Commercial Real Estate Investment Gains Momentum in Select Canadian Markets as Demand for Prime Assets Holds Firm
The Report at a Glance
Canada's commercial real estate market improved selectively in the first half of 2026. Industrial, retail and multi-family properties attracted the most investment capital, while office and land development lagged. REMAX brokers and agents in 12 major markets reported rising absorption and falling availability in the following share of markets:
- 91.6%Industrial
- 83.3%Retail
- 58.3%Multi-family
- 41.6%Office
- 16.6%Land development
Calgary, Edmonton, Saskatoon, Winnipeg, Ottawa and Halifax showed the strongest momentum, while Greater Vancouver and the Greater Toronto Area saw a more uneven recovery.
Industrial, retail and multi-family lead activity in major markets across the country
REMAX Canada examined commercial real estate activity across Canada throughout the first half of the year in all key sectors including multi-family residential, industrial, office, retail, development land, and farmland. It identifies top-performing segments, key factors influencing the market, along with emerging trends, policies impacting growth, and barriers/levers to unlock future potential.
How Is Canada’s Commercial Real Estate Market Performing?
Commercial real estate investment gained momentum in key Canadian markets during the first half of 2026, with industrial, retail and multi-family asset classes attracting considerable capital despite ongoing economic uncertainty, elevated construction costs and financing challenges, according to data and insights from REMAX brokers and agents surveyed for the Fall 2026 Commercial Real Estate Report.
Key Takeaways
REMAX Canada examined commercial trends and developments in 12 major Canadian markets between January 1 and June 30, compared to the same period in 2025. REMAX brokers and agents reported that, while investors maintained the cautious approach evident earlier in the year, improving fundamentals were widespread, as follows:
- Industrial asset class: Absorption increasing and availability decreasing in 91.6 per cent of markets
- Retail asset class: Absorption increasing and availability decreasing in 83.3 per cent of markets
- Multi-family asset class: Absorption increasing and availability decreasing in 58.3 per cent of markets
- Office asset class: Absorption increasing and availability decreasing in 41.6 per cent of markets
- Land development asset class: Absorption increasing and availability decreasing in 16.6 per cent of markets
- Farmland (Saskatchewan): Reported a significant upswing in the number of farms listed for sale, while land values continue to climb
Purchasers and investors drove significant shifts in Canada’s commercial real estate markets in 2026.
- End users and investors favoured existing properties over new construction
- Neighbourhood retail experienced a resurgence
- Businesses sought smaller, more efficient space
- Emerging industries created new sources of demand
While industrial, retail and multi-family continued to attract the greatest interest, the most compelling opportunities were increasingly being shaped by local economic conditions, limited inventory and the rising cost of bringing new product to market.
“Capital is flowing, but investors are trying to make every dollar count,” says Kristie Kimnach, Global Executive Director of REMAX Commercial. “We’ve seen considerable investment in established, income-producing properties this year, particularly in markets where demand remains strong. The challenge in some of these markets seems to have been finding enough quality product to meet investor demand. Elsewhere, we are hearing that rising availability and slower absorption have put pressure on rents and values, creating a very different set of market conditions.”
Investors Are Chasing Proven Income
Prime income-producing properties were most coveted by investors, underscoring the resilience of established asset classes and a growing divide between properties attracting investment and those struggling to gain traction. Activity accelerated in select major centres, with significant capital directed toward properties offering strong tenancy, established cash flow and long-term value. Limited inventory continued to constrain transactions in some of the country’s strongest markets, especially in the industrial and neighbourhood retail segments, while rising availability and slower absorption placed downward pressure on rent and values elsewhere.
Local Strengths Are Driving Growth
Commercial real estate growth has become increasingly specialized. Defence in Halifax and Newfoundland, technology infrastructure in Edmonton, agriculture in Saskatchewan, logistics in Winnipeg and necessity-based retail in Vancouver illustrate how local economic strengths have been driving investment opportunities.
“Supply has become increasingly constrained in some of the country’s key commercial markets,” says Don Kottick, President of REMAX Canada. “Demand for smaller industrial units and neighbourhood retail space has remained strong in many markets, yet high construction and financing costs continue to limit new development. Higher bond yields and economic uncertainty could prolong that imbalance, depending on local demand and development activity. If confidence improves, limited suitable space could constrain transactions in some markets; the timing and extent of any change remain uncertain.”
Key Findings By Segment
Basic Canadian net lease rates by asset class
Price per square foot (ppsf) for industrial, office and retail space in 12 Canadian markets
| Market | Industrial | Office | Retail |
|---|---|---|---|
| Vancouver | $14–$22 psf |
$18–$40 psf |
$26–$60 psfSuburban |
| Kelowna | $15–$17 psf |
$28–$36 psf |
$27–$42 psfClass A |
| Calgary | $14–$17 psfSmall format$9–$15 psfLarge format |
$9 psfWest End$35 psfClass A |
$22–$55 psf |
| Edmonton | Not reported |
Not reported |
High $30s to high $40s psf |
| Saskatoon | $15–$16 psf |
$19.33 psfRiver Landing |
$11–$14.25 psfSmaller/older$30–$37.56 psfSuburbs/newer |
| Regina | $12–$13 psfOlder space |
$12–$15 psf |
Under $20 psfOlder space |
| Winnipeg | $7–$18 psf |
$6–$28 psf |
$6.95–$37 psf |
| London | $10–$12 psfOlder space |
$10 psfDowntown |
$20–$40 psf |
| Greater Toronto Area | $16–$17 psf |
$90–$105 psfClass A |
$28 psf1TRREB average |
| Ottawa | $13–$17 psf |
$19–$20 psfRetrofitted |
$27–$40 psf |
| Halifax | $13–$18 psf |
$13–$16 psfDowntown |
$30–$40 psfDowntown |
| Newfoundland and Labrador | $16–$18 psf2Older space |
$22–$24 psfClass A |
$16–$18 psfOlder space |
- Source: REMAX Brokers and Sales Representatives. These rental ranges are intended as general guidance. Actual rents may fall above or below the ranges, depending on size, condition, quality, lease terms, permitted use and zoning. Each property may also have its own limiting factors and should be assessed individually. TMI is separate.
