TORONTO, February 3, 2012 -- Toronto Real Estate Board Commercial Division Members reported 464,008 square feet of total leased commercial space in January 2012. This result was down by 41 per cent in comparison to January 2011. Industrial space accounted for 86 per cent of total square footage leased, or 397,649 square feet – down 46 per cent compared to January 2011.
Despite the decline in the amount of space leased, average industrial lease rates held up well. The average lease rate for industrial properties was $4.73 per square foot net (calculated for transactions where pricing was disclosed). This figure was up by more than 12 per cent in comparison to the average of $4.21 cents reported for January 2011.
“Firms in the GTA industrial sector have a very cautious outlook right now. While the prospects for the United States economy are looking more positive, there continues to be substantial concern surrounding economic recession in Europe and what the implications could be for the global economy. In the short term, this means that unless it is absolutely necessary for a firm to move or take on more space, real estate decisions will likely be on hold,” said Commercial Division Chair Larry Purchase.
Commercial real estate sales were up year-over-year in January, both for the industrial segment (+13 per cent) and other commercial property types (+10.5 per cent). Average selling prices per square foot (for transactions with pricing disclosed) were down for both property categories in January compared to a year earlier.
“While the number of industrial and other commercial property sales was up over last year, the exact nature of these deals likely varied in terms of location, size and exact property use between January 2012 and January 2011. The changing composition of deals from one year to the next often has a substantial impact on overall average selling prices,” added Purchase.
January 2012: Per Square Foot Net Commercial Leasing Summary
Lease Transactions Completed on a Per Square Foot Net Basis with Pricing Disclosed on TorontoMLS®
Leased Sq. Ft. (Price Disclosed, Per Sq.Ft. Net)
Avg. Lease Rate (Price Disclosed, Per Sq.Ft. Net)
January 2012: Commercial Sales Completed with Pricing Disclosed on TorontoMLS®
Sales (Price Disclosed)
Avg. Sale Price Per Sq. Ft. (Pricing Disclosed)