Avison Young’s Fieder, JLL’s Peretz Weigh in on Market Conditions
Connect is holding its Summer 2025 Leadership Series in which top executives from Canadian commercial real estate firms provide insights on the state of the market. Today, Mark Fieder, head of Avison Young’s Canadian business, and Jonathan Peretz, JLL’s executive managing director of national leasing, offer their views.
Which asset classes do you expect to shine, and why?
Jonathan Peretz: “In the current dynamic market, several asset classes are poised for strong performance, driven by fundamental shifts in how we work, live, and consume. Focusing on office, we’re clearly witnessing the return of this asset class in real time in 2025. The predominant theme for the office sector right now is: Flight to quality and experience. Companies are actively implementing more assertive return-to-office mandates, moving well beyond the hybrid suggestions of 2022 and 2023 to establish clearer expectations around in-person presence. Crucially, they’re pairing these mandates with significant investments in workplace quality. This is creating a pronounced flight to quality where occupiers are demanding spaces that offer leading sustainability credentials, advanced technology, and the kind of amenities that truly transform the office into a destination workplace.
“From a sector perspective, yes, FIRE (Finance, Insurance, Real Estate) continues to generate most of the headlines with their return-to-office pushes. However, I’m particularly bullish on what we’re seeing from TAMI (Technology, Advertising, Media, Information) occupiers. They are actively seeking high-performance buildings and amenity-rich environments specifically designed to foster collaboration and innovation.”
Mark Fieder: “Multi-residential, purpose-built rental and industrial are still highly sought-after by the investor community, and grocery-anchored retail and retail in general. There’s a lot of retail repositioning going on. And, I would tell you, those are value-add opportunities and those are working their way through the market. And lastly, we’re seeing a tremendous change in the view of office. As you are aware because you have written about it, the return-to-office [movement] is building, it’s strong and the major financial institutions in this country are calling their people back. That has created a lot of demand for office space, and a lot of institutions are companies have been growing since the pandemic, and a lot of those people were working from home. Now, they’ve called them back and a lot of institutions don’t have enough space. We expect leasing fundamentals to turn around dramatically going into 2026 because of absorption of space as companies accommodate their employees coming back downtown.
“With the turnaround in leasing fundamentals comes interest from the buying set of the institutions and private capital that are now starting to look at office as an opportunity to buy for less money than they would have to pay pre-pandemic and even during the pandemic. They’re at a place now where they’ve got leasing fundamentals getting better at prices that make sense for office.”
How do you think tariffs will impact Canadian CRE investment during the second half of 2025 and beyond?
Jonathan Peretz: “When considering the impact of tariffs on Canadian CRE investment, particularly within the industrial market, it’s clear they have had a material effect. I fully agree that tariffs noticeably slowed down leasing velocity and investments in the first half of 2025. The inherent uncertainty surrounding tariff policies initially fostered a wait-and-see approach among many occupiers and investors, and we even saw some of our clients begin to look at expansion opportunities outside of Canada as they strategically navigated these global trade complexities. The manufacturing sector continues to be affected by tariffs as companies look to mitigate future trade risks and enhance supply-chain resilience.
“However, this same pressure is also accelerating longer-term strategic shifts, such as reshoring and nearshoring, as companies are increasingly bringing manufacturing and warehousing closer to end-markets to mitigate future tariff risks and supply chain vulnerabilities, which ultimately increases demand for specific industrial space within Canada. As we’re seeing tangible shifts in inventories and production from overseas to nearby North American markets, Canada is receiving early signals of this supply chain recalibration, reinforcing the principle that investment will follow the tenants.
“What I’m now witnessing is a change in leasing momentum through the second half of 2025. This resurgence is driven by the industrial sector’s underlying resilience. As occupiers gain greater clarity on trade policies and fine-tune their strategies, they are actively moving forward with their space requirements here. Therefore, I firmly believe this positive leasing velocity will not only continue to finish out 2025 strongly, but will also gain significant traction and accelerate well into 2026, solidifying the industrial sector’s position as a key growth driver in Canadian CRE, despite the lingering complexities introduced by tariffs.”
What’s your outlook for foreign investment in Canada within the next six to 12 months?
Mark Fieder: “I think that there’s going to continue to be a focus on Canada as a place to invest. Foreign investment has always been a part of our Canadian commercial real estate market. I think that Canada continues, in the world, to be seen as a safe haven for capital. It’s predictable, we have a stable government, the economic fundamental are good. They could be better, but they’re good in the whole scheme of things. With all the turmoil going on in the U.S., it’s quite possible that Canada will get a lot more attention as a stable, predictable place to invest.”