Canadians head south to get into commercial arena

More Canadian investors are taking advantage of attractive commercial real estate opportunities down south.

Thanks to tougher lending conditions, more investors are looking to move into the commercial arena…and they are heading south to avail of the attractive prices  and market supply.

Canadians purchased, on average, between $15 and $19 billion worth of U.S. commercial real estate property per year since 2009, according to the Royal Bank of Canada.

This spending spree means that Canadians accounted for a third of the $38.7 billion of foreign capital invested in 2013 alone, according to the Commercial Real Estate Development Association.

A lack of domestic opportunities and price are two of the main reasons for this trend. The entire Canadian office market is about 400-million sq. ft., roughly similar to the size of Manhattan.

Canada’s commercial property market is also estimated to be worth about $1-trillion (U.S.) compared with $11-trillion for the U.S. market.

"The bulk of Canada’s international real estate investment has traditionally taken place in the U.S. and Western Europe, but we are seeing Canadian investors in the Asia Pacific, Latin America, and Southern and Eastern Europe,” said David Green-Morgan, global capital markets research director for Jones Lang LaSalle.

Commercial investors are reportedly targeting such markets as Tampa Bay, Chicago and Phoenix with ample supply of under-valued properties.

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