Almost 5.9 Million Square Feet Leased in Q4 2023

TRREB Commercial Network Members reported 5,889,769 square feet of leased space through TRREB’s MLS® System in Q4 2023 for all lease transaction types across the industrial, commercial/ retail and office market segments. This result was down compared to the Q4 2023 result of 6,753,182. Year-over-year changes in space leased were down for the industrial and commercial/retail market segments, but up for the office segment.

Annual changes in average lease rates for transactions with pricing disclosed were mixed. The average industrial lease rate for Q4 2023 was $17.24, down slightly from $17.42 in Q4 2022. The average commercial/retail lease rate was $26.80, up from $21.63 in Q4 2022. The average office lease rate, at $20.78, was higher than the average of $19.89 reported in Q4 2022.

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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 Q4 2023 amounted to 248, inline with 250 total sales reported for Q4 2022. Sales in the industrial market segment amounted to 79 in Q4 2023 – down from 92 sales in Q4 2022. Commercial/retail sales were up from 83 in Q4 2022 to 109 in Q4 2023. There were 60 office sales in Q4 2023, down from 75 sales in Q4 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.