- 1Average retail rate as reported by TRREB, October Commercial Development Forum.
- 2Based on older existing product. Given limited inventory, new space under construction will hit the market at approximately $32 psf due to rising building costs.
Industrial real estate is property used for manufacturing, warehousing, distribution and logistics.
Industrial
Industrial remained the backbone of Canada’s commercial real estate market. Positive momentum reported in 92 per cent of markets analyzed (11 of 12)
Strong demand, tightening availability and steady investor interest were reported in Greater Vancouver, Edmonton, Calgary, Saskatoon, Regina, Winnipeg, London, the Greater Toronto Area (GTA), Ottawa, Halifax and Newfoundland-Labrador.
- Market Condition:
- Generally tight supply
- Main drivers:
- Logistics, manufacturing, owner-user demand, limited serviced land and high replacement costs.
Industrial Market Highlights
Where Canada's Industrial Markets Stand
Select a market to see what's shaping industrial conditions in 2026.
Greater Vancouver
Tight supply, softer pricesAverage sale price per sq. ft.
Down 9.6 per cent year over year
Greater Toronto Area
Tight supply, softer pricesAvailability
Industrial availability is tight.
Sale prices
Average sale prices have softened, a similar divide to Greater Vancouver.
London
Slower absorptionLarger buildings
London continued to experience slower absorption for larger industrial buildings exceeding 50,000 sq. ft.
Newfoundland-Labrador
Limited new supplySupply
New industrial construction was almost non-existent, forcing businesses to reconfigure existing properties rather than develop available land.
Demand
Demand spans flex, warehouse and yard space. Some tenants were prepared to sign leases of up to 20 years to secure suitable new properties.
Kelowna
Recovery modeVacancy
Vacancy is beginning to trend lower as the market remains in recovery mode.
Development
Reduced rents for newer product and high construction costs continued to weigh on development feasibility.
*Source: Altus Group, Altus Data Studio.
Overview
Demand increasingly shifted toward smaller industrial properties with end users and investors seeking well-located buildings offering flexible space, higher ceilings and modern loading facilities.
Limited availability continued to support leasing activity in markets such as Ottawa, Regina, Winnipeg and Saskatoon, while strong investor demand was evident in Edmonton and Calgary.
Regional differences
- Vancouver’s geographic constraints
- Edmonton’s industrial growth
- Calgary’s retrofit demand
- Ottawa’s low availability
- Winnipeg’s logistics expansion
- London and Kelowna illustrate the importance of building size and new supply.
- Newfoundland-Labrador’s strong economic growth and growing shortages in commercial availability
Key risk
Higher financing and construction costs and more stringent lending policies could restrict development, while economic weakness could reduce demand for larger buildings. The extent of these risks depends on local financing, supply and demand conditions.
Retail real estate is space leased to businesses that sell goods or services directly to consumers.
Retail
Retail continued to demonstrate remarkable resilience. Positive momentum in 83 per cent of markets analyzed (10 of 12)
Retail continued to demonstrate resilience, with positive momentum evident in Greater Vancouver, Edmonton, Calgary, Saskatoon, Winnipeg, London, the Greater Toronto Area, Ottawa, Halifax and Newfoundland-Labrador.
- Market Conditions:
- Strong for selected formats
- Main drivers:
- Grocery anchors, necessity-based shopping, medical and wellness services, restaurants and smaller-format tenants.
Retail Market Highlights
Where Canada's Retail Markets Stand
Select a market to see what's shaping retail conditions in 2026.
Greater Vancouver
Tight supply, rising investmentRetail vacancy
Little new construction is tightening some suburban neighbourhoods
Edmonton, Calgary and Ottawa
Strong demandDemand
All three markets saw strong demand for well-located retail space.
London, Saskatoon and Winnipeg
Performing wellEstablished areas
Established shopping areas in all three markets continued to perform well.
Regina
Mixed conditionsDowntown mall
Retail activity in the downtown mall was relatively flat, and rents faced some pressure.
Neighbourhood retail
Neighbourhood retail remained strong.
Kelowna
Steady demandDemand
Demand for retail space remained steady.
Investment
Investment activity has yet to gain significant ground.
Ongoing challenges
Several marketsUnder pressure
Traditional shopping malls, larger retail units and select downtown locations continued to face challenges in several markets.
Overview
Grocery-anchored shopping centres, neighbourhood plazas and smaller service-oriented retail properties remained among the most sought-after assets with health, wellness, beauty, medical and food-service operators accounting for an increasing share of demand.
Smaller spaces, generally ranging between 1,000 and 3,000 sq. ft., continued to attract considerable attention as businesses reassessed their space requirements and sought greater operating efficiencies.
Regional differences
- Greater Vancouver and Calgary benefit from limited new supply
- Edmonton has strong demand along major roads
- Toronto commands high rents in prime urban locations
- Halifax benefits from neighbourhood consumer demand
Key risk
Household budget pressures, higher occupancy costs and weaker foot traffic in some traditional malls and downtown locations.
Multi-family real estate is a residential building with multiple rental units held as an income-producing investment.
Multi-Family
Solid investor interest, but growing divide between investment demand and rental market fundamentals. Positive momentum in 58 per cent of markets analyzed (7/12)
Multi-family remained an important destination for investment capital, with positive activity evident in Calgary, Saskatoon, Regina, Winnipeg, the GTA, Ottawa and Newfoundland-Labrador.
