CRE Spring 2026 Magazine

EDITORIAL

REAL ESTATE FORUMS | INFORMA CONNECT

Opportunity before confidence: Conditions for a new cycle

Roelof van Dijk Deputy Managing Director | Real Estate - Global Finance | Informa Connect

Creating asset strength and long-term value

As we progress through 2026, the commercial real estate industry continues to navigate a landscape shaped by prolonged uncertainty. The past year has demanded patience and discipline from investors, lenders, and developers alike. But the foundations of a new cycle are beginning to emerge—well before confidence has fully returned. Across Canada, the economic picture remains complex. In this edition, we distill nine key lessons from the Canadian economy so far this year—insights that reveal both the resilience and the fragility of the current moment. Labour market shifts, productivity challenges, and the recalibration of interest rate and inflation expectations continue to influence investment decisions. Despite these pressures, the underlying fundamentals of many markets remain stronger than the headlines suggest. Our Executive Insights feature brings forward a thoughtful Q&A with the Co Chairs of the Vancouver Real Estate Forum. Their perspectives reflect the pragmatism that has defined Western Canada’s approach: cautious optimism, a renewed focus on asset quality, and a recognition that disciplined capital deployment will shape the winners of the next cycle. Regional dynamics remain a critical lens for understanding opportunity. This issue examines how Canada can advance rental housing solutions by optimizing existing supply—an increasingly urgent priority as affordability challenges persist. In Markets in Focus, we turn to Montréal, where the gap between headline noise and on the ground reality has rarely been wider. We explore where investment opportunities remain compelling, even as sentiment fluctuates, we look at office market dynamics, where

early indicators suggest that some long running negative trends are beginning to reverse, and we examine why hotels continue to outperform other asset classes—supported by strong travel demand. Finally, we also highlight an economic report on Edmonton, which surfaces several unexpected findings about the city’s momentum, diversification, and long term growth trajectory. Edmonton’s evolution continues to defy outdated assumptions. Our feature on greenfield versus infill development in Edmonton addresses one of the most pressing strategic questions facing growing cities: how to balance expansion with sustainability, infrastructure capacity, and long term economic resilience. The choices made today will shape the region’s competitiveness for decades. Across all these themes, one message is clear: while uncertainty is rampant and confidence has not yet returned, opportunity is already taking shape. Bid ask spreads are narrowing, and transaction activity is gradually re emerging. Those who engage deeply with the data, challenge assumptions, and remain agile will be best positioned to lead as the next cycle unfolds. On behalf of the Real Estate Forums team, thank you for your continued support. We remain committed to supporting your success as the industry moves toward a more stable and opportunity rich future, and we look forward to welcoming you to our upcoming events throughout 2026.

All the best, Roelof van Dijk

To find out more visit Morguard.com 1-800-928-6255

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CONTENTS

EDITORIAL 3

Opportunity before confidence: Conditions for a new cycle

MARKET STATISTICS 35

An inaugural economic report on Edmonton throws up some surprises

INFORMA CONNECT — REAL ESTATE Andrew Mullins, CEO, Informa Connect Julian Kirby, Managing Director, Global Finance Roelof van Dijk, Deputy Managing Director | Real Estate - Global Finance | Informa

Latest commercial market statistics across Canada

EDITOR

ASSOCIATE EDITOR

Alexandra Gray

Laura Bennett

DESIGN Informa Connect Design Studio

ECONOMIC & MARKET OUTLOOK 8

MARKETS IN FOCUS 22

9 things we learned about the economy at the Vancouver Real Estate Forum

Headline noise vs reality on the ground: Investment opportunities in Montréal Reversing trends: Montréal office space in 2026 Why hotels are outperforming other asset classes in 2026

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EXECUTIVE INSIGHTS 11

Q&A with Vancouver Real Estate Forum Co-chairs

ABOUT THE CANADIAN REAL ESTATE FORUMS MAGAZINE The Canadian Real Estate Forums Magazine is published three times annually. Editions coincide with key Canadian Real

REGIONAL MARKET INTELLIGENCE 14 Advancing rental housing solutions: How to optimize the existing supply

Estate Forums and associated markets: Spring: Vancouver • Edmonton • Montréal Fall: Calgary • Ottawa Winter: Global Property Market • Real Estate Forum

GREENFIELD VS INFILL 31

Balancing growth in Edmonton

E-magazines are available at — realestateforums.com Select Tab: “News & Insights”

Disclaimer: The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of Informa Connect.

