COVID AND APARTMENTS
NOW Magazine - Richard Trapunski
In March, Toronto Public Health put together a COVID-19 guidance fact sheet of new health and safety measures for commercial and residential buildings at the beginning of the pandemic, and asked property managers and landlords to stick to it.
But, according to a recent survey from the Federation of Metro Toronto Tenants’ Associations (FMTA), half of the 577 tenants who responded said their landlords had not adopted any new health or cleaning systems.
“Survey shows half of responding Tenants said their Landlords had not adopted any new health or cleaning systems.”
On June 29, Toronto city council adopted it as an official bylaw. Now, until at least October 31, 2020, owners or operators of apartment buildings are required by law to implement those extra COVID-19 cleaning and physical distancing measures.
Those now-mandatory measures include: installing hand hygiene stations or alcohol-based hand sanitizer in all essential common areas, including laundry rooms and lobbies; closing non-essential common areas such as playrooms and gyms (at least until Stage 3 of Ontario’s reopening allows them to open in public spaces); increasing and scheduling twice-daily cleaning of frequently touched surfaces like doorknobs, light switches and elevator buttons; and posting Toronto Public Health signage. That could include informing residents of the need to distance from each other or limiting the number of people in certain areas.
As for masks, those are mandatory in indoor Toronto public spaces like grocery stores, retail shops and on the TTC, but multi-unit dwellings are legally exempt – it’s up to private residential buildings to implement masks in common spaces. But Mayor John Tory has asked the Greater Toronto Apartment Association to adopt mandatory masks in residential common spaces as an official policy, and will explore the possibility of making it a bylaw if they don’t.
Before city councillor Josh Matlow introduced the motion to make the guidelines part of an enforceable bylaw, he had a meeting with the FMTA as well as tenants group Toronto ACORN. It was clear that many of the residents the two groups represented had not seen much in the way of extra cleaning, signage or distancing.
In some cases, even when individual tenants’ associations were putting up signs on their own, they were being ripped down.
“[Tenants] were concerned that their landlords weren’t taking even the most basic steps to protect their health and safety during a pandemic,” Matlow says. “They felt frustrated and powerless. There was no one to call and no laws to support their needs.”
Until now, landlords and building managers were basically on the honour system. Though the residential bylaw enforcement program RentSafeTO has been in effect since 2017, Matlow calls its actual implementation “a constant frustration.” Not only has it barely been enforced before the pandemic, he says, but the officers that were supposed to do it were never even hired. So the infrastructure to make sure residential buildings were keeping to the cleaning standards was insufficient before it became an emergency.
Toronto Public Health was also on the call, and both Matlow and Geordie Dent from the TMCA say it seemed clear they didn’t have the data about how the virus was transmitting in residential buildings. But Matlow says that’s all the more reason to take “an abundance-of-caution approach.”
“Enforcement will be complaint-based and when bylaw enforcement officers are attending registered apartment buildings to conduct audits or regular inspections,” says Carleton Grant, executive director of Municipal Licensing & Standards (MLS).
GTA LAND SALES - 1st Half 2020
The Covid 19 situation has impacted the sale of medium and high density land in the GTA. Not 100% on a value perspective but in the number of sales for sure. In Q2-20 there were 29 sales and this is down from the previous quarter which had 39 sales. Actually many of the 29 sales were probably done months before and only have closed at this time. There is a definite sense of a slow down in terms of deals and overall activity in the market.
On the pricing front, overall in the GTA Q2-20 saw average prices per sf buildable at around $105. This is the same as the last quarter and similar to Q2-19 but down from the peak in Q3-19 of $147 psf. Retail pricing per sf on average was around $1,12 per square foot. This indicates that land prices are around 10% of retail selling prices. Bullpen notes that the current numbers reflect a very small sample size and include transactions in different locations and at various stages of entitlements with very different risk profiles.
In the 416 area code Q2-20 pricing averaged around $122 per square foot and this has stayed generally flat for the past three quarters and down from the peak in Q3-19 of $168. In the 905 Q2-20 pricing was around $53 which is down from $68 in the previous quarter and down from the peak in Q3-19 of $83.
In the first half of 2020 the City of Toronto saw prices decline from $187 per square foot (2019) to $145 (2020). Scarborough pricing remained flat during this time at around $52 per square foot. Etobicoke pricing in 2020 was $131 up from last year of $68. North York too has increase in pricing from $87 per square foot in 2019 to $118 per square foot in 2020.
