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Edmonton Commercial Real Estate Market Update
Commercial sales and leasing statistics reported by the Edmonton Real Estate Board show a slow steady decline in the commercial real estate marketplace since the highs of 2006 and 2007.
Land Sales
Land sales peaked in 2006, and have declined every year to a low in 2009 of around 18% of the unit volume seen in 2006. Dollar volume in 2009 was 27% off the highs and this year it is at 32% of the highs. This is quite a drop, but to be expected as land was the subject of much speculation (as it always is) during the boom.This year land sales are up a third over last year so there are signs the market may be bottoming out. Sales/listings ratios are around 11% so there is plenty of product.
Investment
Investment sales have seen the same trend as land, bottoming out in 2009, but at a more respectable 60% of the unit volume seen in 2006. This year investment sales are up 16% from last year to date. Dollar volume in the low of last year was a respectable 70% of the 2006 highs and this year’s dollar volume is actually higher than 2006’s although a few big sales can skew the numbers. Sales/listings ratios have been around 18-19% the last couple years, again indicating a lot of product on the market.
Multifamily
Its starting to sound like a broken record but same story here with sales bottoming out in 2009 at 20% of the unit volume reported by the Edmonton Real Estate Board in 2006. The numbers are up slightly this year. Sales/listings ratios have been pretty steady at 25% for the last three years, again indicating more supply than demand. Dollar volume has been steady for the last two years at about a third of the 2006 high.
Leasing
Lease volume has been the one bright spot, with reported leases up 4 to 6 times the volume seen in the boom years of 2006 and 2007. This is most likely a reflection of the high numbers of people choosing to own their own commercial real estate in the boom years, and who are now being replaced by the business person of today who cannot afford the purchase or the business risk of owning in this environment. Leases/listings ratio has been hovering around 33% for three years now, indicating somewhat of an excess of product available, but certainly not a large oversupply.
Land Sales
Land sales peaked in 2006, and have declined every year to a low in 2009 of around 18% of the unit volume seen in 2006. Dollar volume in 2009 was 27% off the highs and this year it is at 32% of the highs. This is quite a drop, but to be expected as land was the subject of much speculation (as it always is) during the boom.This year land sales are up a third over last year so there are signs the market may be bottoming out. Sales/listings ratios are around 11% so there is plenty of product.
Investment
Investment sales have seen the same trend as land, bottoming out in 2009, but at a more respectable 60% of the unit volume seen in 2006. This year investment sales are up 16% from last year to date. Dollar volume in the low of last year was a respectable 70% of the 2006 highs and this year’s dollar volume is actually higher than 2006’s although a few big sales can skew the numbers. Sales/listings ratios have been around 18-19% the last couple years, again indicating a lot of product on the market.
Multifamily
Its starting to sound like a broken record but same story here with sales bottoming out in 2009 at 20% of the unit volume reported by the Edmonton Real Estate Board in 2006. The numbers are up slightly this year. Sales/listings ratios have been pretty steady at 25% for the last three years, again indicating more supply than demand. Dollar volume has been steady for the last two years at about a third of the 2006 high.
Leasing
Lease volume has been the one bright spot, with reported leases up 4 to 6 times the volume seen in the boom years of 2006 and 2007. This is most likely a reflection of the high numbers of people choosing to own their own commercial real estate in the boom years, and who are now being replaced by the business person of today who cannot afford the purchase or the business risk of owning in this environment. Leases/listings ratio has been hovering around 33% for three years now, indicating somewhat of an excess of product available, but certainly not a large oversupply.
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