Western Canadian investors armed with a strong dollar are hunting for trophy properties amidst the depressed U.S. commercial real estate market.

"The loonie's strength at the same time when U.S. real estates are 'on sale' has not occurred in a generation," said Greg McPhie, managing partner of NAI Commercial in Vancouver. This has made the U.S. prime territory as asset prices have fallen and Canada's investment firms have begun hunting for acquisition opportunities.

The examples are many: Canada Pension Plan Investment Board's investments in New York and Washington, D.C. last year, as well as acquisitions by Riocan REIT and Artis REIT that have been matched by smaller investments across the U.S. Sunbelt by Vancouver developer Onni and syndicator Sunstone Realty Advisors Inc.

"California is on that list, but Arizona seems to be where I'm hearing 'Canadian investor' coming up,"said Ross Moore, director of research, North America, for Colliers International. “We’re in that sweet spot window where I think it works for both sides,” Moore explained. “The guys who are selling don’t feel that they’re selling at the absolute bottom, and at the same time I think that the investors who are going down there still feel like they’re getting good value.”

Ed Sonshine, president and CEO of RioCan REIT, said that prices have “snapped back,” on both sides of the border, noting that RioCan dropped out of the bidding for a U.S. portfolio when the price tag rose too high. “You knew prices would come back but I don’t think anybody knew they would come back this quickly.” In Canada, RioCan is looking to development and the recognition that there is not enough space to house the new, mainly U.S. retailers, earket. “There ain’t much vacant space in the retail area in Canada.” As for the U.S., he anticipates corporate opportunities as many rivals there remain capital constrained.

For a full report on Canadians investing in the U.S. commercial real estate market, see the May issue of Western Investor.