If you’re thinking of investing in commercial real estate or selling a property you’ve inherited, you may be tempted to look to the residential real estate market for insight. We’re here to tell you that won’t help you with your commercial asset. You need to understand Toronto’s commercial real estate market to figure out the best strategy. That’s where the InTrust team comes in. We’re market experts committed to refreshing the commercial real estate industry, and we’ll tell you exactly how to make the most of your investment. Keep reading to discover the 4 major differences between commercial and residential real estate.

1. Different realtors

This is probably the most important aspect, because your realtor is who you’re trusting with your experience and investment. Residential realtors know a lot about the residential market, but if they are transacting residential properties all day, every day, they don’t know about the trends, conditions, and inventory of the commercial market—and why would they? It’s not their area of expertise. It’s important to entrust your venture to an agent who is familiar with commercial real estate in Toronto, from the properties to the other agents to the stats. This way your investment is protected. There is no law prohibiting residential agents from representing commercial transactions (and vice versa), so it’s up to you to choose the right realtor. 

Find a commercial agent to help with your venture here. 

2. Different properties

While this sounds pretty obvious, it’s worth noting because it speaks to the expertise of the agent. Residential real estate inventory consists of a variety of homes, from condos, townhomes, and lofts, to single-family houses, semi-detached properties, and sprawling estates. Commercial real estate includes properties such as mixed-use properties, multifamily real estate, urban development land, and industrial buildings. It’s easy to see how different these kinds of properties are. Which shows how important it is to work with an agent who has specific experience representing commercial real estate. 

See our featured Toronto commercial properties here.

3. Different process

If you’ve bought or sold residential real estate before, you may think that you know how transacting commercial real estate works. The truth is, commercial real estate follows an entirely different playbook. Evaluating a residential property is an entirely different process than evaluating a commercial property. Instead of focusing on aspects like layout or cosmetic upgrades, your commercial agent will look for things like income potential and expenses. 

House hunting involves analyzing aspects like local amenities and number of bedrooms/bathrooms. Buying commercial real estate takes into consideration aspects like city zoning plans and opportunities to decrease overhead costs. Someone who represents residential real estate isn’t going to be able to protect your best interests and strategize effectively when you’re dealing with a commercial investment.

Learn about how we guide your commercial real estate sale here.

Understand our process for buying commercial real estate here.

4. Different timelines

If you’re watching the residential real estate market and you see low inventory and deals closing in less than a week for over-asking, or you see a surplus of inventory and properties selling for below the list price and you expect the same from the commercial market, you’ll have the wrong idea about what your experience will be like. What happens in the commercial market is not necessarily aligned with what’s happening in the residential market. 

Commercial real estate in Toronto is a much more complex process, which means timing is relative. If it takes a residential property a month to sell, that property is considered to be languishing on the market. When it comes to commercial properties, a deal that takes a month—or more—to close is standard. Working with an experienced commercial real estate agent who knows the city’s markets will help you understand the process and manage your expectations so you feel comfortable every step of the way. 

Discover our specialized commercial real estate services here. 

What should you keep in mind before selling or buying commercial real estate?

Most people are not commercial real estate investors. Most agents are not commercial real estate representatives. What’s happening in the commercial market rarely makes headlines. It’s not something people are generally aware of, the way we all know a bit about what’s going on with Toronto residential real estate prices or availability. Looking to the residential market—or a residential realtor—is not going to get you the answers you need. Once you understand that the agents, properties, process, and timelines between the two markets are different, you can start looking for the right guidance to help you accomplish your goals.

Whether you’re looking to sell, buy, or stabilize your commercial asset, you need representation that knows the ins and outs of the Toronto commercial real estate market. Residential real estate can’t be used as a measure for the commercial market, because these markets are for two entirely different products. Our team at InTrust has been representing commercial real estate in Toronto for years. Our brokerage deals specifically with investment assets, and provides holistic advisory services so you and your investment are well taken care of.