Andrew Moffs and Commercial Real Estate

commercial real estate: Few people with their money on their mind haven't been talking about real estate in recent years. , according to Winnipeg Free Press. Most people own a home, or at least strive to do so, and most of us who own property have seen it rise in value over the last decade. c KRT Quick facts Canada vs. U.S: Both nations should do well attracting foreign capital, which will help drive commercial real estate in coming years, but real estate fund investment manager Andrew Moffs says the U.S. will fare better because it has more large, urban centres such as San Francisco, New York and Chicago that attract billions of investment. "The market in Canada doesn't have as many attractive assets for private buyers," he says. "You need to own a national portfolio of prime office space, for example, but a lot of these Canadian REITs can have a mishmash of different types." He says many of Canada's top REITs will continue to perform well, but the smaller ones might struggle to appreciate as they did during the last few years. "When there was an era of cap rate compression, you could have bought anything you wanted and done well. If you bought it in 2009, it would have gone up in value in 2010, even if you didn't show up to unlock the building." What about Winnipeg? Like our housing market, the city's commercial real estate sector is booming. Real Property Association of Canada data show the total return capital and income growth for commercial real estate in Winnipeg was more than 17 per cent in 2013, ahead of the national average of 10.7 per cent. Moffs says he is not an expert on Winnipeg's commercial market. It is not a focus for his fund, but Winnipeg does seem very active, with a lot of new buildings and developments underway. "Looking at the numbers. There is a lot of supply coming, relative to the market," he says. "Maybe that's a good thing because there hasn't been the supply in Winnipeg in many, many years, but it's certainly not a market where global investors look to allocate capital, so it has to come from local sources." Home appreciation: Canada's residential market likely won't continue to be as lucrative as it's been in the last decade, Moffs says. But he doesn't envision a serious downturn in prices to the tune of 30 per cent. A correction, however, is needed. "The issue is affordability in Canada," he says. "It's not necessarily overheated by speculation so much as that logical buyers are simply being priced out of the market." After all, it's the ultimate tangible asset many of us own, regardless of whether we are saving for retirement or not. (www.immigrantscanada.com). As reported in the news.