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The Canadian real estate market is once again on the rise, in spite of the challenges of this past year. Industrial and multi-family sectors have proven to be quite resilient in the face of the pandemic, and even retail and office segments are starting to show promise in 2021.

The COVID-19 restrictions and subsequent changes in consumer behavior have undoubtedly left a mark on all real estate segments. However, the introduction of vaccines and loosening business restrictions is helping the Canadian multi-suite residential and industrial real estate get back on track.

Retail Segment Slowly Bouncing Back

Lockdowns and closures of all non-essential businesses impacted retail more than any other segment. Retail business owners experienced an unprecedented loss of revenue, which led to more store closures, ultimately increasing vacancy. Many retailers that succeeded in staying afloat mainly did so due to leveraging e-commerce platforms and implementing innovative delivery strategies that helped generate more cashflow.

Thus looking forward for 2021, Morguard “2021 Canadian Economic Outlook and Market Fundamentals Report” notes that retail has some key challenges to address, like changes to consumer shopping behavior. Structural changes in retail will be needed to address the key challenges. As such, we can expect to see more retail redevelopment this year, along with the introduction of more retail services. Changes to the tenant mix and allowing alternative uses of space will also help improve retail sales.

Office Segment Gradual Recovery

The office segment, which had a long period of excellent performance prior to COVID-19, saw a steep economic decline in 2020. Many businesses cancelled and delayed both their expansion plans and leasing-related decisions, while others attempted to reduce office footprint.

Morguard predicts that by the end of the year we will see a gradual return to offices; however, in beginning half of 2021 office will continue to soften before making a gradual recovery.

Surprising Resilience of the Industrial Commercial Real Estate

If there is one segment that has been thriving during the pandemic and that will continue to do so long afterwards, it is industrial real estate. Compared to 2019, which enjoyed record low national availability rates of 2.9%, in 2020, the availability rates were just slightly higher at 3.5%.

The rise in online shopping has caused a greater need for delivery and logistic services and encouraged further investor activity.

It is expected that the industrial commercial real estate sector will continue growing well into 2021, supported by the continued economic recovery and interest in e-commerce.

Steady Recovery of the Multifamily Real Estate

The multifamily real estate sector is showing the greatest promise in 2021. Even though the pandemic has left its mark on the sector, investor confidence remains at an all-time high.

Between January and June of 2020, transaction volumes of $3.9 billion have been reported, showing healthy activity in the sector considering that transaction volumes in the same time period in 2019 were just slightly better, standing at $4.0 billion.

Experts are predicting a steady recovery of multifamily real estate, especially with the introduction of the COVID-19 vaccine.


Investor confidence is improving as viable vaccines and less restrictions are allowing consumer spending habits to return. Investment in industrial and multi-family sectors will remain robust this year. Retail and office segments are expected to recover by the end of the year as more investments goes toward completing redevelopment projects. Now is a great time to invest in Canadian commercial real estate.

With 2020 behind us, we can look forward to a brighter future, expecting healthy market activity across the Canadian CRE sectors. Canada has managed to brave the storm without losing too much of its economy and we expect this trend to continue.

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