Real Estate prices in Vancouver are among the highest in the world according to Financial News Magazine Forbes. In a complicated way of measuring how overpriced real estate is Forbes has concluded that Vancouver is in the top 10 most overpriced real estate.
Vancouver among overpriced-land leaders
Forbes' formula deals us in for dubious honour
Ashley Ford
The Province
We all know Vancouver real estate is in nosebleed territory -- but globally overpriced?
According to a somewhat complex formula arrived at by Forbes magazine, Vancouver allegedly has the sixth most overpriced real-estate market in the world.
Monaco, the Mediterranean haunt of the rich and plastically-improved, tops the list of the globe's most overpriced real estate followed by Rome.
The rankings were compiled by calculating an effective annualized rate of return on a property based on annual cash flows derived from renting and adjusted for capital gains tax, transaction fees, operating costs and maintenance, appreciation and inflation.
"We then flipped the return rate to resemble the more familiar price-to-earnings measure," says the Forbes report.
That left the champion Monaco with a P/E ratio of 74.07.
The next nine are Rome (50.51), Paris (37.45), Madrid (30.30), Los Angeles (26.88), Vancouver (26.81), Vienna (25.77), Auckland (25.64), Zurich (25.19) and Oslo (23.45).
The study looked at 50 financial capitals in every continent, except Antarctica, of course. For the most part this meant one city from each country but for countries like India, China, the U.S., Australia, Canada and Switzerland where there were multiple, distinct financial centres, several cities were measured.
If you are thoroughly lost by now, Forbes offers a somewhat simpler way of absorbing their numbers.
"Think about each market like you would a stock: The higher the price-to-earnings figure, the more you have to pay to get one dollar of return," it says.
The valuations were based on data from GlobalPropertyGuide.com, an international real-estate research firm. For each market, it assumed no debt financing, a constant cost of capital, a 10-year hold of the property and a non-primary residence.
Tuesday, August 28, 2007
Tuesday, August 14, 2007
Commercial Real Estate Is Set For A Nose Dive If The Markets In The US Continue On The Current Negative Trend
Commercial real estate is set for a nose dive if the markets in the US continue on the current negative trend. Analysts report that rising borrowing costs may make some commercial real estate ventures unappealing, and the owners will start to sell. Full Article from the Financial Post.
Teetering towers
Commercial Real Estate industry braces for a fall in prices
Garry Marr
Financial Post
Saturday, August 11, 2007
Falling real-estate prices? It sounds like a contradiction in terms. But rest assured, it can happen and many in the sector are bracing for a declining commercial real estate market -- something that hasn't happened in the past seven years.
"I promise you [prices] can go both ways. I've seen enough of that in my career," said veteran real-estate analyst Frank Mayer, who retired this year after 35 years in the sector. "Just think of 1989 through 1994."
The latest statistics from real-estate firm CB Richard Ellis Ltd. show that for the first time this century capitalization rates are actually inching up in some markets, albeit slowly. Cap rates, as they are known in the industry, are the real estate sectors' method of pricing property.
The cap rate is determined by taking a building's positive cash flow and dividing by the value of the asset. A building with $100,000 in positive cash flow that's valued at $1-million would have a 10% cap rate. Much like the yield on a bond, rising cap rates are indicative of falling prices.
The concern in the real-estate community is that rising borrowing costs are going to make it harder for companies to make profitable leveraged real-estate purchases. As borrowing costs go up, cap rates will have to rise too in order for transactions to make financial sense.
"There's a raging debate in the real estate community," says Mr. Mayer, about whether higher borrowing costs will ultimately impact real-estate prices. The thinking among some commentators is there is some institutional and pension-fund money, immune to debt concerns, waiting to buy real estate. That demand would mean prices won't budge.
Cap rates are already at an all-time low in most markets in the country. The starkest example is probably Vancouver's apartment market where investors are willing to accept a 3.5% return on a high-rise unit. If that sounds low, consider the Bank of Canada's 10-year bond -- a risk-free instrument in terms of potential default --generates about a 4.5% return.
The Vancouver apartment building pays one percentage point less than the Government of Canada debt and presumably carries a little more risk than the bond. But investors in Vancouver and other hot markets such as Calgary and Edmonton are paying a premium for potential growth in income and capital.
"If you are [investing in] Alberta where rents are up 40% from a year ago and are going up sharply again, a 5% cap rate really isn't a 5% cap rate. You know the returns are going to be higher in future," said Mr. Mayer.