- Market Conditions:
- Highly market-dependent
- Main drivers:
- Population growth, housing affordability, rental demand, institutional capital and financing programs.
Multi-Family Market Highlights
Where Canada's Multi-Family Markets Stand
Select a market to see what's shaping multi-family conditions in 2026.
Greater Vancouver
Investment downMulti-family investment, first half
H1 2025 figure estimated from the 41 per cent decline
Regina, Winnipeg and Saskatoon
Tight rental conditionsRentals
All three markets continued to benefit from tight rental conditions.
Investors
Investor demand remained a key driver of activity.
Newfoundland-Labrador
Out-of-province capitalTransactions
Major transactions underscored rising interest from out-of-province capital.
Calgary
Pricing gapBuyers
Calgary remained attractive to well-capitalized purchasers.
Pricing
A disconnect persisted between seller expectations and current market values.
Ottawa
Growing rental supplyInvestment
Ottawa reported significant multi-family investment activity.
Rents
A growing inventory of newly completed rental units placed downward pressure on rents and led to more tenant incentives.
Kelowna, London and Halifax
New supplyKelowna and London
Both markets were adjusting to substantial new rental supply.
Halifax
Halifax moved toward a more balanced market following several years of rapid construction.
Edmonton
Softer pricingCapital
Edmonton continued to attract institutional and private capital.
Pricing
Average prices per unit have softened.
*Source: Altus Group, Altus Data Studio.
Overview
The Greater Toronto Area recorded one of the most significant increases in multi-family investment volume, rising more than 240 per cent year over year in the first half of 2026.
Investors continued to target established rental properties, particularly older concrete buildings offering below-market rents, access to transit, and value-add opportunities for capital improvements. Some investors considered retrofitting existing apartment buildings into seniors’ residences where permitted, or boutique hotels for properties located in sought-after areas.
Regional differences
- Toronto, Regina, Winnipeg and parts of Saskatoon have benefitted from established rental demand or investment interest.
- Kelowna, Ottawa and Halifax have absorbed substantial new apartment supply, moderating previously tight rental conditions.
Key risk
New completions could increase vacancies and tenant incentives where supply exceeds absorption. Borrowing costs, construction expenses and valuation gaps could also restrict investment, depending on local market conditions and project economics.
Office real estate is space leased for professional and administrative work, typically graded Class A, B or C.
Office
The urban/suburban contrast Improving fundamentals in 42 per cent of markets analyzed (5/12)
The office market continues to be a tale of two cities, with improving conditions evident in the Greater Toronto Area, Calgary, Ottawa, Halifax, Greater Vancouver and select segments of Winnipeg, primarily driven by demand for higher-quality space.
- Market Conditions:
- Quality-driven recovery
- Main drivers:
- Return-to-office policies, tenant relocations, modern amenities, transit access, parking and competitive lease packages.
Office Market Highlights
Where Canada's Office Markets Stand
Select a market to see what's shaping office conditions in 2026.
Greater Toronto Area
Availability downPremium demand
Availability declined more than 200 basis points, with strong demand for premium space in the downtown core.
Calgary
Availability improvingOffice availability
Office availability declined from its 2024 peak, supported in part by office-to-residential conversions and demand for higher-quality space
Greater Vancouver
Modest improvementOffice availability
A modest improvement from Q1
Ottawa
Renewed interestInstitutional interest
Ottawa continued to benefit from renewed institutional interest.
Return to office
Federal return-to-office mandates also supported the market.
Winnipeg
Class A tighteningClass A
Class-A availability in Winnipeg has declined.
Older buildings
Persistent challenges remain in older buildings.
Halifax
StrengtheningDemand
Halifax’s office market continued to strengthen, with strong demand for office space.
*Source: Altus Group, Altus Data Studio.
Overview
Return to office mandates and changing tenant requirements have supported leasing activity in triple-A and Class A buildings, particularly those offering modern amenities, accessibility and parking.
The greatest weakness remained concentrated in aging Class B and Class C office properties, particularly in downtown markets where vacancies remained elevated, capital improvements were costly and tenants gravitated toward more modern space. Edmonton, Saskatoon, Regina, London, Kelowna and Newfoundland-Labrador continued to face varying degrees of pressure, although well-positioned suburban properties and select premium buildings bucked the broader trend.
Regional differences
- Toronto’s premium office market and Halifax’s comparatively low availability contrasted elevated secondary-office vacancies in Edmonton, Saskatoon and London.
- Ottawa saw renewed interest following federal return-to-office mandates.
Key risk
Persistent excess space, expensive capital improvements and uncertainty over the long-term demand for older buildings.
Development land is raw or underused land purchased to be prepared for future construction.
Land Development
Land development remained under pressure Selective activity in 17 per cent of markets analyzed (2/12)
Land development remained one of the most challenged segments of the commercial real estate market, with higher borrowing and construction costs, longer development timelines and increasingly stringent financing requirements deterring investment.
- Market Conditions:
- Constrained by costs and financing
- Main drivers:
- Construction and financing costs, land availability, development feasibility, population growth, infrastructure investment, zoning and permitting, and the balance between future demand and existing supply.
Land Development Market Highlights
Where Canada's Land Development Markets Stand
Select a market to see what's shaping land development conditions in 2026.
Calgary
Industrial land demandIndustrial land
Calgary continued to benefit from demand for industrial land.
Supply
Well-located development parcels proved increasingly scarce.
Winnipeg
Room to growCentrePort
Winnipeg’s CentrePort expansion and planned industrial parks attracted interest from investors and businesses seeking room to grow.
Edmonton and Halifax
Industrial underwayIndustrial
Industrial development was underway in both markets.
