Commercial real estate sales plunge in Lower Mainland compared with a year ago: REBGV

Lower Mainland land transactions see the steepest year-over-year decline, while total value of office and retail deals drops 72.6 per cent

Glacier Media Real Estate
June 18, 2019

commercial main
A Main Street commercial building with residential suites sold for $5.9 million in early 2019 by Macdonald Realty. Image supplied.

Compared with the busy first quarter of 2018, commercial real estate sales in the Lower Mainland fell significantly in Q1 2019, according to data released June 18 by Commercial Edge, the Real Estate Board of Greater Vancouver’s (REBGV) commercial real estate sales tracking system.

There were 318 commercial real estate sales in the Lower Mainland in Q1 2019, down 42.1 per cent compared with the 549 sales in Q1 2018, reported Commercial Edge.

Deal values also declined year over year, as the total dollar value of commercial real estate sales in the Lower Mainland was $1.531 billion in Q1 2019, a 57.3 per cent decline from the $3.587 billion in Q1 2018.

Ashley Smith, REBGV president, said, “Much like we’ve seen in the residential market, there’s been reduced demand in the commercial real estate market through the first quarter of the year. With housing inventory at a five-year high and more supply on the way, the development community appears to be taking a more cautious approach with new acquisitions and projects at the moment.”

REBGV commercial sales Q1 2019
Source: REBGV Commercial Edge

Looking at individual sectors, land sales took the biggest hit, with just 87 commercial land sales in Q1 2019. That's a 63.1 per cent decrease from the 236 land sales in Q1 2018.

Multi-family transactions also saw a slow first quarter of the year – although as a market with fewer sales, this sector is subject to wider fluctuations. There were eight multi-family land sales in the Lower Mainland in Q1 2019, according to Commercial Edge, which is down 55.6 per cent over the 18 sales in Q1 2018.

The office and retail market was a little more active. The total of 131 office and retail sales in the Lower Mainland in Q1 2019 is 26.8 per cent lower than the 179 sales in Q1 2018. However, the overall value of this year’s Q1 transactions was much lower than those of one year previously. The total dollar value of office and retail sales was just $367 million in Q1 2019, a 72.6 per cent decrease from $1.339 billion in Q1 2018.

The sector to fare best in the first three months of the year was the industrial market. There were 92 industrial land sales in the Lower Mainland in Q1 2019, which is down 20.7 per cent from the 116 sales in Q1 2018. That’s the smallest percentage decrease in activity of all the sectors, and this decline was made up for by higher transaction values. The dollar value of industrial sales was $392 million in Q1 2019, a 35.1 per cent increase over $290 million in Q1 2018.

Joannah Connolly is editorial director of Glacier Media Real Estate, Glacier Media's real estate division. Joannah writes and curates real estate news for Glacier Media's local newspaper websites, including the Vancouver Courier, Times Colonist, Prince George Citizen, North Shore News, Burnaby Now, Tri-City News and others. She also writes and oversees editorial content in Real Estate Weekly Homes, West Coast Condos & Homes, Western Investor and Glacier's special real estate publications. A dual Canadian-British citizen, Joannah has 23 years of journalism and editing experience in Vancouver and London, with a background in construction, architecture, healthcare and business media. Joannah has appeared on major local TV outlets as a real estate commentator, has moderated and spoken on various industry panels, and spent two years hosting the Real Estate Therapist talk radio show on Vancouver's Roundhouse Radio.
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