Strong demand combined with less available product favours B.C. commercial real estate vendors
Recently released, Avison Young’s mid-year report shows a 42% decline in commercial real estate sales in B.C. as compared to mid-year 2010 volumes. Due to strong 2010 demand, purchasers are now finding less available product thus creating a position of strength for vendors in 2011. Although the report focuses on transactions greater than $5 million, these trends are visible in smaller transactions within the B.C. market as well.
Factors, including a stable economy and banking system inspiring investors, historic low interest rates, a lack of available quality commercial real estate and strong demand, are driving prices up and yields down. That being said, vendors, in Vancouver especially, are reluctant to sell as similar risk and return investments are hard to find. Those willing to sell, however, will find “buyers of all types working to meet their pricing expectations.”
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