Property Biz Canada
Alexandre Sieber CBRE's new managing director of Quebec operations
Property Biz Canada
Wed Jan 09 2013
CBRE is considering opening a Quebec City office this year as a way to increase its business in Quebec, says Alexandre Sieber, the firm’s new senior vice-president and senior managing director of its Quebec operations.
“Real estate is a very local business,” says Montreal-based Sieber, who joined CBRE last October. “If you want to really not only serve your existing customers or be reactive in terms of some of the incoming leads that you have, if you want to work a specific market, you need to have a presence there.”
Sieber notes that while CBRE does not currently have a formal presence in Quebec City, it does a lot of business in the city. “Most of our customers have a Quebec presence so our team of 30 plus brokers service Quebec remotely.”
No matter what happens in Quebec City, CBRE is looking at expanding its sales and support staff in its downtown Montreal and suburban St. Laurent offices , on the heels of what he says was a record year for the company in Quebec. The company currently has about 150 employees in Quebec divided among the advisory business run by Sieber and its global services team.
“My mandate is to focus on growth. We’ve been having a tremendous ride in Montreal for the past decade, but in the past two years, there’s been tremendous growth.”
Sieber strives to beat real estate business cycle
While real estate is a cyclical business, Sieber hopes to build a model that sees the company sustaining a certain level of growth per year rather than having cyclical growth. The goal is “to be able to counter some of the cycles in real estate and be a more consistent business.”
Prior to joining CBRE, Sieber was in New York City for three years as managing director of General Electric’s Global Investment Management division. Before that, he was in Montreal for nine year’s with GE’s real estate arm.
“I just felt it was time to change the culture and focus and start something new,” Sieber says of the decision to join CBRE. As well, “I was very impressed by the quality of the team here, the quality of the management both in Toronto and New York and the entrepreneurial culture.”
Personal reasons also entered the picture – his wife works in Montreal. “I was basically shuttling from Sunday evening to Friday evening,” between Montreal and New York, which was difficult.
Sieber is entering a Montreal market that he sees as solid. He anticipates 2013 as being similar to 2012, with vacancy rates for downtown Class A office space falling from 6.2% last year to 6% this year. Vacancy rates for suburban office space are forecast to fall from 11.8% to 11.1%, while the overall vacancy rate is pegged to decline from 8.3% to 7.9%.
Low interest rates and stock market volatility are among the reasons real estate will remain solid, Sieber says, adding that CBRE does not foresee any national events that will change the real estate environment in 2013. However, “we’re not immune to any big shocks we could have internationally in terms of macro-economics.”
CBRE is forecasting 1.5 to 1.8% GDP growth for Montreal this year, “which is not stellar, but better than many places in the world.”
The company sees Montreal and Vancouver as the only two major markets in the country that will see decreases in the availability of industrial space, with rates in Montreal forecast to fall from 8.2% to 7.8%.
Most Montreal condo owners live in them
Although many condominium towers are being built in Montreal, contrary to some North American markets, most are being sold to people who plan to live in them rather than to investors. An aging population, high numbers of singles and people moving back from the suburbs, are among the reasons that demand is still high.
Sieber sees as positive the renewed interest in repairing and rebuilding Montreal’s infrastructure and the long-awaited recent opening of Highway 30 – which serves as a ring-road that bypasses Montreal. Signs like these make investors want to at least stabilize and grow their businesses, he says.
He says concerns were raised when the minority Parti Québécois government sent mixed messages to the business community about tax increases after gaining power last September. However, that situation has largely been resolved, with the government backing down from plans to increase taxes. Sieber warns that Quebec has reached a peak level in how much it can tax individuals and still compete globally.
Judging by conversations he’s had with investors from around the world, there are no changes to their investment plans because the PQ is in power. “As long as we maintain a healthy investor environment, investors will continue to consider Montreal as an attractive place to invest money and to grow business.”
Sieber considers the cranes now dotting the Montreal skyline as “a renaissance for Montreal. We haven’t seen that many cranes for many years, which is promising. Montreal is a good place to be right now. It’s reviving a little bit.”