Northern Saskatchewan Real Estate Overview

Presented By:Rick Brunsdon, AACI, P.App

Offices in Regina and Saskatoon 22 Appraisers and we cover the whole province Residential, Commercial, Industrial, Multifamily,

Agricultural, Reserve Fund Studies, Property Tax Assessment Appeals

Rick Brunsdon: 306 244 5900 Email: rickbrunsdon@brunsdonlawrek.com Web Site: www.brunsdonlawrek.com Regina Office: 306 721-5522

Brunsdon Lawrek & Associates Real Estate Appraisals and

Advisory Services

mailto:peterlawrek@brunsdonlawrek.comhttp://www.brunsdonlawrek.com/

The Saskatoon Office Staff

Don Junor, CRA Kristene Johnson, CRA Sandy Antonini, BA, JD, CRA

Kimberly Maber, B.Comm, AACI, P.App

Cameron Walker, B.Comm, AACI, P.App

Janelle Baerg, B.Comm, AACI, P.App

Amanda Conley, BA,Research Coordinator

Rick Brunsdon, AACI, P.App

Wayne Johnson, AACI, P.App

Grace Muzyka, AACI, P.App

Steven Thair, BA, AACI, P.App, LL.B

PresenterPresentation NotesOur appraisal staff include 7 commercial appraisers and our full time market researcher (first two rows) and our four residential appraisers (last row). Each of our appraisers have different specialties which can be found on their CVs on our website.

Appraisers in our firm have been involved in the financial, real estate or construction industries since the mid-1960s and have worked through various market adjustments. We are the only firm in the province that has this depth of experience to draw upon.

The Saskatoon economy is currently experiencing slow but steady growth. The overall real estate market is relatively good but not as strong as during the recent

economic boom of 2011 - 2013. After several years of substantial growth Saskatoon is now in a slow growth stage. Economies of Saskatoon like the whole province depend mainly on commodity

prices. Oil, natural gas, potash & uranium are currently low priced. Agriculture is stable to relatively good with a significant amount of the 2016 crop in west central Saskatchewan still to be harvested.

Saskatoon has weathered the slow down in the uranium & potash sectors well

Saskatoon Local Economy & Real Estate Market

Saskatoon Serviced Land Prices

Land Type Median Price Per AcreHighway & Suburban Commercial $1,100,000Multifamily/Townhouse $1,000,000Industrial $500,000 /$600,000Industrial Outside City Limits $200,000/$250,000

Very Little Suburban Commercial Land for Sale

Year Number Value ($000s)2000 244 275,0002005 2,709 323,0002007 3,672 549,0002008 3,516 605,0002009 3,550 537,0002010 4,100 666,0002011 4,651 937,0002012 5,196 1,082,0002013 5,020 1,089,0002014 4,996 878,0002015 4,327 1,020,0002016 3,950 727,000Source: City of Saskatoon

Number & Value of Building Permits Issued, Total, Saskatoon, Historical

Year Single Detached Multiples Total2007 1,539 841 2,3802008 1,375 944 3,3192009 1,167 261 1,4282010 1,740 641 2,3812011 1,798 1,196 2,9942012 2,213 1,540 3,7532013 1,882 1,098 2,9802014 1,793 1,738 3,5312015 1,217 1,076 2,2932016 1,184 725 1,9092017 (3 mths) 83 366

Source: cmhc-schl.gc.ca

Housing Starts, Saskatoon CMA, Historical

https://www03.cmhc-schl.gc.ca/hmiportal/en/#Profile/1490/3/Regina

Buyers Market. Highest demand is for low to mid-range homes.

Residential

Sale Price Median Month of March2012 $217,5002014 $333,4002016 $226,6002017 $223,100

Saskatoon Median House Prices(Excludes Condominium)

Good demand by investors due to low interest rates. Vacancy rate 10.3%. (CMHC Rental Market Report Oct/16). Average rent of a two-bedroom unit (new and existing) is $1,109 per month. Only fair demand by tenants due to increasing supply and rising vacancy.

In last few years there has been substantial new construction of rental apartments and apartment condominiums. The market is now overbuilt so very few projects planned for 2017 and 2018.

