Thursday, October 4, 2007

All delegates will automatically be registered to attend the Colliers International Market Update Presentations.

Introduction and Host for the Opening Session
Scott Addison, Executive Managing Director, Toronto Region,
     Colliers International                       

Where are the Canadian Economy and Interest Rates Heading?
An examination of key trends in the Canadian and U.S. economies with a specific view towards their future direction for 2008 and beyond, and the outlook for Canadian interest and inflation rates. 

Dr. Sherry Cooper, Executive Vice-President,
     Global Economic Strategist, BMO Financial Group;
     Chief Economist, BMO Capital Markets &
     BMO Nesbitt Burns 

The 9 “Ts” That Will Determine Your Success
Well-known real estate advisor and futurist Christopher Lee will provide a fast-paced and provocative presentation at the nine key challenges and opportunities that are reshaping the way real estate is acquired, developed, leased, managed and sold.  He will also share his insightful predictions on upcoming changes over the next twenty years for the real estate industry in North America.  Learn why today’s leasing process may become a dinosaur.  Will 50% of brokers today be replaced by transaction specialists?  What do clients really think about their service providers?  This session will inspire you to think through what lies ahead for our industry.   

Christopher Lee,
     President & CEO, CEL & Associates Inc.
 

CONFERENCE OPENING REMARKS

Marta Lewycky, Vice President, Legal Affairs, First Capital Realty Inc.
Finley McEwen, Vice President,
     CREIT Management Limited
 

CONCURRENT SESSIONS  (Select A1, B1, or C1)

Session A1
Industrial Real Estate Leasing Trends in the Greater Golden Horseshoe
This session will examine trends in leasing industrial space primarily in the southern Ontario market. How much spec industrial development is occurring in the sub-markets around the GTA? What has been the market response to this new space? To what extent have the increasing costs of construction and the rising price of industrial land affected build-to-suit activity? What impact have these trends had on lease rates? Do industrial leasing rates reflect economic costs of buildings and land or not? Why is there often a disconnect between the two and how can it be substantiated? What will be the next frontier of logistics buildings? Given the trends in manufacturing closures and changes in logistical building design, how do you reposition older industrial buildings?  Can this be done easily?

Moderator:
Mark Stainer, Vice President, Colliers International

Panel:
James Boyce, Senior Asset Manager, GWL Realty Advisors Inc.
Michael Hanna, Vice President & General Manager,
     O.R.E. Development Corporation
Steve Rawlin, Vice President, Marketing & Leasing, Giffels Management Limited
Jordan Slatt, President, LDC Logistics Development Corporation

Session B1
ROFR, ROFO and Other Special Rights for Tenant Downsizing or Expansion
This session will provide a unique perspective on a group of special rights involving downsizing or expansion of premises. These have sometimes proven to be some of the more contentious elements of a lease: early termination rights, downsizing rights, rights of first offer, and rights of first refusal.  Learn how these points should be addressed from the perspective of a landlord, a tenant, and a litigator resulting in a more ideal lease. What are some sources of common conflict between a landlord and a tenant over special rights and how can they be avoided through the drafting process?  How do you ensure that a ROFO and ROFR are easy to administer? What are the issues to concern yourself with when you are drafting them? Both landlords and tenants are trying to build flexibility, and control, into their leasing arrangements. How can competing interests co-exist?

Moderator:
Lisa Borsook, Managing Partner, WeirFoulds LLP

Speakers:
Sharon Addison, Partner, McLean & Kerr LLP
Peter Icely, Senior Director, Strategy & Research, CIBC Corporate Real Estate
Steve Posen, Senior Partner & Chair, Minden Gross LLP

Session C1
Leasehold Improvement and Construction Costs in Today’s Market:  Current Issues and Management Challenges
The first part of this session will examine how a construction schedule really works.  The goal will be to provide strategic advice on how to effectively manage a buildout or leasehold improvement (from the perspective of a landlord or a tenant) in today’s market taking into account the very latest in building code regulations and standards, the implications of the Bill 124 appeal decision on design and construction professionals, and building permit approvals in today’s market.  Discussion will also cover such as issues as: being ready on time; managing construction costs given the uncertainty in labour, materials and construction costs, and delivery dates and penalties.

