Traditionally, asset management in the commercial real estate sector was a maze of spreadsheets,...
Behind the scoreboard: two markets, two playbooks, and one lesson in balance.
With the Dodgers and Blue Jays facing off this week, CRE Daily and CoStar Analytics offer another matchup — this one between Los Angeles and Toronto’s commercial real estate markets.
Despite economic headwinds, Los Angeles takes the lead in three of four major CRE sectors: multifamily, office, and retail. Toronto holds its own in industrial, where tight supply and regulatory limits continue to stabilize fundamentals.
A tale of two corrections
Both cities are navigating high vacancies and affordability pressures. But LA’s earlier correction and more disciplined development pipeline seem to have positioned it slightly better heading into the next cycle.
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Multifamily: LA’s vacancy rate (5.4%) sits below the national average, while Toronto faces affordability strain and slower population growth.
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Office: Toronto is seeing early leasing momentum, but LA’s focus on repurposing obsolete buildings may win long-term.
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Industrial: Toronto’s strength remains constrained supply; LA’s sector cools amid weaker demand.
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Retail: Both struggle, but LA’s slower vacancy rise suggests a gentler landing.
What this means for CRE teams
The lesson extends beyond LA and Toronto: markets that move early on pipeline discipline and adaptive reuse tend to weather volatility better. In a tighter, cost-sensitive environment, real estate performance increasingly depends on how well owners forecast, rebalance, and reallocate resources — not just how fast markets rebound.
