Almost 5.8 Million Square Feet Leased in Q3 2023
TRREB Commercial Network Members reported 5,788,955 square feet of leased space through TRREB's MLS® System in Q3 2023 for all lease transaction types across the industrial, commercial/retail and office market segments. This result represented an increase compared to Q3 2022.
Year-over-year changes in average per square foot net lease rates, for transactions with pricing disclosed, were up in the industrial and commercial/ retail segments for Q3 2023. The average industrial lease rate for Q3 2023 was $18.65, up from $13.87 in Q3 2022. The average commercial/retail lease rate was $29.42, up from $22.23 in Q3 2022. The average office lease rate in Q3 2023 was down to $14.18 from $18.06 in Q3 2022.
It is important to note that annual changes in average lease rates can be a result of changing market conditions and changes in the mix of properties leased from one year to the next, in terms of location, size, property type mix and other related variables.
Total commercial sales in Q3 2023 were down to 211, compared to 265 in Q3 2022. Sales in the industrial sector amounted to 97 in Q3 2023 3 down from 108 sales in Q3 2022. Commercial/retail sales were down slightly from 95 in Q3 2022 to 90 in Q3 2023. There were 50 office sales in Q3 2023, a drop from 62 sales in Q3 2022.
It is important to recognize that the effects from the COVID-19 pandemic, including work-from-home policies and a shift in retail trade, continue to impact the office and commercial/retail segments respectively. Generally speaking, higher borrowing costs and the related economic impacts are also impacting the demand for some types of commercial real estate.
In conjunction with TREB's redistricting project, historical data may be subject to revision moving forward. This could temporarily impact per cent change comparisons to data from previous years.