Greater Toronto Area
Weakest segmentDevelopment land
Development land continued to be one of the market’s weakest segments.
Opportunities
Joint ventures, seniors’ housing and repositioning of existing properties were being explored.
Kelowna
Slowing developmentChallenges
Oversupply concerns and rising costs slowed development.
Ottawa and Greater Vancouver
Financing constraintsFinancing
Financing constraints have made new construction more difficult to justify.
Overview
Across the country, investors and developers placed greater emphasis on projects with clear income potential, manageable costs and shorter development timelines, often favouring the acquisition and improvement of existing properties over new construction.
Regional differences
- The Greater Toronto Area faced elevated borrowing and construction costs, lengthy non-income-producing development cycles and growing interest in joint ventures and higher-density residential projects.
- Kelowna’s development activity has slowed amid apartment oversupply concerns and weaker project economics.
- Calgary and Edmonton benefitted from industrial demand but faced land constraints and high replacement costs in sought-after areas.
- Winnipeg offered opportunities through industrial land expansion at CentrePort and proposed business parks.
- Halifax benefitted from defence, logistics and housing investment.
- In Newfoundland-Labrador, several new multi-family developments are planned or underway, supported in part by CMHC’s MLI Select program.** However, outside of that sector, developers remained cautious, and new industrial product was almost non-existent.[**References to planned or proposed developments describe current plans, not assurances of completion, timing or final scale.]
Key risk
Projects could be delayed or cancelled where financing costs, construction expenses and land prices make development uneconomic relative to achievable rents or sale values. Prolonged delays could contribute to undersupply if demand remains sustained and alternative supply is insufficient; neither the timing nor the extent of any shortage is certain.
What Are the Top Trends Shaping Canada’s Commercial Real Estate Market?
Six trends are shaping Canadian commercial real estate in 2026: a revival of bricks-and-mortar retail, a shift toward smaller footprints, defence spending, renewed interest in retrofitting older buildings, demand for AI and data centre land and the return of institutional capital to rental housing.
The return of bricks-and-mortar retail prompts an unexpected resurgence, with a supply problem.
Markets: Greater Vancouver, Calgary, Ottawa, Greater Toronto Area, London
Greater Vancouver had one of the more compelling stories. The pandemic-era shift toward online shopping prompted developers to scale back retail construction. Six years later, retailers are now seen expanding their physical presence, particularly in suburban neighbourhoods where new space is scarce. Suburban vacancy has fallen below one per cent in some areas.
Multiple asset classes and markets see shift toward smaller commercial footprints.
Markets: London, Ottawa, Edmonton, Calgary, Saskatoon, Greater Toronto Area
The shift toward smaller footprints now extends well beyond retail.
London reported exceptionally strong demand for industrial units between 1,000 and 2,000 sq. ft., even as absorption slowed for buildings exceeding 50,000 sq. ft. Ottawa's independent retailers concentrated around 1,500 sq. ft., while Edmonton's suburban office market experienced stronger demand for units of 1,000 - 1,500 sq. ft.
Defence spending has become a significant commercial real estate driver.
Markets: Halifax, Newfoundland and Labrador
Halifax has recorded $142.5 million in major defence-related real estate acquisitions, encompassing waterfront industrial lands and military housing. The reported long-term investment commitment at 5 Wing Goose Bay, potentially reaching $8 billion, could benefit Newfoundland and Labrador if implemented. The amount, timing and commercial real estate effects remain uncertain.
There’s growing appeal to older buildings and the economics of retrofitting.
Markets: Calgary, Edmonton, Winnipeg, Greater Toronto Area, Saskatoon
Rising construction costs have given existing properties a competitive advantage. Calgary buyers targeted older industrial buildings already equipped with cranes and specialized infrastructure. Winnipeg investors acquired older concrete apartment buildings for upgrades, while Greater Toronto Area owners explored hotel conversions, seniors' housing and other alternative uses.
AI and data centres have created a new commercial development frontier, an emerging driver of industrial land and infrastructure investment.
Markets: Edmonton, Winnipeg
Edmonton's planned $13-billion Meta data-centre project has raised its profile internationally, while interest from data-centre operators has begun to emerge in Winnipeg. The planned investment does not assure project completion or related property demand. Winnipeg's experience also highlights the challenges of accommodating these projects, including electricity requirements, land-use compatibility and community concerns.
Institutional and out-of-province capital has returned to established rental housing, even as some rental markets soften.
Markets: Greater Toronto Area, Ottawa, Winnipeg, Edmonton, Regina
Multi-family investment volume in the Greater Toronto Area increased more than 240 per cent year over year in the first half of 2026. Investors targeted established concrete buildings offering below-market rents and opportunities to improve operations. At the same time, new rental construction has placed downward pressure on rents and increasing vacancy in Ottawa, London and Kelowna.
Also Trending
Medical, dental, beauty and wellness businesses are changing the retail landscape.
Markets: Ottawa, Vancouver, Calgary, London, Greater Toronto Area
Medical and dental practices have increasingly moved out of traditional office buildings and into neighbourhood shopping plazas. Fitness, beauty and wellness operators have also absorbed space previously occupied by conventional retailers. Calgary's restrictive covenants in established shopping centres have created additional pent-up demand from some of these users.
Office recovery is taking two very different paths.
Markets: Calgary, Greater Toronto Area, Ottawa, Saskatoon, Regina, Winnipeg
Calgary's office availability has fallen from a peak of 23.4 per cent to 20.2 per cent, supported in part by conversions. Toronto's Financial District has seen stronger demand for premium office space, while some C-Class landlords have been including demolition clauses in leases. Saskatoon provides an especially striking contrast: the triple-A Nutrien Tower and adjacent east tower are fully leased, while more than 650,000 sq. ft. remain vacant in surrounding B- and C-Class buildings.
