Will Toronto Continue to Be a Leader for a Commercial Investment Property?
Toronto is Canada’s largest city and the country’s economic and cultural hub. In recent years, the Greater Toronto Area has seen unprecedented growth in population and real estate to facilitate this expansion.
However, recent shifts in the global economy and political climate have made some investors wary of purchasing commercial real estate.
Despite the headlines and uncertainties in the global market, Toronto has continued to see rapid economic expansion in recent years. Toronto is Canada’s number one economic hub and a top contender with the largest US cities in terms of GDP.
The Greater Toronto Area’s GDP has increased consistently by a rate of 2.4% since 2009. All projections show that this increase will continue into 2020 and for years to come. The growth of the GTA has out-performed the national average of 1.8%.
In recent years, Toronto has gained the attention of multinational corporations like Google, which planned to launch a multi-billion dollar project to build a smart city on Toronto’s waterfront. Toronto was also a major contender in the bid for Amazon’s HQ2, being the only Canadian city on the list and placing in the final 20 cities alongside Los Angeles, New York, and Chicago.
The City of Toronto is the fastest growing city in both Canada and the US. Toronto gained over 75,000 new residents in 2018 alone, which is three times more than the growth of the second city in the continent, Phoenix, Arizona.
Toronto’s Prospering Real Estate Market
With such rapid growth in GDP and population comes an increased demand in commercial and private housing. Toronto’s population and business growth have impacted commercial properties especially well.
There is an extremely high demand for commercial real estate in the city, with constant development trying to catch up with the economic and population explosion. The vacancy rate in Toronto is 6.8%, the lowest rate in the country only after Vancouver.
Toronto’s low commercial real estate vacancy rate, coupled with its rapid increase in population and jobs, makes the city a highly valuable place for a commercial investment property. Toronto has no shortage of prospering businesses and startups that will rent property in the city.
Toronto’s vast network of businesses, institutions, and infrastructure facilitate business on a global scale. Because of this, Toronto’s market is perfectly suited for a commercial investment property.
A commercial real estate broker will find no shortage of potential tenants for commercial property. Toronto is home to many new businesses, including tech startups and industrial businesses that need office space.
There is an increasing trend in mixed-use office space in Toronto as a result of limited land availability. Mixed-use offices are office spaces that are located within residential buildings or other non-industrial areas.
One such space is Union Park, a 3.5 billion dollar project that will add 3.3 million square feet of mixed-use office space right next to Toronto’s CN Tower. The project will also add 800 residential units and substantial public park space to the region.
Many tech startups seek units in mixed space buildings. The collaborative and social nature of e-commerce is better facilitated in large, urban environments.
Despite unprecedented projects like Union Park, the vacancy rate for industrial units remains low. The majority of the units under development in Toronto are leased before construction is even completed.
Toronto is Great for Businesses of All Sizes
People typically think of San Francisco or New York when they think of tech startups, the world’s largest tech companies are based in those cities after all. Toronto is—by no fault of its own—simply overlooked because it’s right above the world’s largest economy.
In reality, Toronto is in the same playing field with the Bay Area and other US tech hotspots. There are many reasons for this, one of them being that Toronto is a perfect place for companies to hire high skilled employees.
Toronto is home to many world-class universities that provide an endless supply of highly qualified talent for companies to hire. The University of Toronto’s engineering and computer science programs are both ranked top ten in the world in their fields.
Toronto commercial real estate is also substantially less expensive when compared to New York or Bay Area office space, making it an affordable option for tech startups looking for the benefits of an international city.
The Canadian Government provides many social services to its citizens like free healthcare and heavily subsidized university education that makes Canada an enticing option for foreign workers or entrepreneurs.
The Canadian Government also provides up to $1 million dollars in loans for small businesses via its Canada Small Business Financing Program—of which many small businesses are eligible to apply for when seeking financing.
The Time Is Now for Toronto Commercial Investment Properties
Despite being overshadowed by its loud neighbor to the south, Toronto is a world-class city with an extremely healthy economy and real estate market. There are plenty of opportunities for a Toronto investment property broker to make safe and profitable investments in Toronto.
All predictions show that Toronto will continue to grow as one of North America’s largest economies and real estate markets. With Toronto’s low vacancy rates, an investor will have no trouble finding highly qualified and competitive tenants for any type of commercial real estate.
Are you an investor interested in Canada’s largest city? Our expert team of Toronto commercial real estate brokers at CHI Real Estate can help you diversify your portfolio with profitable and safe real estate investments.
Don’t hesitate to contact our team if you are interested in learning more about commercial investment properties for sale, if you want to work with Toronto’s most recognizable commercial real estate brokers, or if you have any questions at all. A member of the CHI Real Estate team is here to help you.