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ECONOMIC & MARKET OUTLOOK

9 things we learned about the economy at the Vancouver Real Estate Forum

“There are decades where nothing happens and weeks where decades happen”: Benjamin Tal, Managing Director and Deputy Chief Economist at CIBC Capital Markets, made his annual visit to VREF to update us all on his economic outlook. Here’s what we learned. 1. NOBODY REALLY HAS A CLUE Opening his presentation with a large question mark on the screen behind him, Tal stated: “You really want me to tell you what will happen. It’s impossible.” He described President Trump as a decision-maker with “no strategy, no GPS. There are notions and those notions are usually false”. The key was to have a long-term view, he said: “Six months from now, will we be discussing the Middle East? Because your business is not about the next quarter, your business is about the next five years.”

Benjamin Tal Managing Director and Deputy Chief Economist at CIBC Capital Markets

2. TRUMP IS THE OZEMPIC OF THE US ECONOMY Trump is shrinking the US economy, said Tal. The US labour market is weak, and low immigration has already reduced economic growth by 0.7%. The housing market is slowing, significantly impacting consumer sentiment. “There is a negative wealth effect; when house prices go down, the consumer spends less.” 3. DIVERSIFYING THE CANADIAN ECONOMY AWAY FROM THE US IS HARD Even with 15 free trade agreements signed with 51 countries, Canada’s reliance on the US rose. “Why?” asked Tal, “because we are closer to the US than to ourselves. I speak to a lot of business people, a lot of CEOs, who tell me it’s easy to say, very difficult to do: ‘We are sorry, we are so connected to them’, that’s why we will not be able to diversify our economic engine in a way that will make a big difference.” 4. THE BANK OF CANADA WILL BE OVERREACTING IF THEY RAISE INTEREST RATES Monetary policy operates with a lag of two years, explained Tal. Raising interest rates now could trigger a recession. “The economy is not doing great. The labour market is softening.

Youth unemployment is rising. At 2%, inflation is not an issue. Oil prices will raise inflation, but that will not derail the economy. Don’t lock your 10-year commitments now because I believe that rates are way too high, reflecting something that will not materialize.” 5. DEVELOPMENT CHARGES WILL GO DOWN t’s the right time for this to happen, and Tal believes development charges in BC and Vancouver will be cut significantly over the next few months. “I’ve been telling the government this is the time to cut the cost of delivering because the Canadian housing market now is too expensive to buy, not expensive enough to build. If we don’t cut delivery costs, we’ll deliver absolutely nothing. The market will clear for the right price, even the condo market. If you don’t, we will face a major shortage in two years. I’m very optimistic about the government starting to move in the right direction.”

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EXECUTIVE INSIGHTS

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6. THERE IS A MORTGAGE CLIFF, BUT LENDERS ARE GETTING AHEAD OF IT Homeowners will need to renew cheap mortgages taken out in 2021, and around 6 per cent will see a 40 per cent or more increase in their mortgage payments, explained Tal. Delinquency rates are starting to rise, but, he said, they are stabilizing at 60 days, not rising to 90 days: “Why? Because banks are calling you and saying, listen, you are behind. Let’s have coffee on us. Let’s discuss.” “This is going to be a micro story, not a macro story.” 7. POPULATION GROWTH WILL STABILIZE AT 1.5 PER CENT The previous 3.5 per cent growth was completely unsustainable, Tal stated. “It was crazy. We simply were unable to deal with it. Now it’s going to go back to 1 per cent, 1.5 per cent, which will be very supportive for your business.”

8. POLITICIANS SEE A PICTURE OF HOUSING STARTS THAT DOESN’T TELL THE FULL STORY The CMHC calculates housing starts when development reaches grade level, not at the start of digging, which is 18 months later. “The starts that we are seeing now are the starts from 18 months ago,” said Tal. “Housing starts in Canada, in my opinion, are basically close to zero.” And this matters because Tal predicts demand will rise in the condo market as prices come down and households “decouple”. “I believe that many of those small units will be purchased by those people who are living in a doubling-up situation. I’m actually very optimistic about the speed at which the condo market will clear. It’ll take two years, but we need to build.” 9. THERE IS LIGHT AT THE END OF THE TUNNEL According to Tal, time is not on President Trump’s side: “We have many pockets of resistance in the US, starting with the war, continuing with food and energy prices, and extending to the international community, the legal system, and the economy itself. “Good luck to President Trump in November 2026. Don’t look at these threats. They are reflecting a temporary situation. I’m actually optimistic about 2027. I believe the fog will clear in the second half of 2026, and I see 2026 as a transition year between something good and something better.”

Q&A with Vancouver Real Estate Forum Co-chairs

WHAT WAS THE MOOD OF THE CONFERENCE THIS YEAR, AND HOW DOES THIS COMPARE TO LAST YEAR? Ted: I would almost categorize it as a seesaw. There were times when you felt there were a lot of challenges. And then there were times when you felt we’re turning the corner. A few people commented that, as tough a regulatory environment as it’s been in British Columbia, it seems people, politicians, and governing officials are waking up to the fact that maybe we need to make the process of moving forward economically a little easier and less ridden with red tape. Cynthia: I agree with Ted, it was a mixed bag. A level of acceptance and realism has set into the market, with some panels highlighting the negatives, whereas others, like the global panel as an example, discussed reviewing investment opportunities around the world, comparing Canada and BC with other regions, and seeing our market as steady, safe and desirable. It seemed obvious that sometimes, we’re so close to our market that we only see the problems. There are some green shoots.

