Gerald Tostowaryk

Commercial and Residential Real Estate

(780) 732-0977

Selling, Buying or Leasing Is Just A Click Away! Search Now!


As a commercial real estate agent in a mainly residential office, I often deal with smaller tenants. Most smaller tenants ("mom and pops" as the slang goes) are much less sophisticated than large national and international organizations with substantail commercial leasing experience, and can only draw upon the experience they have...residential real estate. And therein lies the problem. In residential real estate clients often fall in love with and buy something totally different than they set out to buy. In commercial real estate leasing, that doesn't happen; you must lease a property that fits your needs which is why that commercial agent asked you so many questions before showing you the property you called on, and in the end wouldn't even show you the one you called on. What's up with that? Well, let's find out as we examine How To Search For Commercial Lease Space. Please note that these comments are intended for the Edmonton commercial real estate market and surrounding areas.


The first thing you absolutely need to do is put your needs down in writing, and be specific. Even if you fall in love with a space, if it doesn't meet all your needs it won't be long before you wish you never signed that lease.
Some of the obvious things to consider are;


Size of Space: Forget how much it costs, just ask yourself in a perfect world how much space is not too big or not too small.


Cost: At this point, don't get into analyzing different spaces, just ask yourself realistically how much you can afford. Remember leases have three components: Lease Rate, Operating Costs, and Utilities. We will discuss this point in more detail later as it is a major issue in small leases, but for now determine your budget for all three combined.


Location: Where would your customers expect you to be? What works best for you? Remember where you live and where your customers are.


And the less obvious things to consider are;


How Pretty Are You? Financially speaking of course. Just because you want a space, the landlord is not going to escort you in on the red carpet. At the end of the day/lease, you leave and the landlord still owns the property. Most landlords will want to know intimate financial details about you and your company. Do you have a business plan? How many years have you been operating? Show me your last 3 years of financial statements. The larger the landlord the more demanding they will be. Their cash flow and the value of their properties depends upon the quality of the tenants. Get your financial information ready.


Employees  When choosing a location, if you have any employees will the want to drive to that location? Be sure to consider where they live also.


Ceiling Height  This is most commonly important in industrial situations but is often important in retail also.

Parking  Is there enough parking for your employees and clients? How many stalls (if any) are assigned to you? Is parking on a scramble basis? Is there on-street parking


Accessibility: What sort of accessibility do you need? Left turns onto or off of a busy street will chase customers away. Gas stations locate so that people can turn right into and out of their stations on their way homes after work. Drive through coffee shops locate for right turns on the clients' way to work in the morning (gotta have that morning coffee).


Visibility:  Is your business a destination business where people come to you specifically for your service or the products you carry, or is your business dependent upon walk-in or drive-by traffic? Remember high visibility locations cost more.


Utilities: Do you have any specific utility needs?

Layout:  What would be your perfect layout? You will likely never find it, but having a draft design of the perfect layout will help you choose your space better.


Tenant Improvements:  Since you won't find the perfect layout, you had better budget a realistic amount for tenant improvements.


 I could go on endlessly, but there is a good list to get you started. This covers the main points to consider when preparing to lease space.


The Search


When To Start Searching


I am often surprised by the number of folks who call on lease space and I find they need something within a month or two. Not going to happen, at least not in the foreseeable future in the Edmonton commercial real estate market. Even in a balanced market, you need to commence your actual search at least six months as a minimum before you need to locate. The search will take at least a couple months (possibly more), the negotiations will likely be about a month, and you will need at least a month, more likely two, to complete your tenant improvements and move in.


Commercial Real Estate Agents


So many small tenants do their own searching, calling the listing agent on each property they find. Let me put this gently...don't do that. Check with any regulatory body in the real estate industry and they will tell you it is in your best interests to have your own agent working for you. When we list a property for sale we are legally bound to get the most money and best terms and conditions for our your expense. So if landlords have their own agent getting them more, why not have your own helping you pay less?

Do your research before you begin your property search. Interview several agents and find ones that are prepared to work with you. Check what their experience is, the services they provide, how they get paid and what their expectations are from you. Don't be surprised if you are asked to sign what is called "Buyer's Agency". Real estate agents don't get paid a penny until you actually lease space through them and subsequently take possession. Adding to that, the agent's fee on a small lease is not very large and many agents, especially the better (and busier) ones, will not be likely to take you on as a client without a reasonable assurance of a payday at the end of the day.


The Actual Search


Don't be surprised if you find numerous properties your agent didn't find (or didn't tell you about). Commercial real estate is much different than residential. Most properties for lease never make in onto a listing service like the MLS. Because of this, searching for commercial properties is much more difficult and time comsuming than searching for residential properties. You will be in this together with your agent. The real benefits of your real estate agent show up in the lease negotiation process...and that is our next topic in this series next Friday...


