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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