Michael Cooper, chief executive of Dundee REIT, which last month pulled off a $2.4-billion real-estate sale that many say will be the last of its kind in this cycle, says pricing real estate can be tricky these days.
Dundee sold most of its assets in Ontario, Quebec and Newfoundland to GE Real Estate. Dundee held onto to $1.5-billion of assets in western Canada and GE Real Estate agreed to buy $165-million of outstanding units in the REIT, about 18% of Dundee, at $47.50 a unit.
"He got that deal done right under the wire. No way it would get done today at that price," said one analyst.
But Mr. Cooper says there is a new reality in the marketplace that is impacting pricing. "From 1995 to 2005 it was all about current income, but now we have growth in rental rates in almost every market in the country. More of the value is coming from [anticipated] growth," he says. "Today, sure you pay more interest and cap rates are lower but that's just Day 1. We all anticipate that income will grow."
He says publicly traded REITs are recording huge jumps in income because rental rates just keep rising on their existing portfolios. In fact, says Mr. Cooper, buildings with long-term leases and low rental rates are going to drop in value.
"Five years ago if you had a locked-in lease people said 'this is fabulous.' Today people say 'you've given up so much on the asset'," he says.
CB Richard Ellis actually thinks there could be some downward movement in cap rates, but, for the most part, thinks prices have stalled. "We are seeing a trend where rates have flattened compared to where we were three or four years ago," said Ray Wong, national research director of CB Richard Ellis. "Some investors are starting to question the pricing of assets."
Ross Moore, the research director of Boston-based Colliers International, is more pessimistic. "I can't go to a meeting or get on a conference call these days without somebody talking about a deal that is falling apart," he says. It's all about the rising cost of debt and Mr. Moore says it's leading to a lot of renegotiating.
"There is a general tone in the marketplace of caution," said Mr. Moore, who doesn't believe improving fundamentals and rental rates will carry the day in the market. "I learned a long time ago fundamentals do not drive real-estate values; liquidity and access to capital drive values. Period. That may sound cynical but that's what I believe. Capital markets are global. This isn't just a U.S. problem," said Mr. Moore, about some of the deals now falling apart. "This will happen in Canada."
Teetering towers
Commercial Real Estate industry braces for a fall in prices
Garry Marr
Financial Post
Saturday, August 11, 2007
Falling real-estate prices? It sounds like a contradiction in terms. But rest assured, it can happen and many in the sector are bracing for a declining commercial real estate market -- something that hasn't happened in the past seven years.
"I promise you [prices] can go both ways. I've seen enough of that in my career," said veteran real-estate analyst Frank Mayer, who retired this year after 35 years in the sector. "Just think of 1989 through 1994."
The latest statistics from real-estate firm CB Richard Ellis Ltd. show that for the first time this century capitalization rates are actually inching up in some markets, albeit slowly. Cap rates, as they are known in the industry, are the real estate sectors' method of pricing property.
The cap rate is determined by taking a building's positive cash flow and dividing by the value of the asset. A building with $100,000 in positive cash flow that's valued at $1-million would have a 10% cap rate. Much like the yield on a bond, rising cap rates are indicative of falling prices.
The concern in the real-estate community is that rising borrowing costs are going to make it harder for companies to make profitable leveraged real-estate purchases. As borrowing costs go up, cap rates will have to rise too in order for transactions to make financial sense.
"There's a raging debate in the real estate community," says Mr. Mayer, about whether higher borrowing costs will ultimately impact real-estate prices. The thinking among some commentators is there is some institutional and pension-fund money, immune to debt concerns, waiting to buy real estate. That demand would mean prices won't budge.
Cap rates are already at an all-time low in most markets in the country. The starkest example is probably Vancouver's apartment market where investors are willing to accept a 3.5% return on a high-rise unit. If that sounds low, consider the Bank of Canada's 10-year bond -- a risk-free instrument in terms of potential default --generates about a 4.5% return.
The Vancouver apartment building pays one percentage point less than the Government of Canada debt and presumably carries a little more risk than the bond. But investors in Vancouver and other hot markets such as Calgary and Edmonton are paying a premium for potential growth in income and capital.
"If you are [investing in] Alberta where rents are up 40% from a year ago and are going up sharply again, a 5% cap rate really isn't a 5% cap rate. You know the returns are going to be higher in future," said Mr. Mayer.
Michael Cooper, chief executive of Dundee REIT, which last month pulled off a $2.4-billion real-estate sale that many say will be the last of its kind in this cycle, says pricing real estate can be tricky these days.
