TORONTO, October 5, 2015 -- Toronto Real Estate Board President Mark McLean announced that TREB Commercial Network Members leased over 4.8 million square feet of combined industrial, commercial/retail and office space in the third quarter of 2015. This result represented an 18.9 per cent year-over-year decrease compared to the third quarter of 2014. Approximately three-quarters of all leased space was accounted for by the industrial market segment, followed by 13 per cent for the office segment and 12 per cent the commercial/retail segment.
Year-over-year changes in average lease rates, for properties leased on a per square foot net basis with pricing disclosed, was mixed in Q3 2015. The average industrial lease rate was $5.33 per square foot net – down approximately nine per cent compered to Q3 2014. The average commercial/retail lease rate was down by 2.1 per cent annually to $18.84 per square foot net. The average office lease rate was up slightly to $12.29 per square foot net from $12.24 last year.
“Economic conditions in the Greater Toronto Area remain relatively strong compared to some other regions across the country. However, it seems safe to assume that the GTA export sector still has room to grow on the back of the lower value of the Canadian dollar vis-à-vis the US. So, while commercial leasing and sales activity through TREB’s MLS® system in Q3 was slower this year compared to last, the expectation is that we will see a pick-up later this year or into 2016 as firms start to experience an uptick in demand for their goods or services from south of the border,” said Mr. McLean.
Total industrial, commercial/retail and office property sales amounted to 230 in Q3 2015 – down by approximately 32 per cent compared to 336 sales in Q3 2014. The number of sales were down for all three market segments.
Year-over-year changes in average sale prices, on a per square foot basis for transactions with pricing disclosed, were mixed. The average industrial selling price, at $101.68 per square foot, was down by approximately 5.5 per cent compared to Q3 2014. The average office selling price was also down substantially, but this was largely due to the sale of some larger spaces compared to the same period in 2014. Larger properties tend to sell for less on a per square foot basis. The average commercial/retail price was up year-over-year to $211.59 compared to $179.83 in Q3 2014.
Third Quarter 2015: All Commercial Lease Transactions
Total Leased Space for All Lease Transaction Types on TorontoMLS
Total Leased Square Feet
Third Quarter 2015: Per Square Foot Net Commercial Leasing Summary
Lease Transactions Completed on a Per Square Foot Net Basis with Pricing Disclosed on TorontoMLS
Average Lease Rate
Third Quarter 2015: All Commercial Sale Transactions
Total Number of Sales on TorontoMLS
Source: Toronto Real Estate Board
Third Quarter 2015: Commercial Sales Completed with Pricing Disclosed on TorontoMLS
Avg. Sale Price Per Sq. Ft. (Pricing Disclosed)
NOTE: Some table totals may differ due to conversion and rounding.