There was a large drop in commercial real estate sales in the Greater Toronto Area in the third quarter compared to a year earlier.

Urbanation says that sales were down 30% in value terms to $4.7 billion while the number of sales transactions ($2m+) was 320, 23% lower than the same period of 2017.

Office buildings saw the largest drop, plunging 58% to $879 million in Q3 2018 from the near-quarterly-record $2.1 billion a year earlier. The average sale price for office buildings in Q3 was $285 psf., while industrial buildings averaged $144 psf. and retail buildings averaged $278 psf.

The total value of apartment development site sales fell 63% year-over-year to $315 million, and low density residential land declined 66% to $281 million.

These property types gained
Conversely, rental apartment buildings more than doubled in sale value to reach a high of $1.1 billion on 30 transactions; and sold for an average of $271,000 per suite, a level that has held steady in recent quarters. Cap rates for rental building sales averaged 3.13% in Q3, ranging between 3.25% and 4.09% among the five largest transactions.

House lots reached their highest quarterly sale value of the year at $189 million, with an average price per lot of $257K.

The largest recorded transaction in Q3 was the Wynn Group portfolio sale, containing a mix of rental apartments, retail and industrial properties for $950 million.


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