■ Alex Gray

Ted Mildon Vice President,

Cynthia Jagger Executive Vice President, Capital Markets, CBRE Limited

Office Leasing and Operations, Oxford Properties Group

As Co-chairs of the Vancouver forum, Ted Mildon and Cynthia Jagger steered the conversation. These are their key takeaways.

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WAS THE CONVERSATION STILL DOMINATED BY TARIFFS AND PRESIDENT TRUMP? Ted: Last year, we were talking about Trump, Trump, Trump, and certainly his name came up a lot, but it wasn’t the primary focus. We were looking a lot more internally. How can we, as a society, make better and faster decisions? How can we put in place systems that allow people to make decisions with greater certainty about timing and costs? So there was less talk about Trump this year, even with the new war and all that entails. The theme was uncertainty. Any part of our business, whether it’s immigration, interest rates, title, or demand, none of those buckets had a tremendous amount of certainty around them. Different people had different views, certainly, but there was no consensus. Cynthia: The Hon. John R. Baird, Senior Business Advisor, Bennett Jones & Former Minister of Foreign Affairs at the Government of Canada, highlighted that we must take President Trump seriously, but not literally. The world is

the folks in the particular Vancouver market see their day-to- day, there are a ton of challenges going on in the rest of the world. So if you’re a dollar of capital looking to be placed in real estate, notwithstanding the challenges in BC, we’re still an attractive place to invest. Cynthia: I would say that we are in a more pragmatic environment, where buyers and sellers are highly aware of market conditions. The truly entrepreneurial groups, of which we have many in BC, will do very well, assuming they make some bets in the next 12 months. It’s exciting to think about 10 years from now, looking back on this time, and hoping we’ll be in a way better place as a province and country. And we can say this was an inflection point. ■ Alex Gray

learning to operate with this Trump 2.0. As such, there was less focus on Trump this year as compared to 2025. There are many factors at play globally and nationally, though the US remains an important one to watch. WHAT WERE SOME OF THE HIGHLIGHTS OF THE CONFERENCE? Ted: I received the most feedback on the Cowichan Case Panel. There was robust discussion on that panel, and the room was packed. There were two leaders in their field (Thomas Isaac and Robert Janes) on stage having an open discussion on the topic and from what I heard from attendees, that conversation was well-received. Another highlight was Benjamin Tal. I always say that without him, it’s not worth putting on the conference. Cynthia: We had some fantastic speakers from a macro level, including Benjamin. Jon Ramscar, President & CEO, Canada at CBRE Limited, delivered a market overview

speech that really set the tone for the event. The global investor panel was a highlight and moderating the closing panel was also a privilege; we had some brilliant people speaking to the direction that we need to go as a province and as a country. WHERE ARE INVESTORS PUTTING THEIR MONEY AMID ALL THIS UNCERTAINTY? Ted: I think that was the biggest debate: what is the safe bet? Certainly, I think there’s a lot of optimism around the hotel sector. A few folks talked about the retirement sector quite a bit. If you look at the residential market as a whole, we’ve got a record inventory of rental units coming online in Vancouver. We’ve got about 5,000 units delivered and unoccupied in the condo market, but seniors housing is still very popular. People felt good about retail. They felt good about industrial. They felt pretty good about class A office. The big thing that’s weighing down our market, where the most question marks are, is the residential side. Cynthia: We are seeing some big bets from foreign capital on the commercial side, like the Post trade, acquired by Pontegedea. Others are looking here and acquiring aggressively, and that trend looks poised to continue, assuming enough quality assets are available to transact. WHAT WAS THE PARTING MESSAGE OF THE CONFERENCE? Ted: Our outgoing question was, “What do you feel good about? What’s giving you hope?” They were all very positive. There are some pretty severe challenges facing the industry and Canada in general. The main message that kept coming up throughout the entire forum was that, as challenging as

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REGIONAL MARKET INTELLIGENCE

it and say the returns make sense. There’s no doubt it’s going to get stalled projects moving forward.”

affordable housing options in the same neighbourhoods available.

