TORONTO, ONTARIO -- (Marketwire) -- 08/16/10 -- The combination of lower bond rates and increased availability of debt bolstered purchaser activity in Canada's commercial real estate market, driving year-over-year transaction volumes upwards during the first six months of 2010.

According to the Mid-Year National Investment Report released today by CB Richard Ellis Limited (CBRE), Canadian commercial real estate transaction volumes from January through June increased by 60.2 per cent, year-over-year, from $4.9 billion halfway through 2009 to $7.8 billion half way into 2010. Mid-year through 2010, the number of commercial transactions was 2,243, up from 1,565 transactions completed halfway through 2009.

Despite the significant national year-over-year increase in transaction volume, it is important to note that mid-year figures from last year were far lower than the historical average, due to the global economic crisis that characterized much of 2008 and 2009. When comparing the current national mid-year figure to mid-year 2005 - a year more reflective of the country's normal commercial real estate activity levels - volume is up by 22.8 per cent.

"Current mid-year transaction volumes and prices for Canada's commercial real estate market reflect healthy, more normal and sustainable numbers when compared to the same period last year. There is indication in the numbers that the market has rebounded from the recession," explained John O'Bryan, vice-chairman, CB Richard Ellis Limited. "As the second half of the year typically shows stronger activity than the first, the commercial real estate market is poised to finish on strong and stable footing."

In the first half of this year, real estate investment trusts (REITs) and local private investors comprised the majority of buyers in the Canadian commercial real estate sector, with foreign investors playing a very small role in the market. Both the private groups and REITs led the charge using available debt aggressively.

Looking across the country, mid-year levels of commercial real estate transaction volume were up in all major cities, indicating that buyer demand is strong in all regions. Toronto, Vancouver and Montreal recorded the highest transaction volumes, respectively.

Added O'Bryan: "Unique to this year is the fact that market activity is consistently up across all major cities - a trend that does not happen often."

Toronto recorded the highest mid-year commercial real estate activity volume of all the major cities, with $2.9 billion in transaction volume, and 563 transaction deals. Current debt levels and available capital gave the Toronto commercial real estate market a boost - factors that have been missing from the market since 2008's economic downturn.

The REIT and private investor groups have been particularly active in Toronto's commercial real estate market over the past several months. As one of the last-standing tax shelters, REITs have been extremely active in the market since the recession occurred, and are benefiting from the economy's rebound.

In Vancouver 632 commercial real estate transactions took place from January through June 2010, totalling over $1.6 billion in transaction volume. Market activity was up across the industrial, retail and multi-residential classes - a trend that is unique to this year. In Vancouver, the greatest year-over-year increase was recorded in the small to mid-size buildings, with the $5 million to $20 million assets receiving the most attention.

Commercial real estate activity in Montreal continued to rebound positively in the first half of 2010, with increased market activity across all asset classes. During the first two quarters, 446 real estate transactions took place, totalling over $1.1 billion in transaction volume.

"Three large independent single asset transactions in the multi-residential investment market in Montreal's downtown core were largely responsible for making the second quarter of 2010 one for the record books. There were 185 multi-residential deals in the first half of the year, making this sector the most active in Montreal's commercial real estate market," said Brett Miller, managing director, CB Richard Ellis Montreal. "It is expected the remainder of 2010 will see increased activity in office transactions with three to four significant office trades expected to meet the increasing demand for this type of real estate."

Regional Mid-Year Commercial Real Estate Activity

Activity in the Calgary and Edmonton commercial real estate markets was strong in the first half of 2010 and continued to rebound from the sluggish activity that occurred last year.

In Calgary during the first two quarters of 2010, 188 real estate transactions took place, totalling over $680 million in transaction volume. Edmonton's commercial real estate market recorded 161 transactions in the first half of this year, totalling $754 million.

In the first half of 2010, activity in London's commercial real estate market saw early recovery from the lows experienced in 2009, with 69 transactions totalling $151 million in investment transaction volume. Canadian private investors accounted for most of the activity in London, as savvy buyers looked to the recovering market for purchasing opportunities.

The industrial sector is expected to see more activity for the remainder of 2010, as depressed industrial prices continue to offer exceptional deals with major industrial buildings currently under negotiation. Land purchases continue to account for a majority of the market activity in London as developers look to land value and potential as the market begins to rebound. While the numbers show positive growth over 2009, full market recovery is expected to take place over the next several quarters.

In Waterloo, activity increased slightly, year-over-year, remaining closely tied to national trends in the first half of 2010. In the first half of this year, 69 deals closed generating $249 million in transaction volume.

In the first half of 2010, activity in Ottawa's commercial real estate market continued along its steady and stable course, recording 83 transactions totalling $267 million in investment transaction volume. Private Canadian investors accounted for the majority of the activity in the market, where the activity consisted mainly of small deals.

Lack of inventory constrained activity in this market both for foreign and domestic investors. Ottawa's commercial market activity is expected to remain dampened by the fiscal restraint program introduced by the federal government over the next four years.

During the first half of 2010, Halifax saw significant deal flow over last year's activity, with 32 transactions totalling $111 million in investment transaction volume. Buyers continue to maintain a cautious approach to the market, still feeling the after affects of the recession and waiting to see how the rest of 2010 plays out. Private Canadian investors accounted for a majority of the market activity with the office and retail sectors seeing the highest transaction volume, at $33 million and $41 million respectively.

2010 Mid-Year Regional Transaction Volume Chart

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Year                                                                Waterloo
(Mid-Year)    (Millions)   Vancouver   Calgary   Edmonton   London    Region
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2006 MY       # of Deals         849       152        175      161        77
                  Volume      $1,701    $1,099       $366     $294      $268
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2007 MY       # of Deals         699       269        167      185       152
                  Volume      $1,449    $2,935       $870     $353      $465
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2008 MY       # of Deals         778       281        138       31        89
                  Volume      $1,545    $2,163       $634      $86      $289
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2009 MY       # of Deals         470       149        120       30        66
                  Volume      $1,199      $471       $547      $58      $167
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2010 MY       # of Deals         632       188        161       69        69
                  Volume      $1,602      $680       $754     $151      $249
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Year
(Mid-Year)    (Millions)     Toronto    Ottawa   Montreal  Halifax     Total
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2006 MY       # of Deals         671        67        227       17     2,396
                  Volume      $3,574      $326       $835     $131    $8,594
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2007 MY       # of Deals         760        80        362       30     2,704
                  Volume      $4,501      $618     $1,639     $193   $13,023
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2008 MY       # of Deals         676        62        415       23     2,493
                  Volume      $3,701      $322     $1,009     $153    $9,902
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2009 MY       # of Deals         287        81        338       24     1,565
                  Volume      $1,267      $250       $840      $77    $4,876
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2010 MY       # of Deals         563        83        446       32     2,243
                  Volume      $2,883      $267     $1,115     $111    $7,811
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About CB Richard Ellis

CB Richard Ellis Group, Inc. (NYSE: CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world's largest commercial real estate services firm (in terms of 2009 revenue). The Company has approximately 29,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CB Richard Ellis offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. In Canada, CB Richard Ellis employs over 1,800 people in 22 offices from coast to coast.

Please visit us at www.cbre.ca.