Out-of-province investors are expanding into smaller commercial markets.
Markets: Winnipeg, Regina, Newfoundland and Labrador, Saskatoon
Toronto-based RFA Capital acquired approximately $80 million in Winnipeg industrial property, while Montreal-based PROREIT purchased nearly $46 million. Newfoundland has also attracted Ontario investors to large multi-residential acquisitions in Gander.
Farmland is undergoing a generational transition.
Market: Saskatchewan
Saskatchewan farm listings have reached their highest level in five years, with 317 properties on the market compared with 2022. At the same time, median farmland prices climbed more than 58 per cent since 2022. Succession decisions could bring additional properties to market, but the number and timing of any listings remain uncertain.
Downtown revitalization is increasingly about creating communities, not simply filling offices.
Markets: Winnipeg, Saskatoon, Calgary, Regina
Winnipeg's downtown redevelopment initiatives involve housing, healthcare, community facilities and mixed-use development, including collaboration between True North and the Southern Chiefs' Organization. Saskatoon is exploring the redevelopment of the former StarPhoenix site into approximately 600 residential units, complemented by retail, grocery and parking.***
[***These initiatives should not be read as assurances of completion, timing or final scale.]
Newfoundland and Labrador's commercial market has attracted interest beyond St. John's.
Newfoundland and Labrador kicked off 2026 with commercial sales volume nearly triple the previous year's first-quarter level. Demand for multi-family assets has extended into Gander, while resource, defence and infrastructure investment has created opportunities throughout the province.
Source: REMAX Canada
What Are the Main Drivers of Commercial Real Estate Value in Canada?
Eight national factors are driving commercial property values in Canada: financing costs, construction costs, limited quality inventory, population growth, changing office demand, new retail formats, industrial restructuring and investor focus on cap rates and stable income.
However, these national forces are producing different outcomes across regions, depending on local economic drivers, development pipelines, property availability and the balance between supply and demand.
REMAX Canada interviewed REMAX brokers and agents in 12 major commercial markets, who provided their insights for this report.
The central theme is a selective, income-focused market recovery, whereby investors have continued to pursue properties with reliable cash flow and strong underlying demand, while higher financing costs, elevated replacement costs and uncertainty have restrained speculative development and investment in weaker assets.
National Factors
Financing costs and tighter lending criteria
Impact: Constraining transactions and new development
- Higher borrowing costs, bond-yield uncertainty and stricter underwriting have made acquisitions and development more difficult.
- Lenders require larger downpayments and stronger financial assurances, particularly for multi-unit industrial and multi-family projects.
- Investors have been prioritizing existing income-producing assets over speculative projects, while vendor take-back financing and programs such as Canada Mortgage and Housing Corporation’s MLI Select have helped some transactions proceed.
- Buyers and sellers have been increasingly negotiating around differences in property valuations and return expectations.
Market implicationCapital remains available, but financing eligibility, equity requirements and dependable cash flow are increasingly important determinants of whether a transaction proceeds.
High construction and replacement costs
Impact: Supporting existing property values while limiting new supply
- Elevated construction costs have made new industrial, retail and multi-family developments harder to justify.
- In Calgary, retail construction costs were reported at $600–$700 psf. In Vancouver, financing for new multi-unit industrial developments can require downpayments of 45 to 50 per cent.
- Owners and investors have increasingly favoured retrofitting, repositioning and acquiring existing buildings with valuable infrastructure.
- If construction remains subdued and demand grows, undersupply could develop in some markets; its timing and extent would depend on local availability and absorption.
Market implicationExisting properties with functional layouts, loading facilities, high ceilings, parking and established locations could have a competitive advantage where new projects cannot meet required investment returns.
Limited quality inventory and uneven supply
Impact: Supporting rents and competition for desirable properties
- Industrial and neighbourhood retail availability is tight in many markets, with particularly limited supply of smaller, functional buildings.
- Investors have concentrated on prime assets, established shopping centres, modern logistics facilities and well-leased multi-family properties.
- Office markets have faced a different supply problem: excess older space exists alongside strong demand for high-quality buildings.
- The shortage of suitable properties has also constrained transaction volumes, even where buyer demand has been healthy.
Market implicationThe quality, location and functionality of a property increasingly matter more than broad market averages. Tight supply does not necessarily mean every property will appreciate.
Population growth, migration and household formation
Impact: Supporting demand, but with significant regional variation
- Population growth and interprovincial migration have supported demand for housing, neighbourhood retail, distribution facilities and commercial services.
- Housing affordability pressures could keep some households in rental accommodation longer, but any effect on multi-family demand depends on local employment, household formation and available supply.
- Slower population growth in markets such as Kelowna and Ottawa has contributed to softer rental conditions as substantial new apartment supply is also being delivered.
- Population and employment growth could support commercial property demand, but new supply could outpace absorption. The duration of any imbalance remains uncertain.
Market implicationPopulation growth is a demand driver, not a guarantee of higher rents or lower vacancy. Its effects depend on local employment, affordability and the pace of construction.
The structural transformation of office demand
Impact: A widening gap between premium and secondary office buildings
- Return-to-office policies have supported demand in some downtown markets, particularly Ottawa, but have not eliminated excess office space nationally.
- Tenants have increasingly favoured modern amenities, efficient layouts, transit access, parking and turnkey suites.
- Older Class B and C buildings have continued to face elevated availability in several cities.
- Office-to-residential conversions, renovations, demolition and alternative uses have been gradually removing or repositioning obsolete inventory.
Market implicationOffice recovery is increasingly asset-specific. Well-located, high-quality buildings could perform differently from older properties; building quality alone does not assure improved leasing or values.
Changing retail formats and service-oriented demand
Impact: Supporting neighbourhood retail and selected urban locations
- Demand has shifted toward grocery-anchored plazas, convenience retail, restaurants, medical and dental services, fitness, wellness and beauty operators.
