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TORONTO, June 5, 2017 — Toronto Real Estate Board President Larry Cerqua announced that Greater Toronto Area REALTORS®, including TREB Commercial Network Members, reported 377,352 square feet of combined industrial, commercial/retail and office space leased through TREB’s MLS® System on a per square foot net basis with pricing disclosed. This result was down by 17.1 per cent compared to 455,463 square feet of leased space reported during the same month in 2016.
Changes in average lease rates for transactions with pricing disclosed were mixed. The industrial market segment, which accounted for almost two-thirds of total space leased, had an average lease rate of $ 5.59 per square foot net – down by 6.2 per cent compared to May 2016. Average commercial/retail and office lease rates were up strongly. These larger increases were largely driven by a larger share of smaller spaces leased this year compared to last. Smaller spaces tend to lease for more on a per square foot net basis relative to larger spaces.
“Economic growth was very strong in the first quarter, including a robust uptick in business investment, which speaks to confidence. If firms are confident enough in their future growth prospects to purchase new equipment and supplies, they may also have plans to invest in more space. A resurgence in exports as we move through 2017 would also be welcome and would likely prompt an increase in demand for commercial real estate in southern Ontario as well,” said Mr. Cerqua.
The combined number of industrial, commercial/retail and office property sales in May 2017 was 74 – down slightly from 78 sales in May 2016. Average selling prices were up strongly for all three market segments. These increases were compositional in nature, with the geography and size of transactions influencing average prices more so than a change in market conditions.