Local Market Knowledge,
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The Greater Toronto Area industrial market carried a lot of momentum into 2020 and although the pandemic slowed market activity in the first half of the year, activity started to pick up in the third quarter and then grew rapidly in the final quarter of 2020. Overall, the industrial sector remained resilient throughout the pandemic storm and quickly established itself as the GTA’s best-performing commercial real estate asset class.

The predictable fourth-quarter surge in investment sales was a welcomed respite in a year where the unpredictability of the pandemic stymied investor appetite for select properties – bringing several years of record-high investment sales results to a halt. However, the foundation for a return to past and even better performances – low borrowing costs and plenty of capital – remains intact and the wide distribution of vaccines should help sustain investor demand in 2021.

COVID-19 took its toll on the Greater Toronto Area office leasing market in 2020, abruptly ending strong demand that had lasted most of a decade in one of North America’s healthiest commercial real estate markets. The pace of vaccinations will be a bellwether for a welcomed rebound likely to take hold in the latter part of 2021.

The GTA multiresidential investment market has shown significant resiliency in 2020, despite the unprecedented economic disruption caused by COVID-19. With an upturn in transaction activity in the third quarter, the market averages close to pre-pandemic levels compared to the same period in 2019.

Leasing activity in the GTA industrial market gained momentum in the third quarter of 2020 with notable transactions inked by the e-commerce and food and beverage sectors. Meanwhile, a sub-2% availability rate pushed rental rates higher yet again. Industrial was also the top investment asset class of the third quarter and year-to-date in 2020.

Uncertainty around the pandemic’s long-term impacts on commercial property in the GTA continues to weigh heavily on investors. While each sector has its challenges, industrial and (to a lesser degree) multi-residential assets have been the favourites. Meanwhile, the bid-ask gap has widened for certain asset types and locales, resulting in a material change in capitalization rates.