"url": "https://www.altusgroup.com/services/wp-content/uploads/2019/06/altus_logo.png", "width": "", "height": "" } }, "datePublished": "2020-12-02", "dateModified": "2020-12-02" } Montreal commercial real estate investment down by 19% in 2020

By Erika Siegert, Senior Analyst, National Research Insights & Diana Pricop, Lead Commercial Researcher, Data Solutions | March 5, 2021

With strong transaction numbers registered throughout 2020, the Montreal commercial real estate market remained resilient amid continued uncertainties caused by the global pandemic. In total, 1,676 transactions took place, which was an 18% increase compared to the previous high of 1,426 transactions seen in 2019. However, the increased transaction activity did not equate to an increase in total investments, as 2020 reached a total of $7.2 billion in volumemarking a 19% decrease compared to 2019. This disparity was in part due to the lack of larger transactions that took place, together with the increase in investment activity for smaller sized multi-residential assets. Overall, the fourth quarter finished strong in Montreal with $2.3 billion in volume, down only 7% year-over-year.

Montreal property transactions - all sectors by year Q4 2021

As seen in prior years, the multi-residential asset class led the way in both transaction counts and investment value. A total of $2.3 billion was invested in multi-residential assets over 2020, however this was a 13% decrease compared to the previous year. Still, the 811 multi-residential transactions seen in 2020 accounted for 48% of all transaction activity. The only two sectors that experienced a positive yearoveryear increase in investments were the ICI Land and industrial asset classes, increasing by 15% and 5%, respectively. Growth in the industrial sector was expected given the record low industrial vacancy rates currently seen in the Montreal market, driving high demand for assets and development sites to increase warehouse supply. The office sector remains an enigma with only $1.1 billion registered in total investment volume for 2020, dropping 51% compared to $2.2 billion in 2019. However, office investors remain optimistic, believing that the pandemic will simply reshape the traditional office space.

According to Q4 2020 results from Altus Group’s Investment Trends Survey, Montreal sits among the top three major markets preferred by investors, alongside Toronto and Vancouver, despite experiencing negative momentum in the fourth quarter. Overall cap rates in the Montreal market compressed slightly, with single-tenant industrial and suburban multiple-unit residential decreasing while other asset classes remained stable. With the market still feeling the impact of pandemic changes, uncertainties continue to push investors towards industrial assets with potential for growth. 

Montreal overall capitalization rates - Q4 2020

Notable Q4 2020 investment transactions:

Groupe Montoni  Summit Industrial Income REIT Portfolio, Montreal  Industrial  
This 11building industrial portfolio consisting of over one million square feet was acquired by the Summit Industrial Income REIT. This 50% interest acquisition by Summit completes their sole ownership of these assets. The portfolio closed in October for approximately $88 million, representing an adjusted aggregate price per square foot of $169These light industrial buildings had significantly low vacancies at the time of the sale, with a weighed average lease term of approximately 8.7 years. 

3000-3430 Jean-Yves Street, Kirkland  Residential Land  
Closing at $19 million, the 50% interest sale of this 36.5acre site represented the most significant residential land transaction in the fourth quarter. The buyer was Broccolini Real Estate Group, who now forms a 50/50 partnership with the seller RioCan REIT. This joint venture will see this underutilized open-air retail asset developed into a mixed-use project, which will include residential, retail and office componentsThe group anticipates beginning construction of the future transit-oriented development by 2022, which will eventually be complemented by an adjacent REM light-rail station in 2024.  

Le Cartier, Island of Montreal  Apartment 
Situated in Golden Square Mile, this 30-storey182-unit luxury apartment building is one of the most prominent in Montreal, and the largest multi-family asset traded in 2020. Acquired by the Benvenuto Group for $107 million, Le Cartier is famously known as once being the tallest residential building in Canada, as well as the first building to feature a facade made entirely of glass and aluminum.  

Le Art, Ville-Marie  Apartment 
This 138-unit apartment building located in downtown Montreal was built in 2018 by the vendor, Groupe Daca. Purchased by Centurion Apartment REIT for $72.4 million, this luxury apartment building was the third largest multi-family transaction seen this year. 

2525A-2525C du Havre-des-Îles Avenue, Laval – Apartment 
This 400-unit apartment complex located on the waterfront in Laval traded for a $71 million. The complex, built in 1964, comprises two 15-storey apartment buildings and one 13-storey building with total gross floor area of approximately 570,000 square feet. 

Montreal property transactions by asset class 2019 vs 2020

With uncertainties continuing into 2021, landlords, tenants and investors continue to adapt to new realities. Although the bid-ask gap between buyers and sellers remains, investors will continue to seek quality assets in the Montreal market and capitalize on low interest rates. Despite unprecedented challenges, Montreal proved once again to be a desirable destination among commercial real estate investors. With the strong and encouraging finish to the year, the Montreal market is poised for positive momentum moving forward.

 

View more insights >

 

ABOUT DATA SOLUTIONS

Data Solutions connects the Canadian real estate industry through the delivery of data with unparalleled breadth, integrity and relevance.  We cover new homes, investment transactions and commercial market inventory in key markets, and also provide intelligence on the national housing market and consumer home buying and borrowing patterns.

Our solutions are used by real estate industry stakeholders to gain market intelligence, identify and validate opportunities, benchmark, strategically plan, manage risk and more.

Data Solutions is part of Altus Analytics, the software and data solutions business of Altus Group, where our focus is to empower real estate clients and partners to work collaboratively to enhance decision making, drive performance and optimize transactional efficiency. Our solutions enable firms to better organize and manage data and connect with the right information and analytics to help them gain a complete picture of real estate assets, portfolios and transactions.

For more information on Data Solutions, please visit www.altusgroup.com/data.

ABOUT ALTUS GROUP LIMITED

Altus Group Limited is a leading provider of software, data solutions and independent advisory services to the global commercial real estate industry. Our businesses, Altus Analytics and Altus Expert Services, reflect decades of experience, a range of expertise, and technology-enabled capabilities. Our solutions empower clients to analyze, gain insight and recognize value on their real estate investments. Headquartered in Canada, we have approximately 2,200 employees around the world, with operations in North America, Europe and Asia Pacific. Our clients include some of the world’s largest real estate industry participants across a variety of sectors.  Altus Group pays a quarterly dividend of $0.15 per share and our shares are traded on the TSX under the symbol AIF.

For more information on Altus Group, please visit: www.altusgroup.com

MEDIA CONTACT:

Elizabeth Lambe
Manager, Communications
Altus Group
(416) 641 9787
elizabeth.lambe@altusgroup.com

Get in touch

Erika SiegertSiegertresearch

Senior Analyst, National Research Insights, Data Solutions

Related posts

close
close
forumRequest a demo
close
close

Thank you for contacting us. we will get back to you shortly!

This site uses cookies to improve your user experience. By using our website, you are agreeing to our use of cookies.
Click here for more information.