Canadian commercial real estate investment nosedived in the first quarter of 2024, says a Morguard report.

Investment sales sank 55.3% quarter-over-quarter to $2.6 billion, marking a four-year quarterly said the firm. The report covers investment-grade properties that sold for $10 million or more in Metro Vancouver, Calgary, Toronto, Ottawa and Montreal areas.

Residential multi-unit sales fell 50.2% quarter-over-quarter and matched a four-year low. Industrial property sales plunged 55% quarter-over-quarter, while office sales volume plummeted to a seven-year low of $282.8 million and retail property sales declined 55%.

The retail drop was exacerbated due to the sale of partial interests in the Vaughan Mill Centre and what is now known as the Shops at Pickering City Centre.

Capital flow into Canadian commercial real estate began to slow significantly in 2022 Morguard attributed the slowdown to a combination of the rising cost of debt, greater economic uncertainty and a wider bid-ask gap between buyers and sellers.

“Often, vendors were unwilling to meet the pricing objectives of buyers when disposing of assets, despite increased downward valuation pressure,” said Toronto-based Morguard.

The report was headed by Keith Reading, Morguard’s senior research director.

Get Ready for Canada Kick-off

Connect CRE will hold its inaugural Canada Kick-off Event in Toronto on June 11. This will be Connect’s first commercial real estate industry conference in Canada. Panelists will include Syl Apps, managing director and co-country head for Hines; Lindsay Brand, chief investment officer at Concert Properties; Mark Kenney, CEO of Canadian Apartment Properties REIT; and, Marie-France Benoit, Avison Young’s director of Canadian market intelligence. Come and gain insights from industry leaders on such matters as buyer sentiment amid a lower interest-rate environment, cross-border commercial real estate transaction trends, and investors’ outlook for 2024 and beyond. Register today.