General Updates and News

[Phalanx]

This is going to going to be a dedicated marijuana distribution location, so repurposing an existing store would likely be problematic. This just happened to be an unused building in a semi-convenient location that they already owned.

I suspect (hope) that this is just a temporary measure to meet the deadline for sales by this summer, and that they'll have long term plans to build a dedicated store elsewhere. They were already looking to unload this building at one point, I think this is just a matter of convenience and necessity.

[Keith P.]

Originally Posted by mleblanc

Especially after announcing a 4k sqft NSLC in the Nova Centre. If you're looking for a downtown location, that seems like it should be the one, not some old store in a residential neighbourhood.

I can't imagine Nova Centre wants a weed store in their shiny new building.

I honestly do not understand the rationale for a liquor store there either.

[eastcoastal]

Originally Posted by Keith P.

I can't imagine Nova Centre wants a weed store in their shiny new building.

I honestly do not understand the rationale for a liquor store there either.

I've heard that the store in Nova Centre is supposed to focus on local product... seems the rationale is that convention-goers will purchase Nova Scotian wines, beers and spirits as mementos of time here. Perhaps marijuana would be same... don't people usually buy some when in Amsterdam?

[OldDartmouthMark]

Originally Posted by Phalanx

This is going to going to be a dedicated marijuana distribution location, so repurposing an existing store would likely be problematic. This just happened to be an unused building in a semi-convenient location that they already owned.

I suspect (hope) that this is just a temporary measure to meet the deadline for sales by this summer, and that they'll have long term plans to build a dedicated store elsewhere. They were already looking to unload this building at one point, I think this is just a matter of convenience and necessity.

That's my impression of it as well. I'm thinking that they are still feeling their way through the pot thing, what will work and what won't. And, since they still had this building available to them, it's a way of trying this out with minimal investment. If it's a flop, then they can do something else, somewhere else. At the very least, it should give them an idea on how a more-permanent store should be laid out and operated, as I suspect there will be key differences between this and the sale of alcohol, that will require a learning curve of some description.

Additoinally, I'm sure being closer to the universities will help their business model somewhat....

[Jonovision]

Bell Lofts making an impact from lots of different angles.

20180131_125534 by Jonovision23, on Flickr

[IanWatson]

Originally Posted by Jonovision

Bell Lofts making an impact from lots of different angles.

20180131_125534 by Jonovision23, on Flickr

It's visible now from the ferry! Still no sign of leasing details?

[OldDartmouthMark]

http://www.metronews.ca/news/halifax/201...high-office-vacancy-rate-in-halifax.html

The vacant truth: Expert sounds alarm over high office vacancy rate in Halifax

The city has entered a “danger zone” as the vacancy rate of office space continues to climb in downtown Halifax amid more and more construction, a real estate advisor says.

New numbers from Turner Drake and Partners Ltd., taken from a recent round of rental surveys for 317 buildings and released Thursday, show that the vacancy in the central business district has jumped to 17.31 per cent in December 2017. That is up from 14.64 per cent the year before and a “far cry” from the five per cent considered healthy, the company says.

With 879,665 square feet currently vacant, and an average yearly absorption rate of 25,420, Turner Drake estimates it would take 25 years to get back to that healthy rate - but of course that’s with no new builds coming on the market, which isn’t the case in Halifax where major projects like the Nova Centre and Queens Marque will keep adding to the available office space.

“I think we’re in a danger zone. I don’t know if I’d say it’s a crisis because equilibrium will be achieved … but it will be at the expense of the older building inventory,” Turner Drake’s Alexandra Allen said in an interview.

[someone123]

Turner Drake has been writing these "dying downtown" type reports for many years. Does anyone really think that downtown Halifax in 2007 or 1997 was better than 2017? Halifax had a low vacancy rate for many years but little absorption, low rents, and almost no new construction.

I think it is regrettable that some office development goes to suburban parks that are not great from a planning perspective (generally completely car-oriented, not enough traffic capacity nearby, and not much other stuff nearby so people are forced to travel a long distance to get to work). However, a lot of the rest of the points in the article are incomplete or misleading.

