Thinking about investing in real estate outside of British Columbia? Look no further! Heather Lloyd and Patrick Briscoe from Graywood Developments sit down with Adam & Matt this week to discuss some of the most exciting investment opportunities in Canada. With thousands of homes currently under construction and a reputation for foregrounding the investment potential of any property type, these two Graywood Execs let us behind the curtain of an international developer’s decision-making process. What metrics do they use to analyze new markets? How do they separate the winning investments from the losers? And, most excitingly, would they personally rather buy in Toronto or Calgary right now? Their answers might surprise you!
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About Heather Lloyd and Patrick Briscoe:
Patrick is the VP of Development at Graywood Developments. He works in Calgary, where he was born and raised. He has been in the industry for about 15 years. Prior to joining Graywood 3 years ago, he was involved in developing suburban residential land developments around the City of Calgary. His father works for a large construction company in Calgary and this originally piqued his interest in development from a young age.
Heather is the VP of Sales and Marketing at Graywood Developments works in Toronto. She got her start in real estate about 20 years ago with a research company doing market feasibility studies for developers. She moved to a job as a marketing coordinator for a large developer where she worked her way up. She started with Graywood about 2 years ago. She has had the opportunity to work on some larger masterplan communities around Toronto and the opportunity to work on projects in other parts of Canada, mainly Calgary.
The Greywood Group is a Toronto based private investment management company that was started 30 years ago. They specialize in real estate development and have been associated with some major real estate projects in Toronto, including the Ritz-Carlton. They are active in Toronto, Calgary and Dallas. They currently have 3,500 residential units under development.
On the metrics used to assess new real estate markets across North America:
The goal of every market is to stay on top of the market. Graywood has a number of experienced professionals with different expertise. Their tool kit includes reviewing reports, staying on top of leading software and subscription services and creating internal reports and analysis. They rely on their local connections to assess markets from top to bottom. They believe the best investment is an exceptional development – which can happen if the market allows them to do what they do best.
On why they like Calgary:
Calgary is historically defined by what is happening in the resource segment. This market was strong pre-2014 when Graywood was starting its first project in Calgary. There were other opportunities in Calgary and they wanted to focus on LRT stations in redeveloping areas and areas with a lot of amenities behind them. The Calgary market offered great affordability and great locations, which was one of the factors that attracted them to Calgary. The net migration in Calgary continues to be positive, both internationally and interprovincially. There are fluctuations in the market, but it is relatively protected as it is one of the top places to live in the world.
On the change in the culture in Calgary away from car culture:
The Calgary dream has always been to have a house with a white picket fence. Over the last 10 years, we have seen greater density in downtown Calgary and a large number of new restaurants and venues. The downtown area in Calgary is now very busy and there is a real draw to downtown. The arts and culture, events and architecture are drawing people to live closer to downtown. As people move closer to the core, you will see a shift away from car culture and an increase in walkability.
On the Calgary market:
There was some concern in the re-sale market in Calgary in the past year. We are now seeing positive year over year changes in sales volumes and confidence in the market is starting to return. There is also a lot more positivity in new builds. Calgary is seeing a bit of an upswing, which is further supported by a 3% vacancy rate that is close to a historical low for rental properties. There has been job growth and people have started to be more entrepreneurial in Calgary. Industries like health care and hospitality and distribution have started to pick up the slack for lost jobs in the oil and gas sector. Amazon is currently constructing additional distribution centers in Calgary. These factors make Calgary a great place to live and a great place to invest.
On where to invest in Calgary if you were a mom and pop investor:
The best investments are places in proximity to the downtown. Calgary is very focused on the downtown as the majority of jobs are located there. It is also a good idea to focus on units that attract the millennials – close to downtown, close to transit, close to the entertainment district, grocery stores, and other amenities. 1 bedroom and 1 bedroom plus den units should allow you to attract these renters and provide a positive cash flow, which is great for investors.
On the Toronto market:
The fall market in Toronto is always busy. It has been projected that there will be 37 launches of new buildings across the GTA this fall. Toronto prices continue to increase, but it remains to be seen if this trend will continue at the same pace. The market should continue to see healthy absorption, but most likely not to the same levels that were seen in 2018. We may start to see launches in stages for new buildings to allow for different pricing structures. Overall, the Toronto market should remain stable, with no huge jumps either up or down. It is hard to predict exactly where it will go and remains to be seen.
Exciting projects in Toronto include Graywood’s Wonder project in Leslieville, situated in the east end of the city core. Toronto’s East End is like a village outside of the city that is a transit oriented location. Generally, a great investment is something on a transit line in an undiscovered area that has all the signals of a great up and coming neighbourhood. Graywood’s Scout development in the St. Clair West neighbourhood is this type of investment. Finally, Graywood’s development, 250 Lawrence in Bedford Park is also exciting – smaller luxury units in an affluent area with great schools that allows people to live in a neighbourhood they otherwise would not have been able to purchase in.
On the movement to urban centers in Toronto:
People are moving closer to the downtown core to be closer to their employment. We have also seen the downtown core expand a bit to include additional commercial areas. People are also working from home and the way people work is changing. This is attracting people to neighbourhoods around the downtown core that allow them access to services and amenities without having to live directly in downtown. There has also been a big movement in Toronto to provide condos that will accommodate families. Larger units with amenities that are devoted specially for children, including playrooms. This is a shift in how people view condo living and condo living is not just for renters and young single professionals anymore.
On if they personally would invest in Calgary or Toronto at this moment:
Heather – Calgary. She really likes the cash flow opportunities and the affordability of Calgary. She is very excited about Graywood’s project in Calgary, the Theodore (featured on Vancouver Presale Condos Podcast – episode 24).
Patrick – Calgary. He feels it poses the best investment opportunity right now. Toronto prices are generally higher with higher deposit structures, greater time frames to completion and less opportunity for cash flow. This is not to suggest that Toronto is a bad investment opportunity, but Calgary is more affordable and quicker timelines allow greater protection from risk.
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