Despite volatility in the commercial real estate market, brokers in this segment may expect an uptick in business in one major market as the economy continues to improve.
“The demand for commercial real estate, whether for lease or for sale, can be volatile on a monthly basis when comparing to the previous year. With this said, recent economic data suggests that we could see an uptick in the demand for commercial space moving forward, given that the Canadian economy expanded at a relatively strong pace over the past two quarters,” Paul Etherington, president of the Toronto Real Estate Board said. “On top of this, the dip in the value of the Canadian dollar vis-à-vis the US could result in increased demand for goods produced in the GTA for export south of the border. This could lead to an increase in the demand for industrial space in the GTA as well.”
Commercial sales remained steady in November, with 67 properties – when the price was disclosed -- exchanging hands. This represents no change year-over-year.
Office space saw the most significant spike, with 16 sales representing a 45.5 per cent year-over-year spike. Meanwhile, industrial (23 sales, -14.58 per cent y/y) and commercial (16 sales, -3.4 per cent y/y) properties did not fare as well.
“Average sale prices, on a per square foot basis were actually quite volatile in November, both to the positive and negative depending on the market segment in question,” according to TREB. “However, it should be noted that average price changes can be the result of both market forces and changes in the type and location of properties sold. In November, price change was largely the result of a change in the mix of properties sold this year compared to last.”