ULI British Columbia Blog

Annual Real Estate Outlook – Post Event Summary

November 16, 2017
Terminal City Club
Vancouver, BC


The world is changing rapidly as the gulf between the urban and non-urban widens by the year, says ULI BC Chair Sergio Custodio (Partner, Fasken Martineau) in his welcome to the 2018 Outlook in Vancouver, BC. As an annual event, the ULI Emerging Trends in Real Estate provides a valuable opportunity to for the industry to assess the issues and opportunities for the coming year by analyzing the trends in the industry.

Keynote Address

ULI Global CEO Patrick Phillips – the evening’s keynote speaker – picked up the tone of change with the themes of the 2018 Emerging Trends Report®: Rebalancing, Rethinking, and Reinventing. These themes, gleaned from over 110 interviews with industry leaders, consultation with 95 organizations, and 325 online surveys, represent a market that is adapting to the new normal of constant change spurred by technological advancement.

Change in the markets requires investors to rebalance their portfolios under new conditions, explained Phillips. For some investors this means shifting from retail to industrial to capitalize on the e-commerce trend.

Affordability is a large concern across the Americas, as demographics shift and talent is leaving major cities in the United States. This requires a rethink of the type of housing on offer, as people begin to look at different ways of living. Senior housing and workforce housing are poised to be good prospects for the Commercial/Multifamily subsectors as a result.

Technology including e-commerce is driving change, bringing both challenges but also opportunities for property owners and users to reinvent their real estate. For example, some single-use retail spaces are being converted to handle retail sales and also be fulfillment centres and warehouse storage for online orders.  Reinvention is also happening in response to new urban challenges of affordability and a desire for more complete live-work-play communities. Mixed-use, transit-oriented, and intelligent cities offer an optimistic outcome for a higher quality of built environment to respond to changing ways of working, living, and playing.

The feeling in the industry is generally good and in line with the previous year’s assessment. Like in the United States, Canada is expected to remain “cruising at altitude” in 2018. Vancouver is expected to be the best-performing market in Canada in 2018, with Toronto in second, and Montreal in third.

Panel Discussion

The topic of technology is ingrained throughout this year’s Emerging Trends report with all sectors being impacted, identified moderator Lucy Fletcher (SVP, International Real Estate Portfolio Management, QuadReal Property Group) as she began the evening’s discussion.

Robert Kavanaugh (Vice President Asset Management, GWL Realty Advisors Inc.) expanded further with an overview of new types of office space and what the industry is starting to look for. While most Vancouver tenants still seek efficiency per square foot, in other markets the conversation is shifting to one of productive output per square foot and models that focus on the creative capacity of staff. This is no more evident than in the tech sector.

This was elaborated upon by Ryan Lalonde (President/Partner, MLA Canada), who noted the coming shift to a wireless ecosystem of internet of things devices was set to revolutionize the way that properties were managed and utilized by tenants. Smart sensors and controls are becoming important to office space. These are a good thing to plan for early and with flexibility allowed, as by the time construction is completed the technology may already out of date.

It is important to keep in mind that the “tech sector” itself is a very broad category that covers everything from web-based applications to manufacturing of components, notes Chris MacCauley (SVP, PREC, CBRE). For e-commerce in particular, Canada has a much lower market share than the United States. In Canada, the entirety of our national e-commerce sector is still 50% of the Los Angeles market. A large part of this is the long distances to transport due to the distances between Canadian cities. Despite this, the market is still growing at 15% per year, and as a result there is greater interest in warehouses and fulfilment centres.

Michael Penalosa (Managing Principal, Thomas Consultants), identified that retail is in an interesting time, with retailers focusing on gaining the attention of customers through new models of bricks and mortar stores. With declining attention spans (eight seconds is the new rule of thumb), retailers are focusing on experiences offered through their storefronts, along with quick service. This trend towards speed is also pushing towards more mixed-use types of neighbourhoods, where residents can get what they need without travelling too far out of their way. Young Millennial and Gen Z employees tend to prefer this type of environment.


As Duncan Wlodarczak (Chief of Staff, Onni Group) closed the evening’s session, it was evident that the theme of change had resonated with the crowd. Conversations eagerly turned to discussions of how to best adapt to an evolving market as participants took to the networking session.

While it is not possible to know for certain what the future holds, especially in an era of such large-scale technological disruption, it was evident from the energy in the room that the industry was ready to respond to the challenge.

The Emerging Trends in Real Estate 2018 Report® is available here.



Written by: Gavin Schaefer, ULI BC YLG Communications Committee



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