Commercial real estate begins to find its footing in Q3 2023
While transaction volumes are decidedly down from the third quarter (Q3) of 2023, the year-over-year figures mask what appears to be an emerging pattern of stability coming back into the Lower Mainland's commercial real estate market.
There were 325 commercial real estate sales in the Lower Mainland in Q3 2023, a 24.6 per cent decrease from the 431 sales recorded in Q3 2022, according to data from Commercial Edge, a commercial real estate system operated by the Real Estate Board of Greater Vancouver (REBGV). The Q3 2023 figure is up, however, relative to Q2 2023, by 7.6 per cent, suggesting that demand is beginning to re-emerge in the market.
The total dollar value of commercial real estate sales in the Lower Mainland was $1.823 billion in Q3 2023, a 20.2 per cent decrease from $2.285 billion in Q3 2022.
"There’s a bottom to every cycle, and while it’s too soon to say for sure that the third quarter of 2023 is definitively it, the increase in transaction levels relative to the second quarter of 2023 suggests we may be nearing an inflection point,” Andrew Lis, REBGV’s Director of Economics and Data Analytics, said. “If Q4 data remains at levels near or above these Q3 data, I think this might reflect a shift in sentiment towards a more positive outlook for 2024.”
Q3 2023 activity by category
Land: There were 88 commercial land sales in Q3 2023, which is a 42.5 per cent decrease from the 153 land sales in Q3 2022. The dollar value of land sales was $814 million in Q3 2023, a 49 per cent decrease from $1.597 billion in Q3 2022.
Office and Retail: There were 134 office and retail sales in the Lower Mainland in Q3 2023, which is down 22.5 per cent from the 173 sales in Q3 2022. The dollar value of office and retail sales was $285 million in Q3 2023, a 22.3 per cent decrease from $367 million in Q3 2022.
Industrial: There were 92 industrial land sales in the Lower Mainland in Q3 2023, which is a 3.2 per cent decrease from the 95 sales in Q3 2022. The dollar value of industrial sales was $592 million in Q3 2023, a 132.2 per cent increase from $255 million in Q3 2022.
Multi-Family: There were 11 multi-family land sales in the Lower Mainland in Q3 2023, which is up 10 per cent from 10 sales in Q3 2022. The dollar value of multi-family sales was $132 million in Q3 2023, a 131.6 per cent increase from $57 million in Q3 2022.