Forecast predicts significant increase in CRE transaction activity

Uncertainty remains a dominant theme in the commercial real estate sector as highlighted in CBRE’s recent Canada Real Estate Market Outlook for 2026. Despite the prevailing uncertainty, the report forecasts a promising uptick of over eight percent in real estate property sales, potentially reaching an impressive total investment volume of up to $56 billion this year. This projection represents a significant increase from the previous year, where the total investment volume was recorded at $47 billion. Moreover, the report expresses optimism for the office sector, citing increased interest and investment possibilities.

CBRE Canada’s President and CEO, Jon Ramscar, in a press release accompanying the outlook, highlighted the trust international capital has placed in the Canadian commercial real estate market. This trust has resulted in the acquisition of assets across the country, driven by Canada’s strong fundamentals and relative stability. Anticipating active participation from various sources of capital, both domestic and international, in 2026, coupled with a resurgent office market and a robust retail sector, CBRE is optimistic about the sector’s performance.

Building on the positive trend initiated in 2025, the outlook points out a steady increase in investment volumes throughout the year compared to 2024. Notably, there has been a broadening purchaser profile, with heightened involvement from institutional groups that had been less active in recent years.

The report predicts that national average cap rates are likely to remain stable or slightly compress in 2026, indicating a favorable investment environment. Specifically addressing the office sector, the outlook envisions an enhanced sentiment and a sustained growth phase leading to increased investments. Factors such as return-to-office mandates from prominent private-sector employers and governments, as well as strong debt liquidity for premium assets, are expected to drive this positive momentum.

Nationwide, there have been two years of net absorption in the office sector, suggesting a stabilization in vacancy rates. Notably, there are no significant office developments set to be completed between post-first quarter of this year and 2030, resulting in a balanced allocation of space. Projections indicate positive net absorption of approximately 5.1 million square feet, exceeding the annual 20-year average. Toronto is expected to account for roughly half of this absorption, with other regions such as Vancouver, suburban Calgary, Kitchener-Waterloo, and downtown Montreal also likely to witness increased activity. Conversely, a slower pace of recovery is anticipated in downtown Calgary, Edmonton, Ottawa, and Atlantic Canada.

Based on the series of high-profile asset transactions in 2025, CBRE anticipates a return to conventional office investments, portraying a promising scenario for the real estate market in the upcoming year.