What are the main elements of tenant space and landlord space?  What are their respective work obligations? How important are measurement clauses in a lease with respect to tenant build-outs? What alternatives do owners and tenants have in light of these issues?

The second part of this session will briefly comment on the regulatory changes in Ontario related to asbestos and their implications for landlords. Asbestos can be commonly found in many forms inside a building, e.g. insulation on hot water piping and heating ducts, floor tiles, sheet flooring, ceiling tiles and acoustical finishes, wall insulating materials. As of November, 2007, all asbestos must be identified and managed including re-inspections at frequent intervals with records being updated at least once a year.  What are the implications of these regulations and liabilities on building owners and tenants? 

Moderator:
Celia Hitch, Counsel, Lang Michener LLP

Speakers:
Colleen Baldwin, Principal, Business Development/Strategic Services,
     Straticom Planning Associates Inc.
Harvey Barth, Partner, Crown Realty Partners Inc.
Jennifer Ryder, Associate Vice President,
     CB Richard Ellis Limited
Jon Taylor, Partner, GovanBrown Group of Companies
 

Session A2

The Challenges in the Greater Toronto Office Leasing Market:  Downtown vs. Suburbs, New Development, RFPs, Subleasing, To Renew or Not Renew and Other Key Trends
This session will open with a brief overview on how the office market has performed in 2007 in the Greater Toronto Area.  How do the trends in the suburbs compare with the downtown cores and other sub-markets?  How much unoccupied space is there currently on the market?  What is happening to net rents? How are major investors reacting to these leasing rates?  

A panel discussion will follow the presentation focusing on significant trends:

• What are the challenges and major differences between marketing a new office building under development vs. promoting an existing building with built out amenities and space?

• How much spec development is underway in the suburbs?  What the reasons for this?  Why are tenants leaving the 416 for the 905? What attributes are these buildings offering to tenants?

• Is there a changing mindset among tenants?  Are they starting to view space and real estate as a strategic attribute rather than a cost? 

• Are new buildings attracting tenants reasonably easily?  What attributes are meeting the corporate culture and needs of these users?  How important is LEED?

• What impact is the availability and cost of land having on rents?

• Why are office rents in the downtown core not rising faster given current occupancy levels?

• What will likely happen in 2012-2016 when a number of major leases rollover in the downtown core and major new developments are completed?

• With potentially rising interest rates, should a landlord or a tenant try to renew leases now or wait until they mature? Is there any noticeable increase in tenant early terminations?

• How much subleasing activity is there in the market?  What are the issues and ramifications of subleasing for the landlord, the primary tenant and the secondary tenant?

• A new emerging trend appears to be the use of RFPs by corporate tenants when they are looking for space. Why is this happening?  How does this process work?  What are the advantages and disadvantages of this approach to both landlords and to tenants?

Moderator and Presentation:
Sandy McNair, President, Altus InSite

Panel:
Paul Morse, Senior Managing Director, National Practice Director,
     Office Leasing, Toronto Central, Cushman & Wakefield LePage Inc.
Joe Nestic, Senior Vice President, Menkes Developments Inc.
Peter Stafl, Director of Leasing, GWL Realty Advisors Inc.
Craig Walters, Senior Vice President, Northam Realty Advisors Limited
Rob Wheler, Vice President, Leasing & Development,
     Bentall Real Estate Services LP

Session B2

The Sale Leaseback Market for Industrial and Suburban Office is on Fire: How Do You Structure the Deal? What Issues Might You Encounter with Ground Leases?
Sale-leasebacks are increasingly becoming important alternative growth strategies for real estate developers of industrial and suburban office properties. They are growing in popularity in what appears to be a seller's market that some would say is one of the biggest equity takeouts in history.  How are sale leasebacks, ground leases and built-to-suit leases negotiated and structured to ensure a win-win for both the tenant and the landlord?  What cap and discount rates are used, and what types of users find these structures most appealing? What are the most significant issues in structuring these types of deals?  How do you establish an effective rate for this type of product? What motivates people to do these types of deals?  What are the rights of landlords and of tenants under these circumstances?  What happens in the case of a ground lease if a building is not built on time?  What is the exit strategy? What are the tax issues of these types of deals? 

