Some encouraging news for real estate investors looking to buy investment property in an area with a strong job market.  Kitchener Waterloo is growing while many economies across Canada slow down.

Remember Ben’s Rule of Rental Real Estate: Buy rental property in strong job markets, near major employers

From Daily Commercial News:

“Strong fundamentals driving Kitchener-Waterloo into 2011

Kitchener, Ont.’s economy is heading into the second half of 2010 in high gear, based on the employment report for July and the building permits statistics for June.

In July, employment growth in the Kitchener-Waterloo metro area (+7.8% year over year) was the fastest among the 27 census metro areas in the country, and more than three times the national average (2.3%).

Year-over-year job gains in July were particularly strong in business services (+42.1% year over year); finance insurance and real estate (+31.0%); professional and technical services (+16.7%); wholesale and retail trade (+16.2%); manufacturing (+15%); and accommodation and food services (+8.3%).

This strong pattern of job creation was accompanied by exceptionally healthy year-to-date gains in residential building approvals (+68%), as well as in all three categories of non-residential building, led by institutional (+134%), industrial (+121.9%) and commercial (+109.8%).

Specific projects that contributed to this increase in building plans include: the Barrel Yards, a 25-storey residential, commercial and hotel project in Waterloo, Ont.; an office/tech building in Waterloo; and a new provincial courthouse designed to put the three courthouses in Waterloo Region under one roof.”

So that’s what the job market in Kitchener Waterloo is doing – what about the rest of Ontario and Canada? A recent headline from The Record reads Canada’s jobless rate edges up; Waterloo Region’s dips to 7 per cent.

I guess that’s why Kitchener Waterloo is the #1 city to invest in Ontario, according to the REIN Top 10 Towns list (see:

Top 9 Reasons You Should Invest in KW Real Estate)

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I spoke with CTV at the Keller Williams office yesterday morning, and they also spoke with a client, Stephen Litt on site at the Arrow Lofts development.  They ran the segment on the 6pm news, and again at 11.

Here is the (shorter) clip from the 11pm news:

(thx Mike Hagedorn for getting this for me!)

If anyone was able to capture the clip that ran on the 6pm news, I’d be eternally grateful for a link.  Thanks!

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Kitchener Waterloo is Ontario’s top Real Estate Investment Destination, again.

Well, it’s that time of year again. Kitchener Waterloo is getting some more much deserved attention from Canadian Real Estate Investors all across the country.

KW has been named the top real estate investment destination in Ontario by the Real Estate Investment Network for a couple years in a row (see: Kitchener Waterloo Real Estate ranked #1 again), and this year the trend continues.

REIN released the REIN Top 10 list that named Kitchener Waterloo the #2 investment destination in Canada, and tops in Ontario again.

From CTV News:

The Record reports:
REIN “refers to Waterloo Region as the “economic Alberta of Ontario.”
That means Waterloo Region is seen not only as the economic engine of the new Ontario economy, but also that it “will outperform all other major regions in eastern Canada,” says REIN president Don Campbell
For indicators, he points to job growth, student growth and a new light rapid-transit system.”

Why are real estate investors focused on our city?  Let’s take a look at the reasons why people like buying investment property in Kitchener Waterloo

Top 9 Reasons People Are Investing in Kitchener Waterloo Real Estate Now

1. Top Area to Invest – The Real Estate Investment Network named Kitchener Waterloo & Cambridge (“the Technology Triangle”) the #1 city to invest in Ontario and #2 in Canada, behind Calgary.

2. Low Interest Rates. currently we have very low interest rates – although there is a slight upward trend right now – which makes NOW a great time to invest.  Rates will be going up in the future. It’s a matter of how soon, and how much.  Smart real estate investors are taking advantage of historically affordable cost of borrowing money.

3. Great prices – Investors love Kitchener Waterloo because it has a booming economy, without big city property prices.  Our clients invest in condos ranging from $120,000 on up, and there are opportunities to buy multi-family housing with cap rates of 7%, leaving room for healthy cash flow with today’s low interest rates.

You can buy good quality new construction rental units here, for much less than you’d pay for an older condo in Toronto.  (That’s what our cilents from Toronto happily do, over and over again).

4. Growth – Kitchener Waterloo is growing at a rapid rate. If you haven’t been here in a few years, just drive down King St! There are mulitple mega million dollar developments that are underway or have been completed recently – The Bauer Lofts, The Barrel Yards, the Arrow Lofts, Kaufman Lofts, the new McMaster medical school and University of Waterloo Pharmacy school, the new King St streetscape in downtown, the new Uptown Waterloo, the Kitchener Market, Market lofts; and LOTS of development in the university areas as well.

Also, the University of Waterloo has recently announced plans to double it’s footprint over the next 40 years. See Is Waterloo’s Student Housing Market Being Over Built?
5. Stable, Diverse Economy – Kitchener Waterloo is a market supported by strong fundamentals – world class high tech companies, universities and NGOs; a strong manufacturing sector; proximity to Toronto and the United States; an international airport; continued job growth etc.