- Many tenants preferred smaller units, often around 1,000–3,000 sq. ft., rather than large traditional retail footprints.
- Physical-store demand has strengthened following the pandemic-era expansion of online shopping, while some traditional malls have continued to struggle with traffic and affordability.
- Limited new construction and established neighbourhood locations have supported rents for suitable existing retail space.
Market implicationRetail performance increasingly depends on tenant mix, everyday consumer needs, exposure, parking and local demographics rather than retail space demand in general.
Industrial restructuring and logistics investment
Impact: Supporting industrial demand, with local exceptions
- Manufacturing, food processing, distribution, supply-chain infrastructure and e-commerce-related logistics have supported demand for industrial space.
- Data centres, AI infrastructure, clean energy and advanced manufacturing have created additional opportunities in selected regions.
- Tenants have increasingly valued practical features such as high ceilings, loading access, cranes, large bays and adequate yard space.
- Slower absorption of large industrial buildings in London and the expansion of supply in parts of Winnipeg have demonstrated that industrial demand is not uniform.
Market implicationIndustrial has remained a major source of investment interest, but property size, building specifications, location and the local economic base determine performance.
Investor selectivity, cap rates and income stability
Impact: Concentrating capital in defensible assets
- Private investors, pension funds, REITs, institutional buyers and out-of-province capital have remained active, but their focus has varied by market and asset class.
- Buyers have favoured strong tenants, established rental income, manageable capital requirements and opportunities to improve operations.
- Cap rates have risen modestly in some markets, while tightening in others for highly sought-after properties.
- Foreign capital has moderated in Calgary, while institutional investment remains active in markets such as the Greater Toronto Area, Ottawa and Winnipeg.
Market implicationInvestment volume and property values are increasingly determined by the quality of income and financing structure, rather than investor appetite alone.
Regional and Local Factors
Greater Vancouver
Confidence-ChallengedFactors
Implications
Tight industrial availability and strong neighbourhood retail; gradual office improvement; weaker multi-family investment and lower average prices per door
Kelowna
Stable, Value-OrientedFactors
Implications
Cautious investment, softening rental conditions and office demand, recovering industrial fundamentals, selective retail demand
Edmonton
MomentumFactors
Implications
Strong industrial demand, rising interest in arterial retail and townhomes, suburban office resilience and persistent downtown office challenges
Calgary
MomentumFactors
Implications
Strong industrial and neighbourhood retail markets, improving office conditions, continued multi-family investment focused on cash flow
Saskatoon
MomentumFactors
Implications
Tight industrial and neighbourhood retail markets, expanding multi-family development, premium demand for Class A office but substantial secondary-office vacancy
Saskatchewan Farmland
Stable, Value-OrientedFactors
Implications
Rising listings alongside continued demand for quality land; upward pressure on values and widening differences between premium and lower-quality parcels
Regina
Stable, Value-OrientedFactors
Implications
Tight industrial and multi-family conditions, suburban office outperformance and price-sensitive retail demand
Winnipeg
MomentumFactors
Implications
Strong industrial investment and tight rental housing; suburban office resilience; redevelopment opportunities and emerging data-centre interest
London
Stable, Value-OrientedFactors
Implications
Strong demand for smaller industrial and retail units, rising rental apartment vacancy, and persistent office-market weakness
Greater Toronto Area
Confidence-ChallengedFactors
Implications
Strong investment volumes, premium office demand, significant multi-family investment and selective industrial demand despite softer sale prices
Ottawa
MomentumFactors
Implications
Strong leasing and renewed downtown office interest, tight industrial and retail supply, but softer new-rental absorption
Halifax-Dartmouth
MomentumFactors
Implications
Strengthening industrial and office markets, steady necessity-based retail demand, and a rental market moving toward greater balance
Newfoundland-Labrador
Stable, Value-OrientedFactors
Implications
Strong investor demand and rising multi-family values; tight industrial supply and demand for modern flex, warehouse and yard space; high retail occupancy; persistent downtown St. John's office vacancy despite improving sentiment; growing employment, incomes and population could support longer-term demand, depending on local supply and economic conditions
Which Canadian Markets Have the Most Commercial Momentum?
Calgary, Edmonton, Saskatoon, Winnipeg, Ottawa and Halifax showed the strongest commercial momentum in the first half of 2026, while Greater Vancouver and the Greater Toronto Area saw a more uneven recovery.
A quick-reference view of market momentum, key demand drivers and the factors shaping each market's outlook, based on input from REMAX brokers and agents.
Momentum Markets
Strong sector momentum****
- CalgaryIndustrial and retail demand, improving office conditions and energy-sector support.
- EdmontonIndustrial shortages, affordability, logistics and major technology investment.
- SaskatoonTight industrial and retail supply, multi-family development and resource-sector support.
- WinnipegStable investment, tight industrial and rental markets, and CentrePort expansion.
- OttawaStrong industrial leasing, limited retail supply and renewed downtown office confidence.
- HalifaxDefence investment, logistics expansion, strong office demand and infrastructure spending.
Stable, Value-Oriented Markets
Selective opportunities****
- KelownaRetail resilience, but apartment oversupply and slower population growth.
- ReginaStrong employment and population growth; industrial and multi-family outperform.
- LondonResilient smaller-unit industrial and retail demand, but rising apartment vacancy and weak office conditions.
- Saskatchewan farmlandStrong demand for quality land, with rising listings and generational farm transitions.
- Newfoundland-LabradorStrong multi-family investment and rising values, high retail occupancy and major energy-sector support, offset by scarce industrial inventory and persistent downtown office vacancy.
Confidence-Challenged Markets
Uneven recovery****
- Greater VancouverRetail strength and tightening industrial supply, offset by financing challenges and weaker multi-family investment.
