Commercial real estate transaction volumes will likely decline from coast to coast in 2009 - due to a slowdown in executive decision-making as many firms elect to stay put while riding out the economic downturn, says a national report released today.
Avison Young (Canada) Inc.'s 2009 National Forecast said that in major markets, the addition of new inventory and a spike in sublease space may cause vacancy levels to rise through 2009, and tenants may see some relief with regard to rental rates. As is the case with cyclical downturns, aggressive investors will target distressed situations for higher, long-term yields. However, the Canadian markets continue to benefit from generally strong fundamentals and relatively constrained supply, and should look for improvement towards the second half of 2009, said the report.
According to the 2009 Forecast, the national office vacancy rate remains tight at 5.2 per cent (as of November 2008) but is anticipated to notch up to 6.7 per cent by year-end 2009, due mainly to curtailed demand across the board and significant new supply, particularly in Toronto.