Small Leases: Part 2 - Negotiating The Lease

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Well hopefully my last blog regarding Alberta's economic situation was as much fun reading as it was writing. I can't think of anything more fun to do than reading economic statistics, well except maybe watching molasses pour. Since we all acknowledge the exciting nature of economics why not a second helping? Here we go, and once again I am borrowing directly from the daily economic updates of Todd Hirsch of Alberta Treasury Branch. Todd is a sought-after speaker as he is very knowledgeable and has a great sense of humour. He recently changed the name of his daily post to "The Owl" in case you want to google it. I have no idea why it is now called the owl but I am sure there is some cryptic and incredibly astute reason. So let's delve into it, and again most of the additional comments and interpretations are mine (and hopefully right!)


Retail Wages


Retail wages have always been low as it is a relatively unskilled sector and many also earn tips. Interestingly retail wages have grown across Canada at a rate somewhat less than inflation since around 2000. Alberta's retail wages have fared better but only recently have caught up to the rate of inflation. Even though Alberta's retail workers have fared better than other Canadian retail workers, I suspect after we factor in Alberta's cost of living compared to the rest of Canada, they are probably not doing any better than other Canadians. So be kind when tipping! And speaking of unappreciated sectors...



Arts and Culture Employment


Arts and culture employment in Alberta has been steady at around 45000 for the last few years. While these are generally part-time and lower paying jobs, they provide some unappreciated benefits to our society. The part-time jobs provide work for young folks entering the work force and mature folks looking for a more relaxed part-time job. Just as important, what fun would life be without Heritage Days, our many festivals, sports teams, and all our cultural and recreation activities? So did I mention be kind when tipping?


Exports Lagging

Exports have always been a big part of Alberta's economy and energy exports a big part of that big part. And the value of those exports have been lagging a bit lately, but not to worry just yet. There are various factors at play for any economic indicator and the current lag is attributable to two factors which change regularly. Many have heard the lament about how Alberta's "Western Canadian Select" oil prices are currenlty significantly lower than "West Texas Intermediate" prices due to pipeline problems, politics, etc. Well the gap has narrowed recently so that will help our lagging exports. Additionally many refineries are down for seasonal maintenance so when they come back online, production will increase and exports should rise again...until the next inevitable blip.

Building Permits Issued

One factor the public so often overlooks when trying to figure out what is going on, yet is such an important indicator is the value of building permits issued by a municipality. It kind of reminds me of two economic indicators "public confidence" and "public spending". Public confidence is how confident the public is about their economy, and public spending is the public putting their money where their mouth is. Building permits issues is the same thing, somebody has decided to spend some money.
In Alberta the value of residential and non-residential permits issued have been rising steadily over the last year and sat at $1.4 Billion in June, up 15.9% over the year.

Job Market

Canadian economists received a small surprise last week (not uncommon in economics) when the job market came in weaker than expected. They predicted Canada's employment would rise by 6000 jobs and they found it dropped by 39,000. Surprise.

Alberta however, is proving a little stronger. Along with Saskatchewan our job market grew, theirs by 3.9% and ours by 3%. We gained 16,000 jobs in July for a total of 2.217 million workers in the province.

An additional bonus is that most of our new jobs have been in non-traditional sectors - professional, scientific and technical services, retail and wholesale trade, and information, culture and recreation - which increases economic diversity, and these positions have been good quality ones with nearly 89% being full-time.

Shortage of Workers

With such a robust job market, Alberta has been by far the largest employer of foreign workers out of all provinces in Canada. We employ some 84,000 foreign workers with Ontario coming in a distant second with just under 50,000.

Needless to say the largest employment of foreign workers is in the food and accommodation sector with nearly 32,000 of the 84,000. This also raises valid questions about the long-term viability of keeping so many foreign workers in the province.

So there you have it, again mostly good news.But economics is never that simple.

With the apparent advent of the "global village" the economies of the various countries are becoming more and more intertwined. As the news media so enjoys dwelling on the negative, we all know too well how fragile the economies of Europe and the US are, with their unfathomable deficits and debts. On the good side, we appear to be in the trough and the US is showing signs of slowly coming around and Europe beginning to address their problems also.

I remember a couple years back being at a Realtors Association of Edmonton economic forecast breakfast and one of the speakers put it so eloquently "enjoy the party but dance close to the door". While things are a little less volatile than they were back then I think the same advice still applies. Get out there, do some business and make some profits, but keep your fallback position a safe one. Overextending on credit is never a safe strategy but it may even more so not be an advisable course of action in this environment. Just one man's opinion!

