Mixed real estate market for 2001.

• Author: SITTER, KEN

Slow population growth and high taxes hampers market activity in northeast

Commercial real estate brokers and agents in Northeastern Ontario's major centres are reporting a mixed market to date for 2001. Larry Gauthier, a broker with Mallette-Goring Inc. in Sudbury, says the city's commercial real estate market was "reasonably stable" over the last year and showing signs of steady improvement for the next few years.

Greg Reynolds, of Claimpost Realty Inc. in Timmins, says some recent good business news has firmed up the commercial market and led to an increase in queries about space in that city.

But that sense of optimism is tempered in North Bay and Sault Ste. Marie.

Slow population growth and high taxes limit the market activity in North Bay, though plans by the city to cut industrial taxes could help turn things around, says Christian Fortin, of Mallette-Goring (North Bay) Inc.,

Similar problems that hamper the Sault Ste. Marie market hamper the rest of northeastern Ontario, says Greg Whelan, a broker with Commercial Realty Services Ltd. in Sault Ste. Marie.

"High realty taxes, increased utility prices and diminished income streams are creating hardship for business and investors," Whelan says.

Sault Ste. Marie's downtown class A office space vacancy rate is in the 30 per cent range and storefront retail space also has a-high vacancy rate which is increasing with the low current demand, he said.

The industrial sector, which has been healthy and fairly stable until recently, is also experiencing increasing vacancy rates, Whelan says, adding that difficulties at Algoma Steel Corp., the community's largest employer, create uncertainties for many.

Meanwhile in Timmins, a decision by Falconbridge Ltd. to spend $640 million to extend the life of the Kidd Creek Mine by 20 years and deepen the mine to the 10,000-foot level has had the opposite effect there, Reynolds says.

That was one of "two good news announcements," the other being TeleTech Holdings Ltd.'s new downtown call centre, that started the phone ringing, he says.

The security of having Falconbridge in the community for another quarter-century spurred calls from other mining industry companies looking to service the expansion or just set up shop, Reynolds says.

The 400 to 450 new jobs at the call centre prompted a "revival of interest" in office and retail space there, he adds. Existing stores have been spruced up and national retailers are inquiring...