Which Cities Have The Best Investments ?
Hello everyone and welcome back to another episode!
In today’s episode, your hosts Daniel Foch and Nick Hill discusses which cities have the best investment opportunities.
Here are some Key Takeaways:
There is a significant drop in transaction volumes (down 25% year-to-date, excluding a mega deal), and the impact of expected rate cuts on both buyers and sellers is noticeable.
Certain asset classes, like industrial properties and multifamily apartments, are seeing specific trends. For example, multifamily properties remain attractive due to the housing shortage, while industrial properties have experienced significant repricing. Suburban office spaces, on the other hand, face higher risks, reflected in their higher cap rates.
The industrial sector in Calgary remains tight, with limited vacancies. Notably, the acquisition of Rocky View Business Park by Concerts was the most significant investment sale in Q1. The office market in Calgary has reached a relative bottom, with limited sales activity but emerging interest in well-positioned B-class assets, potentially linked to office-to-residential conversion opportunities.
In Q1, retail sales were limited, with cap rates expected to align with bond yields. Office cap rates in Calgary ranged from 6.5% to 9.5%, with industrial cap rates between 5.5% and 7.5%, and retail and multifamily cap rates stabilizing similarly.
Edmonton's office market is flat, with cap rates comparable to Calgary. The industrial and retail sectors show consistent performance with cap rates ranging from 6% to 7.5%. Multifamily cap rates are slightly lower, indicating a stable market.
Rising financing costs and high construction expenses are hindering new large-scale development projects in Ottawa. Land values have dropped significantly from their 2022 peaks, and there is growing interest in office-to-residential conversions, supported by potential city initiatives.
The Halifax market is experiencing challenges, particularly in the office sector, where downtown vacancies are higher than suburban areas. However, industrial and retail sectors remain robust, with retail driven by grocery and pharmacy-anchored properties.
In Victoria, multifamily cap rates are as low as those in Vancouver, ranging from 3.5% to 4.75%. The office vacancy is on the rise, with cap rates around 6%. Despite traditionally low vacancy rates, the industrial sector has seen some relief with the completion of new projects.
Listen on Apple Podcasts:
 | A guest post by
|