KPMG Weekly Newsletter – For the Week Ending February 11, 2007!

February 12, 2007

The following information was obtained from newspaper articles appearing
in the Globe and Mail and the National Post for the week ending
February 11, 2007

H&R REIT has signed an agreement to develop The Bow, the 1.9-million-square-foot future
headquarters of EnCana Corp. to be built in downtown Calgary. H&R’s subsidiary, Centre Street
Trust, has purchased the site for $70-million and EnCana has signed a 25-year lease for the
entire 59-storey tower. The $1.1-billion project is scheduled for completion in 2011.
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Shangri-La Hotels & Resorts will build a $430-million, 65-storey luxury hotel and condominium
tower in Toronto with 353 condominium units on the upper levels and 220 hotel rooms on the first
17 floors. Scheduled for completion in the spring of 2011, the Shangri-La will be located at the
corner of University Avenue and Adelaide Street. Vancouver-based Westbank Projects Corp.
and Peterson Investment Group Inc. will develop the project.
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Manulife Financial Corp. acquired a 28-storey, 582,000-square-foot office building at 1100
Peachtree Street in Atlanta for US$153.86-million from a joint venture of USAA Real Estate Co.
and Carter.
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Houston-based Hines REIT Inc. is reportedly about to close a $252-million purchase of Toronto’s
Atrium on Bay office and retail complex from Brookfield Properties Corp. and its investment
partner, Phoenix real estate developer Steve Ellman.
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RioCan REIT reported that profit for the fourth-quarter ending December 31, rose to $43.4-million,
or 22 cents a unit, from $37.3-million or 19 cents in 2005. Funds from operations increased to
$77.1-million, or 39 cents a unit, from $66.5-million or 34 cents. Rental revenue climbed to
$151.2-million from $138.9-million. Portfolio occupancy at the end of 2006 was 97.7%.
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Brookfield Properties Corp. reported fourth-quarter net income fell to $21-million, or 8 cents a
share, from $47-million (20 cents) a year earlier. Fourth-quarter funds from operations dropped to
$125-million (52 cents) from $138-million (59 cents). Brookfield is planning a three-for-two stock
split. The stock split will be in the form of a stock dividend and shareholders will receive one
Brookfield Properties common share for each two common shares held.
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Brookfield Asset Management Inc. is reportedly moving forward with plans to purchase the
property management and development business assets of Australia’s Multiplex Ltd.
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Simon Property Group Inc. and Farallon Capital Management made an offer of about
US$1.56-billion, or US$24 per share, for Mills Corp., which has more than US$6-billion in debt
and preferred stock that the two partners would also assume. Brookfield Asset Management
Inc. struck an agreement in January to purchase Mills for US$1.35-billion, or US$21 a share.
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MI Developments Inc. is paying Magna Entertainment Corp. $12-million for 34 acres of land in
Aurora and US$20-million for a 64-acre parcel of land at Laurel Park in Maryland. MI plans to
develop the Aurora site for residential use and the Laurel Park property for mixed use either on its
own or as a joint venture.
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The City of Montreal, the Caisse de dépôt et placement du Quèbec and the Fonds de
solidarité des travaileurs du Québec are looking to sell the subsidized-rent Cité Multimédia
complex. The property is reportedly expected to attract a price of at least $200-million.
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ING Real Estate Investment Management Australia Pty. Ltd. is reportedly considering making
a bid for Chartwell Seniors Housing REIT in the $19.50 a unit range.
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According to Avison Young Commercial Real Estate, the vacancy rate for industrial buildings in
Edmonton is below 2%. According to Torode Realty Edmonton, there is very little vacancy for
industrial space under 10,000 square feet. According to WAM Development Group, rental rates
for industrial space have risen between 30% and 40% to more than $8 a square foot from as low
as $5.50 two years ago.
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According to the Real Property Association of Canada, the commercial-to-residential property
tax ratio is currently 4.9 in Vancouver. In 2006, Toronto agreed to reduce the ratio from 5:1 to
2.25:1 over 15 years.
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According to CresaPartners, the vacancy rate for the best class of office space in downtown
Calgary is 0.05%.
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According to Statistics Canada, new-home prices in Canada were 10.7% higher on an annual