What is an office vacancy "danger zone"? Are people going to start dying because the offices are not full enough?

The fact is that the newer buildings are finding tenants and creating empty space in the older buildings that will be backfilled, converted, or left empty. It isn't surprising at all that BMO elected not to stay in the same old circa 1980 office tower forever, and it is not a bad thing. Businesses that can't afford new construction can now move into the old BMO tower and have nicer offices than they otherwise would have been able to afford. The only "loser" is the owner of the old BMO tower, but they have hopefully managed to earn a bit of cash renting out their building for 35 years.

The most important trend downtown is residential development. Downtown residential has a bunch of great properties. It increases demand for nearby retail and office space, and it causes infrastructure to be used more efficiently by balancing out commute directions and making use of infrastructure that would be unused outside of 9-5 in a traditional business district. The old "CBD" model of putting all employment into a downtown of office towers that empty out at 5 pm was never a very good one.

[OldDartmouthMark]

I was a little taken aback by the 'sky is falling' report when I heard it on the radio this morning, as I feel the downtown is already better than it has been in a long time, and that's with some big projects unfinished yet.

However, I assumed the 'experts' knew more than I did so I sought it out on a website to post here, as fodder for conversation.

Thanks very much for your good input, someone123, I'm already feeling more positive about it again...

[Drybrain]

I don't know a lot about Turner Drake, but their press releases, studies, and media interviews are rife with alarmism. Two years ago, one of their spokespeople told the Herald that within 15 years every single heritage building not in the Barrington HCD would be demolished because of market pressures.

In Metro this week, they said that the aging population was leading to labour force declines, though Halifax's labour force continues to increase.

They also said that the residential market was soon-to-be saturated, though provided no evidence of that, though I can corral lots of evidence to the contrary.

There's clearly some kind of agenda at play behind their analysis. They're always talking about endangered heritage, and hey, I'm sympathetic, but their economic analysis seems super-wonky.

Of course, the office market is obviously over-built. But the conclusions and predictions they draw from that are dubious at best.

[Keith P.]

Originally Posted by someone123

The fact is that the newer buildings are finding tenants and creating empty space in the older buildings that will be backfilled, converted, or left empty. It isn't surprising at all that BMO elected not to stay in the same old circa 1980 office tower forever, and it is not a bad thing. Businesses that can't afford new construction can now move into the old BMO tower and have nicer offices than they otherwise would have been able to afford. The only "loser" is the owner of the old BMO tower, but they have hopefully managed to earn a bit of cash renting out their building for 35 years.

Actually if memory serves that building came just after the Royal Bank building across the street that was constructed in the second half of the 1960s as part of the downtown's urban renewal around the same time as Scotia Square, although it wasn't part of that. The BMO building was done a couple of years later so I would date it to the early 1970s. It will be having its 50th birthday soon. I always liked the BMO building both for the bank branch on the main floor that I used a lot along with the offices I visited upstairs. The main problem for it is the same as a lot of other standalone office towers downtown, access from outside of downtown. If you weren't already downtown, parking was very difficult at times and for whatever reason I always found it a slightly difficult building to access. That block of Hollis St isn't very friendly to walk on.

[someone123]

Originally Posted by Drybrain

Of course, the office market is obviously over-built. But the conclusions and predictions they draw from that are dubious at best.

It is really absorption that matters, not the vacancy rate. Negative absorption indicates that companies are leaving or shrinking their office footprints, which is a completely different scenario from empty new space coming up for lease.

There are many different companies that produce office reports. The article mentions that "average yearly absorption" is 25,000 square feet in Halifax but they don't explain how that number was calculated. They could easily have created this number by averaging out the statistics over the dead period of the 90's and early 2000's, but that would not say much about current trends.

