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Investment

The supply of quality product for sale could not meet the demands of buyers in 2008. The most sought after products are owned and held by the life companies, REITs, pension funds and other large publicly traded property management groups, forcing buyers to look for value investment in neighboring secondary markets such as Kingston, Kitchener, and London. For the relatively few opportunities that did present themselves in 2008, the market was quick to respond and transactions were completed swiftly.

However, in the third quarter of 2008, the number of active buyers and sellers declined significantly as the credit crunch took many investors out of the game and signs of rising cap rates left sellers reluctant to part with inventory at reduced prices. Transaction volume decreased in 2008 across all product classes and is expected to remain flat in 2009. Many owners will become pressured sellers in order to raise equity to satisfy debt obligations in an environment where financing remains difficult to obtain. With reduced buy-side competition, given the lack of available capital in the market, expect some great opportunities for well capitalized buyers.