Commercial mortgage brokers may be sitting on the cusp of a boom, with a leading report on occupancy rates pointing to the tightest market in 27 years.
“The national central market office vacancy rate fell to 5.0 per cent in the second quarter of 2012, down from 5.4 per cent in Q1,” according to the National Office Trends: Second Quarter Report, released Monday by Cushman & Wakefield. “This is only the second time vacancy has dipped to this rate since 1985.”
That's already translating into a minor building boom in key markets across the country, as developers move to satisfy the growing need. It also marks an increase in demand for the mortgage brokering services of commercial specialists.
“There is a significant new office development cycle currently taking place in some markets – a level of building activity not seen since the early 1990s,” said Pierre Bergevin, rresident and CEO of C&W C. “This should address a portion of the current pent-up demand, which is being largely driven by the aggregation of workspace and employees, greater productivity found in more modern building operations, and proximity to the workforce.”
Brokers already representing investor clients are best positioned to capitalize in any uptick in commercial construction. Although, the industry has struggled to add to their numbers despite potentially lucrative remuneration compared to residential deals.
One challenge has been getting the mentorship and training needed to advance broker skills beyond residential and into the labour- and time-intensive commercial sphere, say brokers.