The hope is that this program will extend beyond Ontario, in particular, to British Columbia, where development charges are also a pressing issue. WHAT TO DO ABOUT OLDER RENTAL STOCK Tony was one of the speakers at the conference on a panel exploring How to maximize the potential of Western Canada’s current rental housing stock, in particular, the intersection of new supply versus aging stock. According to the CMHC, after record gains in 2024, rental stock continued to expand in 2025, with completions running well above historical norms, particularly in Calgary, Edmonton and Montréal. But there is also a lot of older stock that needs to be modernized to remain in service as rental apartments, and this is an area fraught with difficulty, says Tony. “The cost to modernize these aging units is immense. In rent-controlled markets, there are challenges in terms of how you pay for it. Even in markets that are not rent-controlled, affordability is always an issue. How do we square both sides?” Ultimately, the work has to happen. But there’s a positive sustainability angle: making buildings more efficient makes sense from an environmental perspective and enables the use of cleaner and more efficient technology. The problem of modernizing ageing stock will only become more pressing. The older a unit gets, the more major infrastructure repairs are needed, and there are fewer

It’s incredibly difficult for existing tenants, who must be housed elsewhere while the work is underway. Tony argues that landlords need to come up with a way to help tenants through the change without making the project financially unviable. There is a need to “have a framework and rules” around how this is done to “acknowledge residents’ concerns” and “offer them a transition plan that allows them to return to the new units”. Unfortunately, says Tony, there is often a lack of trust between operator or developer and tenant. The relationship is “often problematic”. “There’s no perfect way to deal with these things. I know that’s easy for someone who isn’t impacted to say, but I think you do have to look at the broader picture at some point. It has to be about more than just the individual people. “We’re all working towards a shared goal, which is to ensure that we have the housing we need for Canadians going forward and to ensure that we have good rental housing, which is a vital part of the housing continuum.”

Advancing rental housing solutions: How to optimize the existing supply

Tony Irwin President & Chief Executive Officer at Rental Housing Canada

“People ask me: ‘What are the issues that stand in the way of getting rental housing built?’ At a high level, it comes down to time and money. When you get to costs, government fees and charges are a very significant part.”

A month before the Western Canada Apartment Investment Conference, Prime Minister Mark Carney, alongside the Premier of Ontario, Doug Ford, announced a series of measures to boost housing supply for Canadians. This included an announcement that development charges in Ontario would be lowered by up to 50 per cent. The measures would be in place for three years and target municipalities covering 80 per cent of the province’s population. Development charges are an issue that has been top of mind for the Canadian Real Estate industry over the last few years, and a key obstacle to getting shovels in the ground. Speaking ahead of the Western Canada Apartment Investment Conference, Tony Irwin sets out the policy reforms and pragmatic solutions needed to move the rental housing sector forward.

■ Alex Gray

THE IMPACT OF A REDUCTION

The reduction in charges does more than stimulate new starts, says Tony, it positively impacts the construction industry, providing jobs at a time when the industry has ground to a halt and Canada needs to boost its domestic economy. “We’ve been advocating at Rental Housing Canada (RHC) for a 100 per cent reduction, even if it’s for a shorter period of time, to really make a difference.” RHC members tell Tony that any reduction will help, he adds. “This is really about numbers. It’s not a subjective thing. It’s about getting the proforma to a place where your construction financing can look at

Tony Irwin, President & Chief Executive Officer at Rental Housing Canada, says the announcement was a very positive development.

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An inaugural economic report on Edmonton throws up some surprises

Heather Thomson Vice President, Economy & Engagement at Edmonton Chamber of Commerce

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When Heather Thomson, Vice President, Economy & Engagement at Edmonton Chamber of Commerce, first published the inaugural “State of the Economy: Edmonton unfiltered”, not everyone was happy about it. But the city now has a treasure trove of data on which to act. The 2025 State of the Economy: Edmonton unfiltered” offers up the most comprehensive and data-driven analysis of Edmonton’s economic strengths and challenges to date. The report is based on current data, purchased thanks to a government grant, from reliable sources such as Moneris, Esri, and Lightcast, rather than on outdated open-source data. The result of six months’ work, the report challenges some of the oft-repeated assumptions about Edmonton.

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EDMONTON’S AFFORDABILITY IN QUESTION

One thing that was bugging Heather — author of the report and social economist by trade — was the notion of Edmonton being so affordable.

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“Are we?” she asks. “I’m not seeing that picture. We’re seeing high levels of consumer debt and homeownership. On the face of it, high levels of home ownership sound good, and that’s part of why the debt’s so high, but credit card debt is higher in Edmonton than in the rest of the country. Nearly three- quarters of households carry debt.” Another metric Heather says is “out of whack” is the median income, which is about $99k per year. “It’s lower, and it’s getting lower; in every other city it’s going up”, she says. “Is Edmonton affordable? If you use certain metrics that are a little bit misleading, like average income, it looks like we’re affordable. If you dig into it, though, we’re not affordable. And our affordability advantage is crumbling fast.”

