(Source: Financial Post)
Office tower market stalling, say real estate giants
Nobody is selling real estate and few are buying it, so how do you value it?
The question dominated a panelist discussion that included the leaders of some of the largest real estate companies in the world. The consensus at the 14th annual North American Real Estate Equities conference, put on by CIBC World Markets, is the Canadian market will see little activity in 2009.
Pinned down on what Toronto’s Scotia Plaza might fetch in today’s market, Andrea Stephen, executive vice-president of Cadillac Fairview Corp., said she couldn’t answer.
“It is difficult because there is a small pool of buyers,” said Ms. Stephen who passed the question on to Tom Farley, chief executive of Brookfield Properties Corp. which is now building the Bay-Adelaide
Centre, the first new office tower in Toronto’s financial core in 15 years.
Mr. Farley noted only three major assets have traded in the past seven years, the last being the TD Canada Trust Tower in Toronto. That was sold at $723/square foot, he said.
Ms. Stephen said that figure might be “little rich” in today’s market, but said it’s hard to establish a real price. When Cadillac, which is owned by the Ontario Teachers Pension Plan Board, bought the Toronto-Dominion Bank’s office tower assets the price was about $300 a square foot but that was eight years ago.
Read Garry Marr’s full article “Office tower market stalling, say real estate giants” in the Financial Post (April 7 2009)