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GTA REALTORS® Release Commercial Market Statistics

TORONTO, January 5, 2017 — Toronto Real Estate Board President Larry Cerqua announced that the total amount of leased space reported through TREB’s MLS® System by TREB Commercial Network Members in the fourth quarter of 2016 was down on a year-over-year basis.  There was a combined 5,849,174 square feet of industrial, commercial/retail and office space leased – down by 5.1 per cent compared to the fourth quarter of 2015.

Industrial space accounted for the great majority of leasing activity reported through TREB’s MLS® System, with more than three-quarters of total space leased accounted for by the industrial segment.  The average industrial lease rate on a per square foot net basis, for transactions with pricing disclosed, was up by 2.1 per cent to $ 6.23 compared to $ 6.10 in Q4 2015.  The average commercial/retail lease rate was up on a year-over-year basis, while the office lease rate was down compared to last year.

“The demand for commercial real estate has a lot to do with businesses’ outlooks on the future of the economy, in general, and the direction of their particular economic sector.  Growth in the economy was somewhat volatile in 2016.  On top of this, there may remain some uncertainty with regard to the impact of the US elections going forward.  It is likely that many GTA firms have taken a wait and see attitude towards property investment until the trajectory of the Canadian economy becomes more certain,” said Mr. Cerqua.

The number of combined industrial, commercial/retail and office property transactions was down in Q4 2016 compared to a year earlier, with 253 properties changing hands versus 337 properties in Q4 2015.

Average selling prices on a per square foot basis, for transactions where pricing was disclosed, were up for the industrial and commercial/retail market segments.  The large increase in the average commercial/retail selling price had more to do with a greater number of large properties trading in more expensive locations in Q4 2016 compared to Q4 2015.  The average selling price for office properties was down on a year-over-year basis.  While market factors may have played a role, this dip was more related to a compositional shift in the type and location of properties sold this year versus last.