WHERE THERE IS DATA, THERE IS POWER The business community were delighted to receive the report, she states. They had relevant, actionable information in their hands that they could use to run their business. “Yep, everything you’re saying in here makes sense,” they told her. Others told her that it was a relief to “finally be talking about this properly” because at some point, the findings were going to become increasingly obvious. But others found the report more difficult to accept, largely because some of the data didn’t put Edmonton in the best economic light. “The region is economically outperforming the city in almost every single metric. Meanwhile, the city is shouldering much of the social burden for the region. So, economically, it just isn’t making sense,” she argues. To illustrate the point, Heather outlines the data on discretionary spending. “18% of the city’s discretionary budget comes from the region. Look at how much the region needs the city to attract people.” But ultimately, the report is a call to action to get the very best out of Edmonton for everyone, by offering solid, reliable data on which to base decisions. “If we can all collectively understand the problem, then we have a solution. Saying everything’s affordable, saying everything’s great, is not helpful when we have declining assets and a city budget that is constantly running a deficit. “Giving everyone access to the same data is the whole point of the report,” states Heather. “And the outcome of this data could be so beneficial.”

THE YOUNG AND THE JOBLESS

Another finding readers might find surprising was that, while Edmonton does have a young and educated workforce, they’re not seeking jobs. “When you look at those unemployment levels, it’s newcomers to Canada, and its people aged 18 to 25 that make up 95% of our unemployment rate. “We have an extraordinary number of jobs available; we don’t have workers. This mismatch does not make sense.”

EDMONTON’S EXPORT STRENGTH

It wasn’t all bad news: the data also shone a light on where Edmonton is particularly strong.

■ Alex Gray

The Edmonton region exported $115 billion in goods and services last year, second only to Calgary and ahead of Ottawa, Winnipeg, and Halifax. Half of all regional exports come directly from Edmonton, underscoring the city’s central role in driving the metro economy. “We have a lot of capacity for exports. Our entire region is geared for this. If we can get our economic ducks in a row, we have significant potential for new industries that even the federal government wants to support, such as defence.”

Heather says it’s a combination of social and economic factors that is preventing young people from being launched into their lives the way previous generations have been. “So many of our Gen Zs were starting the workforce during the pandemic. That in and of itself robbed them of a lot of opportunities to do the scary thing when you’re meant to, which is when you’re 18 to 23, and you’re getting your first job. They don’t see the value of being with humans. They’re not seeing the job as ‘it’. They’re not motivated to launch because they were robbed of those experiences. There are also Gen X parents who are alarmingly okay with this.” This is where the data from the report becomes so useful, she says: “We can now advocate for funding in skill development that aligns with what the economy is demanding, so people can get jobs.”

There’s also a ripe case for investment in downtown Edmonton, she argues.

“We currently have post-war building and zoning that designates downtown for work and the suburbs for living. We don’t need that anymore. Calgary has done such an amazing job at this. It’s not perfect, but it’s better. What we’re hoping to see is that all different orders of government invest in downtown. I think that would make such a difference.”

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MARKETS IN FOCUS

Headline noise vs reality on the ground: Investment opportunities in Montréal

Mark Sinnett Principal, Executive Vice President and Head Capital Markets, Québec at Avison Young

In today’s environment, investors need to look beyond the headline noise and stay focused on fundamentals, says Mark Sinnett, Principal, Executive Vice President and Head Capital Markets, Québec at Avison Young. While the Montréal investment market remains fundamentally sound, it is experiencing heightened volatility, and transactions are taking longer to complete. Deals today are more complex and more sensitive to rapid shifts in pricing and sentiment. As the adage goes, time kills deals, and investors are being challenged to balance short‑term volatility with a longer‑term perspective. Mark Sinnett, moderator at the Montréal Real Estate Forum on a panel discussing the challenges and opportunities in this market for investors, says that the impacts of the geopolitical turmoil are certainly being felt.

allow us some stability in the marketplace so we can predict what kind of housing we need.”

UNDERAPPRECIATED OPPORTUNITIES

TIME KILLS DEALS It used to be that you could be sure of the value of the real estate in a deal. As a long-term play, real estate values should, in theory, not change dramatically. But Mark says this is no longer the case; values can almost change week by week, making deals much more complex. “You could literally have the complete valuation of the property change in the middle of the transaction,” he states. And this could be driven by any number of things. A change in local government regulations, macroeconomic threats such as tariffs or an interest rate move.

But some opportunities are not getting the attention they perhaps deserve.

SAFER BETS The speed and level of change have led to real caution in the market, and investors are looking for what they deem safer areas – which means a flight to quality.

2025 saw the first year of positive office space absorption in Montréal since 2019. There are two significant drivers of a return to office, says Mark: the back-to-office mandate from large employers, including banks and now the government, and the five-year lease cycle. Between 2020 and 2023, tenants were returning space due to the hybrid model. Those leases have started to roll, and many of those tenants have realized they might well need more space. “I’m not saying that if you buy an office building today, you’re going to fill it up tomorrow. But I think if someone were to look opportunistically at office as an investment sector, the likelihood is that in two years, they would probably see a nice return on that investment.”

