Edmonton commercial real estate market hits $1.46 billion in sales by mid-2022: report

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Edmonton’s commercial real estate market saw an increase in investment activity during the first half of 2022, according to a mid-year market report.

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Total investment in commercial real estate jumped by more than $930 million to $1.46 billion in the second quarter of 2022, according to the report by intelligence firm The Network.

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President and owner Nathan Gettel attributed part of the gain to lower interest rates to borrow money sooner as well as out-of-province investments.

“We’ve seen a lot of buyers from British Columbia and Ontario coming to Alberta because those markets are starting to have quite high prices,” he said. “They see quite a bit of upside in Alberta right now, so that’s contributing to a lot of sales and higher prices.”

Overall, year-over-year sales are up more than 120%, the report says, highlighting a “renewed appetite” for industrial properties, multi-family properties and undeveloped land compared to in the first trimester.

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Investment in industrial property sees a “huge” increase

The company said there was a noticeable year-over-year increase in the sale of owner-used warehouses. These owner-user properties accounted for 55 of 79 deals in the first half of 2022 and $170.8 million in sales, the company added, while eight deals involving sole-tenant warehouses accounted for more than $254.5 million. over the same period.

Overall, investment in industrial warehouses saw a “huge quarter-over-quarter increase” of just under $440 million across 44 deals, according to the report.

Gettel said Edmonton has a strong industrial sector and properties in the city have attracted interest from large real estate investment trusts (REITs).

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“It’s a good investment in Alberta,” he added.

Investment in multifamily properties also saw a marked rise in the second quarter, the report added, noting 24 deals closed for more than $185 million, nearly double the value of sales in the first quarter.

At the end of June, there were 42 transactions involving multi-family properties, representing more than $397.8 million in sales, the company reported, adding that townhouses were of particular interest, with three selling for more than $25 million. dollars each.

News of the recovery in the multi-family asset class follows a reported slowdown in the residential market which saw unit sales in July fall 10.3% from the same month a year earlier and 23 .8% compared to June.

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Sales of single-family homes in July fell 24.4% from the previous month, while sales of condos fell 22.1% and duplexes 21.3% month over month.

Commercial condo sales up from ‘shy’ first quarter

The first quarter of 2022 saw $78.8 million in first-quarter land sales — a figure that roughly doubled to around $159 million in the second quarter, the company reported.

Mid-year 73 deals accounted for $238 million in sales, the company added, breaking a four-year record set in mid-2019 that hit $233.4 million and a reported two-year decline. during the first half of 2020 and 2021.

The company cites the $60 million purchase by Air Products Canada Ltd. of 150 acres in northeast Edmonton as a “remarkable transaction” in 2022 so far.

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As of mid-2022, there were $53.5 million in commercial condo sales from 83 transactions, nearly double the 43 transactions seen in a “lackluster first quarter,” according to the report.

In early 2022, increasing cases of COVID-19 were stimulated by the Omicron variant. The effects of the COVID-19 pandemic may have caused investors to turn away from the market during this first quarter, Gettel said.

“Those sales started to flow into the second quarter,” he added.

The first half of the year also saw strong demand for industrial condos, the company reported, which accounted for 65% of 83 deals in this asset class (compared to about half of deals in previous years), and more of $33.7 million in Sales.

However, the report says there were only $4.3 million in retail condo sales at the end of June, compared to about $22 million in mid-2021.

— With files by Kellen Taniguchi

[email protected]

@hamdiissawi

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