Interest-rate stability is drawing investors back to Canada’s commercial real estate markets, with capital increasingly targeting strong cash-flow assets as leasing activity strengthens and fundamentals firm up despite ongoing economic uncertainty, says a new Renax Commercial report.

The company examined first-quarter activity across 12 major Canadian markets and found improving absorption in the office sector, resilient industrial demand and continued strength in retail fundamentals, according to the 2026 Remax Commercial Market Overview.

The report said return-to-office mandates are supporting leasing activity in premium office space, while industrial inventory shortages persist in several markets nationwide. Retail demand has remained strong, supported by population growth and infrastructure investment, while improving financial conditions have renewed interest in well-located, income-producing assets.

“While uncertainty shaped much of 2025, we’re now seeing a clear shift in investor behaviour,” said Damon Conrad, head of Remax Canada Commercial. “Capital remains cautious and focused on preservation, but as financial conditions stabilize, deferred demand is beginning to re-emerge. Investors are highly selective, but they are increasingly prepared to act where income stability and long-term value are evident.”

The report noted that selective capital re-entry is occurring in markets such as the Greater Toronto Area, Vancouver and Edmonton, while office demand has strengthened for triple-A, amenity-rich buildings in Toronto, Vancouver and Ottawa. Older downtown office inventory in Calgary, Winnipeg and London, Ont., continues to face pressure to reposition or convert to another use.

Retail assets, particularly grocery-anchored and service-oriented properties, were identified as among the strongest-performing commercial asset classes in markets including Calgary, Regina, London, Hamilton-Niagara and Halifax, where low vacancy and strong investor demand are driving competition for available space.

Industrial markets remain mixed, with supply-constrained conditions in Regina, Winnipeg, Ottawa and Halifax supporting repurposing activity, while Vancouver and Ontario’s Hamilton-Niagara region continue to absorb newer inventory and move toward more balanced conditions.

The report also highlighted ongoing adjustments in the multi-family sector, where rising supply in Vancouver, Calgary and Halifax has increased vacancy rates, while demand for existing rental stock remains strong in Regina, Winnipeg and Saskatoon. It pointed to Toronto’s new $1.3-billion acquisition and conversion fund for unsold condominium inventory as a potential model for other major markets.

“Investors are no longer approaching the market broadly,” Conrad said. “Capital is being deployed with far greater precision, targeting assets with clear income profiles and long-term resilience. Quality, location and tenant stability are driving decision-making with less emphasis on speculation and greater focus on durable cash flow.”

According to the report, development activity has slowed in Vancouver and the GTA as condominium presales stall, while industrial, logistics and infrastructure-related land demand continues to gain traction in markets such as Calgary and London.

The report said Canada’s industrial real estate sector remains one of the country’s strongest-performing asset classes, supported by ongoing demand for small-bay and flexible industrial space from both owner-occupiers and investors.

“Investors are only prepared to sit on the sidelines for so long,” Conrad said. “As financing conditions ease and pricing expectations align, capital is re-entering the market with greater conviction. Transaction activity is beginning to build, and while recovery remains uneven, momentum is clearly shifting toward a more active and disciplined investment environment.”

Remax Commercial was formed after Remax Canada President Don Kottick recruited Conrad in November 2025 from Royal LePage Commercial, which he grew into a leading national brokerage.

Pictured: Vancouver

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