Multifamily and retail are dominating right now, says Mark. Multifamily is seen as essential and anti-inflationary.

Retail is also attractive, largely down to where we are in the cycle (with a lack of construction) and partly to the weeding out of weaker retailers: “Today, most retailers in operation have solid balance sheets and are doing exceptionally well. When the Bay unfortunately went bankrupt in Canada, it did not move the needle; it hasn’t changed the retail landscape.” Retail demand is now dominated by entertainment, food and beverage, he adds: “Pickleball, movie theatres, gaming centres, and things like that. So the need for indoor space has also gone up.”

But for the first time, says Mark, there are signs of a shift in real estate fundamentals in certain cases.

“Canada’s explosive growth was untenable, but also for the first time, there were 51,000 fewer people at the end of the year in Quebec than there were at the beginning. “The concern is that not enough growth will negatively impact the sector. There’s a hope that immigration policies will be right-sized and we’ll be back to normal levels again, which will

On industrial, Mark argues that the so-called down market is actually a return to more normal conditions:

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Reversing trends: Montréal office space in 2026

One of the biggest challenges for companies is attracting and retaining talent. This has become more acute as the work-from-home and hybrid trend reverses; some larger companies, particularly in the tech, banking and government sectors, have mandated a return to the office (RTO). Some employees, however, are reluctant to return. Companies are employing a carrot-and-stick approach: the stick is the RTO mandate, and the carrot is making the office an attractive place to go by amenitising the space and making it more attractive.

“It’s just because of the highs of the previous years, where we were seeing sometimes 20 to 30 per cent rent growth on an annualized basis. But if you had told someone 20 years ago, rents would be $14 a square foot and vacancy as low as five to seven per cent, they would say ‘you’re crazy’” “If you told that same person two years ago the same thing, they would say, ‘Oh my, the market’s going to crater.’ And that just tells you how much the market has moved.”

Why the way to value office space must change

A balanced market, adds Mark, needs some room for tenant movement. “A seven per cent vacancy, generally speaking, is a healthy market.”

David Salomon-Lima Senior Vice President at Savills

The latter was one of the drivers of the flight-to-quality that the real estate office market saw post-pandemic.

In last year’s Canadian Real Estate Forums, the conversation around office centred on flight to quality and the amenitisation of office space, but also on the fact that tenants were leasing less space. If only half your workforce is in at any given time, why have all that empty space? THE RESURGENCE OF OFFICE But in 2026, there are signs that this trend is reversing. David Salomon-Lima, Senior Vice President at Savills and a moderator at the Montréal Real Estate Forum this year, explains why: “I think tenants are still trying to figure out what they need. It’s a question of making sure you come to the office and feel good while you’re there, that you have room to collaborate, that you can concentrate, and that you feel like it’s worthwhile to leave the house.” What this means this year and beyond, says David, is that there needs to be a rethink of how office space is valued, moving beyond cost per square foot.

While the market is volatile, opportunities exist for those who are cautious, fast, and data-driven, not headline-driven. Mark advises that investors must look past the headline noise, which often creates disproportionate volatility: “If I read the headlines today, we’re still talking about a housing shortage. If I look at the data, we’ve got a 10 per cent vacancy rate. You tell me which? If you’re buying based on the headlines, you’re buying into a story where there’s a shortage.”

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Opportunities exist, concludes Mark, for those willing to look beyond the short term.

“I cannot tell you how many battles we have had, explaining to all parties that we need to move the deal forward. It’s the old acronym time kills deals, and it could not be truer in this environment.”

■ Alex Gray

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“People who feel good when they come to the office are more productive, which means that the bottom line gets impacted. The reality is that the increase in rent for quality buildings and the flight to quality pays for itself in spades because your employees are more productive. “Then it’s not a discussion of how many square feet you’re renting and what the cost per square foot is; it’s about what value you’re getting. Then we’ll work the math backwards to make sure that the rent justifies itself, which, spoiler alert, it always does.” AS CLASS A SUPPLY BECOMES TIGHT, WHAT’S NEXT FOR CLASS B? While flight-to-quality is still very much in play, conversations are starting to turn to what happens when Class A supply becomes scarcer. One option that David thinks is becoming increasingly feasible is converting C-class to B-class. But it’s a specific kind of transition, he argues.

“For me, where I think the opportunities are is where you have institutional-grade landlords that own B buildings.

“You go from 96 per cent occupancy on average for trophy A-class buildings, then you go to B, and you’ll find 20 to 30 per cent vacancy. But some of those are really good landlords. And they’ll spend money on their buildings for covenant-worthy tenants. There’s something to be said for having an institutional landlord that can stand the test of time and invest in their properties.” THE COMING WAVE Just as there are signs of more positive momentum in the office market, a new challenge enters the room. Artificial intelligence. In the worst-case scenario put forward, AI causes widespread job losses, leading to the office market falling off a cliff. According to a recent report by Cushman & Wakefield, over the next decade, AI will drive a transformation in what we mean by office space, with a knock-on impact on demand.

