Sentry Executive Chairman Uses Hockey Analogy to Describe Market, Tells Conference Get Your “Floaters” Off
Pictured from delegated right: Mediator Justin Bosa, managing director, head of real estate financial investment banking at ScotiaBank; Sandy McIntyre, executive vice-chairman at Sentry Investments; Moray Tawse, EVP in the beginning National; Francois Bourdon, CIO at Fiera Capital; Benjamin Tal, deputy chief economic expert at CIBC World Markets and Cecilia Williams, CFP at Allied Properties REIT.Sandy McIntyre, executive vice-chairman of Sentry Investments, pulled out a hockey analogy this week at a Toronto realty conference to explain the state of the business property market. McIntyre, whose Sentry is a wholly-owned subsidiary of CI Financial Corp., a wealth management company with properties under management of$ 185.9 billion, said he’s watching the yield curve really closely to find out exactly what kind of “players “to put out in a property market lots of believe has peaked in Canada. “I’m taking my floaters off the ice. The people who are at the red line attempting to score goals,” stated McIntyre- the property equivalent of a longshot financial investment with a low possibility of success. “I have actually got my two-way players on the ice (who can play offense and defence ). I have not gotten to the point of entering into the bunker team, which means I am eliminating companies that have capital requirements, companies that have balance sheet problems, and business where the sustainability of the operations is problematic.” The vice-chairman was speaking at an industry panel attending to
capital allocation in 2018 at the Real Capital conference in Toronto. McIntyre stated the indication he’s always considered the most important is the slope of the yield curve. He says when it goes inverted or flat, you are typically in mid-cycle downturn or economic crisis.” I will mention you do not get Bitcoin, marijuana, FANGs early cycle,” he said to laughs, referring to the cost development of publicly-traded business Facebook, Amazon, Netflix and Google. Moray Tawse, co-founder and executive vice-president of home mortgage financial investments with First National Finance LP, and another panelist said lending institutions get to see deals from gamers both big and small.” I’m actually seeing the cycle of fear and greed right now,” stated Tawse.” Everyone is having a tough time trying
to discover realty that makes good sense, but they have this substantial wall of money. Everyone has loan. They have loan coming in and have to put money out. They say, ‘they’re building apartment over there ‘, and everybody hurries over to see what they are developing. “His issue isn’t really that the marketplace” is crashing” however he believes it’s simply too hard to make loan on deals in 2018. Tawse states there are expectations of rental boosts that do not make good sense.” When we start to underwrite brand-new construction of apartment a year ago people believed they would get$ 2.40 a square foot in rent. Land costs increased, and they think they’ll get$ 3.50 a square foot or$ 3.75. They are reverse engineering (deals),” he stated.” I’m uncertain it makes economic sense.” Françoise Bourdon, international chief investment officer for Fiera Capital, funnelled some Hollywood to describe where he sees the marketplace going. “I do not believe in the story that
the economy will just exhaust itself like Forrest Gump where he began running and just decided to stop,” he said. “I think the credit system
will be choked and U.S. brand-new tax dynamic will develop inflation. An economic downturn will come, but there is still time to have a good time.” Benjamin Tal, deputy chief economic expert with CIBC World Markets, believes the threat in Canada for real estate will be increasing rates. “You see the central bank overshooting with rate walkings
he said.” The central bank stated it has actually gained from previous experience about raising rates too quickly. Possibly, there will be a soft landing, but it’s wishful thinking.” Garry Marr, Toronto Market Press Reporter CoStar Group.