TRREB Reports Q3 2020 Commercial Statistics
TRREB Commercial Network Members reported 7,184,790 square feet of leased space through TRREB's MLS® System in Q3 2020 for all lease transaction types across the industrial, commercial/retail and office market segments. This result represented a 14.3 per cent increase compared to Q3 2019.
Year-over-year changes in average per square foot net lease rates, for transactions with pricing disclosed, were mixed depending on market segment. The average office lease rate was up to $19.50 from $13.30 in Q3 2019. The average industrial lease rate for Q3 2020 was $10.33, slightly down from $10.40 in Q3 2019. The average commercial/retail lease rate was $19.51, down from $26.44 in Q3 2019. It is important to note that annual changes in average lease rates can result from changing market conditions and changes in the mix of space leased from one year to the next, in terms of location, size, property type mix and other related variables.
“Industrial leasing activity, which continued to account for the great majority of space leased through TRREB’s MLS® System in the third quarter of 2020, has remained strong despite the uncertainty brought about by the pandemic. Availability rates in the industrial segment have remained low, providing support for market rents. In addition, changing consumer patterns, including increases in online shopping, have arguably created new demand for additional distribution space,” said TRREB President Lisa Patel.
Total commercial sales in Q3 2020 were down by 109 sales to 259, from 368 in Q3 2019. Sales in the industrial sector amounted to 93 in Q3 2020 – down from 148 sales in Q3 2019. Commercial/retail sales were down from 140 in Q3 2019 to 114 in Q3 2020. There were 52 office sales in Q3 2020, a drop from 80 sales in Q3 2019.
It is important to recognise that the effects of COVID-19 and related public policies have impacted the commercial real estate industry, and have certainly resulted in changes in market activity on year-over-year basis. Moving forward, it will be important to monitor trends through the lens of COVID-19-related public policy and broader economic indicators including Gross Domestic Product and employment to get a better sense of the medium and longer-term trajectory of different segments of the commercial real estate market.
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.