In the July 2010 figures released by Stats Canada, the jobless rate of the KW area fell, while national unemployment rose.

6. Access to Property Management – all of our clients have access to world class property management for a very reasonable rate. Contact me for more details !

7. Great Business Community – Major companies and organizations call the Technology Triangle home including RIM (makers of the blackberry), Toyota, OpenText, Manulife, Sunlife, the Perimetere Institute, the Centre for International Governance Innovation, and a host of world class local companies.

8. Awesome, Smart People: Kitchener Waterloo is the MOST INTELLIGENT COMMUNITY IN THE WORLD. Take that Toronto

9. Great Resource – You have found a real estate agent and Wealth Building team that is focused on building your wealth!

What are some of the reasons you like investing in Kitchener Waterloo? Let us know in the comments!

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Owners of Student Housing Rejoice

Back in April you read about the University of Waterloo proposed plans to double the size of campus (Is Waterloo’s Student Housing Market Being Over Built?), and today the news is announced that the plans are moving forward.

This is great news for people who invest in the student housing market here – the demand for quality new student housing will continue to increase for decades.  We will need to build even more property around WLU and UW!

From The Record:

Plans are moving forward to double the size of the University of Waterloo campus over 40 years.

Monday, Waterloo council endorsed a subdivision plan that calls for the staged development of the north-west campus, between Westmount and Fischer-Hallman roads. It’s estimated the 73-hectare site could eventually support 9,000 jobs, similar to the research and technology park operating on adjacent campus lands.

Waterloo council will spend $9 million to grade and service the site, as part of a deal to locate a new city library branch and YMCA there.

Vacant lands could be used for research, academic buildings, and housing for students or faculty

Student Housing can provide great cash flow, abundance of tenants (and even in a recession, when investing in an education becomes even more of a priority), and long term security for your family’s money.

We have a terrific development opportunity for sale; building your own property is a great way to get into the student housing market.

For full details, and for other opportunities in the Waterloo student housing market, just email or call me.

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$46,710,000 to be exact.

Waterloo Region Apartment Buildings Fetch $46 million

Killam Properties has announced the purchase of two river front Waterloo Region apartment buildings in Cambridge, totalling 225 recently built residential units.  This is one of the largest recent Multi-Family transactions in the Kitchener Waterloo area recently.

“Killam has acquired 100 and 200 Eagle Street North in Cambridge, Ontario, in the Kitchener-Waterloo Region. The luxury apartment buildings are of newer concrete construction and include spacious units ranging from 1,000 to 1,400 square feet, modern features and five appliances. The buildings’ amenities include a fitness centre, guest suite, air conditioning and underground parking.

100 Eagle Street, constructed in 2008, has 119 units with 9-foot ceilings, including 3 one-bedroom units, 59 two-bedroom units and 57 two-bedroom units with a den. The average rent is $1,523 per month. 200 Eagle Street, constructed in 2004 and located directly beside 100 Eagle Street, has 106 units, including 25 one-bedroom units and 81 two-bedroom units. The average rent is $1,351 per month.

The purchase price for the two river-front properties of $46.7 million ($207,600 per suite) was satisfied with a combination of the assumption of a 20-year mortgage for $10.1 million at 5.15%, a new mortgage for $16.0 million at 4.5%, and the balance in cash.

“We are pleased to report progress on our apartment acquisition program in Ontario” noted Philip Fraser, Killam’s President and CEO. “Closing these two Cambridge assets increases Killam’s apartment ownership in Ontario to 362 luxury apartment units. We have continued our acquisition focus on newer, high quality assets. These two assets meet this standard and are among the highest quality assets in Cambridge.

Valuations of Waterloo Region Apartment Buildings

The cap rate on the acquisition is approximately 5.7%, reflecting the buildings’ age, location and quality of construction.”

Both the cap rate and the price per suite are rich for the region, reflecting the quality of the asset, as well as the cheap financing that REITs and other institutional investors have access to right now.  (CMHC is happy to loan on Multi Family properties, as it is a secure asset class.  Rents continue to come in, in both good and bad economic times – not the case with retail, office and industrial properties, which are much more sensitive to swings in the economy.)

Looking to invest in Waterloo Region apartment buildings?

We have helped lots of investors invest in high quality investment properties, and would love to help you as well.

There are several apartment buildings available in Kitchener Waterloo between $1 million and $10 million.   Due to the nature of the Multi-Family market, we’re unable to provide a full list of available listings on our website.

For a full list of investment property currently available, contact us using the form on the right (click the red button)

Own a Kitchener Waterloo Apartment Building?

We have many qualified real estate investors looking to buy apartment buildings now – if you own one, contact us to arrange for a quick sale.  You’ll likely be pleased with what buyers are willing to pay for a quality building!

The Globe Advisor expands on the lack of available supply of apartment buildings in Canada:

Apartment buildings - there are about 100,000 of them across Canada, with the majority of them clustered along the Windsor-Quebec City corridor – may not return as much to their investors as shopping centres or office buildings, but they offer a lower-risk way to own income-generating properties.

