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No other event in recent memory has had quite the effect on Canadian businesses and individuals as the COVID-19 pandemic. With global lockdowns, business closures, social distancing measures, and more, the Canadian CRE market has suffered harsh blows throughout 2020 and well into 2021. 

Still, this, too, shall pass, perhaps sooner than expected. We’re headed into a much brighter 2022. 

According to the Morningstar report, real estate companies in Canada should brace for positive changes and brighter financial outlooks in 2022. 


Canadian CRE returning to pre-pandemic highs 

The commercial real estate market in Canada is expected to experience significant financial recovery. With the darkest days of the pandemic behind us, different market segments are slowly regaining their strength and returning to their pre-pandemic highs. 

The road ahead is still rocky, and it will take a while for the commercial real estate industry to get fully back on track. Still, with patchy recovery, the market should experience pre-pandemic activity levels within the next two years. 


Retail segment recovering with vaccine rollout 

The Morningstar report indicates that CRE firms’ earnings will recover by 2022 thanks to the faster vaccine rollout that’s eased provincial restrictions. 

In-person orders are becoming more common, nonessential businesses are confidently reopening, and discretionary retail subsegments are on a path to more significant financial gains. 

However, enclosed shopping centers will be slow to recover. Rising vacancies, elevated risks, and volatile cash flows are among the biggest problems for this retail segment. Landlords will get rising leasing, and those who offered rent abatements will regain financial footing by returning to regular rents, but the recovery will be somewhat slower. 


Industrial CRE remains strong 

Of all the Canadian CRE segments, the industrial market fared best during the pandemic. Those involved in logistics and distribution saw massive gains with the rise in e-commerce. Even with a return to normal, the industrial CRE is expected to keep thriving. 


Offices are the slowest to recover 

Even with vaccine rollout, easing restrictions, and healthier market activity, Morningstar reports that the office segment will still be the slowest to recover. Urban business districts saw a high number of vacancies during the pandemic, and many businesses are still shying away from returning to offices. 

The pandemic has made it evident that remote work is a viable option for businesses across industries. It offers convenience, cost-saving benefits, and more flexibility, so companies are slow to embrace a return to normal. 

Still, even though it will take a while before the office segment reaches its pre-pandemic highs, we should see improvements in this segment as well.



Despite the setbacks in 2020, Canadian CRE is looking brighter in 2022. The Morningstar report has echoed rising confidence among Canadian CRE investors. It is important to move forward with confidence and create a strategy that works for your investment needs and goals. 

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