The outlook for the Canadian commercial real estate market in 2017 through 2018 is very promising, fuelled by the growing strength of our domestic economy against a backdrop of uncertainty on the international stage. Here at Primecorp Commercial Realty, we are fine-tuned to the pulse of trending developments and transactions throughout Canada in various sectors of commercial real estate. Our knowledge is gleaned on the ground by way of the various deals we’ve transacted throughout the year, through the ceaseless networking of our brokers and support staff, and the ongoing diligence of our research team.
Strengthening Canadian Economy Positively Impacts Commercial Real Estate Market
Canada’s economy is poised to grow this year at a pace to match the U.S. and better than the other G7 countries:
Canada's economy is projected to grow this year by 2.4 per cent, equalling what's now expected in the United States and ahead of the other Group of Seven countries… [The OECD] said Canada's economy will be supported this year by export growth, a better market for commodities and government spending initiatives. - CTV
This growth and stability is reflected in the hotspots of Canadian commercial real estate. Toronto leads the charge and currently holds North America’s lowest office space vacancy rate at a projected 5.1% for 2017.
Another star in Canada's 2017 commercial real estate outlook is Vancouver, where the already low vacancy rate is expected to drop to 7.4% from the current rate of 7.7%. Vancouver and Toronto both have significant new construction allowing the supply in both cities to keep up with current and expected demand.
Although the overall commercial vacancy rate throughout Canada is expected to increase this year, this is mostly due to extremely high vacancy rates in a few areas of Alberta. The commercial market throughout the rest of Canada remains strong.
Stability of Canada Attractive Compared to Other Investment Options
With the dramatic change in the U.S. Administration, Brexit pending in the U.K. and the entire European Union threatened with other countries considering leaving the E.U., Canada stands out as a stable and attractive option for commercial real estate investors in the West. This sentiment was clearly reflected by the level of Canadian deals brokered in 2016:
Canada is coming off a record-breaking year for commercial real estate transactions with $34.7 billion in property changing hands in 2016. - Financial Post
Aside from the political stability and economic prospects that Canada has to offer, other factors are creating a strong appetite for institutional investors in certain market segments of commercial real estate:
And when it comes to particular types of real estate, multi-unit residential properties are showing continued promise. Investors are keen on the area for several reasons… immigrants are helping to bolster the demand for housing in cities… millennials who are delaying getting married and having families are helping to drive up the need for apartment buildings… the Canada Mortgage and Housing Corp. imposed stricter mortgage rules last year. - BenefitsCanada
In addition to the multi-residential sector, some industrial areas, such as logistical buildings that support the maturing e-commerce supply chain of the new digital economy are attracting investment. Although some of these developments threaten the retail sector, there remains considerable attraction for large institutional investors, such as the Nova Scotia Employee’s Pension Plan which allocates about 50% of it’s investment portfolio to the retail sector.
Primecorp’s Industry Knowledge is Based on Practical Experience
At Primecorp, we’re well aware of the prevailing trends in Canadian commercial real estate, especially by way of transactions we’ve facilitated on behalf of our valued clients and partners. Here is a sampling of some of the deals we brokered in 2016, that give us as a real working pulse for the industry:
Multi-Residential Portfolio Sale in Southern Ontario for $32.1M CAD: July 2016
On July 7th, Primecorp Commercial Realty Inc. was happy to announce that our National Multi-Residential Investment Sales Group, led by founding partners Aik Aliferis and Sam Firestone, successfully completed the sale of a 6-property, 415 unit multi-residential portfolio in Southern Ontario (Sarnia and Niagara Falls) for $32,100,000 CAD.
Primecorp Brokers C$26.1M Prime Commercial Real Estate Deal in West Ottawa Market
On May 2nd, 2016, Primecorp Commercial Realty Inc., acting as exclusive Advisor and led by veteran Primecorp Broker, Aaida Oakley, announced the successful sale of Emerald Plaza (Ottawa Business Journal), situated in a prized retail and office area on Merivale Rd. near Meadowlands, just south of Baseline. This area is widely regarded as one of the most robust commercial hubs in the capital region.
Primecorp’s Retail Team Helps Set Up First Canadian Starbucks Reserve Coffee Bar Location in Ottawa’s Byward Market
Primecorp Commercial Realty’s own Candice Lerner-Fry was the one to assist Starbucks in setting up this new location. With our Retail Team’s superior operation knowledge of the Ottawa market and our working relationship with landlords throughout the city, we were able to secure the ideal location for the new Starbucks Reserve Coffee Bar.
Primecorp’s Mult-Residential Investment Sales Team Brokers Deal in Scarborough for 103 Unit-Building
On April 4th, 2016, our National Multi-Residential Investment Sales Group closed the sale of 560 Birchmount Road, Toronto. This single, high-rise apartment building in Toronto's Scarborough region features a mix of spacious one and two bedroom suites with large balconies.
Primecorp Apartment Sales Team Closes Deal for Trophy Asset in Ottawa
On December 13th, 2016, Primecorp closed the sale of 22 Murray Street, Byward Market Ottawa. This trophy asset and landmark location features 85 spacious and luxurious apartment suites, along with 7,444 SF of prime retail space and a spectacular roof-top terrace. The property is nestled in a private, beautifully landscaped courtyard, in the historic ByWard Market, one of Ottawa's highest profile locations, steps from the U.S. Embassy and National Gallery of Canada.
Primecorp’s Proven Track Record
Primecorp is a progressive Commercial Real Estate Investment Brokerage and Management and Advisory Firm specializing in commercial investment sales, multi-residential investment sales, retail leasing, office leasing and property management. Our firm has offices in Ottawa, Toronto, Gatineau, and Montréal and we are proud of our track record, brokering transactions in over 55 Canadian cities in excess of $6 billion CAD since our inception in 1998.