Dundee sold most of its assets in Ontario, Quebec and Newfoundland to GE Real Estate. Dundee held onto to $1.5-billion of assets in western Canada and GE Real Estate agreed to buy $165-million of outstanding units in the REIT, about 18% of Dundee, at $47.50 a unit.
"He got that deal done right under the wire. No way it would get done today at that price," said one analyst.
But Mr. Cooper says there is a new reality in the marketplace that is impacting pricing. "From 1995 to 2005 it was all about current income, but now we have growth in rental rates in almost every market in the country. More of the value is coming from [anticipated] growth," he says. "Today, sure you pay more interest and cap rates are lower but that's just Day 1. We all anticipate that income will grow."
He says publicly traded REITs are recording huge jumps in income because rental rates just keep rising on their existing portfolios. In fact, says Mr. Cooper, buildings with long-term leases and low rental rates are going to drop in value.
"Five years ago if you had a locked-in lease people said 'this is fabulous.' Today people say 'you've given up so much on the asset'," he says.
CB Richard Ellis actually thinks there could be some downward movement in cap rates, but, for the most part, thinks prices have stalled. "We are seeing a trend where rates have flattened compared to where we were three or four years ago," said Ray Wong, national research director of CB Richard Ellis. "Some investors are starting to question the pricing of assets."
Ross Moore, the research director of Boston-based Colliers International, is more pessimistic. "I can't go to a meeting or get on a conference call these days without somebody talking about a deal that is falling apart," he says. It's all about the rising cost of debt and Mr. Moore says it's leading to a lot of renegotiating.
"There is a general tone in the marketplace of caution," said Mr. Moore, who doesn't believe improving fundamentals and rental rates will carry the day in the market. "I learned a long time ago fundamentals do not drive real-estate values; liquidity and access to capital drive values. Period. That may sound cynical but that's what I believe. Capital markets are global. This isn't just a U.S. problem," said Mr. Moore, about some of the deals now falling apart. "This will happen in Canada."
Labels:
Commercial Real Estate
Wednesday, August 08, 2007
Edmonton Real Estate Has Begun To Cool After Huge Surges In Prices And Sales In The Last Year
Edmonton real estate has begun to cool after huge surges in prices an sales in the last year. Last month the price of a home in Edmonton fell for the first time in many months, triggering concern that the housing market is cooling in the city. The Edmonton Journal Reports.
Real Estate in Calgary is still flying high, too high for most. The average home price is now $500,000 in cow town. This is way out of reach for most working people in the city. The rising oil prices will only further fuel high home prices. On the positive side MLS reports a very high inventory in Calgary, relatively speaking. Alberta Index reports.
Real Estate in Calgary is still flying high, too high for most. The average home price is now $500,000 in cow town. This is way out of reach for most working people in the city. The rising oil prices will only further fuel high home prices. On the positive side MLS reports a very high inventory in Calgary, relatively speaking. Alberta Index reports.
Friday, August 03, 2007
Calgary Real Estate Is Poised To Level Off
There are now more homes on the market in Calgary than at any other time this year. The Calgary Real Estate Board says as of the end of July there were almost 9,000 homes up for sale.The average price of a single family home in Calgary last month was almost $510,000.The average condo price was just over $318,000.The real estate board says with all this inventory, prices can be expected to level off.
BC's Biggest Deal
British Columbia real estate has reach new highs. The largest deal in BC history has seen $246 million change hands for a 25 story high rise. Full Story.
Central City Tower has been sold in what is described as the largest real estate deal in B.C. history.
The Insurance Corporation of British Columbia (ICBC) announced Wednesday it sold the 25-storey tower to Blackwood Partners Inc. for about $246 million. Blackwood is a real estate transaction group, which bought the property on behalf of a consortium of Canadian pension funds.
ICBC has had the property listed for a few years, describing it as “not appropriate for the company’s investment portfolio.”
The components of the Central City project that have been sold include 570,000 square feet of office tower and podium space, and 490,000 square feet of retail mall space. Simon Fraser University continues to own 305,000 square feet in the tower and podium.
It’s also believed the company is preparing to make an offer on the Zellers store.
All tenants of the building are expected to remain.
Central City has a long and colourful history.
The Leader first reported in 1999 that ICBC had purchased the Surrey Place Mall property in North Surrey for $40 million. The purpose of that acquisition was to construct the current tower and provide a home for the now defunct TechBC, a technical university created by the former NDP government.
