What is the state of the commercial real estate industry in Calgary?
Barry: As far as the commercial real estate industry, the area that I specialize in and Barry Commercial specializes in is investment sales. This is distinctively different than leasing. In investment it has been very, very, very challenging – more challenging than I have experienced in my entire 28-year career.
Why is that?
Barry: I think the protracted recession that we were in and basically political factors. We needed some change at the various levels that we deal with. We’re starting to see that. I’m hopeful that we’re in the very end of the trench.
As far as investment sales, what particular areas are you focusing on?
Barry: As far as the areas, my background as a fellow with the Royal Institution of Chartered Surveyors affords me or benefits me by being able to value any type of real estate in any market, particularly Calgary.
It’s a smaller market. So effectively the international designation as my education allows me to value any kind of real estate. So as a generalist, if it produces an income, we’ll value it. If it’s a development situation, we’ll value it.
When looking at all the aspects of real estate, whether it’s office, industrial or retail, what has been hit hardest in terms of investment in the last few years?
Barry: As far as investment, obviously the downturn has grossly affected our entire central business district. Our core.
As far as the trickle effect, every sector, even apartments. It does trickle down. So when people aren’t working, they can’t afford a place. When people can’t afford a place, rents go down. When rents go down, cap (capitalization) rates go up. Or values go down.
So it’s an inverse relationship. Effectively if you’re a landlord you’re dealing with much more competition, you’re dealing with in some cases blood on the street to even cover your operating expenses.
What impact will the change in government in Alberta have on investor confidence in the province?
Barry: Well, what I can tell you is while there’s nothing concrete, we have hope. And hope, while not a fabulous business strategy, is what we have to go on right now.
– Mario Toneguzzi for Calgary’s Business