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GTA Commercial Realtors report commercial market figures


October 24, 2012
By Toronto Real Estate Board

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Oct. 24, 2012 – Toronto Real Estate Board Commercial Division Members reported lease transactions accounting for almost 3.5 million square feet of industrial, commercial/retail and office space during the third quarter of 2012. This result was down from slightly more than 3.7 million square feet leased in the third quarter of 2011.



Oct. 24, 2012 – Toronto Real Estate Board Commercial Division members reported
lease transactions accounting for almost 3.5 million square feet of industrial,
commercial/retail and office space during the third quarter of 2012. This
result was down from slightly more than 3.7 million square feet leased in the third
quarter of 2011.
 
The year-over-year change in average lease rates was mixed. Based on
transactions for which pricing was disclosed, the average industrial lease rate
was up compared to last year whereas average commercial/retail and office lease
rates were down.

"The industrial market segment accounted for almost three-quarters of
total leased space in the third quarter. Average lease rates were up for all
industrial size categories reported by TREB. If growth in average industrial
lease rates continues in the fourth quarter and into 2013, it would suggest
that market conditions are tightening with industrial firms in southern Ontario
more confident about future growth," said TREB Commercial Division chair,
Cynthia Lai.

 
Commercial Division members reported 214 combined commercial sales in the third
quarter, down 18 per cent from 262 sales during the same period in 2011. The
average selling price was down for all three categories, but a comparison of
transactions suggests that the decline was more the result of a different mix
of property types sold this year compared to last, especially in relation to
commercial/retail and office space.
 
"The mix of sold office space shifted towards larger properties in the third
quarter of this year. Generally speaking, larger office properties are
associated with a lower price per square. As a result, when larger properties
account for a greater proportion of total transactions the overall average
lease rate tends to dip, all else being equal," said Lai.
 
"The dip in the in the average commercial/retail sale price was also
driven by sales of larger properties. Last year the mix and use of larger
commercial/retail properties sold dictated a higher price compared to this
year. For transactions in smaller size categories, average selling prices were
more comparable between 2012 and 2011," continued Lai.

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