Almost 6.9 Million Square Feet Leased in Q2 2023
TRREB Commercial Network Members reported 6,898,357 square feet of leased space through TRREB's MLS® System in Q2 2023 for all lease transaction types across the industrial, commercial/ retail and office market segments. This result was in line with the Q2 2022 result of 6,906,773. Year-over-year changes in space leased were up for the commercial/retail and office market segments, but down for the industrial segment.
Annual changes in average lease rates for transactions with pricing disclosed were mixed. The average industrial lease rate for Q1 2023 was $18.12, up from $12.17 in Q2 2022. The average commercial/retail lease rate was $26.32, down from $48.44 in Q2 2022. The average office lease rate, at $19.13, was higher than the average reported in Q2 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 Q1 2023 were down to 287 sales, from 344 a year earlier in Q2 2022. Sales in the industrial sector amounted to 117 in Q2 2023 – up slightly from 112 sales in Q2 2022. Commercial/retail sales were down from 131 in Q2 2022 to 104 in Q2 2023. There were 66 office sales in Q2 2023, a drop from 101 sales in Q2 2022.
It is important to recognize that the lingering effects from Pandemic-related policies have impacted the commercial real estate industry, in terms of place of work, shopping patterns and other behavioral shifts which continue to result in some variances in year-over-year comparison numbers. On top of this, higher borrowing costs and less certainty about economic growth moving forward have also impacted some commercial real estate market segments.
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.