- Greater Toronto AreaStrong investment volumes and premium asset demand, but high costs and weaker older office stock.
****Based on input from REMAX brokers and agents, and is not intended as investment advice.
Cross-Market Indicators at a Glance
The overall picture of the Canadian commercial real estate market is one of selective recovery.
Industrial and necessity-based retail fundamentals have been generally resilient, office markets have been recovering unevenly, and multi-family conditions vary according to local rental supply. Financing and development costs have remained important constraints across the country.
Select an indicator
Interest rates & bond yields
Current status: Constraining- What the supplied market data indicates
- Financing remains selective, requirements are elevated and bond-yield uncertainty continues to affect investment decisions.
- Implication for the outlook****
- Transactions and new development remain constrained. Greater financing stability could support activity, but would not by itself assure recovery.
Industrial & retail availability
Current status: Generally favourable- What the supplied market data indicates
- Industrial availability is tight in many markets, including Vancouver (4.2%), Calgary (4.7%) and Ottawa (4.0%). Retail vacancy is exceptionally low in several suburban markets.
- Implication for the outlook****
- Limited availability could support rents and existing property values for functional industrial buildings and necessity-based retail, subject to local demand and financing conditions; appreciation is not assured.
Construction starts & completions
Current status: Development constrained- What the supplied market data indicates
- High construction costs and financing challenges are delaying projects. However, apartment completions have increased supply in markets such as Kelowna, London and Ottawa.
- Implication for the outlook****
- Industrial and retail undersupply could develop if demand outpaces new supply. In selected rental markets, the timing and extent of absorption of recently completed units remain uncertain.
Population & employment growth
Current status: Uneven regionally- What the supplied market data indicates
- Employment and population growth support demand in Alberta, Regina and Halifax, while growth has moderated in Kelowna and some other markets.
- Implication for the outlook****
- Population and employment growth could support leasing and rental demand, while weaker growth could slow absorption. Outcomes depend on local supply and economic conditions.
Office absorption by building class
Current status: Improving, uneven- What the supplied market data indicates
- Premium office buildings are attracting tenants in Toronto, Ottawa and other markets. Older Class B and C buildings remain challenged in Edmonton, Saskatoon and London. National office vacancy has also declined year over year.
- Implication for the outlook****
- Office recovery is underway, but building quality, location and repositioning potential remain decisive.
Rental vacancy & tenant incentives
Current status: Mixed- What the supplied market data indicates
- Rental conditions remain tight in Regina and Winnipeg, but vacancies and tenant incentives have increased in markets with substantial new supply, including Kelowna and Ottawa.
- Implication for the outlook****
- Rental income prospects are sensitive to local supply pipelines, absorption and achievable rents; current conditions do not assure future income or occupancy.
Cap rates & transaction prices
Current status: Selective recovery- What the supplied market data indicates
- Investment activity has strengthened nationally, while cap rates have compressed modestly in several sectors. Property pricing remains uneven, with some markets recording lower average prices per square foot or per unit.
- Implication for the outlook****
- Investor confidence is improving, but asset quality, financing and income sustainability remain central to valuations.
Trade policy & sector investment
Current status: Uncertain, with growth pockets- What the supplied market data indicates
- Trade uncertainty remains a concern for manufacturing and logistics. Meanwhile, energy, technology, defence and infrastructure investments are supporting demand in selected regions.
- Implication for the outlook****
- Sector investment could support property demand in selected regions, but its timing and effects remain uncertain, particularly in trade-sensitive sectors.
****Based on a survey of REMAX brokers and agents on market activity and local developments. Not intended as investment advice. Each REMAX office is independently owned and operated. Responses are meant to capture industry-level information and are not meant to serve as an indication of Real REMAX Group’s company-specific growth trends.
Overall reading
Positive signals
- Tight industrial and neighbourhood retail supply.
- Improving office leasing and stronger investment volumes.
- Continued capital interest in quality, income-producing assets.
Key constraints
- Financing and construction costs.
- Uneven rental absorption and office-market performance.
- Trade uncertainty and regionally divergent population growth.
Bottom line
These indicators point to a market in recovery, but not a uniform one.
Performance by sector
Industrial and necessity-based retail
Strongest operating fundamentalsIndustrial and necessity-based retail have shown some of the strongest operating fundamentals.
Office
Improved selectivelyOffice has improved selectively.
Multi-family
Dependent on local supply and demandMulti-family performance has become increasingly dependent on local supply and demand.
Signs to monitor
The most important signs to monitor are whether:
- Financing becomes more accessible.
- Leasing improves beyond premium assets.
- New development aligns more closely with local demand.
What Is the Outlook for Canadian Commercial Real Estate?
The outlook points to selective improvement rather than an assured national recovery, with investors favouring well-located properties that offer reliable income, strong tenants and limited competing supply.
Based on expectations provided by REMAX brokers and agents, a gradual, uneven recovery in Canadian commercial real estate through late 2026 and into 2027 is one possible scenario, assuming investment demand remains resilient, selected asset classes continue to improve and regional economic fundamentals remain supportive. The timing and extent of any recovery remain uncertain.
Higher financing and construction costs, economic uncertainty including political and geopolitical factors among others, and uneven supply-demand conditions could constrain growth or prevent that scenario from materializing.
National investment volume has strengthened, with CRE investment in the first half of 2026 rising 19 per cent year over year*****, according to Altus Group. (*****Excludes Alberta. Alberta data was not available at the time of publication.)
Outlook by asset class
Industrial
Markets such as Edmonton, Calgary, Vancouver, Ottawa and Winnipeg have reported support for leasing and property values from limited availability, logistics demand and infrastructure investment. If those conditions persist, high construction costs could favour demand for existing buildings. Trade uncertainty and changes in local supply or demand could offset that support; continued growth is not assured.
