Press Release
Robust GTA Land Sales Signal Optimism for Life After COVID-19
September 22, 2020
Media Contact
Ryan Starr
Communications & Media Manager

Demand has remained strong for industrial and residential sites across the region
Land sales are an indicator of where the commercial real estate market is headed. In the Greater Toronto Area, CBRE’s advisors say they’ve seen few signs of activity slowing despite the ongoing pandemic. In fact, industrial and residential land transactions are nearly as robust as they were during the same period in 2019, with pricing remaining firm, suggesting investors are confident about a return to normal and a bright future for the region. Industrial evolution There was $342.2 million in industrial land sales in the GTA between April and August 2020, with 507 acres transacted, according to CBRE Research. This compares favorably with the same period last year, when the region’s industrial land sales volume totaled $362.4 million, for 560 acres. Demand for logistics and fulfilment properties is driving the bulk of these industrial land sales, with sites that can be developed in the next 10 to 18 months being aggressively pursued by companies looking to build their own buildings and control their real estate. “End users are really pushing the market, competing with developers and driving up pricing,” says CBRE Executive Vice President Matt Brown. Well-located sites that have a longer development timeline—three to seven years out—are being sought by large institutional buyers, including major Canadian pension funds, who are acquiring properties with a long-term view that e-commerce and logistics will be king moving forward. “These groups are willing to make a calculated bet,” Brown says. “They’re saying, we don’t have to put this in production today but we’re confident this trend is just getting started and we want these well-appointed sites to be ready four or five years from now.” COVID could trigger a fundamental shift in the industrial market, Brown points out. In the past, industrial buildings were rarely seen as the highest and best use for a site; office, retail or residential were always better options. But this perception may be evolving. “Owners are now looking at retail centres and saying, I can convert some of this into warehousing and lease it to industrial tenants,” says Brown. “Given where industrial lease rates are at and how valuable the buildings themselves are, industrial development could soon be seen as a viable alternative to preconceived highest and best uses in certain cases.” Residential resurgence On the residential land sales front, CBRE Executive Vice President Casey Gallagher notes that this past August was his busiest month ever, with considerable demand for low- and medium-density zoned land in the 416 and 905 regions and for sites even farther afield. There was a total of $1.2 billion in residential land sales in the GTA between April and August, comprising 879 acres. When COVID hit, the market froze and residential land sales ground to a halt. “Anything on the books for the most part was put on pause,” says Gallagher. But opportunistic condo developers began to re-emerge and test the market through late spring, with big-name builders launching projects and getting strong sales and pricing holding firm. “The market was operating closer to normal than you would expect. Condo developers were contracting sales in core and non-core locations at market pricing, which has given confidence to others.” This has resurrected land deals for condos that had blown apart when COVID hit, with Gallagher closing several transactions in recent weeks in the GTA and areas farther afield, such as Brampton, Kitchener and Hamilton, all at “confident numbers and strong pricing.” Low-rise allure Land for single-family home development has become a particularly hot commodity. People see detached homes as a safer and bubble-friendly alternative to high-density buildings. “So developers are looking at single-family-home lands more closely, and that’s where we’re having good activity,” says CBRE Executive Vice President Mike Czestochowski, noting that while some smaller and mid-sized builders remain on the sidelines, institutional and larger private developers are actively pursuing sites. “New home sales have increased tremendously and people are out there buying homes, virtually and in person. They must have faith in their jobs and in the overall economy if they’re buying single-family homes. And this is giving developers a push to buy the land to build more of them.”
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2021 revenue). The company has more than 105,000 employees (excluding Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
In Canada, CBRE Limited employs 2,200 people in 22 locations from coast to coast. Please visit our website at www.cbre.ca.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2021 revenue). The company has more than 105,000 employees (excluding Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
In Canada, CBRE Limited employs 2,200 people in 22 locations from coast to coast. Please visit our website at www.cbre.ca.