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I remember some years back when I was out hunting with a friend and I heard that lovely sound of a couple of shots coming from his direction. I headed over to find him and when we finally met up, he had the proverbial good news-bad news scenario for me; "I got a moose, but we only have a couple hours of light left" Well off to work we went dressing out this big animal and getting it out of the woods.

In today's world, economic updates seem to always be of interest, and they all seem to be the same - good news mixed with bad; hope mixed with despair. Alberta on the other hand, seems to be mostly all (but not all!) good news these days.

So what is the scoop on Alberta's economy these days? Let me give you a taste of several tidbits of what is going on. The following updates are all recent posts from Todd Hirsch of Alberta Treasury Branch. Todd's daily updates are quite popular and you can follow him on Twitter @ABeconomist. Some of the ad-lib comments are mine.



In the last two years full-time employment is up over 11% while part-time employment is down around 3%. The drop in part-time employment is probably a good thing indicating part-time jobs turning into full-time.


Population Growth

Alberta's population grew by a nice 2.5% from 2011 to 2012. Of course it's all those people moving in to the province for work, right? Wrong. Well, two-thirds of them were from in-migration (if that is even a word) but almost 8 out of every 25 were from an excess of births over deaths, natural population growth


Retail Sales Increases, but...

Alberta retail sales have been climbing steadily over the last few years. From May of 2011 to May of 2013 monthly retail sales have increased from $5.2B (seasonally adjusted) to about $6.1B. Interestingly, comvenience store sales have been decreasing, down 23% in the last two years. Why? The answer is one of those deceptively simple stores are open longer hours these days, and since they do have better prices, where do we go? To the grocery store of course. Interesting. It may be worth watching to see how convenience stores respond.


Construction Spending

Non-residential construction spending has had some ups and downs but overall is keeping a pretty good pace. Since bottoming in 2010, commercial construction spending is up around $1.8B. Industrial spending is crawling ahead also, reaching approximately $400M by April of this year. Institutional/government spending dropped dramatically from a high of approximately $1B in Q2 of 2010 to a current level of also around $400M.


Employment Insurance

With our strong economy, the number of EI claimants had dropped dramatically from about 70,000 in May of 2009 to a current level of around 28,000. Not bad. As always, youth are hit the hardest with an unemployment rate of approximately 8%, almost double the national average.


Prices and Earnings

So, are we making more in Alberta? Are we spending more? Yes and yes. The good news is that our earnings have risen faster than the rate of inflation since 2006 and we have more disposable income. Before 2006 earnings increases were pretty much neck and neck with inflation. Mind you, prices have been rising at an annual rate of 2.3% in Alberta this year, compared to 1.2% for the rest of Canada. I don't know about you but those inflation rates these days just don't seem right, prices seem to be rising fairly quickly to me. Who knows?


So there you have it, mostly good news mixed in with a few tidbits of bad news. I will give you another smattering of Todd's updates in another blog post soon, but feel free to check him out on Twitter @ABeconomist and get your own good news/bad news scenarios directly. Oh yes, the moose. Well the bad news is it started raining shortly after dark, and we were stumbling our way around through the bush until 1:30 am. It's amazing how 40 yards can be an eternity in pitch black. The good news is we finally got him out of the bush safe and sound. Bed never felt so good.


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Every now and then I like to write about things other than Commercial Real Estate in Edmonton and last year's blog on the great eateries in the North Edge BRZ of Edmonton (105 to 107 Ave  between 101 St and 116 St) was a big hit so I thought I'd mention a couple of new restaurants (well new for me) that I just discovered that are superb. And so without further ado, here we go;


Tasty Tom's Bistro on Whyte - 9965 82 Ave


Late last year I had the pleasure of being referred to Tom, the owner of Tasty Tom's, as after 15 years it was time for a change and Tom wanted to sell. The new owner Lisa is just as friendly as Tom and injects the energy of youth into the business. Don't worry because Tom shared all his recipes with Lisa and her dad is a five star chef so the food should be every bit as good as it was.
Tasty Tom's is a laid-back and friendly place with that relaxed atmosphere that just puts you at ease. The menu is casual with all your favourites from hamburgers to Clubhouse sandwiches but with a few twists. Tom added flair from cuisines around the world. Many of the typical north american breakfasts have German influences like bratwurst for example and Tom's famous ketchup (you can buy a bottle to take home) has curry amongst other top-secret flavour enhancements to make it delicious if you're a ketchup person like me.

New owner Lisa talked about adding a few Asian cuisine touches so it can only get better.