In 2001, the newly elected Liberals folded TechBC in favour of SFU, and the government set about off-loading the tower property.
At the time, a number of Liberals blamed the NDP for the acquisition. Former finance minister Gary Collins said it was a scandal equivalent to the fast ferries fiasco.
“The only difference between this and the fast ferries is that this one doesn’t move,” Collins said in 2002.
Two years later, the Liberals announced they were spending $70 million to acquire 305,000 square feet of the building for the Surrey SFU Campus.
Earlier that year, Central City won the prestigious International Property Market’s Special Jury Award as the world’s best overall new development.
ICBC has said the proceeds from the sale will be reinvested to help keep auto insurance rates down and stable.
The Insurance Corporation of British Columbia (ICBC) announced Wednesday it sold the 25-storey tower to Blackwood Partners Inc. for about $246 million. Blackwood is a real estate transaction group, which bought the property on behalf of a consortium of Canadian pension funds.
ICBC has had the property listed for a few years, describing it as “not appropriate for the company’s investment portfolio.”
The components of the Central City project that have been sold include 570,000 square feet of office tower and podium space, and 490,000 square feet of retail mall space. Simon Fraser University continues to own 305,000 square feet in the tower and podium.
It’s also believed the company is preparing to make an offer on the Zellers store.
All tenants of the building are expected to remain.
Central City has a long and colourful history.
The Leader first reported in 1999 that ICBC had purchased the Surrey Place Mall property in North Surrey for $40 million. The purpose of that acquisition was to construct the current tower and provide a home for the now defunct TechBC, a technical university created by the former NDP government.
In 2001, the newly elected Liberals folded TechBC in favour of SFU, and the government set about off-loading the tower property.
At the time, a number of Liberals blamed the NDP for the acquisition. Former finance minister Gary Collins said it was a scandal equivalent to the fast ferries fiasco.
“The only difference between this and the fast ferries is that this one doesn’t move,” Collins said in 2002.
Two years later, the Liberals announced they were spending $70 million to acquire 305,000 square feet of the building for the Surrey SFU Campus.
Earlier that year, Central City won the prestigious International Property Market’s Special Jury Award as the world’s best overall new development.
ICBC has said the proceeds from the sale will be reinvested to help keep auto insurance rates down and stable.
Monday, July 30, 2007
Thursday, July 19, 2007
Ottawa's Real Estate Deal Is Bad For Taxpayers
Stupid Canadians
The Canadian Federal Government has almost completed their harebrained scheme of selling of hundreds of millions in real estate, so they can lease it back from the new owners. This sounds like a hell of a plan doesn't it. On top of selling, then leasing back, the government is going to pay for any maintenance that is required is the dilapidated building. I need to own one of these buildings. Free money from the government, 25 year lease, better than the lottery. Full article below from the Globe and Mail.
Ottawa's real-estate deal is bad for taxpayers
JOHN GORDON
Globe and Mail Update
July 17, 2007 at 11:12 PM EDT
Most homeowners would consider it absurd to sell their property and rent it back in order to pay for a new roof or other maintenance. Moving from ownership to being a tenant just doesn't make sense.
Yet that's what the federal government is planning for a handful of prime real-estate assets owned by Canadians.
By the end of the summer, the federal government will pick a new owner or owners for nine of the best federal office buildings located in major cities across the country.
The plan is to sell these buildings and the land on which they are located, which taxpayers currently own outright, then guarantee the new owners that the federal government will lease back 100 per cent of the space for 25 years.
In addition, the government promises the new owners that taxpayers will foot the bill for all maintenance and upgrades to the buildings' interiors. Tax dollars will ensure that heating systems, windows, elevators, plumbing and electrical systems in these soon-to-be-private buildings are kept in top shape.
Sounds like a sweet deal for the new owners, but is this a good deal for taxpayers? On the surface, the answer would seem to be no. And a more detailed examination of the transaction isn't possible because most every important detail is secret.
All documents, studies, valuations, and advice about the sale and leaseback are being withheld from the public. The federal government has established a cloak of secrecy so dense that even members of Parliament are being kept in the dark. In fact, a parliamentary committee recently called for the sale to be put on ice until these details are made available to the public.
The public is not allowed to see the study conducted by the real-estate wings of two banks (Bank of Montreal and Royal Bank of Canada) that recommended the sale and leaseback plan for these nine buildings. These same two banks are now acting as real-estate agents in the sale of the buildings — for a commission fee — creating the strong appearance of a conflict of interest.
