1.35-billion) to purchase the landmark London office building, known as the Gherkin, from Swiss Reinsurance Co, according to The Sunday Times.
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Dubai-based Limitless LLC plans to build a new Russian city on 17,800 hectares near Moscow. An US$11-billion investment in the Great Domodedovo project will be made in partnership with Russia-based Coalco Corp. Construction on the first 150,000 residential units, along with some commercial space, is scheduled to begin late in 2007.
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The Dubai government investment agency Istithmar reportedly purchased the Shell-Mex building on The Strand in London for nearly £520-million ($1.1billion), according to Property Week magazine.
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Real Estate Weekly Newsletter (from KPMG)

Thank you to KPMG for the following:

The following information was obtained from newspaper articles appearing in the Globe and Mail and the National Post for the week ending December 3, 2006:

Ivanhoe Cambridge will purchase a 93% stake in the Arcaden mall in Dusseldorf,
Germany, for $249.3-million. The mall is scheduled to open in 2008.
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FirstService Corp. has purchased a majority interest in PGP Valuation Inc., a San Diegobased
commercial real estate appraisal and consulting firm. FirstService will rebrand its
Colliers CMN appraisal business in the U.S. as PGP Valuation.
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According to CB Richard Ellis Ltd., Canadian companies and pension funds have invested
nearly $10-billion in foreign real estate in 2006, about twice the amount invested in 2005. At
the same time, foreign investors have purchased between $5-billion and $6-billion in
Canadian commercial properties in the past 12 months. In 2006, the total value of
commercial real estate transactions in Canada is expected to reach about $23-billion.
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Developers expect substantial building opportunities to arise as the federal government
reorganizes its office space in Ottawa. The federal government’s Public Works department
expects to renew about 3.4 million square feet of space and replace about 861,113 square
feet of office space over the next three years. Also, BMO Nesbitt Burns and the real estate
division of RBC Dominion Securities are expected to release a report in December
recommending solutions for 40 government-owned buildings across Canada that are
underutilized, outdated or fail to comply with new environmental standards. Eighteen of
these buildings are located in Ottawa and comprise about 10.3 million square feet of office
space.
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According to Cushman & Wakefield LePage, class A and B office vacancy rates in Kanata,
Ontario, have fallen to 8% from 28.3% at the end of 2003.
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According to Statistics Canada, new housing construction in Canada dropped 3.3% in the
third quarter and investment in residential structures fell 2.2%, or 8.2% at annual rates.
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Canada Mortgage and Housing Corp. signed a memorandum of understanding with the
Federal Agency of the Russian Federation for Construction and Housing and
Municipal Services to promote the export of Canadian housing products and expertise.
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According to the Canadian Institute of Mortgage Brokers and Lenders, the total
outstanding mortgage debt in Canada is expected to reach $730-billion by the end of 2006
and more than $800-billion by the end of 2007. In 2006, $197.7-billion in new mortgages will
be completed, with approvals projected to exceed $200-billion in 2007.
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According to LaSalle Investment Management, global real estate funds raised a record
US$55-billion in 2006.
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According to the Lower Manhattan Construction Command Center, about 50 Lower
Manhattan projects, costing US$20-billion, are planned or currently underway. These include
the Ground Zero construction, a new US$2-billion, 43-storey headquarters for Goldman
Sachs Group Inc., and new underground water pipes, subway stations, parks and
residential buildings.
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Toll Brothers Inc. reported that orders for new homes fell 58% in the third quarter.
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According to the U.S. Commerce Department, sales of new homes fell 3.2% in October
from September, increasing the supply to seven months’ worth of new homes. Sales in
October were down 25.4% from a year ago. Investment in housing in the third quarter
dropped 18% during the third quarter. Overall construction spending dropped 1% in October.
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According to the National Association of Realtors, new-home sales in the U.S. are
expected to fall 17.3% in 2006 to 1.06 million.
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According to the National Association of Realtors, sales of existing homes in the U.S.
increased 0.5% in October from September to a seasonally adjusted annual rate of 6.24
million, but fell 11.5% from October, 2005. The median selling price dropped 3.5% from a
year earlier.
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Donald Trump is proposing to build a golf resort on a 566-hectare site near Aberdeen in
Scotland that will cost up to £1-billion ($2.2-billion). Plans call for a golf academy, two golf
courses, nearly 1,000 holiday homes, 36 luxury villas and a 450-bedroom luxury hotel.
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State-run Qatari Diar Real Estate & Investment Co. is reportedly in talks with Britain’s
Ministry of Defense to purchase London’s Chelsea Barracks. In October, Westminster City
Council approved plans to demolish the tower blocks to allow for 1,500 homes, shops and
offices on the 13-acre property in the heart of London.
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According to the Dutch Housing Ministry, there are almost 150 people seeking housing for
every 100 houses offered for rent in Amsterdam.
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OAO Gazprom plans to build a 300-metre-high skyscraper in St. Petersburg’s historic
centre. The project, called “Gazprom City,” is encountering opposition from cultural leaders.
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Dubai Property Ring is developing a US$109-million, 30-storey, 80,000-ton rotating
condominium tower, called Time Residences, in Dubai which is scheduled for completion in
2009.
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Aldar Properties will begin construction of a US$40-billion island, known as Yas, off the
coast of Abu Dubai in 2007 that will feature a leisure complex including a Ferrari theme park.
The island will be completed in 2014.
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According to JPMorgan Australia, foreign investment accounts for about 40% of all real
estate held through the Australian public markets due to limited product available in
Australia.
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According to the Sydney Morning Herald, housing prices in Australia climbed 2.2% in the
September quarter and increased 9.5% from September, 2005. Prices rose 10.1% in Perth
in the quarter and 45.9% annually. For the September quarter, prices were up 3.1% in
Darwin, 3.8% in Canberra, 0.6% in Adelaide, 1.5% in Hobart, 1.7% in Melbourne, 0.9% in
Brisbane and 0.2% in Sydney. On an annual basis, prices climbed 17.3% in Darwin, 10.5%
in Canberra, 6.4% in Adelaide, 9.4% in Hobart, 7.5% in Melbourne, 6.5% in Brisbane and
1.4% in Sydney.
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