“For occupiers, the question moves from ‘how many desks do we need’ to ‘which decisions do we need to make faster and better’ - and whether the office is designed to consistently produce those outcomes. For investors, the question becomes which assets are positioned to support that shift - and which are still priced on a model of work that AI increasingly compresses,” says the report.

David says he has yet to see evidence of a reduction in the need for office space resulting directly from AI.

The key issue with AI is one that is much less discussed, he says: the impact of its energy consumption on tenants’ requirements. “If our tenants start to use AI more and their electrical requirements become more important and significant as a result of using AI daily, are our buildings okay to accommodate that for the future or what needs to happen?”

The coming does illustrate David’s fundamental argument — that how we assess the value of offices must change.

“Investors need to look beyond the calculations and to the value,” asserts David. “The industry has evolved. Times have changed, and it’s our job on the front line to educate people about how it’s changed.”

■ Alex Gray

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Why hotels are outperforming other asset classes in 2026

Carrie Russell Senior Managing Partner at HVS

The hotel sector is performing exceptionally well across Canada. After a strong 2025, with RevPAR reaching a historic high of $142.89, Canada’s hotel industry reported a second consecutive month of year-over-year performance increases in February this year, according to CoStar. In 2025, Vancouver had the highest RevPAR at $223.05 for the major markets, but its growth was one of the slowest, at 0.2 per cent. Vancouver’s critical supply shortage led the City to update its hotel policy last year to encourage the development of a diverse inventory. IS THE HOTEL SECTOR STRONG, OR ARE OTHER ASSET TYPES WEAK? According to Carrie Russell, Senior Managing Partner at HVS, the conservative lending environment and high development

As moderator of the session Unlocking opportunities in hotels and resorts: A look at this thriving asset class, Carrie Russell, senior managing partner at HVS, unpacks the highs — and lows — of the hotel industry in 2026

WE INVEST TO DRIVE LOCAL REAL ESTATE.

costs, which have historically included high land costs, are two key factors behind the low supply.

But perhaps the most significant factor, says Carrie, is the current performance of the condo and office markets.

“If developers could build in those two segments, I don’t think we would see hotel growth. We would see new projects, but not to the same degree. We’ve just got so many developers that are having to sit on their hands in the asset classes that they’re familiar with, and they’re having to come up with a way to pivot.”

Quartier Molson, Montréal

Thanks to the strength of the sector, lenders are also looking more favourably at the market, adds Carrie.

In partnership with

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GREENFIELD VS INFILL

DRIVERS OF FUTURE DEMAND This summer, Canada, Mexico and the United States will host the 23rd FIFA World Cup, bringing throngs of supporters to stadiums across the region. It’s a high point for Canada’s position as a global destination, but June and July are already busy months for hotels. The Vancouver hotel market won’t be as impacted as it was when the Taylor Swift Eras Tour visited in December 2024, states Carrie: “There’s not much you can add to occupancy during the FIFA period, but there will be advantages in terms of the average rates that hotels are able to charge.”

Balancing growth in Edmonton

Katrina Rowe President, Cantiro Communities

As new data questions the true cost of greenfield development and residents push back against densification, Edmonton finds itself at a crossroads. Katrina Rowe, President, Cantiro Communities explains.

Even if supply picks up, there is little danger of oversupply in the city, states Carrie.

“If you look at everything being discussed in the pipeline, you would likely expect an overshoot and oversupply. But I don’t think that’s going to happen — the lending market will keep that in check. “The lending environment is historically conservative, and there is a small enough pool of lenders that while there may be 40 different sites in Vancouver that have worked towards considering a hotel, it’s unlikely that even a quarter of those could find a financing partner. “The nature of the asset class is that, as long as demand is on a positive trajectory, we’re probably always going to be a little bit short of supply relative to demand.” Going forward, Carrie is bullish about the sector, despite geopolitical events: “I see the geopolitical situation ultimately benefiting Vancouver because it is seen as a safe destination. And we’re optimistic about what the international market will do in 2026 and beyond, particularly now that Canada is once again an approved destination for China. “Things like geopolitical events and operating costs are beyond the control of operators. They just have to be nimble enough to manage them when they come up.” ■ Alex Gray

Every time the greenfield versus infill debate flares up in Edmonton, I’m reminded we’re asking the wrong question.

Urban growth generally takes two forms: extending development into new areas within the city (greenfield) or adding housing within existing neighbourhoods (infill). Local governments tend to see infill as a more efficient way to increase housing supply in the long run, but existing residents can often view these new developments as detrimental to their neighbourhood.