The identities of the bidders are secret, as are the details of their bids. And taxpayers will pay Deutsche Bank almost $2-million to review the transaction before it's final. This, too, will be kept secret.
With so much information being withheld, it's reasonable to ask: What is the government trying to hide? And can taxpayers expect to be treated in this manner by the new owners?
Some details have leaked out. The Globe reported last month that taxpayers could lose up to $600-million if the deal goes wrong and there are irregularities in the valuation of the properties, including one building that was valued at $120-million in excess of the market price.
According to the man in charge of the sale, Public Works Minister Michael Fortier, successive governments have failed over the years to properly maintain the buildings.
Taxpayers, who ultimately own these assets, are faced with a multibillion-dollar maintenance bill to bring the federal real-estate portfolio up to scratch.
This is a reasonable assessment of the situation. But offering the buildings at fire-sale conditions is penny wise and pound foolish in the long run. According to James McKellar of the Schulich School of Business at York University: "it looks like the government's doing the right thing today, but it is really short-term gain for long-term pain."
It's also important to note that Mr. Fortier has been silent when it comes to making a commitment that money from the sale will be used to fix up the buildings in need of repairs.
This is a bad idea for taxpayers. According to our calculations, Canadians could pay as much as $2 in rent for every $1 received in proceeds from the sale.
Locking taxpayers into 25-year leases removes the flexibility the government requires to manage its real property needs, which go up and down according to the number of public service workers it employs, as well as other factors.
If the government gets out of real estate today, what happens 25 years down the road when it may wish to resume ownership? After 25 years, its expertise in building-asset management will be long gone.
Ottawa should scrap this sale and leaseback plan and come back with an alternative that makes economic sense for taxpayers and can be proudly shared in all its detail.
The Canadian Federal Government has almost completed their harebrained scheme of selling of hundreds of millions in real estate, so they can lease it back from the new owners. This sounds like a hell of a plan doesn't it. On top of selling, then leasing back, the government is going to pay for any maintenance that is required is the dilapidated building. I need to own one of these buildings. Free money from the government, 25 year lease, better than the lottery. Full article below from the Globe and Mail.
Ottawa's real-estate deal is bad for taxpayers
JOHN GORDON
Globe and Mail Update
July 17, 2007 at 11:12 PM EDT
Most homeowners would consider it absurd to sell their property and rent it back in order to pay for a new roof or other maintenance. Moving from ownership to being a tenant just doesn't make sense.
Yet that's what the federal government is planning for a handful of prime real-estate assets owned by Canadians.
By the end of the summer, the federal government will pick a new owner or owners for nine of the best federal office buildings located in major cities across the country.
The plan is to sell these buildings and the land on which they are located, which taxpayers currently own outright, then guarantee the new owners that the federal government will lease back 100 per cent of the space for 25 years.
In addition, the government promises the new owners that taxpayers will foot the bill for all maintenance and upgrades to the buildings' interiors. Tax dollars will ensure that heating systems, windows, elevators, plumbing and electrical systems in these soon-to-be-private buildings are kept in top shape.
Sounds like a sweet deal for the new owners, but is this a good deal for taxpayers? On the surface, the answer would seem to be no. And a more detailed examination of the transaction isn't possible because most every important detail is secret.
All documents, studies, valuations, and advice about the sale and leaseback are being withheld from the public. The federal government has established a cloak of secrecy so dense that even members of Parliament are being kept in the dark. In fact, a parliamentary committee recently called for the sale to be put on ice until these details are made available to the public.
The public is not allowed to see the study conducted by the real-estate wings of two banks (Bank of Montreal and Royal Bank of Canada) that recommended the sale and leaseback plan for these nine buildings. These same two banks are now acting as real-estate agents in the sale of the buildings — for a commission fee — creating the strong appearance of a conflict of interest.
The identities of the bidders are secret, as are the details of their bids. And taxpayers will pay Deutsche Bank almost $2-million to review the transaction before it's final. This, too, will be kept secret.
With so much information being withheld, it's reasonable to ask: What is the government trying to hide? And can taxpayers expect to be treated in this manner by the new owners?
Some details have leaked out. The Globe reported last month that taxpayers could lose up to $600-million if the deal goes wrong and there are irregularities in the valuation of the properties, including one building that was valued at $120-million in excess of the market price.
According to the man in charge of the sale, Public Works Minister Michael Fortier, successive governments have failed over the years to properly maintain the buildings.