Moderator:
Jim McIntosh, Senior Vice President, Industrial Investment Sales,
     Colliers International

Panel:
Richard Abboud, President, Forum Leasehold Partners Inc.
David Leeming, Vice President, Eastern Canada,
     Hopewell Development Corporation
Irene Subocz, Vice President, Financial Products, Marsh Canada Limited
Thomas von Hahn, Partner, Blakes LLP
 

Session C2

Operating Cost Charge-Backs:  Five Key Issues on the Edge
This session will focus on the often-thorny issue of operating cost charge backs in a net lease and where the most significant difficulties lie with this practice. Operating costs and charge-backs are one of the most negotiated issues in lease negotiations, and sometimes they are the most misunderstood. What exactly is an operating cost and what is not?  Do tenants understand them?  What are the courts saying notwithstanding what the lease says? How transparent are landlords?  How transparent do they need to be?  Is there a challenge in allocating costs in a mixed-use building?  If CAM costs are reduced, how are these savings passed on to tenants? If a tenant asks for full audit rights, can they exercise such a right?  How frequently are landlords of office and retail space being audited by their tenants?  What are their experiences and policies with respect to lease audits? What is the language of a good and a bad audit clause, including how to settle audits, the timing and the process? Is there an appropriate administrative fee that landlords can charge? 

Moderator:
Jane Helmstadter, Partner, Corporate/Commercial, Bennett Jones LLP

Panel:
Ian Boake, Senior Vice President, Corporate Solutions,
     Jones Lange LaSalle Real Estate Services Inc.
Marta Lewycky, Vice President, Legal Affairs, First Capital Realty Inc.

Deborah Watkins, Partner, Daoust Vukovich LLP

Paul Wilson, President, Advisum
 

An Update for the Industry on GHG Issues, Green Leases and Other Major Environmental Practices Emerging in the Real Estate Market

Speaker:
Michael Brooks, Executive Director,
     Real Property Association of Canada
 

Session A3
Repositioning Older Office Buildings:  How Are They Going to Compete With New Ones?
Given the increase in new construction and a greater propensity for the greening of interior spaces and the total buildings in general, how will older buildings and space compete in this market? What are the major differences in leasing an older existing building vs. a new development? If you decide to upgrade an existing building to a LEED EB or BOMA Green Globes Plus standard, how do you pass-through the consulting fees and hard costs associated with this type of work?  How do you involve your existing tenants in developing your strategy, getting their input and their buy-in?  What costs are considered to be capital expenditures and which ones fall under operating costs?  What are the rights and remedies of landlords and tenants in retrofitting an existing building?

Moderator:
Craig Tresham, Principal, Senior Vice President,
     Avison Young Commercial Real Estate

Panel:
Chris Holtved, Senior Vice President, Toronto Region, GE Real Estate
Wayne Jacobs, Executive Vice President, Allied Properties REIT
Keith Major, Senior Vice President, Property Management,
     Bentall Real Estate Services LP
Glenn Way, Vice President, Asset Management, GWL Realty Advisors Inc.

Session B3
New Developments and Challenges in Retail Leasing
Change is a constant in retail development.  The panel will discuss the implications of some of the latest trends in retail real estate on leases and the relationships between landlords and the tenants. What new types of retail properties are being created in this market?  What are the leasing issues in mixed-use buildings and lifestyle centres? Are there new concepts creating a new set of problems or are they mitigating some of the old ones? What impact is consolidation in both the landlord as well as the tenant sector having on retail leasing? Why are there so many issues pertaining to exclusive use clauses?  Are they poorly drafted or is it a function of market trends as retailers change their product offerings and reposition themselves?

The issue of retrofitting former anchor space into smaller uses will also be discussed since the pool of available major tenants is shrinking. How do you sub-divide it?  How does it impact the CRU tenants?  What happens now with exclusivity?  What impact do clauses in the master lease have re: subleasing?  Is there a possibility that you may need rezoning?  If so, what would be involved with that process?  What are the rights of the head tenant vs. the subtenants?

