Hot Potato: Scott McEwen Talks Agriculture and Alternative Investments in PEI

When Scott McEwen moved from Ontario to Prince Edward Island with his wife Lori Ann nearly 25 years ago, the couple was ready to take on a new challenge. At the time Scott had been travelling the world working in the auto parts and industrial business while Lori Ann taught at the Toronto Montessori Schools. Together they uprooted their lives and moved to PEI, Canada’s smallest province, where they converted an old church into the first Island Montessori Academy.

Today the couple owns three Montessori facilities. Over the past two years in particular they have developed and grown the capacity and square footage of the schools. They now employ over 50 employees and have about 220 students.

But growing their Montessori schools isn’t the only project Scott McEwen has taken on since leaving Ontario. “When we moved to PEI I pivoted to valuations management for timberland and agriculture,” he says. “Over time I got to know the leading institutional players in the field and saw an opportunity on the brokerage side.”

McEwen joined CBRE in 2018, becoming the company’s first representative in PEI. Today he has a dual role in alternative asset valuations with a focus on timber and agriculture, which he supplements with local brokerage—one of the only CBRE Canada employees to do so. Investors pursue alternative assets as a way of accessing higher returns than might be offered by traditional investments in office, industrial or apartment assets, for example.  

“Sometimes it feels like I have two full-time jobs,” he says. “But the end result is a good relationship base locally and nationally.” 

Wealth of Knowledge

McEwen’s specialized knowledge of alternative assets enables him to collaborate on projects across Canada.

He recently teamed up with CBRE Ottawa’s Erik Falardeau to sell 1,053 acres of agricultural land in Casselman, ON. The team represented the seller, a private equity agricultural holder called Market Maker Agriculture. “I had a good relationship with the owner from previous valuation work so that helped us win the mandate,” says McEwen.

High debt rates and rising land costs have slowed institutional agricultural investment in recent years, creating lower returns on the land and making the sector riskier for investors. Despite this, the listing received strong interest and was bought by a Montreal-based landscaping supplies business in June.

“Agri-business can be a tough sector to break into because local farmers prefer selling to other local farmers,” McEwen says. “But we’re seeing more farmers consider offers from institutional capital or private equity because they no longer want to run large farms. We’re about 15 years behind the U.S. market on that trend.”

McEwen collaborated with CBRE’s Vancouver and Calgary offices to lease 18,700 acres of agricultural land in Alberta and B.C. He is partnering with CBRE Toronto North’s Brett Taggart on selling gas station properties, and has worked with CBRE Edmonton’s Cody Nelson on agricultural land sales in the past year.  He was also awarded an international mandate on an agri-business sale on which he is working with David Yanoshita, from CBRE London’s office.

McEwen is also hoping to expand his work to Saskatchewan and Manitoba’s agricultural sectors. “I have a unique opportunity to support CBRE brokers in other markets,” he says. “Bringing in my specialized knowledge of alternative assets gives them added credibility and creates value for clients.”

On Home Turf

When he’s not working on off-island deals, McEwen is growing his local brokerage business, which currently makes up about 20% of his annual revenue. Operating in a small market, he has had to acquire knowledge of various property types, sometimes leaning on other CBRE offices for advice. McEwen is currently leasing retail, office and industrial space and is working on relocating regional industrial clients as part of a build to suit mandate. He recently took on a listing for a 54,320 sq. ft. industrial building on the outskirts of Charlottetown and has completed small retail and office deals.

“In a small community like Charlottetown or within PEI, you have to take on all sorts of deals and service everyone the best you can,” says McEwen. “Word of mouth goes a long way here and entrepreneurs here often have several businesses. Supporting them with smaller transactions and providing insights into off-market opportunities will inevitably lead to larger opportunities.” 

Charlottetown’s commercial real estate market is competitive, with most of the office space occupied by the provincial and federal governments, retail vacancy under 2.0% and industrial availability at less than 1.5%. PEI’s rental apartment vacancy is at 0.8%, the lowest in Canada.

“PEI is somewhere that outside investors come to play more than they have traditionally done business,” says McEwen. “PEI is a sought-after investment market, with more than 1.5 million visitors in the summer months. Wealthy business owners buy properties here so they can come golf in the summer or bring the family to enjoy the beach, which increases the value of land.

“That’s evolving too. Charlottetown may be a small market, but it’s a capital and a port city, making it highly attractive.”

McEwen encourages commercial developers from other provinces to consider building in PEI. He sees opportunities for retail clients looking to expand as national and multi-national quick service restaurants and other retail clients pursue PEI locations. “The demand is there,” he says. “As a valuation professional, broker and business owner, I can help clients navigate this market while helping my community evolve in a positive way. That’s pretty special.  PEI is very entrepreneurial.”