All right, let’s have a look at some recent news briefs from around the commercial real estate world. The sources for the information below are the City of Edmonton, ATB’s “The Owl”, and IREM (Institute of Real Estate Management).
No Change in Edmonton Inflation Rate
The City of Edmonton reports that our inflation rate was steady at 1.1% (annual) in September. Decreased home heating and rental rates offset increased gasoline prices. The rising dollar is expected to moderate the cost of imported consumer items such as groceries and clothing, and the lovely carbon tax has probably been completely absorbed so inflation is expected to hold between 1.0 and 1.5% for the remainder of the year.
Inflation Eats into Eating
While the rising dollar is expected to moderate food prices, one could say it is about time. Over the last 10 years, grocery prices have risen much faster than most other consumer items. Since 2007, Albertans’ grocery prices have climbed 27% compared to 15% for all consumer items combined. No surprise, the cost of the food bill when eating out at restaurants has coincidentally increased over the same time period by almost 29%.
Unemployment down in Edmonton
While Alberta saw a decrease in employment in September, Edmonton actually recorded a gain of about 4,000 full-time positions. The main areas of growth were construction, energy and health and the gain was in spite of positions lost in professional services and public administration.
While the province lost 7,800 positions overall, our (Edmonton) unemployment rate dropped from 8.7% to 8.5.
Alberta’s Agriculture Sector enjoys Increasing Sales
Maybe the increasing food prices have something to do with it, but since 2000, Alberta’s farms have seen cash receipts increase from just under $8B to almost $14B. As of last year there were almost 51,000 people employed in agricultural work with nearly another 21,000 employed in food and beverage manufacturing. Gross farm revenue grew 5.4% during 2015, the first year of the recession. Sales of manufactured food products increased 7.1% during the recession years of 2015 and 2016.
The Impact of Technology on Real Estate Management
One of the big buzzwords these days, especially when referring to technology is “disruptors”. The Institute of Real Estate Management (IREM), at its recent Global Summit, held a session on disrupting technologies and their effects on real estate management. She’s a brave new world out there, one of the latest technologies employs beacons and stickers with embedded processors to personalize content on screens and other computing devices. So, for instance, when you are walking through an airport, you get ads for content tailored to your interests, previous purchases, and line of work. I don’t know, but “personalized” isn’t the word I would use for that.
Another program makes constant minor adjustments and corrections to a building’s HVAC systems to save energy and labour.
Fracking Isn’t Just for Oil Anymore
At IREM’s Global Summit, another session discussed “Fracking” of real estate assets. With 90% of the world’s data having been created in the last couple years, fracking is a new technology to break real estate assets apart and reassemble them into something more productive. For something so “new” it sounds very familiar to me. If you’ve ever seen the movie from some years back “Other People’s Money” with Danny de Vito about corporate raiders buying an old steel mill and selling off the assets for more than the firm was worth as an operating entity, one begins to realize that sometimes new concepts are just new coats of paint on older ideas.
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