basis in December than a year earlier. New-home prices are increasing at a 38% rate in Alberta
on an annual basis, but fell 0.9% on a monthly basis in December.
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According to Canada Mortgage and Housing Corp., housing starts rose 17.3% to 249,300 units
in January from 212,600 in December, on a seasonally adjusted annual basis.
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According to Canada Mortgage and Housing Corp., construction of new homes is expected to
fall to 209,500 units in 2007 and 195,500 units in 2008 from 227,395 in 2006. Sales of existing
homes are projected to fall to 464,550 units this year and 449,200 in 2008 from 483,609 in 2006.
The average price of an existing home will climb to $302,181 in 2008.
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According to Canada Mortgage and Housing Corp., housing starts in Ontario are expected to
reach 67,000 units in 2007 and 63,000 units in 2008. According to the Ontario Home Builders’
Association, starts in January fell 2% from a year earlier.
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According to Canada Mortgage and Housing Corp., the average price of a new single-detached
home in Clarington rose 13.4% to $296,746 in 2006 from $261,767 in 2005. New Tecumseth had
an average price of $268,793 for a detached house in 2006, while Georgina reported an average
price of $283,330. The average price in Bradford climbed 23.6% to $361,312 in 2006 from
$292,271 in 2005.
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According to the Toronto Real Estate Board, 5,173 homes were sold through the MLS in
January, up 13% from January 2006 and 6% more than January 2002. The average sale price in
the GTA was $353,724 in January, up 5% from December and 9% over January, 2006.
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According to the Realtors Association of Hamilton-Burlington, the average sale price of all
residential properties in the Hamilton-Burlington area increased by nearly 6% to $255,753 in
January from $241,285 for January, 2006. The average price in January was $268,729 for a
home and $193,735 for a condo. The total number of residential listings rose 7.4% to 1,545 in
January from 1,439 a year earlier.
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Blackstone Group LP’s offer of US$22.9-billion in cash, or US$55.50-a-share, for Equity Office
Properties Trust was approved by shareholders. Blackstone also assumed US$16-billion in debt.
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HSBC Holdings PLC reports that it has had to raise its total provision for bad loans by 20% due
to defaults by sub-prime borrowers in the U.S. housing market.
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NewCentury Financial Corp., a sub-prime mortgage lender in the U.S., will restate earnings for
2006 because it had not set aside enough to cover borrowers who can’t meet their payments.
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According to FPL Advisory Group, more than 90% of U.S. real estate executives expect their
companies’ profits to increase in 2007. More than 80% believe the availability of capital will be the
same as or better than in 2006 and 54% said their biggest financial challenge will be finding
appropriate investments.
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According to Colliers International, rents for prime U.S. downtown office space may climb an
average of 15% in 2007, compared with an average increase of 18% in 2006. In midtown
Manhattan, rents for prime space rose 33% in 2006.
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According to the U.S. Census Bureau, there were about 2.1 million vacant homes for sale in the
final three months of 2006. The national homeowner vacancy rate increased to 2.7% from 2% a
year earlier. The homeowner vacancy rate was 3% in the South, 2.9% in the Midwest, 2.4% in the
West and 2% in the Northeast.
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According to the National Association of Realtors, median homes prices in the U.S. were up
1.1% in 2006.
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According to the Mexican Association of Real Estate Professionals, housing sales in Acapulco
fell 40% in 2006 from 2005 and prices have dropped by as much as 20%.
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British home builder Barratt Developments PLC will purchase Wilson Bowden PLC for £2.2-
billion ($5.1-billion), or £22.57 in cash and stock for each Wilson share.
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China Properties Group plans to raise as much as $320-million in a Hong Kong IPO to fund
building work in Shanghai. Hong Kong-based China Properties is selling 450 million new shares,
or a 25% interest, for 53 cents to 71 cents each.
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Tomorrow is Valentine’s Day! Today is the news….

SatsCan has determined that housing prices didn’t change at the end of 2006 signalling an end to the 6 year run…

Mortgage Fraud Victory!! Hooray!!!!

