Windsor Case Study: Generational Change versus Economic Expansion

As an investor, watching the market is a necessity; understanding the market is another matter entirely. Really peeking behind the curtain and wrapping your brain around the driving force behind its movements, and understanding if it's an outlier or the beginning of a trend?  That’s an art form that we at Canadian Real Estate Wealth are sharing with our valued readership.

To that end, we’ve enlisted the help of Rhys Wyn Trenhaile. Aside from being the founder and broker of the Vanguard Real Estate Team at Manor Realty in Windsor which is perennially ranked as one of the top teams in the country. Rhys is also heavily involved in Private Equity, currently repurposing over 150,000 square feet of downtown commercial space into badly needed residential with his institutional partners. 

To examine generational change, let’s profile a single city: Windsor, Ontario. This City isn’t just looking at robust economic growth. This City is just beginning Generational Change. To understand this at its core, and truly appreciate how rare it is, is to profit long term. 

Macroeconomically Speaking

It’s about as simple as it gets: Windsor has a huge supply and demand challenge that’s only going to get worse as all these multi-billion projects continue to come online. Sometimes things are complex, sometimes they’re simple. This is as straightforward a problem to grasp as you get.

So what are these major developments being referred to?

• A $6 billion battery production plant between LG and Stellantis, will produce more batteries by next year than the entire USA. Currently under construction, 2,500+ jobs.
• One of two World Leading battery R&D facilities, over 100,000 sqft full of 650+ PHDs and engineers.
• A 4.4 billion 2nd International Bridge to further accommodate the expected rapid growth in international trade – and it’s already the busiest International Trade Route in the World.
• A $2.1 billion mega-hospital was recently accelerated by 18 months on the Province’s list, again in anticipation of the rapid population growth.
• A recently completed $1.7 billion freeway to complement the new International Bridge.
• 200+ acres need to be freed up by the City to accommodate new international companies wishing to move to Windsor to support the new battery plant supply chain.
• The Province of Ontario, via Hydro One, is scrambling to more than DOUBLE the electricity supply to Windsor-Essex – in the next 4 years. Double. The rest of Ontario is projected at a 4-7% increase. Windsor? 105%.

You look at all the billions and billions of dollars the Provincial and Federal Governments are investing into Windsor’s infrastructure – it doesn’t make sense for a City of 330,000 unless you think the population is going to double over the next generation. For the real estate investor, there is a ridiculous amount of opportunity to ride on the coattails of these announcements and the City that is at the forefront of the new Electronic Vehicle emergence.

It’s hard to argue with this.

Microeconmically Speaking

In continuing or examination of Windsor, is this a trend only for residential real estate? The answer is no. This phenomenon has been observed in the commercial real estate space, as well.

The Windsor Star reported that the local industrial real estate prices reached record level highs in the second quarter of 2022, bucking the residential market trend of softening. 

Each of these is a solid indication of a significant generational shift that is ripe for real estate investors’ picking; some of which has already begun.

There are several sectors of investment that we are very, very bullish on. As an example, there are a ton of baby boomers right now who want to sell their businesses and retire. The bonus is that the commercial real estate associated with the business is acquired at a very, very reasonable price, as opposed to current market prices. We have clients shifting to business and real estate as a result, adding value to their business and doing very well with their portfolios. Anyone is welcome to reach out to me or my teammates if they want to know more about how to take advantage of the Windsor market with a long-term plan in mind.

Get in touch with Rhys and his team about generational change, buying, or selling via [email protected] or 519-250-8800. They’d love to hear from you!