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CHICAGO-A latter-day Horace Greeley might advise an investor to “go north.” Not across the state line to Wisconsin, but to Canada.

While the US endured economic stress that has been defined anywhere from a slowdown to a recession, the fall-out has not hit Canada as hard as previous slumps have, notes a report by LaSalle Investment Management. Meanwhile, Canada had emerged as a safe haven for foreign investors, even before the events of Sept. 11, adds Catherine Marshall, vice president and director of research in Canada.

“Canada is really starting to come up on people’s radar screens,” Marshall tells GlobeSt.com. “As the year progresses, you’ll probably see more international interest.”

There is strong evidence in office vacancy rates. The 150-million-sf Toronto office market—it would rank between Boston and Atlanta in size, Marshall notes–has an 8.8% vacancy rate, which drops to 7.3% in the Central Business District. Toronto is Canada’s financial center but like Chicago, has a diversified economy with a large industrial base.

Investors already are getting a premium buying Montreal office properties, Marshall says. However, that premium could disappear if the Separatist Party loses at the polls later this year, erasing a political risk that hasn’t stopped Israeli investors from betting on a market with knowledge-based employers much like Boston and Washington, D.C., she adds. For now, the city’s 10.7% office vacancy rate drops to 9.3% in the Central Business District.

Meanwhile, Vancouver’s vacancy rate of 9.9%–9.3% in the Central Business District—is a minor annoyance compared to some Seattle submarkets down I-5.

Vancouver’s market is the only one at risk of overbuilding, Marshall notes, something US office proponents can’t boast. “Canada’s had a different approach to construction since the recession of the early 1990s,” Marshall tells GlobeSt.com. “Canada has really learned its lesson since then.”

A fourth market is Calgary, similar to Texas in its heavily oil- and energy-based economy, Marshall says.

Canada’s economy typically has been dragged down when the US has entered recessions. But in addition to avoiding that, LaSalle Investment Management points to consensus predictions that the Canadian economy should grow at a faster clip. In addition, Marshall notes the outlook for the Canadian dollar is stronger.

“Given forecasts of lower levels of new supply in Canada relative to the United States and expectations that Canadian and U.S. economic growth will be on par this year, Canada’s real estate market could recover faster than the United States,” Marshall concludes in her report.

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