We made a prediction in May that Hillary Clinton would be the next President of the U.S. We were so confident she would win that we started preparing this week’s article on how her energy policies (particularly her stance on fracking) would coincide with the magnitude 5.0 earthquake in Oklahoma. We started addressing how this combination had the potential to reduce fracking and ultimately curtail the amount of global crude oil supply. A decrease in fracking production would have eventually manifested itself into higher oil prices, which would undoubtedly benefited Alberta’s economy.
We did not endorse either Clinton or Trump, but among billions of people worldwide we were quite surprised to see Trump prove victorious and the differences between the two are remarkable. Notwithstanding the polarizing views that he became known for, Trump is very much in favour of fracking. Also, while Trump has previously expressed support for the Keystone pipeline, it was with the caveat he expected more in return. Furthermore, he has much disdain for the North American Free Trade Agreement (and many other international trade agreements for that matter).
Perhaps in a knee jerk response to how these policies will impact Canada, John Rose, chief economist of the City of Edmonton, has a negative sentiment for our city:
“It would take a while for this to unfold but in terms of investment in additional manufacturing capability in the Edmonton region I think there would probably be a bit of a chill right away as potential investors say, ‘now wait a minute, why would we invest in Edmonton or Canada in general if really our target market for this equipment is the United States? Wouldn’t it make more sense to be there?’”
John continues on this theme and references two large companies headquartered in Edmonton:
“Probably the ones that would be most severely effected would not be so much the U.S. based companies that are here, but the PCL’s and the Stantec’s of this world that are based here in Edmonton and now would suddenly find themselves in a situation where selling professional services or project management services into the U.S. marketplace would suddenly become potentially much problematic.”
We don’t necessarily share John’s outlook for the City and neither does the market as a whole. PCL is privately owned but Stantec is traded on the New York Stock Exchange. Stantec (NYSE:STN) closed at $21.60 on the day of the election and closed today at $25.30 for an impressive 17% increase since the results. Surely this could change overnight, but in the interim investors seem to be thinking the opposite of what John suggests. There will be much said about this topic over the coming months but in the few days following the election the markets actually seem encouraged by the results.
We were wrong on our prediction for the U.S. election but we will continue providing relevant and timely information and news as it relates to the commercial real estate market in Edmonton.
Regardless the outcome of any election, how appropriate a time to remember all the sacrifices those before us made so we can live in a free and democratic nation.
God of our fathers, known of old,
Lord of our far-flung battle line,
Beneath whose awful hand we hold
Dominion over palm and pine—
Lord God of Hosts, be with us yet,
Lest we forget—lest we forget!’
Chad GriffithsPartner, SIOR, CCIM
Chad is a partner with NAI Commercial Real Estate and focuses on the Greater Edmonton area. Chad entered the industry in 2004 and has completed over 400 commercial transactions with clients ranging from small, local companies to large institutional owners. Chad has been a top 15 producer with NAI Canada-wide since 2013.
Ryan BrownPartner, BCom, SIOR
Ryan is a partner with NAI Commercial Real Estate in Edmonton and is currently ranked nationally as one of NAI's top advisors. Having executed in excess of $100 Million worth of sales transactions and over 2 Million square feet of lease transactions, Ryan has developed a firm understanding of asset evaluation and an aptitude for building design, functionality, and long-term practicality.
Darcie is a licensed Commercial Real Estate Agent in the Province of Alberta with a focus on the Edmonton market and its surrounding areas. Darcie accomplishes custom solutions for her clients through her personable nature and results driven attitude. Darcie can help if you are looking to invest in commercial real estate or are looking for representation for a sale or lease transactions.
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