Retail
Neighbourhood shopping plazas, grocery-anchored centres and properties serving everyday needs could remain comparatively resilient if tenant demand persists. Limited new supply and demand from medical, wellness and food-service tenants could support rents in selected markets, but do not assure rental growth. Traditional malls and weaker downtown locations remain exposed to household budget pressures, occupancy costs and weaker foot traffic.
Multi-family
Long-term demand has been supported by housing affordability and population growth, but those factors do not assure future performance. Markets experiencing substantial new apartment completions, including Kelowna, Ottawa and London, could face higher vacancies and softer rent growth if absorption does not keep pace. Regina, Winnipeg and other supply-constrained markets have retained favourable rental fundamentals, which could change as local supply and demand evolve.
Office
Recovery has progressed, driven by return-to-office policies and tenant demand for premium, amenity-rich buildings. Toronto, Ottawa and Halifax have demonstrated relative strength, while older Class B and C properties in several cities have continued to struggle. Renovations, conversions and repositioning could remain options, but their feasibility and effects depend on property-specific costs, tenant demand and achievable returns.
Land development
New development could remain selective if financing costs, construction expenses, land constraints and uncertain returns persist. Industrial and residential supply shortages could emerge where demand remains sustained and development is insufficient, but their timing and extent are uncertain.
The bottom line
Overall, reported conditions suggest selective improvement rather than an assured national market recovery.
Investors could continue to favour well-located properties with reliable income, strong tenants and limited competing supply, but preferences and outcomes may change. Any further recovery would be sensitive to financing conditions, economic growth, trade relations and each market's ability to absorb new development; its timing, pace and extent remain uncertain.
Regional growth drivers
- AlbertaEnergy, technology and logistics investment
- SaskatchewanAgricultural and resource economy
- HalifaxDefense and infrastructure spending
Regionally, Alberta’s energy, technology and logistics investment, Saskatchewan’s agricultural and resource economy, and Halifax’s defense and infrastructure spending have been important growth drivers. Meanwhile, major urban markets have benefitted from institutional investment and demand for quality assets.
Regional reports
Explore commercial real estate in your market
Read local insights from REMAX brokers and agents in 12 markets across Canada.
About the Report
The REMAX Canada Fall 2026 Commercial Real Estate Report includes data and insights supplied by REMAX brokerages and analyzed by Point Blank Communications. REMAX brokers and agents are surveyed on market activity and local developments. Each REMAX office is independently owned and operated. Responses are meant to capture industry-level information and are not meant to serve as an indication of Real REMAX Group’s company-specific growth trends.
About the REMAX Network
As one of the leading global real estate franchisors, REMAX, LLC is a subsidiary of Real REMAX Group (NASDAQ: REAX) with more than 145,000 agents in nearly 8,500 offices and a presence in more than 120 countries and territories. REMAX Canada refers to REMAX Canada, Inc., which is a subsidiary of REMAX, LLC. Nobody in the world sells more real estate than REMAX, as measured by residential transaction sides. REMAX was founded in 1973 by Dave and Gail Liniger, with an innovative, entrepreneurial culture affording its agents and franchisees the flexibility to operate their businesses with great independence. REMAX agents have lived, worked and served in their local communities for decades, raising millions of dollars every year for Children’s Miracle Network® and other charities. To learn more about REMAX, to search home listings or find an agent in your community, please visit remax.ca. For the latest news from REMAX Canada, please visit blog.remax.ca.
Forward-Looking Statements
Some of the statements in this press release are “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Exchange Act of 1934, as amended, and the U.S. Private Securities Litigation Reform Act of 1995, including statements regarding the stock repurchase authorization. Forward-looking statements include all statements that do not relate solely to historical or current facts, and can generally be identified by the use of words such as “anticipate”, “believe”, “estimate”, “expect”, “intend”, “plan”, “potential”, “project”, and similar expressions or future or conditional verbs such as “could”, “may”, “should”, “will” and “would”. These statements inherently involve numerous risks, uncertainties, and assumptions that could cause actual results to differ materially from those projected in these statements. Where, in any forward-looking statement, Real REMAX Group expresses an expectation or belief as to future results or events, it is based on Real REMAX Group’s current plans and expectations, expressed in good faith and believed to have a reasonable basis. However, Real REMAX Group cannot give any assurance that any such expectation or belief as to future results will be achieved or accomplished. Significant risk factors that may cause such a difference include, but are not limited to, slowdowns in real estate markets, economic and industry downturns; the inability to successfully integrate the companies; Real REMAX Group’s ability to attract and retain agents and franchisees; Real REMAX Group’s inability to successfully launch new products and features; Real REMAX Group’s inability to scale while improving operating leverage, or inability to successfully execute its strategies; possible unfavorable results in legal proceedings; changes in laws, regulations or the regulatory environment affecting our business; disruption to our technology or cybersecurity incidents; and other risk factors detailed from time to time in our reports filed with the SEC, as well as in legacy Real’s and legacy REMAX’s reports filed with the SEC, including legacy Real’s annual report on Form 40-F, reports on Form 6-K and other documents filed with the SEC, and legacy REMAX’s annual report on Form 10-K, quarterly reports on Form 10-Q, reports on Form 8-K and other documents filed with the SEC, copies of which are available at www.sec.gov, and legacy Real’s reports filed with Canadian securities regulators, including legacy Real’s audited annual financial statements and annual management’s discussion and analysis for the financial year ended December 31, 2025, Annual Information Form dated March 4, 2026 and quarterly financial statements and quarterly management’s discussion and analysis for the period ended June 30, 2026, copies of which are available under legacy Real’s SEDAR+ profile at www.sedarplus.ca.
