Apartment transactions up versus Q1 last year

Highlights from RealNet's GTA commercial real estate market report
Thursday, April 23, 2015
By Richard Vilner

RealNet Canada Inc. announced results for the GTA commercial real estate investment market for the first quarter of 2015. A total of 484 transactions above $1 million were recorded, totaling $2.7 billion for the Greater Toronto Area, representing a dollar volume decline of 24 per cent versus the previous quarter, and a decline of 37 per cent compared to the same period in 2014.

Residential land, industrial and retail property sectors lead all activity in the opening three months, combining for $1.6 billion in transactions, or 59 per cent of the overall market in terms of dollar volume. Compared to the same period a year ago, residential land and industrial sectors recorded gains of 24 per cent and 2 per cent respectively, while the retail sector declined by 61 per cent.

The apartment sector contributed $328 million, or 12 per cent, to the overall first quarter dollar volume with a total of 37 properties trading in excess of $1 million. On a dollar volume basis, this represents a decrease of 7 per cent against the previous quarter and an increase of 64 per cent from the same period in 2014, which totaled only $200 million (33 transactions).

In the opening quarter, a total of seven apartment transactions closed in excess of $10 million contributing $242,135,300, or 74 per cent to the overall sector total.

The following seven apartment deals averaged $167,585 per unit and had an average yield of 4.25 per cent:

Q1 transactions

Overall capitalization rates for the apartment sector averaged 5.0 per cent in the first quarter, remaining flat with the 2014 twelve month average cap rate. The average price per unit in the first three months of 2015 declined slightly to $185,564 from the 2014 average of $193,577.

2015 Q1 apartment transactions summary

The following chart summarizes, on a quarterly basis, the total dollar volume and the total number of apartment transactions greater than one million in the GTA region. Q1-2015 reached $328 million, with a total of 37 multi-residential properties trading above $1 million.

2015 Q1 Quarterly Breakdown

2015 Q1 apartment transactions bubble chart

The following chart summarizes the first quarter apartment transactions greater than $1 million in the Greater Toronto Area geographically and by dollar volume (the larger the transaction is in dollar volume, the larger the size of the bubble).

2015 Q1 Transactions Bubble Chart

Richard Vilner is Research Manager at RealNet Canada Inc. Contact Richard at: RealNet Canada Inc. is the leading real estate information services company in Canada, powering the decisions of firms involved in approximately 75% of the market activity.