Canadian commercial real estate buyers and sellers will have more opportunities to trade assets in 2024 as market conditions continue to improve, says a new Marcus & Millichap report.
Increased immigration, declining borrowing costs and healthy performance metrics bode well for the market in 2024, says the company in the report.
The commercial real estate industry was resilient in 2023 as fundamentals held steady across most property types and markets even though rising interest rates curbed investment activity.
“These healthy performance metrics, along with the expectation that borrowing costs have peaked, are set to provide some optimism for investors over the coming year,” said Marcus & Millichap in the report. “Stabilizing financing conditions will aid in price recalibration while record levels of deployable investment capital are currently sidelined, waiting for uncertainty to abate. These factors should align to boost sales activity over the course of the year.”
Investors will continue to prefer industrial assets and multi-family properties will keep gaining investor attention as immigration is set to reach new highs and home ownership challenges increase demand for apartment rentals, the company predicts.
Marcus & Millichap also anticipates that the commercial real estate sector, and the Canadian economy as a whole, stand to benefit from an immigration-induced rise in consumer spending.
“While growth is expected to be modest, commercial real estate should be well-positioned to benefit, given limited supply and ongoing demand across the property spectrum,” said the company.
The report was headed by Marcus & Millichap vice-presidents Michael Heck and Mark Paterson, Canadian Research Director Luke Simurda and John Chang, the firm’s research services director.
Monte Stewart serves as Content Director - Canada for Connect Commercial Real Estate.
Based in Vancouver, British Columbia, Monte provides daily news coverage of major Canadian commercial real estate markets, including Vancouver, Toronto, Montreal and Calgary. He has written about the real estate sector for various media outlets and Avison Young since the early 2000s.
In addition, he has covered sports, general news and business for several leading wire services and publications, including The Canadian Press, The Associated Press, The Calgary Herald, The Globe and Mail, Research Money, The Daily Oil Bulletin, Natural Gas World and The Toronto Star.
Monte is active in his community as a youth basketball coach and raises funds for such charitable causes as Movember.