Moderator:
Stephen Messinger, Senior Partner, Minden Gross LLP

Panel:
Tom Burns, Senior Vice President, Retail, JJ Barnicke Limited
Paul Harrs, Senior Vice President, National Leasing, Ivanhoe Cambridge Inc.
Todd Lisso, Executive Vice President, Development, Forecast Inc.
Catherine McKenna, Vice President, National Retail Leasing,
     Arcturus Realty Corporation

 

Session C3
Drafting Key Clauses in Leases:  Damage and Destruction, Termination, Demolition and Restoration Obligations, Environmental Liabilities
This session will examine a number of key clauses within a lease that encounter considerable discussion and debate between landlords, tenants, brokers and lawyers during a lease transaction.

Damage and destruction provisions of a lease were often overlooked or lightly negotiated. However, as a result of many natural and man-made forces over the past five years in North America, prudent landlords and tenants are reassessing their master lease and policies in an effort to avoid some of the potential quagmires. This session will examine many aspects of these issues from all perspectives, e.g. What does “not tenantable” mean?  Can you invoke that if you merely cannot get access?  What if there is mould damage as a result of a storm?  What if there is damage from contamination?  What if there is a blackout? Who bears the risk?  Is it insurable?

Termination clauses will be examined.  How do you break them if you are a landlord?  If you are a tenant?  How can termination be applied for default?  Many tenants are not aware of their final obligations at the end of the term of their lease. 

The final discussion will examine some of these issues and responsibilities including: demolition and restoration obligations; moving out problems; redundant wiring and who must remove it.; asbestos abatement, toxic mould, potential pandemics and other environmental and health risk issues.  How are leases being drafted with these issues and clauses in mind.

Moderator:
Lloyd Cornett, Partner, Aird & Berlis LLP

Panel:
Ken Beallor, Counsel, Fraser Milner Casgrain LLP
Jim Fraser, Associate Counsel, Miller Thomson LLP
Joe Grignano, Consultant, Blakes LLP
Nancy Prenevost, Vice President, Legal, Oxford Properties Group Inc.
 

Session A4
Greener Buildings and Greener Interior Environments:  What You Need to Know
Costs seem to be less of a factor and not the top priority in today’s office market.  There appears to be a greater emphasis on finding the right environment. What is a “next generation” building in today’s market? What are tenants demanding?  How are developers and landlords responding? What lies ahead with respect to the next generation of high performance buildings? What does this mean for landlord and the broker who are responding to these priorities? What are the dollars and sense related to providing these kinds of building environments?  Are there really higher costs and, if so, can they be justified? Can the quality of facilities contribute to retaining and recruiting key employees? Do greener buildings enhance occupant productivity and lower operating costs? What implications do green buildings have on leases? Is it necessary for tenants to pay a higher NER in order for this to happen?

What does LEED really mean for new buildings?  What are the implications of LEED-CI on interior spaces and on existing buildings? What impact is it likely to have on leasing documents?  What are common definitions and expectations that are starting to be used with respect to green building and green space?

Moderator:
Doug Hitchcox, Vice President, Office Leasing,
     Cushman & Wakefield LePage Inc.

Panel:
Don Crichton, Vice President, Practice Leader -
     Workplace Solutions, HOK Canada Inc.
Nancy Searchfield, Vice Chair,
     Canada Green Building Council
Dermot Sweeny, Principal Partner,
     Sweeny Sterling Finlayson &Co. Inc.
Daryl Watts, Global Director, Leasing, RBC Financial Group

Session B4                   

Mastering Lease Negotiation in Today’s Market
This session will examine some key negotiating strategies, techniques and issues that landlords, tenants, lawyers and brokers that apply to today’s real estate leasing environment. What is the ideal timing for renewing leases in today’s market? What is the risk and reward of waiting or acting now in an increasing interest rate environment? How to you deal with subleasing and sub-subleasing issues and reconciling the rights of first refusal and rights of first offer that might be multiple layers deep? Why do some landlords say “no”? The issue of relocation rights and what is “comparable space”. How often is this exercised and why? How do owners behave when buildings approach full occupancy? How do they deal with conflicts? How do landlords perceive themselves? How do tenants perceive themselves? What are the typical discussion points that should be easily resolvable in lease negotiation and what are the arguments used to reach the middle ground? How long should it take to finalize a deal? How will a landlord deal with a bully tenant who just can’t be satisfied? How should a tenant deal with a bully landlord that won’t compromise?

