Edmonton commercial real estate market hits $1.46B in sales mid-2022: report & More Latest News Here – Up Jobs

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Edmonton’s commercial real estate market saw a boost in investment activity during the first half of 2022, according to a mid-year market report.

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Total commercial real estate investment jumped by more than $930 million to $1.46 billion in the second quarter of 2022, said the report from intelligence firm The Network.

President and owner Nathan Gettel attributed part of the gain to lower interest rates for borrowing money earlier on as well as investment from outside the province.

“We saw a lot of B.C. and Ontario purchasers coming to Alberta because those markets are starting to get priced quite high,” he said. “They see quite a bit of upside in Alberta right now, so it’s contributing to a lot of sales and higher prices.”

Overall, year-over-year sales increased more than 120 per cent, the report said, pointing to a “renewed appetite” for industrial property, multi-family properties and undeveloped land compared to the first quarter.

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Industrial property investment sees ‘enormous’ increase

The firm said there was a notable year-over-year increase in the sale of warehouses used by owners. These owner-user properties accounted for 55 of the 79 transactions in the first half of 2022 and $170.8 million in sales, the firm added, while eight transactions involving single-tenant warehouses accounted for more than $254.5 million over the same period.

Investment in industrial warehouses overall saw an “enormous quarter-over-quarter increase” of just under $440 million over 44 transactions, the report said.

Gettel said Edmonton has a strong industrial sector, and properties in the city have drawn interest from large real estate investment trusts (REITs)

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“They’re a good investment in Alberta,” he added.

Investment in multi-family properties also saw a marked climb in the second quarter, the report added, noting 24 transactions that closed for more than $185 million — almost double the value of sales in the first quarter.

By the end of June, there were 42 transactions involving multi-family properties, accounting for more than $397.8 million in sales, the firm reported, adding that row house properties were of particular interest with three selling for more than $25 million each.

News of the upswing in the multi-family asset class follows a reported downturn in the residential market that saw unit sales in July fall 10.3 per cent compared to the same month the year before, and  fall 23.8 per cent compared to June.

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Single-family home sales in July fell 24.4 per cent compared to the month prior, while condo sales dropped 22.1 per cent and duplex units fell 21.3 per cent month-over-month.

Commercial condo sales up from ‘shy’ first quarter

The first quarter of 2022 saw $78.8 million in land sales in the first quarter — a figure that roughly doubled to about $159 million in the second quarter, the firm reported.

By mid-year, 73 transactions accounted for $238 million in sales, the firm added, breaking a four-year record set in mid-2019 that reached $233.4 million and a two-year slump reported in the first halves of 2020 and 2021.

The firm lists Air Products Canada Ltd.’s $60-million purchase of 150 acres in northeast Edmonton as a “stand-out transaction” in 2022 thus far.

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By mid-2022, there was $53.5 million in commercial condo sales over 83 transactions — nearly double 43 transactions seen in a “lackluster first quarter,” the report said.

Early 2022 saw mounting cases of COVID-19 spurred by the Omicron variant. The effects of the COVID-19 pandemic may have led investors to shy away from the market in that first quarter, Gettel said.

“Those sales started trickling in towards the second quarter,” he added.

The first half of the year also saw a high demand for industrial condos, the firm reported, which accounted for 65 per cent of 83 transactions in that asset class (compared to about half of transactions in previous years), and more than $33.7 million in sales.

However, the report said there was only $4.3 million in retail condo sales by the end of June, which is down from about $22 million in mid-2021.

— With files from Kellen Taniguchi

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