TORONTO, June 4, 2018 -- Toronto Real Estate Board President Tim Syrianos announced that TREB Commercial Members reported 210,579 square feet of combined industrial, commercial/retail and office space leased through the TREB MLS® System, on a per square foot net basis with pricing disclosed, in May 2018. This result was down from 389,671 square feet of leased space reported in May 2017.
In a departure from the norm, the industrial market segment did not account for the largest share of leased space reported in May. This was due to the fact that no large spaces of 50,000 or more square feet were reported leased with pricing disclosed. This was also a key reason why the average industrial lease rate, for transactions with pricing disclosed, was substantially higher than the May 2017 average on a per square foot net basis. Average lease rates are generally higher for smaller properties.
The average commercial/retail lease rate, on a per square foot net basis, was up to $24.35 in May 2018, compared to $22.53 in May 2017. The average office lease rate was down to $11.73 per square foot net, compared to an average of $15.15 a year earlier. Larger spaces accounted for a higher share of overall office lease transactions. This compositional shift was largely responsible for the dip in the average office lease rate.
"While the amount of space leased in May was down compared to May 2017, results can be volatile on a month-to-month basis. Regional economic conditions suggest that the demand for all types of commercial space should be strong. However, the positive impact of a strong regional economy could be mitigated by the emerging trade dispute between the United States and Canada. Some businesses could put their decision to take on more space on hold until there is more clarity on how the trade situation will unfold," said Mr. Syrianos.
Total industrial, commercial/retail and office property sales, with pricing disclosed, amounted to 42 in May 2018, down from 85 in May 2017. The number of sales was down for all market segments. It is important to note that the timing of transactions can be quite volatile. One month of data does not necessarily point to the emergence of a trend.
Average sale prices on a per square foot basis were influenced by changes in the mix of properties sold this year compared to last, as it relates to size and location. In the commercial/retail market segment, sales in May 2018 were limited to smaller properties that generally command a larger price per square foot.
May 2018: Per Square Foot Net Commercial Leasing Summary
Lease Transactions Completed on a
Per Square Foot Net Basis with Pricing Disclosed
Leased Square Feet
Average Lease Rate
May 2018: Commercial Sales Completed with Pricing Disclosed on TorontoMLS
Sales (Price Disclosed)
Avg. Sale Price Per Sq. Ft. (Pricing Disclosed)
NOTE: Some table totals may differ due to conversion and rounding.