Andrew Petrozzi needs just one word to explain the cause of a sizable decline in Vancouver commercial real estate sales in 2025.

Uncertainty.

Petrozzi, head of Canadian research at Newmark was responding to a recent Greater Vancouver Realtors report that the region’s commercial real estate sale transactions (minimum value $1 million) declined 8.3% in 2025.

“I think you can say the overall number of deals are down because of uncertainty,” he said in an interview with Connect. “There was a lot of uncertainty last year and investors don’t like uncertainty. So, you’re naturally going to see reductions in the number of deals being done simply because in the beginning of the year, we were dealing with trade-war tariff stuff. Towards the end of the year, obviously, that had started to fade a bit, but still remain a concern.

“Moving into ’26, you’ve had larger geopolitical issues as well. But it’s not a surprise that 2025 saw fewer deals, simply because the cost of capital started to rise, and there was more uncertainty in the market related to tariffs.”

The drop in the region’s total investment dollar volume was even more acute, 23.2%, in 2025 as investors devoted considerably less capital to asset purchases, said Greater Vancouver Realtors. Total dollar volume fell to about $7.5 billion from approximately $9.7 billion in 2024.

Altogether, 1,335 deals were completed in 2025 compared with 1,456 in 2024. By asset class, land recorded the steepest decline in transaction count, falling 48.5% to 212 deals in 2025, while dollar volume dropped 59.5% to about $1.8 billion. Multi-family followed, with transactions down 29.9% to 61 sales and dollar volume decreasing 41.7% to $751 million.

Petrozzi was not surprised that land and multi-family declines in both the number of transactions and dollar volume, following what he described as “a challenging year” for both sectors, posted the largest drops.

The industrial sector was burdened by a flight to quality and lack of large-format warehouse supply, said Petrozzi, echoing Newmark’s year-end 2025 report on the sector. Those factors played a large role in a 15.7% drop in industrial sales transactions, to 343, and 29% plummet in industrial dollar volume to $1.3 billion.

In contrast, retail and other assets posted a 10.7% increase in transactions to 352, alongside a 20.4% rise in dollar volume to about $1.6 billion. Petrozzi was not surprised by the contrast in the local real estate board’s findings on retail in wake of the uncertainty.

Office recorded the strongest gains, with transactions up 58.2% to 367 deals and dollar volume surged 128.8% to approximately $2 billion. But Petrozzi thought dollar volume would be higher due to the sale of The Post tower in downtown Vancouver for a reported price of $1.1 billion.

But, he added, the office sector’s gains still “kind of” fit expectations.

“We have seen some office transacting,” said Petrozzi, who is based in Vancouver. “It has been fewer and farther between [compared to showings before the COVID-19 pandemic], but it’s an improvement over the year before.”

Photo: Greater Vancouver Realtors