CRE Market Segment – Fall 2022 Summary

• Commercial Office vacancy decreased in the National markets. This implies optimism in the office sector for Simcoe County, where the suburban office was once considered a secondary option; we see suburban vacancy rates are almost universally lower than downtown. Lower asking rents, free parking, and shorter commutes all contribute to the appeal of the suburbs. 

• Agriculture is a major player in the County of Simcoe’s regional economy and Agri properties continue to “spark” interest for investors and sellers alike. With an up-and-coming generation of skilled   Agri specialists, this is one area to pay attention to. 

• Multi-family is unquestionably a hot news story with the rising rents and housing supply shortfalls constantly being pushed in the mass media. Simcoe County, namely the urban centres of Barrie and Orillia, is following the trend across the Nation with a serious shortfall of inventory in this asset class.  

• As media reports abound of the probability of a recession with the next rate hikes, we brace ourselves for the chill of the winter and the market. According to Finance Minister, Chrystia Freeland the country’s economy is in for another hard drop, but Simcoe County’s growing “micro-economy” shows much promise. In real estate, they always say the biggest factors are location-location-location. Simcoe is nicely situated to not only survive the anticipated doom and gloom environment but to thrive as business migrates north. It’s a great time to relocate your business to the land of promise!   

Opportunities in this kind of environment that we’re already helping our clients take advantage of: 

• It’s an ideal time to renegotiate leases with commercial tenants. Tenants are seeking to purchase their own buildings, particularly in industrial zones. With short supply and the cost of finance increasing, we see our clients more willing to fix their costs over the next 3-5 years to pull through the uncertainty of the mortgage market. 

• With financing costs increasing for the buyer and pricing expectations remaining the same for the seller negotiations are healthier than the frenzy of the market in the first half of the year.  Creative terms that we see in this market create a win-win for both parties. 

• Long-time real estate holders looking for an exit strategy now have a realistic option to sell and invest in traditional low-risk tools like GIC’s where they get a rate comparable to the cap rates that were common in 2021. 

Maven CRE helps clients develop their goals and then matches those goals with strategies and market availability. When purchasing property in today’s market, discovering the right opportunity requires looking at more deals when they hit the market and be prepared to move forward quickly with a strong bid. Maven Commercial Real Estate helps build your plan and helps you understand your financing options, which is vital for getting a property that’s the right fit. Our purpose is maximizing your returns  and realise your long-term business goals.