Q1 of Industrial & Commercial Real Estate 2015 of Toronto Compared With Q1 2014

“5,776,322 square feet was leased in office space, industrial space and commercial/retail space during first quarter of 2015 in Toronto.”TREB

This figure is a sum of reports submitted by TREB Commercial Network Members who are spread all across Toronto. The 5,776,322 square feet of leased space is a 28.2 percent increase compared to the entire previous year.This is representative of the fact that industrial as well as commercial real estate market is experiencing a surge compared to the entire 2014.

In addition to the general square feet of lease, the reports contain other information related to commercial real estate of Toronto. The constituents of the reports shed light on several other components and variables of real estate of Toronto when making a quarter-quarter comparison.

The average per square foot lease rate for industrial property in Q1of 2015 was $5.39 which is 4.8 percent greater compared to the same quarter in 2014. On the other hand, the average rate for commercial/retail lease was down by 4.9 percent, making it $19.46 per square foot in Q1 2015. The average rate for office space was $12.64 per square foot, which showed a 2.8 percent increase compared to the first quarter of 2014.

“The economic situation in Canada remained uncertain through the first quarter of 2015 … the industrial leasing news for the Greater Toronto Area was certainly a positive.”Eherington – President, TREB.

At the start of 2015 and throughout its first quarter the economic situation of Canada was not clear and the investors remained uncertain about the direction the economy was going to take. However, the news that the industrial firms in Canada were taking more space retained the confidence of the investors in industrial and commercial real estate of Ontario in general and GTA in particular. Industries leasing more space in an uncertain economic situation meant that the firms had experienced or they hoped to experience some increase in their sales, which for GTA meant that it could actually benefit from the receding Canadian dollar value. All assumptions proved good for GTA and it actually did become the key beneficiary by experiencing a boom in first quarter leases.

Besides all the increase in per square foot price and the general lease space figure, the one area in which the first quarter of 2015 was down compared to Q1 of 2014 was the number of transactions or total sales. The figure in sales for the first quarter of 2015 was 187 which was 28.9 percent less compared to the figure of 263 in Q1 2014. This decrease in transactions was experienced equally by all the major three market segments. It is the increase in per square foot price that covers up for the decrease in the number of transactions and still makes Q1 of 2015 more profitable compared to the first quarter of 2014.

“GTA economy and commercial real estate market is comparatively well-positioned within Canada for 2015.”  saidEtherington.

With the arrival of spring, the economic condition of Canada will become clearer.Only then can the exact impact of it on the commercial real estate could be judged. There is also a possibility that in the remaining quarters of 2015 the GTA industrial and commercial/retail estate market might show volatility in the leasing and sales figure, yet the commercial and industrial real estate of Canada in general, GTA in particular is on a path of boom, and it will continue on prospering throughout the year.

The doomsayers predicting the new bubble are coming at our market from all angles. HilliardMacBeth’s  new book; When The Bubble Bursts, Surviving the Canadian Real Estate Crash, which I just finished reading, provides a very interesting perspective of the market. This book clearly focusses on the residential market, but typically residential fluctuations, whether positive or negative tend to have an impact on the commercial sectors which usually follows. The book looks into  and provides a very insightful look at the level of debt and types of debt compared to the U.S. debt landscape and why we could just as easily be in a bubble which is ready to burst!

Decrease In Office Space Requirement And Its Impact On Commercial Real Estate Of Toronto

“In the Greater Toronto Area the government wants to decrease the real estate footprint by reducing the space requirement from 250 square feet to 200square feet per employee.” TD Economics

The Greater Toronto Area (GTA) does not require any introduction. It is one of the most populous metropolitan areas of the country and attracts a great number of immigrants from foreign lands on daily basis. Moreover, the big corporates also establish their head offices in this region, as it helps them in controlling and monitoring rest of the province and country with ease.

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Decrease In Office Space Requirement And Its Impact On Commercial Real Estate Of Toronto

“In the Greater Toronto Area the government wants to decrease the real estate footprint by reducing the space requirement from 250 square feet to 200square feet per employee.” TD Economics

The Greater Toronto Area (GTA) does not require any introduction. It is one of the most populous metropolitan areas of the country and attracts a great number of immigrants from foreign lands on daily basis. Moreover, the big corporates also establish their head offices in this region, as it helps them in controlling and monitoring rest of the province and country with ease.

Read more

Retirement Homes: A Lucrative Commercial Real Estate Investment In Toronto

As strange as it might seem, Retirement Homes are increasingly becoming a lucrative component of the real estate market in Toronto. The obvious reason behind this surge in demand is the increase in aging population. Real estate investors know that aging is inevitable; therefore, for them the lucrativeness of retirement homes will increase with the passage of time.

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With Companies Trending Towards A ‘No-Desk’ Concept: Will This Affect The Office Market?

Organizations are quite rational to assume this much space for every employee working under their roof. The allocation of this much space is what an employee requires to make his/her personal working space according to their likings; and organizations support it for productivity. However, the trend is changing and now large corporations in general and startup or small businesses in particular are moving towards a ‘no-desk’ concept within their working environment.

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Will The Internet Affect Retail Leasing In Toronto?

There is no denying the fact that internet has transformed our lives and has caused a great shift in the way things were done. Consumers as well as businesses have gone online and they have established an online market where the competition is the same, if not more severe as is in the conventional market.

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Downtown Toronto Is the Place to Invest In Commercial Real Estate

The need of the people pertaining to the kind of living they prefer is what drives the real estate market. If people are more inclined towards convenience where every facility of life is easily accessible then they prefer living in downtown, while if they want a more elegant living that keeps the hustle and bustle of the city at bay, then their preference is the life of suburbs. In Toronto, the former preference is prevalent at present.

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Dragons’ Den Star Reveals He’s the El Mocambo Buyer

Dragons’ Den star and entrepreneur Michael Wekerle revealed last week that he’s the purchaser of the legendary El Mocambo club on Spadina Avenue. He bought the property for $3.78M and says he plans to keep it going as a live-music venue. “It’s afirm deal,” says Royal LePage Commercial’s Neil Warshafsky, who brokered the transaction between Michael and club owners Sam Grosso and Marco Petrucci. The deal is expected to close in December, Neil tells us.

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How many cranes are too many in Toronto?

“We have more cranes in the sky than any major city in North America right now. It’s fantastic.” – Rob Ford

This was the statement of Robert Ford in April 2012 when he was asked about his future action plan pertaining to the betterment and prosperity of Toronto. This statement goes on to show the economic development in general and the construction boom that Toronto was experiencing particularly in 2012.

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Commentary on Where Interest Rates Are Going in Canada

The interest rates have peaked at lower levels for as long as anyone could have imagined, and Canada is no exception.

The Bank of Canada the interest rates are likely to remain “new neutral” – the level that would sustain the economy at full capacity. The rate benchmark has been at 1% for more than four years. Senior Deputy Governor of Bank of Canada, Carolyn Wilkins, stated in the last month that the nominal neutral rate has dropped to a range of 3 percent to 4 percent even further than they have in the past.

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