CMHC predicts a ‘soft’ landing for Canadian real estate…

Expect a 5 year run for the Toronto Condo market.

The price of being GREEN…

March Madness: Real Estate vs RRSP’s

I thought CMHC said soft landing?!? Now they are saying that NEW construction will DROP over the next 20 months. And in Ontario expect a decline in the resale market. At the same time CREA is predicting an active year for the resale market nationwide and Toronto has started with a BANG to prove them right while Ottawa started with a wimper to prove them wrong. Are you confused about what’s happening in the real estate market? Me too!

A look at Regent Park and Public Housing….

Buy a Home for $1,000.

February 8th 2007:

Jim Adair reports on how Boomers will IMPACT the Demand for housing in Canada. I have had the opportunity to speak with Jim on many an occassion and he is nothing but a bright and insightful person. Anyways, check out his article HERE.

2007 starts off with a BANG in Toronto. Read all about it HERE.

What is Web 2.0 and how does it affect you and your real estate world?

New House Prices level off in December 2006. Read the financial post article HERE.

U.S. luxury homebuilder profits faaaaaaallllllll………

Century 21 2007 KickOff

WOW!!

What an event! I have to say that Century 21 sure knows how to put on an event. Their KickOff Event is an annual conference filled with motivational and insightful speakers. There is also an accompanying trade show as well. For many Realtors this event is a must attend. And so it is for many vendors and suppliers.

RealCash Bancorp was there as well! And boy, were we BUSY! There was lots of questions and inquiries about our company and services. Before I tell all of you a little bit about us I need to do something first…

Congratulations to Debra Jafelice, Sales Representative for Century 21 Today Realty for winning our special draw. Debra won a personal coffee maker from Cuisinart! Congrats Debra!

RealCash provides commission advances to Realtors across Canada. If you or any of your associates are in need of immediate funds, RealCash will purchase your earned commissions from your firm residential re-sale deal and deposit the funds into your bank account. It’s a simple and easy process. And FAST!

If you are wondering why someone would need this type of service just read what some of your associates have to say. You can read their comments by visiting our website at www.RealCashCanada.com and clicking on the Testimonials Link.

Well, that’s all for now!

Keep your eyes on THE BLOG for up to date information on all things pertaining to real estate!

I look forward to helping many of you soon.

Regards,

Karim Kanji
1.800.265.2694

Century 21 2007 KickOff

I look forward to meeting many of you on Wednesday February 7th 2007. Century 21 is holding their annual KickOff event this Wednesday and RealCash is excited to be participating again. Come visit us at Booth 42. I’ll be there from 8am until 2pm. See you there!

Karim Kanji

CMHC Housing Market Outlook – 1st Quarter 2007

The First Quarter 2007 Housing Market Outlook Analysis has just been released and sent to my email by the good folks from CMHC. To take a look at it click HERE.

Mattamy Homes provides on the job training.

Resale market growth falls for first time in five years. Read article HERE. However, resale market should grow over 16% by 2010. Read this article HERE. And while you’re reading the new HighRise Condo market continues to sell at record levels. So Read HERE.

Confused yet? Excited? Depressed? Want more? Read Bob Finnigan’s opinion and analysis HERE.

Thoughts and news from real estate

Some thoughts before I bring you some interesting bits of real estate news from around Canada and the World…

Stop me if you’ve heard this already. Actually, you can’t stop me. you can only stop reading. Anyways, the stock market is chugging along, the housing market seems to be moving upwards with no end in sight, and many people are saying that interest rates are going to come down even more. Do you see a problem here? Everything seems to be doing great! Now, I’m the last person to be a doomsday soothsayer, however, something doesn’t seem right here. Should there be a balance in the marketplace? Is the recent news of BMO layoffs the beginning of something bigger? Stay tuned. In the meantime, continue to take advantage of these trends. Change is good! Remember this.

Now on to the news….

As many of you know, www.RealCashCanada.com has a News Section. Please visit it for Real Estate News from Globe & Mail and RIS Media.

A Canadian Gold Medal Renovation.

