Almost 5.2 Million Square Feet Leased in Q1 2023
TRREB Commercial Network Members reported 5,195,707 square feet of leased space through TRREB’s MLS® System in Q1 2023 for all lease transaction types across the industrial, commercial/ retail and office market segments. This result represented a 20 per cent per cent decrease compared to the Q1 2022 result of 6,498,421 square feet.
Year-over-year changes in space leased were down across all three market segments.
Annual changes in average lease rates for transactions with pricing disclosed were mixed. The average industrial lease rate for Q1 2023 was $13.89, in line with $13.80 in Q1 2022. The average commercial/retail lease rate was $29.04, down from $39.34 in Q1 2022. The average office lease rate, at $15.48, was in line with the average reported in Q1 2022.
It is important to note that annual changes in average lease rates can be a result of changing market conditions and changes in the mix of properties leased from one year to the next, in terms of location, size, property type mix and other related variables.
Total commercial sales in Q1 2023 were down to 196 sales, from 375 a year earlier in Q1 2022. Sales in the industrial sector amounted to 65 in Q1 2023 – down from 110 sales in Q1 2022. Commercial/retail sales were down from 162 in Q1 2022 to 85 in Q1 2023. There were 46 office sales in Q1 2023, a drop from 103 sales in Q1 2022.
It is important to recognize that the lingering effects from COVID-19-related policies have impacted the commercial real estate industry, which have resulted in some variances in year-over-year comparison numbers.