I went to CBRE's website to see what their numbers are. You have to pay for the full report but one of the highlights from Q4 2017:

Absorption totaled 181,650 sq. ft. on the quarter, posting a YTD absorption of 308,944 sq. ft. Average asking net rents sharply increased $0.57 per sq. ft. quarter-over-quarter, up to $14.44 per sq. ft. in Q4 2017. (Source - you have to hover over the links)

This is completely at odds with Turner Drake's assessment. It is for the whole market, not just downtown, but I am not sure how much that matters. There seems to be strong demand for office space lately, which makes sense with all of the construction happening. It is not a case where a bunch of developers independently and spontaneously decided to waste hundreds of millions of dollars building office space for no reason.

Here is what Avison Young says about Halifax:

OFFICE
Optimism remains high and the city is experiencing an explosion of high-quality office space in the downtown core. Efficient, modern developments are the hallmark of Halifax’s urbanization movement and record levels of immigration, as well as a strong manufacturing sector, create long-term confidence in the market.

[musicman]

These higher end tenants want the new high efficiency buildings that are being built today. A building built in the 60's or 70's would not even be "B" class commercial property today without major upgrades to it's systems.

I've been hearing talk of a couple of conversions that are in the early planning stages with a couple of these older buildings being either completely or partially turned into condos or appartments. We shall see what comes up about those in the next year or so..

[Jonovision]

Bell lofts from Portland St.

20180214_164758 by Jonovision23, on Flickr

[JET]

Just noticed that 'Five Guys Named Moe' is at Neptune theatre, no wonder some construction projects are taking so long.

[Colin May]

Originally Posted by someone123

It is really absorption that matters, not the vacancy rate. Negative absorption indicates that companies are leaving or shrinking their office footprints, which is a completely different scenario from empty new space coming up for lease.

There are many different companies that produce office reports. The article mentions that "average yearly absorption" is 25,000 square feet in Halifax but they don't explain how that number was calculated. They could easily have created this number by averaging out the statistics over the dead period of the 90's and early 2000's, but that would not say much about

[i]Absorption totaled 181,650 sq. ft. on the quarter, posting a YTD a]

Turner Drake has rebutted the Scott McRea rebuttal pointing out their report is about the CBD not metro HRM.
https://www.turnerdrake.com/blog/default.aspx

" The CBC interviews were focused on the Halifax CBD. Ms. Baird Allen’s data referred to the Halifax CBD. Mr. McCrea’s interview focused on the Halifax CBD… unfortunately the CBRE data he referred to did not. It pertained to the wider HRM metropolitan market. CBRE’s estimate of the vacancy rate for the Halifax CBD is very similar to our own (18.5% versus our 17.3%). A world away from the 13% to 14% cited by Mr. McCrea. CBRE’s vacancy rate for the entire HRM office market was 15.5% (we place it at 14.97%)… probably the source of Mr. McCrea’s confusion. There will always be some differences between the Turner Drake and CBRE survey results, an important factor being that our survey does not just focus on larger buildings but covers some as small as 5,000 ft.2. Mr. McCrea’s comment that the “annual market demand was 300,000 ft.2 not the 25,000 ft.2 quoted by Turner Drake” was similarly erroneous. Alex’s figure of 25,000 ft.2 referred to the CBD, which, after all, was the subject of the CBC interview to which Mr. McCrea was responding. It was based on the average market absorption over the past five years. CBRE’s estimate of annual market absorption of 308,944 ft.2, referenced by Mr. McCrea, referred to the entire HRM market. "

[Jonovision]

This is making such a big impact around downtown.

20180217_111910 by Jonovision23, on Flickr

20180217_111559 by Jonovision23, on Flickr

[eastcoastal]

Originally Posted by Jonovision

20180217_111910 by Jonovision23, on Flickr

Wow - the brick texture on the existing portion is pretty great. What a sincere attempt to explore a material's properties.

[OldDartmouthMark]

It's looking good!

It's interesting that they are using wood framing instead of steel, as I would have thought the main structure to this building was steel. Maybe not?

I'm wondering if this should have its own thread?

[Jonovision]

20180221_120517 by Jonovision23, on Flickr

20180221_121932 by Jonovision23, on Flickr

20180221_161924 by Jonovision23, on Flickr