They held their value through the recession for one main reason – there were no distress sales because owners could refinance their debt inexpensively through Canada Mortgage and Housing Corp. This ensured them access to credit at a time when other property owners found debt markets completely closed.

And with mortgage rates almost certain to move higher in coming months, buyers are scrambling to make purchases while rates sit near all-time lows.RealNet Canada, which tracks sales, shows first-quarter sales volumes actually decreased in most of the country at a time when other commercial sectors were showing sharp signs of recovery.

It has nothing to do with a lack of confidence in the sector, but rather illustrates how reluctant sellers are to part with their income-generating properties.

“What’s happening is people who own them are quite happy and those who want to buy really have to spend a bit more than they may like,” said RealNet president George Carras. “The most dominant owner profile in the sector is the private investors, and they tend not to want to trade.”

…

“You can get money at ridiculously low rates and the big challenge is just finding quality product,” Mr. Greer said. “There is no low-balling, and when something comes around, you see a ton of interest.”

Halifax-based Killam Properties started the year with a goal to spend up to $150-million on Ontario apartment buildings, and passed the $100-million threshold with the Cambridge deal earlier this week.

Chief executive officer Philip Fraser said it has become increasingly difficult to find relatively new buildings that met the company’s criteria, and indeed there were never any “for sale” signs planted on the front lawn in Cambridge.

If you have a building, and you have thought of selling in the next ten years, I strongly recommend we talk today; with interest rates as low as they are (but heading up fast!) you will likely get more for it today then when rates are higher.  There is strong demand for Waterloo Region Apartment Buildings, making it a great time to bring assets to market.

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On Monday, Waterloo councillors approved conceptual plans to expand the research and technology park north of the current campus, and also to develop nearby vacant lands in the northwest corner of the campus.

Council also reviewed a university proposal to launch construction of a first phase in its northwest corner. The lands could be used for research, academic buildings, and housing for students or faculty.

“It’s pretty much doubling the size of the university footprint,” Coun. Mark Whaley said. “It’s remarkable stuff.” (originally from The Record)

I was close to UW’s campus this morning, and I had the opportunity to snap a few pictures of the development projects underway on campus.

Here is a sampling:

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Since 2005 a lot of student housing has been built.  Like, thousands of beds. An investor represented by Keller Williams purchased over 500 newly built bedrooms, and there have been other groups just as active. 

Just down from a 380+ student property, there is a new 500+ student investment property under construction: 

(Waterloo Student Apartment Building under Development)

This is not the only building going up right now – there are many other properties slated to come online in the next few years.

So – will there be a long term demand for this much housing around the Universities?

Right now, there are approximately 30,000 full and part time students at the University of Waterloo (UW) and about 15,000 attend WLU’s Waterloo campus.  Lots and lots of tenants ready to rent your rooms.

Looking forward to the future, things look bright for people investing in Student Housing in KW:

UW campus poised to double in size over 40 years

By Jeff Outhit, Record staff

WATERLOO — Plans are taking shape to double the built size of the University of Waterloo campus over 40 years.

On Monday, Waterloo councillors approved conceptual plans to expand the research and technology park north of the current campus, and also to develop nearby vacant lands in the northwest corner of the campus.

Council also reviewed a university proposal to launch construction of a first phase in its northwest corner. The lands could be used for research, academic buildings, and housing for students or faculty.

“It’s pretty much doubling the size of the university footprint,” Coun. Mark Whaley said. “It’s remarkable stuff.”

He praised the university founders for creating the school in the 1950s and buying up all the vacant land now proposed for development. “What an amazing foresight these guys had,” he said.

The current research park is expected to expand north onto vacant lands over 15 years, adding as many as 4,000 more employees.

The vacant northwest corner of the campus, between Westmount and Fischer-Hallman roads, is to be developed in phases over 40 years. It could see another 13,750 employees added to the campus payroll.

We’ve seen rents and values of student rental properties steadily increase over the years.  With the planned expansion from UW, it looks like this trend will continue for a long time.

If you have any questions about the student real estate investment market in Waterloo, or for a list of properties that produce cash flow in the region, email me at Benjamin@BenjaminBach.com

KW Commercial is your one stop shop for commercial, investment, retail and multi family advice and brokerage in Waterloo Region.

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So, last time we looked at the investment property under construction on King Street it was just a hole in the ground, with some preliminary foundation in place.

Well, I was showing an investment property to a group of real estate investors across the street yesterday, and I snapped another shot of the construction site.  They’ve made a lot of progress!

 This is going to be one big property…  over 500 bedrooms for students.  It will probably be completed in the next 12-18 months.

If you have any questions about the student real estate investment market in Waterloo, or for a list of properties that produce cash flow in the region, email me at Benjamin@BenjaminBach.com

KW Commercial is your one stop shop for commercial, investment, retail and multi family advice and brokerage in Waterloo Region.

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How much cash flow will a rental property generate? Let’s take a look at a real example of an investment property for sale on the MLS.

The property generates positive cash flow, and your tenants are paying off a lot of debt for you.

If you’re interested in a list of student rental properties in Waterloo, email me at Benjamin@BenjaminBach.com or call me at 519 772 4376

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