Canadian Commercial Real Estate Investors Heading South to Buy or Lease

Posted February 2, 2014

In California, Commercial, Industrial, investing, Los Angeles, Office

Recovery has been very slow in the United States commercial real estate office and industrial markets, but falling vacancy and limited new development, from constrained construction financing, should push rents up in 2014. This will make the U.S. market more attractive to Canadian investors.

Canadian markets have slowed because of overbuilding and weaker demand although their vacancy rate currently is much lower than the United States at 8.3 percent for office and 4.6 percent for industrial. This will change because Canada has 27 million square feet of new office space in the pipeline that will force a slowdown in absorption.

The vacancy in the Canadian industrial market has actually increased slightly to 4.6 percent from 4.4 percent at the end of 2012. The Canadian market is stable and has plateaued a bit because it bounced back from the recession much faster than the United States so there’s more room for growth in the U.S. market.

Canada leads, but with a significant margin in its investment in American commercial real estate for sale and while they prefer Canadian markets for common currency valuation, tax reasons, etc., they won’t hesitate coming to the United States. I’ve personally seen much Canadian presence in Los Angeles commercial real estate for sale and with Santa Monica commercial real estate for lease. I’ve seen little with Columbus commercial real estate for sale or lease so they’re sticking with U.S. primary markets

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