Taxpayers, who ultimately own these assets, are faced with a multibillion-dollar maintenance bill to bring the federal real-estate portfolio up to scratch.
This is a reasonable assessment of the situation. But offering the buildings at fire-sale conditions is penny wise and pound foolish in the long run. According to James McKellar of the Schulich School of Business at York University: "it looks like the government's doing the right thing today, but it is really short-term gain for long-term pain."
It's also important to note that Mr. Fortier has been silent when it comes to making a commitment that money from the sale will be used to fix up the buildings in need of repairs.
This is a bad idea for taxpayers. According to our calculations, Canadians could pay as much as $2 in rent for every $1 received in proceeds from the sale.
Locking taxpayers into 25-year leases removes the flexibility the government requires to manage its real property needs, which go up and down according to the number of public service workers it employs, as well as other factors.
If the government gets out of real estate today, what happens 25 years down the road when it may wish to resume ownership? After 25 years, its expertise in building-asset management will be long gone.
Ottawa should scrap this sale and leaseback plan and come back with an alternative that makes economic sense for taxpayers and can be proudly shared in all its detail.
Friday, July 13, 2007
Real Estate Prices In Canada Are Up, Again
Home prices in Canada are up, again. Huge price jumps occurred in Alberta and Saskatchewan, near 30 percent in both cases. Ontario and Quebec took a bit of a hit on the housing front due to the rising Canadian dollar. All in all Canadian real estate is healthy and growing. Full Yahoo! News article.
Labels:
Canada,
Home Prices,
Real Estate
Tuesday, July 10, 2007
Real Estate Lawyers Go Paperless
Lawyers are usually a bunch that enjoy tradition and are somewhat resistant to change. This is not the case with real estate lawyers. The Canadian Bar Association has entered into an agreement to have a paperless transaction for mortgages. Read the article below.
Real estate lawyers going paperless
By: Vawn HimmelsbachIT World Canada (09 Jul 2007)
The Canadian Bar Association has entered into a preferred supplier agreement with Emergis to make the mortgage application process a lot less painstaking.
The service, called Assyst Real Estate, electronically links lenders and lawyers. Once the lender approves a mortgage loan, instructions are sent to the lawyer or notary (depending on the province) on what must be done to close the mortgage. This is a fairly long process involving multiple forms to be signed by the client, which are typically sent back and forth several times.
Using the electronic service, the lender sends a file to Emergis as soon as the mortgage is approved, and that information is sent through Emergis to the lawyer.
“We present a summary of the mortgage instructions that contains all the financial data,” said Pierre Bisson, vice-president of Assyst Real Estate with Emergis Inc. The lawyer receives the information on the Web through a secure portal, and whenever a status or an event is confirmed, the lender is informed electronically.
“We eliminate the paper between the lawyer and the lender, so when the lawyer receives the information electronically, he can start working on the file,” said Bisson.
The banks want a seamless way of providing instructions and receiving reports when they’re advancing mortgage money to clients, said John Hoyles, CEO of the Canadian Bar Association.
“The difficulty for them is that there are many different report styles,” he said. “With this kind of program, it will all be the same, [and] it can all be done online.”
After selecting Emergis in an RFP process, the CBA negotiated an arrangement to provide this service to its members at a reduced cost. However, this does not mean every lawyer that practices real estate law is required to use the service – it’s up to them.
Lawyers tend to be quite conservative, said Hoyles, and some people embrace new approaches more than others. “But the reality is, if you’ve got a high-volume real estate practice it would be helpful,” he said.
The manual method involves going to the bank with a requisition letter for the funds. “If you look at the real estate fees charged by lawyers, they’ve virtually been unchanged for 20 years,” he said.
“If you can lessen the steps in the process and your cost to do the transaction, then it makes business sense to have something that’s as simple as possible.”
The CBA provides a link on its Web site to Emergis, and will be working with the vendor to provide seminars for members as it rolls out the service in each province.
While the process is paperless between the lawyer and the lender, the purchaser still needs to sign the documents. Lawyers, however, use a digital signature through the use of a certification authority.
Emergis has operated in Quebec for the past five years and some 80 per cent of notaries in the province use the service, according to Emergis.
The vendor has an agreement in place with the Royal Bank of Canada and Desjardins Bank in Quebec. It recently signed an agreement with Laurentian Bank, and the service should be operational this fall in Quebec.
“The agreement that we have with the Canadian Bar Association enables us to have better coverage with the lawyers because the CBA represents all the lawyers across Canada,” said Bisson.