TTC and Land Development – “May I have a Transfer, please?”

Varsity Stadium grows up to become Varsity Centre.

Hey Realtors! Check out FACEBOOK. It could be a great Prospecting tool for you. www.Facebook.com

Petro-Dollars make 5,0000 Calgarians owners of $1M homes.

Opps! ReMax did it again!

Congratulations to Elli Davis – Top Royal LePage real estate salesperson in T.O.

11.1% increase in 2006 in the re-sale market.

www.HomesByOwner.com – Can you guess what this website is all about? That’s right! It’s a prospecting site 🙂

Cost of Housing too much to bear for 25% of Canadian households.

Montreal and Vancouver prices and demand goes up while U.S. new home sales plunge.

KPMG Weekly Newsletter – For the Week Ending January 28, 2007

January 29, 2007

The following information was obtained from newspaper articles appearing
in the Globe and Mail and the National Post for the week ending January 28, 2007:

Homburg Invest Inc. increased its stake in Alexis Nihon REIT from 8.6% to 19.5% by acquiring 2.96 million shares in a private placement. Cominar REIT sweetened its bid for Alexis Nihon to $18.50 from $17, with the extra $1.50 coming in cash. Cominar also extended the deadline to vote on the offer to February 22.
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Toronto-based FirstService Corp. invested a total of US$14-million to acquire controlling interests in two consulting companies. First Service purchased an 80% interest in the San Francisco-based hotel consulting group PFK Consulting Corp. and its PFK Hospitality Research. First Service also bought a 60% interest in Ottawa-based MHPM Project Managers.
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According to a prospectus filed by Column Canada Issuer Corp., the owners of the West Edmonton Mall, the Ghermezian family, are raising $600-million through the issuance of mortgages secured by the mall’s assets. The $600-million in proceeds received through the sale of multi-class pass-through certificates of Column Canada represent a stake in a first mortgage bond issued by West Edmonton Mall Property Inc. West Edmonton Mall is estimated to have an appraised value of $926-million, a 54% increase from the appraised
value of $603-million in April, 2003.
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In the fourth quarter of 2006, mortgage-backed securities transactions in Canada included $386.3-million by Canada Mortgage Acceptance Corp., $553.6-million by Merrill Lynch Financial Assets Inc. and $787.6-million by Real Estate Asset Liquidity Trust.
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Imperial Oil Ltd. will begin talks with Calgary City Council regarding the purchase of a laneway between two pieces of property it owns, as part of a potential plan to build a new office tower in Calgary. Imperial is considering building a 35-storey, 700,000-square-foot tower to house employees now working in three buildings.
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Vancouver-based Concord Adex Investments Ltd. is planning to build 20 condominium towers with nearly 4,000 units on about 40 acres of land near the southwestern corner of Sheppard and Leslie in Toronto. Concord purchased the land from Canadian Tire Corp. for $149.7-million in October, 2006.
According to N. Barry Lyon Consultants, 9,995 new condominium suites along the Sheppard corridor will go on the market in 2007.
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According to J.J. Barnicke Ltd., the office vacancy rate in the Broadway Corridor in Vancouver is 3.4%, compared with about 6% in 2006. The vacancy rate for light-industrial tenants in the area is below 1%. By 2009, two new projects in the area will add 420,000 square feet of retail and office space occupied largely by national retailers. Vancouver-based PCI Group’s Crossroads project will redevelop the site of the former Fairchild Plaza mall with about 98,000 square feet of office space, 122,000 square feet of retail space and 98
condo units. Grosvenor Canada is developing a $150-million mixed-use project on a 2.2- acre site that will include big-box retailers, such as Home Depot.
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According to Canaccord Adams, the Canadian REIT sector is expected to produce a 12% to 15% total return in 2007.
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According to Demographia International, Canada’s housing market is the most affordable among six countries that include the U.S., Ireland, Britain, Australia and New Zealand. Regina was tied for first place with Fort Wayne, Indiana, and Youngstown, Ohio, as most affordable among 159 major urban housing markets. It would take a worker earning the average wage in Regina two years to make as much as the average home price in that city. Winnipeg and Quebec City placed ninth at 2.5 years. Vancouver made the list of the top 25 least affordable cities at 7.7 years of annual income to equal the average price of a home. The most expensive cities were Los Angeles at 11.4 years and San Diego at 10.5 years. Australia had the least affordable housing market of the six countries.
