We released our quarterly report!
It's a 1.5 minute read - but here are the coles notes:
Cap rates have edged higher YoY, reflecting the 2025 rate environment with debt currently sitting around 3.5% for a 5-year CMHC mortgage and ~4.1% for a 10-year. Although yields have come down (recently), the market took time to digest the move away from near-zero percent rates. Also note - higher cap rates reflect a larger share of building sales with rents closer to market in 2025.
Only 10 transactions closed across the GTA in Q3 (10+ units), which resulted in a handful of deals having an outsized impact on the data set.
Why the reduced transaction volume? There are a few reasons, but a big one was the Canadian federal election.
Deals generally take 4 - 6 months from signed listing to close. But 4 - 6 months before mid-Q3, we were about to vote for a new prime minister - ie a lot of uncertainty and owners delayed decisions.
So in Q3 deal volume in the GTA was a mere $318M. We have already seen deal volume surge back in Q4. For instance this month (outside of the report's data set), we've already seen $187M in closings or roughly 59% of Q3s entire volume.
There continues to be a tremendous amount of liquidity from both private and non-profit purchasers. Institutional buyers - who were less active than usual in the first half of the year - have been scaling back up.
Based on our teams activity - and what we're seeing in the market - we expect a big fourth quarter.
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