Residential real estate might be hogging the headlines, but it’s commercial properties that are attracting the big bucks in Waterloo Region.

Seven such properties in downtown Kitchener, including the Galleria building on Frederick Street and the Market Square mall, were just sold along with one in Waterloo for a total in the neighbourhood of $140 million.

According to the seller, Dream Office REIT, the properties contain nearly 1.1 million square feet of office space.

“From what we understand, they’re excited about the opportunities that downtown Kitchener presents,” said Cory Bluhm, Kitchener’s interim executive director of economic development.

Bluhm says the new buyer was drawn in by the impending arrival of light rail transit, the rapid growth of the local tech sector, and other factors that he says were sparked by incentives offered by the city over the past decade.

“It’s great to finally see a point where we see significant private-sector interest to really want to drive the change down here, and not simply (have) the city driving the majority of the change,” he said.

Regional Chair Ken Seiling agrees, saying similar effects are being seen along the LRT corridor.

“There’s much more that hasn’t gone public yet that we’re aware of – and things we’re not aware of,” he said.

“It’s actually happening, and people are beginning to see that.”

High prices are even being sought in places where light rail tracks aren’t a few feet from the front door. The Waterloo property currently housing Household China and Gifts is on the market with an asking price of $10 million.

Commercial real estate agent Benjamin Bach of Cushman & Wakefield Waterloo Region says one key factor is likely behind listing the property at that price – the lack of land able to be redeveloped around the universities, especially on King Street.

“For someone who wants to build a high-rise close to campus, I don’t know where else you’d buy it,” he said.

“It’s really a terrific corner – it’s over an acre, it’s close to the universities, it’s surrounded by six or seven recently built high-rises.”

Bach expects anyone eyeing the property to be thinking about a retail or office use of the main floor, with many floors of residential development above that.

With reporting by Marc Venema