As far as portions and food quality go, it is hard to beat Tasty Tom's. The hamburgers are huge and heaped with mushrooms. The home-style fries are delicious.


The Nawabs - 110 Mayfield Common


We went into The Nawabs for the first time earlier this week. It was a weekday so it was fairly quiet so service was very quick, and we were quite impressed with the food. My wife and I both ordered the 1 person combo of Basmati Rice, Butter Chicken, Chick Peas in Sauce and Naan Bread. While the entire meal was of great quality and fresh, the Butter Chicken and the Naan Bread were out of this world. The Butter Chicken sauce had a superb smoky flavour that was very distinctive and really made the dish. I mentioned it to our server and he replied that they cooked it in a clay oven. I  didn't enquire further but suspect they must cook it on a wood fire or at least  toss some wood chips in.

The naan bread was delicious, fresh and coated with a garlic butter and with a hint of the same smoky flavour so no doubt into the clay oven it also went.


Anyways, there's a couple of places on my favorites list. Give them a try, I hope you like them.

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Well, if you follow my blog posts, you will probably notice a couple things. 1) It's been a darn long time since I wrote one. Guilty as charged. The commercial real estate market in Edmonton is very active and I have been blessed with a lot of business lately.

2) I have a new web site. I hope you like the looks of this site and I hope you find it serves you better. Okay, let's get into today's topic.


As the title gives away, this blog post is more residential-oriented but it is great information nonetheless so I felt an irresistable urge to post it. As consumers we are often poorly informed of our rights and obligations in certain contractual situations. we go. You may find a great portion of it in point form so I do apologize for that but there is a lot of material and point form keeps it shorter!


Fair Trading Act


The Fair Trading Act is consumer protection legislation and sets specific rules for

  • Direct Selling
  • Time Shares
  • Collection Agencies
  • Credit Reporting Agencies
  • Payday Loans
  • Auctions

    and the subject of today's talk...

  • Pre-paid Contractors


Sale of Goods Act


  • Applies to both commercial and consumer transactions
  • Implied warranty for goods that they are fit for the purpose, match the description and of mercantable quality
  • An agreement for sale of goods for over $50 is of no force and effect unless
    • it is in writing
    • full or partial payment made OR
    • some or all of the goods delivered


Okay so now that we have a basic description of both, let's look at some of the details


Over Promise and Under Deliver


There is a long list of unfair trade practices, for example

  • Undue pressure, take advantage, exaggerat, grossly overcharge, etc.
  • Over budget by $100 or 10% without express consent
  • Charging for an estimate without agreement
  • Promising completion or delivery in a time frame that cannot be achieved

Consumers may cancel without penalty in the case of an unfair trade practice


Licencing and Security Requirements


Any contractor taking deposits or progress payments must be licenced by Director of Fair Trading and must post Security with the Director. The application includes a criminal record check and a credit check. Most contractors have to deposit $25,000 with the Director


Courts have determined that soliciting business at any place other than the contractor's place of business, including discussing the scope of work, could make the contractor a pre-paid contracting business.


The FTA lays down some contract specifics also, including that "entire agreement" clauses are not enforceable and that you cannot contract out of the FTA requirements. The cotnracts must include a description of the goods or services that is sufficient to identify them.


Cancellation Rights


Everybody's favourite, the right to cancel, is addressed also. Consumers can cancel without reason up to 10 days after receiving a copy of the contract. If you do not receive the goods within 30 days of the date specified, you can cancel within one year of the contract date (unless you accept delivery). The contractor then has 15 days to refund your money and you must return the goods. Of course, your cancellation has to be in writing.

If the contractor engaged in an unfair trade practice, or wasn't licensed at contract time, if the contract was lacking required information, or if all the goods or services were not supplied within 30 days of the specified date, the cancellation rights may be extended.


Dispute Resolution


Beleive me, you don't want to go to dispute resolution. It's always better to take preventative measures up front. But if you must go, then off to Court of Queen's Bench or Small Claims Court you will go. In some cases arbitration may be appointed by the Minister, and in exceptional cases the Director of Fair Trading may take action on a complaint.


So there you have a nutshell view of the Fair Trading Act and the Sale of Goods Act. You can probably download both for free in pdf format from the Government of Alberta Queen's Printer web site. It's always good to read them over in detail...and then when you're thoroughly confused, get some good legal advice.


Thanks to Philip Carson of Miller Thomson LLP in Calgary for permission to summarize his presentation at Buildex Edmonton 2013 in this blog. This information is the author's interpretation and should not be relied upon. Always seek legal advice from a lawyer familiar with that area of law, like Philip.

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