British Columbia’s commercial real estate investment market is at its peak. According to the Avison Young Year-End 2010 BC Real Estate Investment Review, the first half of the year 2010 was record-setting, but the market didn’t lag after that and reached almost $2 billion in a 12-month period. The actual dollar volume of British Columbia’s commercial real estate investment market reached $1.946 billion in 2010.
The first half of the year ended with the record-setting dollar volume of $1.026 billion, while the second half came just slightly lower at $920 million. The 2010 number is a new provincial all-time record, easily surpassing the 2009 dollar volume of $1.36 billion as well as the 2008 dollar volume of $1.27 billion. The new record is substantially higher than the previous ceiling of $1.53 billion recorded in 2004.
Bob Levine, Avison Young’s Principal, said: “All-time high dollar volume and transaction levels were indicative of the low cost of debt and redeployment of capital accumulated in the wake of the financial downturn of 2008. Improved debt markets with fewer restrictions and reallocation of capital to targeted asset type investments propelled 2010 to new heights of commercial real estate activity in BC.” No single transaction twisted the dollar volume statistics in any asset class in 2010, unlike in 2009. The record sales can be attributed not only to the market’s reinforced underpinnings, but also to investors who showed much more confidence.
Of the total 99 transactions, 40 were of the retail asset class, which was the most active class for all types of buyers, bringing 59 per cent ($1.148 billion) of total dollar volume. The increase in retail asset sales dollar volume was more than double-fold from the 2009 number of $499 million.
Office sales made for 26 per cent (26 of 99) of total transactions, generating $484 million. This is down from 2009’s office sales dollar volume of $660 million, which was skewed heavily by the $297 million purchase of Bentall V. in 2009.
Industrial property in British Columbia took off in 2010, recording 33 transactions compared to 21 in 2009. The total dollar volume rose 58% to $313.5 million from $199 million in 2009.