Canada’s commercial real estate market is poised for an increase in investment as investors position themselves ahead of the next cycle, according to a new national outlook from Marcus & Millichap.

The firm says stabilizing financing conditions, following recent Bank of Canada interest-rate cuts, are beginning to normalize borrowing costs and improve liquidity, laying the groundwork for renewed deal activity across major asset classes. While progress is expected to be gradual, the rate environment is becoming more predictable, supporting investor re-engagement and tenant expansion.

Lingering trade uncertainty weighed on sentiment through much of 2025, but Marcus & Millichap points to a potential turning point as U.S.-Mexico-Canada trade-deal renegotiations come into view and a more pro-growth federal agenda gains traction. Greater clarity on trade policy, increased government spending and efforts to remove interprovincial trade barriers are expected to help rebuild confidence later in 2026 and into 2027.

Many investors are already acting ahead of a broader recovery, taking advantage of pricing adjustments, negotiating leverage and improved access to higher-quality inventory before competition intensifies, according to the company. The report notes that capital has remained selective, with a focus on prime assets and property types offering stability and defensive characteristics.

Across property sectors, the outlook calls for gradual improvement rather than a sharp rebound. Multi-family fundamentals are expected to soften further in the near term amid elevated completions and slower population growth, but the sector continues to attract investor interest given Canada’s structural housing shortage. Retail and office markets are showing early signs of stabilization, supported by lower rates and easing supply pipelines, while industrial performance remains closely tied to trade developments. Hospitality is forecast to benefit from resilient domestic travel and global events, including the 2026 FIFA World Cup.

Overall, Marcus & Millichap says, the market is transitioning into a new cycle, with investors positioning capital in anticipation of more consistent transaction flow as economic and financial conditions continue to stabilize.

Luke Simurda, Marcus & Millichap’s head of Canadian research, was the report’s lead author.

Photo: Marcus & Millichap