Commercial Property Investment
Part 1 – Introduction
• What is the purpose of the report?
• Includes sections of the report
• What will you talk about?
Part 2 – The Firm
• Private investment firm, public investor, real estate investment trust (REIT), institutional investor (bank, pension fund)
• Focus mainly on the firm’s investment strategy
• Can talk about portfolio (value $. occupancy %. total properties), President’s message. number of employees, HQ location, investor profile NB: Be sure to paraphrase and restate information. Do not copy directly from the company website, and be sure to properly cite material you are using.
Potential Firms
• Allied Property REIT • Morguard REIT • H&R REIT • Dream REIT • MSR Holdings • Fengate Real Asset Investments
Part 3 – The Property • Commercial property listings can be found on Loopnet, CBRE, JLL, Cushman & Wakefield, Colliers, etc. • Choose a property you find interesting and can conveniently visit as its required • Take several pictures of the property/site during your visit
Part 3 – The Property • Describe the property/listing • Where is it located? • Is it close to public and private services? (public transit. highways) shops. parks. childcare facilities. etc.) Why is this important? • Price (lease info if available) • Size. storeys. access
• Describe the location • What is the urban form of the area? Urban or suburban? Vibrant or isolated? Mix of land uses or not?
Part 3 – The Property • Zoning • What is the property zoned for? • www.Torontoca/zoning/
If property is in municipality with no interactive map. go through the municipality’s Zoning By-Law and corresponding map
If no Zoning By-Law online then call municipality’s planning department
Part 3 – The Property • Calculate cap rate for your investment and compare to a non-real estate investment
• Canada Government bond rate (5 year) • If your property does not include the current rent income, use rental averages for area/type of property from other sources (e.g. see: TRREB Income Data) • The cap rate is quite simple to calculate. Simply divide the annual rent income by the price. Normally, we would use net operating income, but its not necessary for this assignment. You can calculate the income by multiplying the rental income per sq. ft. by the square footage of the building (not including grounds/parking).
Part 4 – The Recommendation
• Should the firm invest into the property based primarily on its investment strategy? • In what ways does it match the strategy? • What are the deficiencies?
