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by new_state
February 12, 2016
Category:   Commercial Real Estate


TORONTO, February 3, 2016 — Toronto Real Estate Board President Mark McLean announced that TREB Commercial Network Members reported a combined 240,606 square feet of industrial, commercial/retail and office space leased through TREB’s MLS® System in January 2016, for properties where pricing was disclosed on a per square foot net basis.  This result was down from 349,270 square feet of leased space in January 2015.

Industrial properties accounted for approximately 60 per cent of space leased.

The month of January is often quite volatile from one year to the next in terms of the types and sizes of properties that are leased.  For this reason, average lease rates for reported transactions varied markedly between January 2015 and January 2016, with the average industrial lease rate up substantially year-over-year and the average commercial/retail lease rate down substantially.

“The way in which the GTA commercial real estate market unfolds in 2016 will depend a lot on how the regional economy adapts to the lower value of the Canadian dollar.  To date, we have not seen a full resurgence in the goods production sector, particularly as it relates to exports.  If export-related production starts to increase, it is possible that commercial sale and leasing activity could increase this year as well,� said Mr. McLean.

There were 40 combined industrial, commercial/retail and office sales reported in January 2016.  This result was down compared to 53 sales reported for the same period in 2015.

Similar to the leasing market, sales results for the month of January can be quite volatile, which can periodically lead to larger swings in average sale prices on a per square foot basis.  As the number of transactions picks up through the first quarter, in line with the recurring seasonal trend, the volatility in average selling prices is expected diminish.


January 2016: Per Square Foot Net Commercial Leasing Summary
Lease Transactions Completed on a Per Square Foot Net Basis with Pricing Disclosed on TorontoMLS
Leased Square Feet Average Lease Rate
Jan. 2016 Jan. 2015 % Change Jan. 2016 Jan. 2015 % Change
Industrial 142,527 268,799 -47.0% Industrial $6.77 $5.20 30.3%
Commercial 68,249 42,288 61.4% Commercial $14.16 $19.17 -26.1%
Office 29,830 38,183 -21.9% Office $14.74 $13.71 7.6%
Total 240,606 349,270 -31.1%
January 2016: Commercial Sales Completed with Pricing Disclosed on TorontoMLS
Sales (Price Disclosed) Avg. Sale Price Per Sq. Ft. (Pricing Disclosed)
Jan. 2016 Jan. 2015 % Change Jan. 2016 Jan. 2015 % Change
Industrial 13 26 -50.0% Industrial $64.23 $86.11 -25.4%
Commercial 17 18 -5.6% Commercial $194.18 $208.34 -6.8%
Office 10 9 11.1% Office $222.90 $313.53 -28.9%
Total 40 53 -24.5%
Source: TREB
NOTE: Some table totals may differ due to conversion and rounding.

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