OCR Range 4% - 6%

Multi-Family

Good demand by owner occupiers and investors especially for smaller buildings. Fair demand by tenants

Although rents have softened vacancy is still low

2014 vacancy 6.5%. 2015 vacancy 7.5% 2016 vacancy 8.25%Source: Colliers Saskatoon

Saskatoon Industrial Rents $8 - $12 psf

OCR Range 5% - 7%

Industrial / Warehouse

Weak demand by tenants. Vacancy is rising due to new buildings constructed, sub-lease space on the market and weaker economy.

Landlords are offering incentives up to $50.00/sq.ft.to maintain face rents

Office

Saskatoon Office Rents 2014 $24 psf 2015 $21 psf 2016 $18 psfSuburban Office Rents$10.00 = $18.00 per square foot

VacancyDec. 31 2014 10%Dec 31 2015 15%Dec 31 2016 15%

Estimated Current 16.5%

9 Buildings 502,000 sf total 6 in Regina (258,203 sf) 3 in Saskatoon (244,015 sf)

Dream Saskatchewan Office Buildings

Good demand by investors. Relatively good demand by tenants especially for high quality locations.

Retail

Vacancy Rate December 31, 2014 3.0%December 31, 2015 4.0%December 31, 2016 4.2% (Survey by Colliers International)

Rental RatesNew $30 - $35 psfOlder $15 - $25 psf

1. Preston Crossing in final stage of build-out2. Stonebridge in final stage of build-out3. Blairmore in final stage of build-out4. Dreams Brighton Neighbourhood land being serviced5. Rosewood Arbus commercial area starting development,

anchored by second Costco

New Retail Developments

Population 7,000 & 5,000 respectively Generally stable to strong real estate market as

bedroom communities to Saskatoon Rental rates and cap rates similar to mid-range of

Saskatoon rates

Martensville & Warman

Population 43,100 Real estate market is stable. Cornerstone Retail Development nearing 100% build-out. This project

has increased the retail trading area.

CMHC October 2016 Apartment Vacancy 5.3% 2 Bedroom Rent $837

OCR Range 6% - 7%

The Apartment market is showing increasing vacancy rates.

Prince Albert

Population 17,000 Generally weak real estate market, still a good investment for long term due to

agriculture and some oil/gas sector. Construction of Northland Power Station (fired by natural gas) was completed in

October 1, 2013. This was a short term boost to the economy and the market has returned to more historic norms.

CMHC October 2016 Apartment Vacancy 10.6% 2 Bedroom Rent $796

OCR Range 6% - 7%

The Battlefords receive strong competition in the retail sector as it is less than 1 hours away from Saskatoon and Lloydminster.

The Battlefords

Agricultural Land Values

19.5%22.1%

14.3%

10.1%7.9%

0%

5%

10%

15%

20%

25%

2012 2013 2014 2015 2016

% c

hang

e

Canadian farmland values: 5-year history

Farmland Value Change 2016 Saskatchewan (Overall) 7.5%

Region Comparisons North Western 10.3% North Eastern 9.3% East Central 0.0% West Central 7.8% South Western 16.6% South Eastern 0.0%

*Source: 2016 FCC Farmland Values Report

Farmland Value Change 2016

Saskatchewan (Overall)

7.5%

Region Comparisons

North Western

10.3%

North Eastern

9.3%

East Central

0.0%

West Central

7.8%

South Western

16.6%

South Eastern

0.0%

Questions??

PresenterPresentation NotesI have a few questions I want to ask your group before I ask you for your questions. 1. We have stopped doing the office study for the past couple of years because brokerage firms have been completing these studies and we felt we were being redundant in the market. Would you still like us to complete this study?2. Is there another area where a study is lacking that you would like us to investigate and report on?3. Concerns their clients have had with appraisal reports or where we can improve?

Thank you to our session sponsor!

Information Services Corporationof Saskatchewan

Northern Saskatchewan Real Estate OverviewBrunsdon Lawrek & Associates Real Estate Appraisals and Advisory ServicesSlide Number 3The Saskatoon Office StaffSaskatoon Local Economy & Real Estate MarketSaskatoon Serviced Land PricesNumber & Value of Building Permits Issued, Total, Saskatoon, HistoricalHousing Starts, Saskatoon CMA, HistoricalResidentialMulti-FamilyIndustrial / WarehouseOfficeDream Saskatchewan Office BuildingsRetailNew Retail DevelopmentsMartensville & WarmanPrince Albert The BattlefordsAgricultural Land ValuesQuestions??Thank you to our session sponsor!