COVID AND MANUFACTURING
Total manufacturing sales decreased from $162.4 billion in the first quarter to $125.3 billion in the second quarter, a record 22.8% decline. The value of sales in the second quarter was at its lowest since the third quarter of 2009. In volume terms, manufacturing sales decreased 20.5% in the second quarter, mostly because of lower volumes sold in the transportation equipment (-50.6%) and petroleum and coal product (-28.5%) industries.
Manufacturers anticipated an 18.5% decrease in capital spending in 2020 (down to $18.1 billion from $22.1 billion) when compared with 2019, as reported in the revised intentions for non-residential capital and repair expenditures release. The decline in capital spending intentions may impact manufacturing capacity utilization in the future, as well as demand for machinery and equipment.
Based on respondent feedback, the largest estimated impacts of the pandemic on manufacturing sales in dollar terms were in the transportation equipment (-$1.1 billion), machinery (-$481 million), fabricated metal product (-$463 million), petroleum and coal product (-$385 million), food (-$319 million), and primary metal (-$260 million) industries. It should be noted that these estimates are on an unadjusted basis. However, they provide a snapshot of the magnitude with which the pandemic may have lowered sales.
Sales in Ontario increased for the second consecutive month, up by more than one-third (+35.8%) to $22.5 billion in June. Sales increased in 18 of 21 industries, led by the motor vehicle (+288.9%), motor vehicle parts (+200.7%), plastics and rubber products (+33.8%), petroleum and coal product (+35.8%), fabricated metal product (+18.5%), and primary metal (+16.3%) industries.
RECENT APARTMENT SALES
Signet Portfolio – Toronto – SOLD $193,750,000 / $287,000 per suite
This sale consists 7 rental apartment buildings owned by Signet Realty Inc. which had owned these buildings for over two decades. The buildings ranged from 18 to 187 suites and were all located in the 416 area code. As far as we could see the project was not marketed. This sale represents one of many recently where long term owners are selling their real estate. Three buildings were purchased by Timbercreek Asset Management for a total or 289 suites for $278,000 per suite. The remainder of the buildings were purchased by Starlight Investment Ltd. for a total of 386 suites for $293,580 per suite.
10 Elvaston Drive - Toronto – SOLD $5,200,000 / $260,000 per suite / 3.0% Cap Rate
This property is located near Victoria Park and Eglinton Avenue East and is a 3 storey walk up apartment building with a total of 20 suites. The building was constructed in the 1950's and sites on 0.5 acres of land. It was fully occupied at the time of sale with below market rents. The property was fully marketed and exposed and purchased by a private investor.
8 and 16 Wilsonview Avenue – Guelph – SOLD $33,000,000 / $295,000 per suite / 4.25% Cap Rate
This asset comprises of 112 suites in two mid rise apartment buildings near the University of Guelph. The buildings have a masonry and siding exterior, double windows and flat roof, balconies, elevators and was fully occupied at the time of sale. The property was owned by Starlight Investment Ltd. and was fully exposed and marketed. The buildings were in good shape with rental upside. The purchaser was Equiton Residential.
150 Sanford Avenue North – Hamilton – SOLD $26,000,000 / $174,500 per suite / 4.75% Cap Rate
This property is located in north central east Hamilton and comprises 149 suites in a 15 storey concrete building. The building has mostly 2 and 3 bedrooms suites. Rents were 20% below market and potential exists to convert locker space to more suites. There also is potentiao to add more suites on site given the site is 1.86 acres. The property was fully marketed and exposed and was purchased by private investor.
THE APARTMENT GROUP
Together the team has completed over 1,000 transactions and has sold over $5 billion in apartments and development land. Put us to work for you and see the results. NO ONE has sold more buildings then our group. Experience, knowledge and professionalism will insure you get the right deal or the highest price if you are selling.
The Apartment Group is a dedicated team of professionals specializing in the sale of multi-residential investment properties. With over 40 years of combined experience, the team brings together their strengths including strong negotiation and sales skills along with highly technical market analysis and appraisal methods.
We are a boutique Brokerage but have the capabilities of the larger houses without the overhead. We have: an internal database of over 10,500 active apartment and land Buyers; a list of all apartment building owners in the Greater Toronto Area; our web site gets over 50,000 hits a month; we highlight properties for sale through our newsletter which reaches 10,000 investors monthly.
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LORENZO DIGIANFELICE, AACI
Broker of Record, Owner