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In Edmonton, the debate has been contentious since the introduction of a brand-new zoning bylaw. Earlier this year, there was a two-

“Traditional lenders that previously hadn’t been in the space are considering the hotel space to a greater degree. There’s also interest from international buyers, especially south of the border.” Underscoring the sector’s favourability are some notable developments in Vancouver, says Carrie. This includes the new 30-storey Marriott hotel featuring Moxy Vancouver Downtown (263 rooms) and Element Vancouver Downtown (132 rooms) in the heart of Vancouver’s entertainment district, set to open in summer 2028. “This is a different product type in downtown Vancouver,” states Carrie. “It’ll be the first micro-hotel combined with an extended-stay brand.” Other notable developments include Bosa Properties’ redevelopment of the former Listel Hotel site on Robson Street in Vancouver’s West End into a mixed-use project. It will feature residential units and a luxury hotel branded as part of the Unbound Collection by Hyatt. Germain Hotels and Reliance Properties are converting an office building into a 180-room boutique hotel under the Le Germain brand, expected to open in 2029. “It’s really a market where developers with expertise are the ones who are bringing these projects to fruition,” says Carrie.

day public hearing on the city’s zoning regulations, with arguments heard from both sides. But the question isn’t should it be one or the other; it’s how do we do both?

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police, and recreation, aren’t enough to service everybody. Not all infrastructure needs are purely a cost of taking up more land area. “If we add 20 per cent more people to the City of Edmonton, existing infrastructure and services, including schools, police, and recreation, aren’t enough to service everybody. Not all the infrastructure needs are purely a cost due to taking up more land area.” FINDING A BALANCE The challenge is driven by Edmonton’s explosive growth. The city’s population reached 1.2 million in 2025, growing 3.38 per cent year-over-year and 18.3 per cent over the past five years. The change is astounding, and things have moved much faster than anyone anticipated. That growth shouldn’t be framed as an either/or choice between infill and greenfield. What’s needed is a sensitive, responsible approach to both, taking into account the real drivers of demand. I think we need to keep growth as a positive, and not just growing by densifying the core, but growing and allowing people to live where they want to live. At the same time, we have to make growth responsible and affordable for the city for the next generations, so that new areas can be maintained and remain enjoyable to live in.

It’s important for the City of Edmonton to keep enabling infill through supportive policies and targeted infrastructure investment. But that shouldn’t mean limiting greenfield development. Both are necessary to provide the variety of housing options people are looking for. Some of the challenges are just a cost of growing. But if you’re not growing, you’re dying. ■ Alex Gray

BUILDING IN THE CORE I recently moderated a session at the Edmonton Real Estate Forum on exactly this topic, and one of the central issues was the momentum around densifying mature communities. Under Edmonton’s Zoning Bylaw, builders and developers now have far greater flexibility to deliver a range of housing types on sites that were previously limited to single-detached homes. Residents in these mature communities often fear that new infill developments will bring more traffic, extra garbage, or even make their streets less safe due to the added density. While it’s important to densify the core, there are meaningful challenges associated with it. I believe these changes have largely been positive, helping more people access housing in mature neighbourhoods and introducing a broader range of housing options for different incomes and lifestyles. But the transition can be challenging for existing residents. In some cases, a single detached home now sits beside a multi-unit building, which can feel like a significant shift in scale and intensity, changing not just the built form, but the lived experience of the neighbourhood.

There is an additional argument against infill: the core is not necessarily where demand lies. People aren’t moving to Edmonton with the dream of raising their family in an apartment or a condo downtown. They are drawn to the city in large part because of affordability and the ability to own a home. For many households, that means ground-oriented housing, single-family homes, duplexes, or townhouses. As much as we continue to invest in more urban forms, we need to recognize that this remains a core part of what attracts people to Edmonton. THE COST OF GROWTH The premise that greenfield development is too expensive is based on outdated data, and a new report challenges that assumption directly. In 2016, a city report said that taxpayers in other parts of Edmonton would have to pick up a $1.4 billion tab for the development of three new neighbourhoods over the next 50 years: Decoteau in the southeast, Riverview in the southwest, and Horse Hills in the northeast. But a new development report released in July last year by BILD Edmonton Metro challenges that assumption. The Urban Growth Case Study is a data-driven look at how urban expansion is impacting Edmonton’s economy, infrastructure, and communities. The report, which has not yet been verified by the city, shows that newer areas Windermere and Heritage Valley actually bring a positive contribution to the City’s funds. We think that the greenfield areas, now that they’re building out at higher densities, are actually incredibly efficient. The city’s target is 45 units per hectare, which is obviously far denser than what the more mature communities inside the Anthony Hendray ring road would be. The common argument that greenfield means more investment in public services is not always relevant, because population growth demands that investment regardless. If we add 20 per cent more people to the city of Edmonton, existing infrastructure and services, including schools,

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