Private Capital Investors Driving Growth in Toronto Office Sector

TORONTO, August 15, 2024 – JLL Capital Markets is pleased to announce the successful sale of 77 Peter Street, a prominent brick-and-beam office building located in downtown Toronto, for a transaction valued at $12.55 million. This marquee transaction highlights the growth of private capital investor interest in the Toronto office sector.

The 18,253 square foot brick-and-beam office building, currently 76% leased by AppLovin (NASDAQ:APP), attracted interest from private investors and owner-users, reaffirming the growing appeal of Toronto's commercial real estate market. JLL represented the private seller throughout the transaction, working closely with the buyer to facilitate a successful deal.

"We have been working with this seller for over two years, and this sale signifies not only a significant milestone for our client but also showcases growing interest from private investors for income producing properties in Toronto, with some new groups now looking at opportunities in the office sector," said Jackson Safrata, Vice President, Capital Markets.

Office investment sales in the GTA totalled nearly $1.5B over 2023, down by about 43% on the five-year annual average. With high costs stifling ground-up development and negative downtown absorption, private investors could explore opportunities to convert traditional office assets to alternative uses like life sciences, residential and education spaces. Many of the largest office transactions in 2023 involved these types of conversions, with 50% of deals coming from private investors.

“With most institutional investors sitting on the sidelines, private capital has emerged as the single-largest buyer segment across the commercial real estate sector in Canada. Today, private investors are acquiring larger properties than ever before, spanning all asset classes and geographies. As institutions reevaluate their portfolio mix, the next 12-24 months may present one of the best buying opportunities for private investors in a generation,” said Matt Picken, Head of Capital Markets, JLL Canada.

JLL Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers. The firm's in-depth local market and global investor knowledge delivers the best-in-class solutions for clients — whether investment sales and advisory, debt advisory, equity advisory or a recapitalization. The firm has more than 3,000 Capital Markets specialists worldwide with offices in nearly 50 countries.