Marcus & Millichap Upgrades Toronto Office as Commercial Real Estate Market Strong Across All Sectors in 2019

The Toronto commercial real estate market has been performing at a strong clip, in all sectors, for the last four years and is showing no signs of letting up. The Toronto office for Marcus & Millichap is thriving in the highly competitive environment of the GTA. This success is directly attributed to the quality team we have assembled and the visionary leadership of our Toronto Area Manager, Mark Paterson, who was recently promoted to Vice President, tasked with more responsibility in managing larger events and growing and developing Marcus & Millichap’s presence across Canada. The success of our Toronto office is also reflected in our recent move this spring to a physical environment designed to enhance the spirit of highly effectively collaboration that Marcus & Millichap has become known for, as the largest Commercial Real Estate Brokerage in North America, while offering a personalized service experience more widely found in boutique brokerages.

Marcus & Millichap’s New Downtown Toronto Office

200 King Street West Toronto Interior
200 King Street, West, Toronto: Atrium

Our new Toronto office is centrally located at 200 King Street West, in the heart of downtown Toronto near Roy Thompson Hall and just a few blocks from Union Station, bordering the financial and entertainment districts of this world-class Canadian city. Our new office is an exciting and open space, infused with plenty of natural light and terrific views of this dynamic city-scape. Large video screens, strategically placed throughout the office, facilitate sharing of information within the team and with colleagues and clients across Canada. Retractable barriers enable room configurations for a variety of group and meeting sizes and requirements. Team members are encouraged to collaborate or seek solitary time to focus, depending on their work items, to unwind with a friendly, semi-competitive game of ping pong or to simply hang out in the beautiful kitchen area and connect with others in the office. Clients are taken aback by how nice the overall office space is, while agents and team members are more motived and inspired to perform at their very best. Reflecting on the office move, Mark Paterson quips, “If you ask for excellence from your agents, you have to offer excellence as a manager, and that includes a terrific office space to work in.”

This kind of latitude is a cornerstone of the company culture at Marcus & Millichap across North America. Despite the huge size of our organization, the corporate structure is essentially flat, where every office is unique and encouraged to have its own flare. After all, the folks in a specific region are the ones who know the aspects of their market, their client-base, and their team members best. What is common among our regional managers and offices is a desire to see the best in each team member and encourage each player on the team to bring their A-Game.

200 King Street West Toronto Building Exterior
Marcus & Millichap New Toronto Office Exterior

Marcus & Millichap Toronto Team Recognized for Performance Excellence

This spirit of collaborative and shared success certainly holds true for our Toronto team, as the year-over-year volume of transactions we broker on behalf of our valued clients has consistently grown in the range of 75 to 100 per cent over the past four years! This year, our efforts were recognized within the commercial real estate industry as we were awarded the prestigious CoStar™ Power Broker Award, for being among the most active dealmakers in our market. This is even more remarkable, considering that the overall volume of transactions in all sectors of the Greater Toronto Area commercial real estate market has sustained a high level of activity and competition over the past 4 years, as noted in the chart below.

Toronto Commercial Real Estate Sectors 2016 - 2019
Toronto Commercial Real Estate Sectors (First 5 months of Each Year) Source:

High Demand for GTA Office Space, Driven by Low Unemployment

The Greater Toronto Area is a vital hub of economic activity in Canada which is showing no signs of slowing down through the first half of 2019, reflected in a very tight office space market, where inventories and vacancy rates have been very low for the last few years. This high level of demand has spurred the creation of new supply, with over 20.9 million square feet of office space under construction, renovation, and redevelopment through 2024. This is a significant increase over the 6.2 million square feet of office space developments that were under construction or in the works in the first quarter of 2018. By the end of the second quarter last year, the vacancy rate for office space in downtown Toronto had dropped to 3.4 per cent, with no signs of letting up as we continue into the 3rd quarter of 2019. Much of this activity is fueled by record low unemployment rates, especially in the services and technical sectors, not only in downtown Toronto but in many of the surrounding areas and hotspots, such as York Region:

York region continues to outpace the provincial and national average by growing employment another 2.4% adding a wonderful 15,120 jobs in 2018. And the sector that keeps the engine heated is the service sector with 78% of people spoken to in a recent York survey saying they work in the service sector. – GTA Bi-Weekly Newsletter from Marcus & Millichap Toronto Associate & Sales Representative, Arash Doulatshahi

Emerging Industries are Tightening Vacancies for Industrial Space

Low unemployment, high levels of investment activity and high demand for emerging industries such as e-commerce logistics and cannabis are resulting in a very tight market for industrial space in the GTA and other economic hotspots across Canada. Industrial vacancy rates have dropped significantly in many major Canadian cities in the first quarter of 2019, resulting in a burst of new supply under development, especially in the GTA:

Three Canadian cities had the lowest industrial vacancy rates in North America in the first quarter, with Vancouver at 1.2 per cent, Toronto at 1.5 per cent and Ottawa at 1.6 per cent. Halifax had the highest vacancy rate in Canada at 8.7 per cent, but even there vacancy was down 420 basis points year-over-year… New industrial supply deliveries doubled to 16 million square feet on a year-over-year basis, led by Toronto with 5.5 million square feet, Calgary with 3.6 million square feet and Vancouver with 3.5 million square feet. –

GTA Retail Space Holding Steady Despite Online Competition

Despite heavy competition from online shopping, many discount and luxury retailers are prospering in the GTA, at the expense of mid-market retailers, evidenced by the stable transactional volume in the chart above over the past 4 years. The intense competition has forced successful retailers to take innovative approaches to enhance their physical shopping experience. For example, Samsung “Experience Shops” are popping up inside select Best Buy outlets offering software upgrades, troubleshooting, initial device setup and cursory training for Samsung products. Canada Goose is offering “Cold Rooms,” where patrons can test out these famous jackets in temperatures below 30 degrees centigrade surrounded by ice sculptures to immerse in the full Canada Goose experience. High consumer debt and rising interest rates have been largely offset by healthy employment levels to help stabilize spending in this sector, but some landlords are redeveloping their properties geared toward more mix-use elements such as condos and offices.

Multi-Family Sector Attractive for Investors

Rising mortgage rates and a new mortgage stress test, initiated by federal regulators last year, put the brakes on an overheating residential housing market in the GTA through 2018 and 2019. These conditions, combined with rising immigration levels, have created higher demand for apartment rentals stimulating investment in the multi-family sector, which is not showing any signs of diminishing as we move into the 3rd quarter of 2019. A similar trend is occurring across Canada, where Marcus & Millichap is one of the leading brokers in terms of transactional volume in this hot sector:

In recent months, more multi-family buildings were constructed than any other housing type in Canada’s hottest markets, according to a new report by the Canada Mortgage and Housing Corporation. – Canadian Real Estate Magazine

Demand for Land Shifting from Residential to Industrial

A slowing housing market, lower residential housing starts and a lack of commercial land to build on, coupled with high industrial demand, drove up industrial rents by 15 per cent year-over-year in 2018. According to Steve MacLean, in a recent article for, this trend could continue well through 2019. These conditions are driving up the price per square foot for industrial land by as much as 44 per cent in some regions of the GTA.

Commercial Real Estate Services in the GTA

The Toronto office of Marcus & Millichap provides real estate investment sales, research information and advisory services for multi-family, retail, office, industrial, single-tenant net-lease, self-storage, seniors housing, manufactured homes, hospitality, land and special assets. If you are an investor, property owner or business seeking assistance in any of these areas, we’d love to hear from you! Simply contact us and we’ll follow up with you to get started.


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