Moderator:
Stefan Ciotlos, Executive Vice President & Executive Managing Director,
     CB Richard Ellis Limited

Panel:

Glenn Featherstone, Vice President, Retail Leasing,

     Morguard Investments Limited

Ron Goldenberg, Partner, Fraser Milner Casgrain LLP

John Peets, Vice President, Office Leasing, Oxford Properties Group Inc.
Natalie Vukovich, Partner, Daoust Vukovich LLP

Session C4

Insurance Clauses:  Why You Must Understand the Subtleties
The first part of the session will examine the central issues pertaining to insurance and indemnification, e.g. why are insurance clauses in leases, why do landlords/tenants care about each other’s insurance, what should these clauses cover, what is a waiver of subrogation and why is it important, why is a release better than a waiver, how is accountability for damage and destruction dealt with in a lease.

The second part will examine some of the latest issues and trends in insuring commercial real estate.  How much push back is there from tenants on the demands of landlords and their insurers these days? What are the issues that are creating the most difficulty? Some discussion will also focus on the challenges of dealing with the environmental aspects in the case of industrial, retail or office developments on brownfield sites. What are the insurance challenges for these types of properties?  How are insurers dealing with asbestos abatement, toxic mould and other environmental and potential health risk issues in their policies? Brief discussion will also focus on the increasing use of title insurance within the leasing process, and what are the pros and cons of this resource.

Workshop Leader:
Dennis Daoust, Partner, Daoust Vukovich LLP

Speakers:
Neil Gilbertson, Managing Director, Marsh Canada Limited
Ed Martingano, Director, Risk Management, Oxford Properties Group Inc.
 

EXECUTIVE ROUNDTABLE

UNDERSTANDING THE DIFFERENCE IN TODAY’S LANDLORDS, THEIR ASSET MANAGEMENT STRATEGIES AND THEIR LEASING POLICIES & PRACTICES

Today’s office, retail and industrial real estate market is comprised of a diverse group of building owners and landlords – from REITs to pension fund and their advisors, from passive equity investors to privately owned companies, from corporations to private individuals and their families.  As a result, the range of asset management and leasing policies, styles, practices, and processes can be quite considerable. 

This roundtable discussion among senior executives will examine how leasing strategies, policies and approvals can be influenced and differ among various types of owners and asset management decision-making models.  The following are some of the questions that they will address:

• How do you ensure that your investment, asset management and leasing teams are all on the same page?

• To what extent would you say that product differentiation and branding is a critical part of your corporate priorities and marketing strategies?  Do you believe that any of this matters to your tenants?

• What have you found to be the most effective ways to market your properties and space?

• How do you develop a strong leasing team?  Where do find good people?

•  What role do brokers and intermediaries play within your marketing and leasing strategies?  Do you see these roles changing going forward?

• How would you describe deal flow, velocity, and pace in today’s market?

• n a soft market, are you prepared to lease out your buildings at any price?  Would you make a positive decision not to lease in certain markets?  How does this strategy affect your leasing programs? 

• As a leasing executive, how do you manage an asset manager?  As an asset manager, how do you manage the owner?

• How actively are you developing new buildings?  What has been your experience in leasing this space?  What are tenants demanding and expecting from new projects?

• Are tenants more or less sophisticated today?   

• Everyone talks about tenant retention but how strongly do you really practice it?  What are your most significant strategies as part of these programs?

Moderators:
Marta Lewycky, Vice President, Legal Affairs, First Capital Realty Inc.
Finley McEwen, Vice President, CREIT Management Limited

Panel:
David Bowden, President, Canada, Brokerage Services, Colliers International
Victoria Foley, President, bellladonna communications;
     Vice Chair, Toronto Board of Trade

Philip Gillin, Senior Managing Director & Head, Canadian Real Estate,
     Sun Life Assurance Company of Canada

Peter Nobre, Executive Vice President, Leasing, SmartCentres Inc.

Scott Pennock, Senior Vice President & Portfolio  Manager,
     The Cadillac Fairview Corporation Limited
 

ADJOURNMENT