This industry includes asset managers, real estate brokers, developers and construction companies, real estate investment trusts and other service providers specifically catering to the residential, commercial and industrial real estate industry. The industry relies on accounting and legal services, advertising and publishing services and market research firms for business support. The industry is currently in its mature stage. Developers and brokers in the industry have to abide by building codes and face heavy regulation, while asset managers face light regulation. The Canadian real estate industry witnessed strong growth in the last five years due to the continued migration of foreign nationals and low-interest rates. This trend is expected to continue driving growth, partially offset by increasing household debt and rate hikes. The Canadian housing market is expected to undergo a correction which will slow down growth over the next five years. Construction demand, however, remains robust in both commercial and residential sectors.
Macroeconomic Factors – Factors such as the interest rate and inflation can all affect consumer expectations and expenditure, resulting in changes in real estate activities. Among these factors, the mortgage rate has the highest influence on the housing market. A high mortgage rate can discourage consumers from investing in their personal real estate, and vice versa.
Demographic Factors – Population trends directly correlate with changes in the real estate industry dynamics. For instance, an influx of immigrants into the economy can boost overall demand in the housing market.
Government Regulations – The real estate industry is heavily regulated by the government. Tax credits, deductions, and subsidies are some of the ways the government can temporarily boost demand for real estate for as long as they are in place.
Selling a Real Estate Company
Selling a business in the real estate industry requires special considerations. As Canada’s leading private market M&A Advisory firm, Beacon understands that selling a business is an important decision. A dedicated business owner not only seeks to extract maximum value from the sale of a business but also seeks to sell the business to a competent buyer who can continue the company’s legacy. Beacon has worked on valuation and M&A advisory mandates in the entertainment industry, bringing extensive experience in deal negotiation to the table. Our experienced advisory team will assist your business in navigating the entire sell-side M&A process.
As an entrepreneur or business owner who is exploring a potential sale, it is important to understand some key factors specific to the real estate industry that might impact the likelihood of a potential sale. These are factors that determine business attractiveness for potential buyers and investors.
Niche Service Offerings – Due to the high volume of companies in this industry, businesses that differentiate themselves through niche service offerings can provide more values to both customers and potential buyers.
Geographic Markets – Some professional services are deeply rooted in their geographic markets and have a regional advantage. They often have strong brand recognition, as well as well-established client and supplier relationships within the area. Businesses looking to expand into other geographic markets can consider M&A opportunities with these companies.
Experienced Professionals – A skilled, experienced team that can deliver high quality services and meet client expectations is a key distinguishing factor for a business in the professional services industry. Key personnel and strong management teams are also integral to the health of a professional services business.
With 140 years of combined experience serving businesses within Toronto, Ontario, and abroad, the Beacon transaction team has extensive knowledge and experience successfully working for several real estate companies from a variety of industries. Whether it be a valuation or sale, our team can provide expertise and resources found only at larger corporations, paired with the personalized touch of our M&A Advisory team. Contact us today to get in touch with one of our advisors.