Canadian private investors remained the most active commercial real estate buyers in the first quarter of 2024, says a new Avison Young report.

Private Canadian organizations accounted for 73% of deals, while domestic institutional investors participated in just 8%. Owner-users ranked second, completing 12%. Other investors, including developers, foreign buyers and governments represented just 7%.

The report’s lead author, Matthew McWatters indicated that a wide bid-ask gap is delaying and limiting transactions.

“Longer price discovery periods between the buyers and the sellers remain a key factor in the increased amount of time required to close transactions, and the lack of investment trades,” wrote McWatters, who heads Avison Young’s valuation, advisory and tax services practice in Canada.

But Canadian private investors are playing second fiddle to foreign buyers on large transactions in Vancouver, said Jessica Toppazzini, Avison Young’s managing director in the city.

“While transaction volume is down overall, Canada still remains attractive to foreign investors given our strong fundamentals and discipline, secure banking and a strong economic outlook in GDP, population growth and employment,” she said.

Market sentiment remained aligned on industrial and multi-residential investments. Meanwhile, the retail market remains active due to strong investor demand and competitive market capitalization rates.

But the office bid-ask gap remains widespread, Time will tell whether a recent uptick in activity can narrow the gap, wrote McWatters.

(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 market sentiment amid a lower interest-rate environment, cross-border commercial real estate trends, and the outlook for 2024 and beyond. Register today.)