The
Alberta Connection
I
had family in the real estate business in Alberta a number of years ago. It was
a volatile time in Alberta with fluctuating prices; down one day and up the
next. It was a little bit like them Chinooks they get down there. One day I got
a call from one of them wanting an evaluation on an investment property one of
his clients had purchased in Winnipeg. The downturn in Calgary had prompted disposing
of this unnecessary investment.
When
this fellow had bought the property, it had been a bargain according to his
reckoning. Well, you have to understand that for Albertans, Calgary and
Edmonton are the centers of the universe and all the world’s wisdom flows from
there. Had he done his proper due diligence in the first place, he would have
found that Manitobans have a slightly different view of things. Now he had to
find out the hard way.
You
can bet your boots that I had a ten page summary of pictures, comparable costs
and sales to hand over to support my appraisal. It all came in at about a third
of the price the client had expected and I wanted to protect myself as well as
my brother-in-law without making apologies.
Needless
to say there was an awkward silence of some duration at the other end. I had
expected that, wondering if I had alienated that whole end of the family. The
thing was that I had a verbal offer from the tenant of the property who was
already at odds with his landlord. It seemed as though I had walked myself into
another mess (again). Would I never learn to leave this commercial stuff alone?
When
I finally heard from my brother- in- law again, he expressed total disbelief in
the evaluation. How could this be possible? Places in Alberta were going for much
higher prices. His client was still trying to reconcile this anomaly and he
needed some time to think about it. I told my brother-in-law I could likely
prompt an offer close to the price shown and he promised to consider it.
Finally he said “Bring it.”
The
tenant, having other businesses as well, put in an offer under a numbered
holding company. I encouraged him to come close to my appraised price (which
was fair) and he agreed. I don’t remember exactly how the whole thing went
together, but it did and my client (the tenant) continued on cooking his Indian
food.
What
I wanted to mention here has nothing to do with real estate, but rather the
Alberta mentality which shows up in the oil business these days. The story
illustrated here is exactly the same as the basis for the oil business. They
discovered they had a valuable resource, started to develop it and then called
on the country to allow them to transport it here, there and everywhere. They
were totally surprised by the push back to their preconceived plans and
couldn’t understand the unfairness of it all. It seems nothing has changed
since the days of Peter Lougheed and P. E. Trudeau.
Just
think what might have happened in either case if Alberta(ns) would have
consulted with stakeholders first before making decisions based on Alberta
wisdom. I’ll leave that with you.
No comments:
Post a Comment