Montreal commercial real estate investment activity has slowed down, says a new Altus report.

Year-to-date transaction dollar volume fell 44% year-over-year by the third quarter to $5.7 billion.

“High interest rates and inflationary pressures have softened demand as investors continued through the price discovery phase with heightened caution,” stated Altus in the report.

According to the company, Montreal has a negative momentum ratio, indicating that the market remained favourable to sellers. Cap rates continued to trend higher for all assets except top-tier malls. Cap rates continued to trend higher for all assets except top-tier malls.

Land investments fell 16% to $858 million. Although $2 billion in apartment sales were completed, that total represented a 39% year-over-year decline.

Office investment dollar volume decreased 53% year-over-year to $498 million as the sector saw no project completions in the third quarter; meanwhile, 1.6 million square feet was under construction with 70% preleased.

Year-to-date industrial dollar volume dropped 58% to $1.5 billion at the same point in 2022. Retail investments dropped 31% year-over-year to $728 million.

The report was authored by Altus analysts Jennifer Nhieu and James Sosner.