U.S. INFLUENCE Global forces may affect Canadian real estate scene GLOBAL FORCES increas- ingly will have a profound effect on the Canadian real estate and land development industry, says J. Chris Davis, president Royal LePage Commercial Real Estate Services. ‘“*Consequently, forecasting future directions and conditions of Canadian real estate markets will become a more complex and dynamic undertaking,’’ notes Davis, a featured writer in the Royal LePage 1987 Market Survey. While numerous world forces will impact on Canada’s commercial real estate markets, none will be more powerful than those imposed by economic forces spilling over from the United States, explains Davis. Most notable of these economic forces will be ongoing Free Trade discus- sions between Canada and . the United States. and ‘the sweeping: U.S. Tax Reform” Act, recently passed into law, with most reforms scheduled to become effec- tive as of January 1, 1987. Because of the ‘‘bilateral nature’? of any Free Trade arrangement, Canada _ will have an opportunity to exert ‘significant influence’’ over the ultimate pact, explains Davis. ‘*As a result, impacts on Canada from Free Trade will be felt only well into the future, will be gradual, and hence, as in all gradual change, relatively evolu- tionary instead of revolu- tionary.”’ Conversely, the economics of investing in real estate in the United States have been “particularly and severely impacted by passage of the U.S. Tax Reform Act,’ adds Davis. Under the new Tax Reform Act, real estate in- vestment will have to com- pete virtually purely on economic grounds against alternative investment op- portunities. This is a radical departure from tax treat- ment enacted by the United - States government in 1981, ‘which, according to Davis, has turned out to be ‘‘far too favorable for the long term health of the industry.”’ “Due to the sweeping nature of the tax reform, it is safe to forecast an immi- nent shakeout of major pro- portions, severely affecting major institutions and cor- porations, and lasting a number of years before a new stability enters the mar- ket based on the new rules of the game,”’ stresses Davis. Given the close economic ties that Canada has with the United States, it is inevitable that the Canadian real estate industry and markets will not be immune te the changes taking place south of the border. However, notes Davis, major Cana- dian developers, which number among the most powerful and most solidly capitalized players in the United States market, largely are well-positioned to weather the shakeout. “The major Canadian develcpers have displayed the strength and market acumen to work with lenders and acquire low-risk posi- tions in distressed situtions, with the result that they will continue to build portfolios of major office buildings at far less than replacement costs ,’’ he forecasts. 35 - Friday, January 9, 1987 - North Shore News Caunichaedl Keatly Ld. 922-4467 NEW LISTING WEST VAN LANDMARK 1387 ESQUIMALT AVE. Tradition — 3 level — cross hall living & dining rm, 3-5 bdrms — 2 baths. This type of property is hard to find 60'x134’ Close to everything — parks, school, trans. M. CARMICHAEL 922-4476 “| LOVE TO SELL REAL ESTATE” — “LIST YOUR HOME WITH ME AND PREPARE TO MOVE” 13 years in the business and over One Thousand Homes listed and sold. Those are consistent and positive results. JACK HAMER-JACKSON 986-s9101 Off. (24 hrs.) To All My Valued Friends, Clients & Colleagues Sincerest Best Wishes For A Happy, Healthy & Prosperous New Year | $86-9101 (off.) (24