Emergis is currently rolling out the service in B.C. and Ontario, while the Western provinces are expected to be onboard by the end of this year and the Maritimes in 2008.
In some cases the mortgage process involves 16 to 20 different forms, and those forms can be quite different from one province to another, so Emergis is integrating the service with the provinces while providing a common interface for lawyers and lenders.
It’s also in discussions with other financial institutions to expand the service.
Real estate lawyers going paperless
By: Vawn HimmelsbachIT World Canada (09 Jul 2007)
The Canadian Bar Association has entered into a preferred supplier agreement with Emergis to make the mortgage application process a lot less painstaking.
The service, called Assyst Real Estate, electronically links lenders and lawyers. Once the lender approves a mortgage loan, instructions are sent to the lawyer or notary (depending on the province) on what must be done to close the mortgage. This is a fairly long process involving multiple forms to be signed by the client, which are typically sent back and forth several times.
Using the electronic service, the lender sends a file to Emergis as soon as the mortgage is approved, and that information is sent through Emergis to the lawyer.
“We present a summary of the mortgage instructions that contains all the financial data,” said Pierre Bisson, vice-president of Assyst Real Estate with Emergis Inc. The lawyer receives the information on the Web through a secure portal, and whenever a status or an event is confirmed, the lender is informed electronically.
“We eliminate the paper between the lawyer and the lender, so when the lawyer receives the information electronically, he can start working on the file,” said Bisson.
The banks want a seamless way of providing instructions and receiving reports when they’re advancing mortgage money to clients, said John Hoyles, CEO of the Canadian Bar Association.
“The difficulty for them is that there are many different report styles,” he said. “With this kind of program, it will all be the same, [and] it can all be done online.”
After selecting Emergis in an RFP process, the CBA negotiated an arrangement to provide this service to its members at a reduced cost. However, this does not mean every lawyer that practices real estate law is required to use the service – it’s up to them.
Lawyers tend to be quite conservative, said Hoyles, and some people embrace new approaches more than others. “But the reality is, if you’ve got a high-volume real estate practice it would be helpful,” he said.
The manual method involves going to the bank with a requisition letter for the funds. “If you look at the real estate fees charged by lawyers, they’ve virtually been unchanged for 20 years,” he said.
“If you can lessen the steps in the process and your cost to do the transaction, then it makes business sense to have something that’s as simple as possible.”
The CBA provides a link on its Web site to Emergis, and will be working with the vendor to provide seminars for members as it rolls out the service in each province.
While the process is paperless between the lawyer and the lender, the purchaser still needs to sign the documents. Lawyers, however, use a digital signature through the use of a certification authority.
Emergis has operated in Quebec for the past five years and some 80 per cent of notaries in the province use the service, according to Emergis.
The vendor has an agreement in place with the Royal Bank of Canada and Desjardins Bank in Quebec. It recently signed an agreement with Laurentian Bank, and the service should be operational this fall in Quebec.
“The agreement that we have with the Canadian Bar Association enables us to have better coverage with the lawyers because the CBA represents all the lawyers across Canada,” said Bisson.
Emergis is currently rolling out the service in B.C. and Ontario, while the Western provinces are expected to be onboard by the end of this year and the Maritimes in 2008.
In some cases the mortgage process involves 16 to 20 different forms, and those forms can be quite different from one province to another, so Emergis is integrating the service with the provinces while providing a common interface for lawyers and lenders.
It’s also in discussions with other financial institutions to expand the service.
Labels:
innovation,
Lawyers,
Real Estate
Tuesday, July 03, 2007
Real Estate Can Be A Blood Thirsty Business
Famed castle to Dracula, Bran Castle, is now up for sale in Romania. The castle along with the surrounding fields, perhaps up to 40+ acres, is expected to sell in the nine figure euro range. Dracula must be turning in his coffin. Read the full article below.
Dracula's castle at stake in real estate deal
Reuters
Friday, June 29, 2007
NEW YORK (Reuters) -- In the cutthroat business of real estate, U.S.-based firm Baytree Capital Associates has been chosen to market Dracula's Castle.
Archduke Dominic Habsburg, who lives in New York State, and his family retained the private investment firm to market Bran Castle and the surrounding property in the Transylvanian region of Romania.
"They're looking to flat out sell the entire project, but they are particular about who they sell it to," said Michael Gardner, Baytree chair.
"While they are amenable to someone building a resort that continues the castle and such, they're not amenable to blood dripping on swords. This is not going to be Vampire Land."
