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Key insights for the real estate industry from the 2023 RealREIT conference

Key insights for the real estate industry from the 2023 RealREIT conference

Synopsis
6 Minute Read

The annual RealREIT conference is an important opportunity for leaders in the real estate industry to discuss current trends and challenges, share knowledge, and learn from each other. Key discussions at this year’s conference included:

  • The impact of inflation and interest rates
  • The current housing shortage
  • Delayed development timelines
  • The opportunity for cash purchases
  • The success of retail properties
  • The potential to transform office properties

MNP welcomed the opportunity to attend several of the networking events at this conference and make new connections with leaders in this space. We look forward to using the insights we gained to further support those working in the real estate industry.

Partner, Assurance and Accounting, FCPA, FCA, ICD.D

Leaders in the real estate industry gather each year at the RealREIT conference to discuss the trends and challenges impacting the real estate investment trust (REIT) space. This event presents many opportunities for industry professionals to engage in thought-provoking discussions and network with executives, board members, and leaders from across Canada.

This year’s conference was hosted on , at the Metro Toronto Convention Centre. MNP welcomed the opportunity to connect with leaders in the industry during networking events to discuss the priorities that matter most to them today.

Through our conversations, we gained insights into the opportunities and challenges facing the real estate industry and made some exciting new connections. Below is our summary of some of the key discussions and why they matter in today’s real estate landscape.

What challenges are facing the industry?

Leaders are facing several key challenges in the real estate industry today. Key topics of concern discussed during the event included:

Inflation and interest rates

The potential impact of high inflation and rising interest rates was one of the most pressing topics at the RealREIT conference. High interest rates are a key concern in the real estate industry — and many Canadians are anticipated to struggle in meeting increased payments when they renegotiate their mortgages. This may result in more defaults in 2024 and 2025.

Leaders predict that the potential increase of mortgage defaults may lead to more properties entering the market in the next several years. However, if inflation remains high, property values may also remain high — which can further exacerbate the current housing shortage.

Housing shortage

Canada has increased immigration in the past several years — and immigration presents exciting new opportunities to increase economic development and activity. However, the country is also experiencing a housing shortage with fewer homes available on the market, causing immigrants to struggle to find affordable housing when they arrive in Canada.

Leaders in the real estate industry voiced concerns that immigrants and international students may be discouraged from coming to Canada if the housing shortage continues. This may have a considerable impact on the country’s economic activity and population growth in the future.

Delayed development timelines

It is essential to build more multi-residential properties to alleviate the current housing shortage. However, the real estate industry is facing increasingly long property development timelines — especially those working in the multi-residential space.

Costs of construction increased during the pandemic and have continued to rise steadily due to increasing inflation rates. Additionally, high interest rates are making the cost of financing new development projects more expensive. Lastly, increasing residential project approval times are also contributing to increasing costs to complete projects. All of these factors are causing challenges with development forecasting.

What opportunities are emerging?

While leaders are facing challenges such as delayed development timelines and high inflation, key opportunities are also emerging in the real estate industry. Some of the topics discussed at the conference included:

Opportunities for cash purchases

Opportunities are available for companies who have cash available to purchase the assets entering the market. Equity financing and deals in the public space have slowed significantly with unit prices falling well below the fair value of companies’ net assets. However, those with cash reserves or liquidity may be able to capitalize on the opportunities that are currently emerging.

Retail properties exceeding expectations

Retail properties have made a surprising recovery in the post-pandemic environment. While there has been some repurposing in the retail space, as well as transformation in the components of retail environments, the sector has exceeded expectations in the wake of the COVID-19 pandemic.

Potential to transform office properties

Office properties were a reliable investment before the COVID-19 pandemic. In the post-pandemic landscape, many who invested in this space are exploring new opportunities to transform office properties that are no longer fully utilized due to the rise of hybrid and remote work environments.

A key topic of discussion at the RealREIT conference was the potential to repurpose, rezone, or convert vacant office properties. Additionally, offering new amenities may increase the appeal of working in office spaces.

MNP’s Real Estate and Construction newsletter

The MNP Real Estate and Construction team looks forward to continuing to provide you with industry-specific information to help you stay ahead of the game in this constantly evolving sector.

Take the next steps

The 2023 RealREIT conference was a highly positive experience for our firm — and provided us with valuable insights into the most pressing topics within this space today. We left the conference with a deeper understanding of the challenges and opportunities currently facing the industry and felt inspired by our discussions with others who work in this space.

The conference also offered many opportunities to connect with leaders in the industry — and we were happy to connect with more women in leadership positions at networking events such as the Desjardins RealREIT dinner. It was an affirming experience to meet more women in leadership roles in the industry and share our knowledge and experiences with each other.

We look forward to continuing to attend events such as the annual RealREIT conference to gain valuable insights that will enable us to further support those working in the real estate industry.

Contact us

For more information, please contact Jo-Ann Lempert, Partner, Assurance and Accounting, FCPA, FCA, ICD.D.

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