GTA commercial market takes a hit

The amount of commercial space leased in Toronto in May was down on a year-over-year basis, but the average industrial lease rate was up, suggesting the market remains strong, according to TREB.

“Commercial leasing activity is often volatile on a month-to-month basis, with one large deal, or the absence thereof, making all the difference to the aggregate results,” says TREB president Paul Etherington.

“However, the fact that the average industrial lease rate was up in May compared to last year suggests that the demand for space in this important market segment remains strong.”

TREB Commercial Network Members reported 377,052 square feet of space leased on a per square foot net basis with pricing disclosed in May 2015 – down from 629,864 total square feet leased in May 2014.

While the amount of space leased was down on a year-over-year basis in May, average per square foot net lease rates were up for the industrial and commercial/retail segments.

The total number of combined industrial, commercial/retail and office properties sold in May 2015 amounted to 52, down from 61 transactions reported during the same month in 2014.

The average industrial sale price on a per-square-foot basis was down slightly year-over-year.

The average selling prices for commercial/retail and office properties were down by a greater amount, but this was largely due to a change in the mix of properties sold this year compared to last.

“Both the sale and leasing markets for commercial properties are dependent on firms' outlook for the economy,” adds Etherington.

“While the positive impact of the lower Canadian dollar is promising for businesses in the Greater Toronto Area, uncertainty in the broader Canadian economic picture will likely feed through into some periodic volatility in results.”

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