Q1 2019

Brought to you by GTA REALTORS® and TREB’s MLS® System | Join the conversation #TREBCommercial

Full Commercial Tables Available at TREBhome.com

02M 4M 6M 8M

Q1 2018

Q1 2019 6,814,418 sf

6,246,773 sf

9.1%compared to Q1 2018

0 1K 2K 3K

2018

2019 2,182

1,843

+18%compared to Q1 2018

Q1 New Leases Per Property Type Q1 Total Square Feet Leased Key Indices

Q1 Total Lease Listings Added

Commercial Watch

TORONTO, April 22, 2019 � Toronto Real Estate Board President Gurcharan (Garry) Bhaura announced that TREB Commercial Network Members reported 6,814,418 square feet of total leased space for all transaction types across the industrial, commercial/retail and office market segments. This result represented a 9.1 per cent increase compared to the first quarter of 2018.

There were mixed results regarding year-over-year changes in average per square foot net lease rates for transactions with pricing disclosed. The average industrial lease rate rose to $7.52 from $6.70 in Q1 2018. Average commercial/retail and office lease rates were both down year-over-year by 11 per cent and 11.5 per cent, respectively.

It is important to note that annual changes in average lease rates can be the result of changing market conditions and changes in the mix of properties leased from one year to the next, in terms of location, size, mix, and other related variables.

“A strong increase in total square footage leased through TREB’s MLS® System is likely linked to favourable economic conditions throughout the Greater Toronto Area. Historically low unemployment rates signify that the region continues to be a hub for economic growth and innovation, suggesting that space is in demand for a variety of businesses in multiple different sectors,” said Mr. Bhaura.

Total commercial sales decreased by 106 in Q1 2018 to Q1 2019 from 286 to 180. A large part of this decrease was due to industrial sales declining from 108 in Q1 2018 to 62 in Q1 2019. Also, office sales declined by 36 from 75 to 39 units sold. Commercial sales decreased from 103 to 79 units sold.

February 2019 TorontoUnemployment Rate: 6.3%1

Q4 '18 Real GDP Growth: 0.4%1

Feb. '19 Inflation Rate: 1.5%2

BoC Overnight Rate: 1.8%2

Prime Rate: 4.0%2

1. Statistics Canada2. Bank of Canada

TREB RELEASES COMMERCIAL MARKET FIGURES AS REPORTED BY GTA REALTORS®

Commercial/RetailIndustrial

Office

OFFICE

0 1K 2K 3K

2018

2019 2,119

2,149

-1%compared to Q1 2018

COMMERCIAL/RETAIL

0 500 1000

2018

2019 965

981

-2%compared to Q1 2018

INDUSTRIAL

Upcoming

Commercial

Courses & Events

June 27: Searching in Stratus – Commercial Hands-On Course – 9am-1pm

May 30: Financial Challenges in Closing Commercial Transactions

(at REALTOR® QUEST) – 2pm-3pm

For more information, or to register, visit TREB e-Commerce.

40%

41% 18%

Brought to you by GTA REALTORS® and TREB’s MLS® System | Join the conversation #TREBCommercial

Economic Indicators Recap

Commercial real estate is an important sector in the Canadian economy. According to a recent study by CBRE, in 2018, commercial real estate investment topped nearly $50 billion in Canada, a third consecutive annual record. With record low vacancy rates and high demand for supply in the GTA, it is important to understand some of the economic drivers underlying the strong demand and tight supply in different segments of the commercial real estate market.

Attractiveness for Employers

The GTA has benefitted from historically low unemployment rates over the last two years. In the immediate post-recession period in mid-2009, the unemployment rate hovered around 10 per cent. Since late 2017, however, the unemployment rate has hovered between 5.8 and 6.3 per cent. This, coupled with ultra-low vacancy rates in many segments of the commercial real estate market, is testament to the attractiveness of the GTA, both as a place to build and/or expand a business, and as a place to move to and build a career. The GTA and the Greater Golden Horseshoe more broadly are home to multiple world-class, post-secondary institutions, providing for one of the richest and diverse local talent pools in North America. This is clearly very attractive for employers looking to expand.

Cheap Loonie

Over the past 12 months ending March 31, the Canadian Dollar ranged between $0.73 and $0.80 vis-à-vis the US Dollar. Many analysts feel the value of the loonie will remain in this range or perhaps edge lower over the next year. Unresolved trade issues notwithstanding, the value of the loonie could certainly be beneficial to export-related industries, particularly in the industrial sector. In addition, industries that attract foreign currency to the GTA, like tourism, are also poised to benefit. These currency-related considerations could certainly play into businesses’ decisions regarding employment and the need for space.

Low Bond Yields and Increased Investment in Construction

There was $11.6 billion in total investment in ICI (industrial, commercial, investment) construction in the GTA, a 7.3 per cent increase over the previous year (Altus Group). Industrial property construction accounted for 46% of the total construction, due to both strong demand for industrial property in the GTA and an attractive average CAP rate of 4.6%.

COMMERCIAL CONTENT AT REALTOR® QUEST

Canada’s largest real estate conference and trade show is coming to the Toronto Congress Centre on Wednesday, May 29 and Thursday, May 30. This year’s event is going to be bigger and better than ever!

It will feature exciting presentations from headliner and marketing guru Gary Vaynerchuk, Realtor safety expert Carl Carter, Jr., and an exciting new Real Estate Symposium, plus many other highlights, including a revamped trade show and a revamped TREB Central.

There will also be plenty of great commercial professional development content, including a session on Financial Challenges in Closing Commercial Transactions. More great content announcements to come, so stay tuned to your inbox, Stratus and social media.

Plus, head to realtorquest.ca anytime for the latest info!

Q1 2019Commercial Watch