While he would not say how much the property would go for, he suspects it would be in the nine-figure euro range. He expects to start marketing the property in about 60 days.
The castle and ancillary buildings are located on 22 acres and additional acres also may be attached to the sale. The property is about 20 minutes away from an international airport that is under construction and near the Brasov ski area.
The association of Bran Castle as Dracula's Castle can be traced back to Irish author Bram Stoker, who used the castle as his inspiration for the settings of his 1897 novel, Dracula. The Romanian government has about two years left to operate the castle as a museum, which plays host to about 450,000 visitors a year, Gardner said.
The castle originally was built as a fortress in 1377 and was given to the Romanian royal family in 1920. The castle became a possession of the state in 1947 and was transformed into a museum in 1957. The Romanian government returned the property to the Habsburg faimly in 2006.
Gardner said the property will probably be marketed to private equity firms and hotel real estate investment trusts, but the buyer will probably be European.
© The StarPhoenix (Saskatoon) 2007
Dracula's castle at stake in real estate deal
Reuters
Friday, June 29, 2007
NEW YORK (Reuters) -- In the cutthroat business of real estate, U.S.-based firm Baytree Capital Associates has been chosen to market Dracula's Castle.
Archduke Dominic Habsburg, who lives in New York State, and his family retained the private investment firm to market Bran Castle and the surrounding property in the Transylvanian region of Romania.
"They're looking to flat out sell the entire project, but they are particular about who they sell it to," said Michael Gardner, Baytree chair.
"While they are amenable to someone building a resort that continues the castle and such, they're not amenable to blood dripping on swords. This is not going to be Vampire Land."
While he would not say how much the property would go for, he suspects it would be in the nine-figure euro range. He expects to start marketing the property in about 60 days.
The castle and ancillary buildings are located on 22 acres and additional acres also may be attached to the sale. The property is about 20 minutes away from an international airport that is under construction and near the Brasov ski area.
The association of Bran Castle as Dracula's Castle can be traced back to Irish author Bram Stoker, who used the castle as his inspiration for the settings of his 1897 novel, Dracula. The Romanian government has about two years left to operate the castle as a museum, which plays host to about 450,000 visitors a year, Gardner said.
The castle originally was built as a fortress in 1377 and was given to the Romanian royal family in 1920. The castle became a possession of the state in 1947 and was transformed into a museum in 1957. The Romanian government returned the property to the Habsburg faimly in 2006.
Gardner said the property will probably be marketed to private equity firms and hotel real estate investment trusts, but the buyer will probably be European.
© The StarPhoenix (Saskatoon) 2007
Labels:
Castles,
Oddities,
Real Estate
Northwest Territories Real Estate News
Real Estate in Canada's north is experiencing a bit of a crunch do to the energy boom. Some prime housing is sitting empty in Yellowknife, and local officials feel the government owned property could be put to better use. Northwest Territories Real Estate has been on the rise for the last three or four years do to an expanding resource sector.
As a housing crunch escalates in Yellowknife, questions are being raised about some government-owned houses that are sitting empty on prime real estate.
The five houses on 55th Street, which were used as federal government housing, are located close to schools and the downtown.
"You'd probably put it on the market, and probably that day or that evening … you'd probably have six, seven people putting in offers," real estate agent James Clarke told CBC News.
But the federal government has no plans to put them on the market any time soon, even though they've been sitting empty for years.
The houses are part of a large inventory of federal government housing that dates back to the 1960s and was used for RCMP officers and other employees.
In 2003, when they were declared surplus by the federal Public Works Department, Indian and Northern Affairs Canada (INAC) purchased them as potential offerings in future aboriginal land claims negotiations. From CBC.ca
Full Article
As a housing crunch escalates in Yellowknife, questions are being raised about some government-owned houses that are sitting empty on prime real estate.
The five houses on 55th Street, which were used as federal government housing, are located close to schools and the downtown.
"You'd probably put it on the market, and probably that day or that evening … you'd probably have six, seven people putting in offers," real estate agent James Clarke told CBC News.
But the federal government has no plans to put them on the market any time soon, even though they've been sitting empty for years.
The houses are part of a large inventory of federal government housing that dates back to the 1960s and was used for RCMP officers and other employees.
In 2003, when they were declared surplus by the federal Public Works Department, Indian and Northern Affairs Canada (INAC) purchased them as potential offerings in future aboriginal land claims negotiations. From CBC.ca
Full Article
Labels:
Housing Crunch,
Real Estate,
Vacation Rentals
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