Active in Southern California, Seattle, Toronto and Vancouver, Intracorp works in partnership with landholders who want to retain some, or all, of a development’s ownership.
The company undertakes meticulous research campaigns before deciding whether or not a market is worth entering. In particular, it analyzes long-term trends rather than looking at markets retrospectively. The result, says Intracorp North America’s President and CEO Don Forsgren, allows the company to determine markets’ viability and volatility.
Such was the case in Alberta, where Intracorp decided to exit, even though the housing market was healthy.
“When we left Alberta, we left at a pretty good time in that market, but it was a volatility decision,” he said. “The ability to supply in that market is easy, it’s unconstrained, but job and population growth has bigger swings when looked at over a longer period of time. Oil is such a big topic in their media and they choose not to buy houses when oil tightens up. We’re pretty sure that’s what’s driving that volatility. We see lot of rapid job increase and job loss that you don’t see in Toronto.”
Unlike Alberta, Toronto and Vancouver meet Intracorp’s demanding list of criteria: Jobs, population growth, diversity, emerging industries, new business, a technology sector, affordability, trends in prices, land supply/constraints, market distress, local government, local economy, and societal norms.
Additionally, Intracorp’s due diligence involves spending time with prospective markets’ business communities, specifically their chambers of commerce.
“We get a multi-point perspective on what they’re hearing in their cities,” said Forsgren. “We try to get more of a business perspective to see which industries are emerging. We also spend time with experts in local law firms who spend time dealing with municipal and state laws to see what changes may happen there.”
Intracorp also spends time with large real estate firms in new cities, but only ones that deal with all housing types—rather than, say, only condos—because they paint fuller pictures.
There’s also the knowledge gleaned from one market that’s brought to another. In Seattle, for example, there are a lot of purpose-built rental buildings, however, nearby Vancouver has a severe rental supply shortage.
So what can Intracorp bring to the table?
“What we bring from the States to Vancouver is we do a lot of rental product and how it’s put together with amenity and service packages, and lease-up strategies,” said Forsgren. “We look at the high-tech Millennial worker and what they’re looking for in rental offerings. To get renters in Seattle, there’s a lot of product innovation, and we look at their amenity packages and see what they offer and how to get the highest rent per square foot. We hope to bring that to Vancouver.”
A victim of its own success
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Merging its Canadian and American offices, Intracorp is streamlining its knowledge of different markets to bring a unique approach to building.