January 2022: Commercial Real Estate News Roundup

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The real estate market has been generally unstable almost everywhere over the course of the pandemic, but it’s fair to say that Ontario real estate has been particularly volatile. 

Yet there are many signs that the area’s real estate market will only improve throughout 2022. 


Here’s the latest news roundup for commercial real estate in Ontario. 


Report: Canada’s Real Estate Market Poised for Recovery


The 24th annual report from Morguard on Canadian real estate found that investment performance stayed resilient throughout 2021 for both industrial and multi-suite residential rental properties. 


Called the 2022 Canadian Economic Outlook and Market Fundamentals Report, it provides a detailed analysis of the 2021 Canadian real estate market along with trends to pay attention to over the coming year. 


According to the report, the office and retail real estate sectors showed signs of stabilization thanks to efforts to reduce the spread of COVID-19 as well as the eventual easing of some of the country’s restrictions. 


As a result, the report predicts that:


  • The multi-suite residential rentals market will slowly improve in 2022, as demand is supported by rising immigration and easing of some pandemic restrictions.

  • Industrial real estate is likely to keep performing in 2022, which is parallel with the trend of near record-low availability rates over the last couple of years.

  • In the short term, retail property sector fundamentals should gradually stabilize


Crestpoint Buys Canada’s Largest Fulfillment Centre: Amazon Ottawa


In a deal indicative of the improving climate for commercial real estate in Canada, Crestpoint Real Estate Investments Ltd. recently bought the largest fulfillment centre ever completed in Canada, Renx.ca reported. 


The multi-level Amazon facility in southern Ottawa has a whopping 2.8-million-square-feet, for which Crestpoint paid $494 million. Crestpoint will have a 90.1 per cent share of the building, and developer Broccolini will retain a 9.9 per cent share. 


The facility includes more than 450,000 square feet, and was recently valued at about $200 million when Broccolini started the project in summer 2020.


The facility is located in Barrhaven, an Ottawa suburb, and utilizes the latest tech, and with the capacity to handle more than 100,000 packages every day. 


The project was delivered in late 2021 and is leased to Amazon for 20 years. 


Toronto Investment in London Shows Strength of City’s Industrial Market


The industrial real estate market in London is so hot that a January 2022 report from commercial realty firm CBRE found that the vacancy rate was a tiny 0.8 per cent. In addition, the report said that there was only 328,000 sq. ft. of small- to mid-sized spaces still available.


That’s why Toronto-based Nexus Real Estate Investment Trust has said it’s going to invest over $85 million in London during 2022 and 2023. The plan is to buy industrial space. Nexus already invested over $56 million in 2021, The London Free Press reported. 


“London is a fantastic market. There has been a migration from Toronto to secondary markets due to rents and that, combined with low vacancies, bodes well for the future,” said Kelly Hanczyk, chief executive of Nexus REIT. “There is a significant demand for industrial space across Canada. Toronto is very pricey and secondary markets such as Cambridge, London and St. Thomas and Sarnia are all seeing industrial spaces snapped up rapidly. I don’t see that changing anytime soon.”

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