2021 brought good news for Canadian commercial real estate investors. As the pandemic restrictions eased, buyers and sellers jumped back into the market.
According to a recent report from CBRE Group Inc., “$14-billion worth of commercial real estate changed hands in the three-month period, a 29 per cent increase over the previous quarter.”(1)
WHAT ARE THE MOST DESIRABLE COMMERCIAL PROPERTIES TO INVEST IN?
1. WAREHOUSES
Investors seem to have developed an insatiable appetite for industrial space, particularly warehouses, which have become especially popular since the beginning of the pandemic. E-commerce has increased the need for storage among retailers in the online shopping sector and home renovation markets. Investors were eager to provide much needed warehouse space to house the massive amounts of merchandise, home renovation materials and appliances that were being ordered. As a result, vacancy rates for industrial properties in Vancouver, Toronto and Montreal hit historic lows on 1.5%.(2)
2. APARTMENT BUILDINGS
Apartment buildings have historically been considered dependable assets and the positive sentiment toward them has only grown in 2021. The demand for multi-residential properties has intensified substantially as surging home prices have prevented many potential buyers from purchasing. Individuals who were hoping to purchase have resigned themselves to renting, at least for the near future, as they wait (with bated breath) for home prices to stabilize. That is good news for those who have invested in multi-family assets. As vaccines roll out and the pandemic restrictions ease, “Buyers are seeing a clear path to the under 30-35 cohort returning to the rental market.”(3) This is also good news for many parents who are looking forward to their adult children leaving the nest
1 & 2 Financial Post (September 13, 2021) https://financialpost.com/real-estate/property-post/real-estate-investment-surges-to-record-with-canada-rebounding
3 Canadian Apartment/ Part of the REMI https://www.reminetwork.com/articles/investment-performance-expectations-rally-in-q2/ (August 9, 2021)
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