Top CRE Executives Share Views on State of Market
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 marks the first edition in the series. Read on as Jonathan Turnbull, managing director and head of Canada for Harrison Street; Alex Akman, chief operating officer at Shindico; and, Skyline CFO Wayne Byrd, share their views. And, watch for more comments in coming days and weeks.
Which property types may be hidden gems?
Jonathan Turnbull: Harrison Street believes that the alternative sectors, such as senior housing, student housing, self-storage, medical office, life sciences and data centres, are less followed [or] understood and, therefore, could be considered hidden gems. The supply-demand imbalance in those sectors remains strong and, therefore, pricing leverage for the owners is expected to remain firm. We expect the operating performance of these demographic-driven sectors to continue its recent trend and deliver attractive growth over the coming years. Continued growth of local and global institutional investor interest in these sectors is expected to drive valuation support relative to other real estate sectors which, when combined with operating performance [and] growth, should translate into strong relative returns over the coming years.”
Alex Akman: “We’re very interested in the industrial outdoor storage market, iOS, and that’s a market that we’ve been studying for some time in the U.S.A, where it is more prominent and prevalent. But as cities continue to require more land for residential, and as folks typically tend to prefer single-family as opposed to dense urban condos, the availability of industrial lands will diminish. Everyone knows that the highest and best use for a piece of land typically isn’t a warehouse. Typically, it’s housing or an apartment or retail or office. So, it’s possible that some of these employment lands end up getting swallowed up for other uses; and at the end of the day, the goods need to be moved, and they’re still going to be moved by semi-truck or train or air. I don’t know that we’re going to have drones buzzing around everywhere delivering seed cans any time soon. So, we’re very interested in that industrial outdoor storage from the perspective of our business strategy, and our business strategy revolves around long-term view and long-term thinking.
“For example, when we’re buying a retail parcel now in Winnipeg, one of our inputs will be: What is our price per acre? What are we paying per acre for this site? Because 15 years from now, in the next cycle, this would be an amazing multi-family location. So if we game that out, is it possible that we can clip a coupon now in the interim and then have inventory for a future cycle as it relates to potential redevelopment, and we view industrial outdoor storage as exactly that, but for the industrial market. So, we’re trying to do that right now with retail, if that makes sense, and multi-family. And, we think that the intensification for industrial outdoor storage is to develop distribution centres and to develop traditional industrial buildings on what are typically very well-located parcels that have some improvements, that have some neighbouring amenities that are by industrial standards, infill. So, the most exciting market for us is industrial outdoor storage. We did just complete the large acquisition of the Trans X portfolio with another family office that is a long-time partner of ours in Winnipeg. And, we’re very excited about that project and about the prospects. It’s, again, a very large deal. It’s 211 acres across Canada, and it put us in every major market.”
What is your outlook for Canadian CRE investment over the rest of 2025 and into 2026?
Wayne Byrd: “The outlook varies by asset class, but overall, we remain confident in the long-term fundamentals of the segments in which Skyline operates, namely multi-family residential, industrial, and essential retail.
“On the multi-family side, there’s no question that certain segments of the market, such as urban condos, are experiencing oversupply in some metropolitan areas. However, supply and demand dynamics remain fluid and are dependent on local economies, land zoning regulations, and population growth. And while homeownership affordability is improving, the affordability gap remains too great to materially affect the rental market. Overall, I see a rental market slowly returning to equilibrium, with pricing stabilizing after several years of outsized growth driven by population surges and constrained housing supply.
“On the retail side, there is continued strength in essential retail, which comprises roughly 80% of Skyline’s Retail REIT portfolio. Favourable supply and demand dynamics continue to drive the industry as new quality retail space continues to lag behind population expansion. Recent profit growth at Loblaws and Empire Co. Ltd. underscores this strength, with metrics such as same-store sales, basket size, and overall consumer traffic showing meaningful growth. This bodes well for industry tenancy and leasing metrics.
“On the industrial side, we see record supply in certain markets gradually being absorbed and incremental visibility on U.S. tariffs. Although certain industries like steel and softwood lumber are bracing for significant impact, it appears Canada has escaped the broad-based tariffs that were threatened to be imposed at the start of the year. Local pockets in provinces like Alberta continue to see strength. I believe transaction flow and leasing demand will firm up further as economic visibility returns to the market.
“In short, while each sector of real estate is responding differently to current economic forces, the long-term outlook remains constructive across the board. I believe high-quality assets in undersupplied, essential segments will continue to attract both investor and tenant demand.”