WATERLOO REGION

A new report says investment in local commercial real estate dropped off significantly in the first half of this year, but not all area real estate agents agree the year has been slow.

Commercial transactions in Waterloo Region, Guelph, Brantford and the Stratford area totalled $289 million, down from $465 million in the first six months of 2007, reported real estate firm CB Richard Ellis Ltd.

Declines were especially sharp in sales of retail properties, multi-family residential buildings and land. Sales in those categories are on track to fall 35.7, 69.7 and 75.3 per cent, respectively, for the year. On the other hand, office and industrial transactions are running ahead of last year's pace.

Peter Hall, CB Richard Ellis's managing director for Waterloo Region, said the area may be experiencing a spillover effect from economic weakness in the U.S. "One has to realize that when an American-based company has a branch up here that may be ready for expansion, it's growing very nicely, (but) it gets turned off by the same tap that turns it off for the United States."

A weaker economy means less demand for retail space, while land sales are down in part because the region is simply running low on attractive properties, he said.

But other real estate agents said they have not noticed a slowdown in commercial sales this year.

"We're having our best year ever," said Peter Benninger of Coldwell Banker Peter Benninger Realty, who said the numbers he has seen indicate little change in commercial transactions from last year.

Similarly, John Whitney of DTZ Barnicke Waterloo Wellington Ltd. said his firm's retail and office activity is "fast and furious," while industrial sites vacated by plant closures are quickly finding new owners.

Last year's numbers may have been skewed by some especially large transactions, such as the $24.2-million sale of the former BF Goodrich factory site to South Kitchener Holdings; its subsequent sale of nearly half of that property to the City of Kitchener for $20.6 million; the Hallman family's sale of four seniors' homes to a Mississauga investment trust for $50 million; and the $23-million purchase of eight Kitchener apartment buildings by CA Bancorp Inc. and Centurion Apartment Properties Ltd. Partnership.

Jafar Konoodi, an agent with ReMax Twin City Realty in Kitchener, said commercial transactions may be down slightly this year, but not because of any long-term weakness in the local market.

"Because of rumours of recession or something like that happening in the United States and because of the recent real estate problems there, the buyers are expecting prices (are) going down, then they hold off," he said. "But in my opinion, the buyers are still out there."

mwalcoff@therecord.com