While much has been made recently about Toronto’s Real Estate Bubble, the city is expected to remain a hub for commercial real estate investment in the year ahead, presenting investors with a number of intriguing investment opportunities. However, a number of factors make finding available space the biggest hurdle to overcome.
A recent report from the Financial Post called Toronto the most constrained industrial market in Canada, with only 2.4% of industrial inventory left. Those able to afford the average $11.59 per square foot cost will no doubt be able to find a wide variety of takers, with Price Waterhouse Cooper citing space for Warehousing and Fulfillment being a top priority for many businesses invested in e-commerce. The demand is so high that the report also states the idea of “industrial hoteling,” which would allow companies to use space during peak periods temporarily, may become a concept that’s worth exploring.
A recent report states that while foreign investment has been a long-time driver of real estate action in the city, a new power player is about to take over as the dominant force in Toronto’s housing boom: the tech industry. With Toronto skyrocketing up the list of most important tech hubs in North America, many new jobs are expected to be added, meaning an influx of new workers. These workers will require housing, making investment in rental properties a safe bet for the year ahead, especially with the vacancy rates of residential real estate so consistently low in the city.
With an aging population, another trend in commercial real estate for the year ahead is expected to be senior residences. According to PWC, this type of development is in the midst of a boom, but demand is expected to remain strong. However, compared to other opportunities, they note that building these types of residences are complicated, as the lifestyle requirements vary. Many seniors these days are active, so these types of developments need mixed-use, high-quality facilities that are adaptable to a wide variety of needs.