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According to Re/Max, residential housing values in Canada rose 264% to an average of $276,824 in 2006 from $76,021 in 1981. Nationally, the compounded annual rate of return was 5.3% over the past 25 years. The largest gain occurred in Barrie, where the average home value soared 372% to $244,000 in 2006 from $51,665 in 1981. Prices climbed 297% to $257,481 from $64,854 in Ottawa, jumped 290% to $351,941 from $90,203 in the GTA,
and increased to $203,178 from $59,366 in Halifax-Dartmouth. Increases of 292% were reported in Montreal, 242% in the Greater Vancouver Area, 229% in Victoria and 227% in Calgary.
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According to Statistics Canada, homeowners’ replacement costs increased 8.2% in December from a year earlier.
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According to Urbanation Inc., more than 3,000 new condominium units were sold in the Toronto Census Metropolitan Area in the fourth quarter of 2006. Total new condominium apartment sales reached more than 113,000 units in the past 10 years.
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Blackstone Group LP raised its bid for Equity Office Properties Trust to US$22.4-billion, or US$54 a share from US$48.50. Including debt, the offer is valued at US$38.3-billion. The revised bid tops Vornado Realty Trust’s offer of about US$21.6-billion or US$52 a share.
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The value of takeovers of property companies in the U.S. doubled to nearly US$200-billion in 2006. Blackstone Group LP’s real estate funds have generated annual returns of 35% to 40% since 1992. Blackstone reportedly plans to raise another US$8-billion to US$10-billion real estate fund by June, 2007.
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Los Angeles-based Coastal Resources LLC purchased two adjacent Santa Barbara County cattle ranches from Bixby Ranch Co. for a price reportedly very close to the combined asking price of US$155-million. Both the 8,580-acre Cojo Ranch and the 15,814- acre Jalama Ranch are categorized in California as noncommercial properties.
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According to the National Association of Realtors, sales of existing homes in the U.S. fell 0.8% to a seasonally adjusted annual rate of 6.22 million units in December from November. Sales of condominiums rose 2.1%, while sales of single-family homes dropped 1.3%. Sales of existing homes for all of 2006 fell 8.4% to 6.48 million units from 2005, the biggest annual decline since 1989. Sales of single-family homes dropped 8.1% to 5.68 million, while sales of condominiums and cooperatives were down 10.4% to 803,000 units. Sales dropped 15.5% in the West, 7.1% in the South, 5.5% in the Northeast and 5.8% in the Midwest. The existing-home median price increased 1.1% to US$222,000. The NAR forecasts sales will decline 1.2% in 2007, while Fannie Mae projects a drop of 7% to 8%.
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According to Merrill Lynch, office vacancy rates in New York City are 10.3%, down 112 basis points from 2006. Rents are climbing 30% year-over-year in New York, making it the top office market in the U.S.
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According to the UK property Web site Rightmove, house prices are expected to rise 6% across the UK in 2007. The number of properties for sale is down 18% from January, 2006, helping to boost average prices 0.5% so far in January of this year. The price of an average home in the U.K. rose 13.5% in the past year and reached £222,859 in January. Prices in the top end of the London market climbed 22.4% last year to a record £356,192 ($826,353) and Savills forecasts a gain of 15% in 2007. The biggest increase in a London borough was seen in Kensington and Chelsea, where the average price grew 61.8% to £1.15-million over the year.
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According to Standard and Poor’s, Macau reported that earnings from gambling activities climbed 22% to US$7-billion in 2006 from the previous year. Earnings from gambling activities on the Las Vegas Strip are reportedly expected to reach about US$6.6-billion for 2006. Macau’s earnings are projected to reach US$10-billion by 2010.
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Richard Branson, owner of Virgin Group Ltd., reportedly may open his first casino in Las Vegas or Macau and is seeking possible partners.
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