Private investors control 54% of Canada's commercial real estate market—here's how to capitalise as conditions shift

Private investors remained the highest investing cohort of purchasers of Canada's commercial real estate market, with their share of real estate deals jumping from 43% in 2019 to 62% in 2024, now down to 54% ending 2025. Large institutional buyers and public purchasers that had pulled back in recent years due to economic uncertainty and rising interest rates are seeing an uptick in purchasing activity. 

“Private capital is driving the investment market right now,” says Scott Figler, head of national research at JLL Canada. “Private investors have an advantage: they can play the long game. They aren't pressured to hit the same quarterly benchmarks as the big institutions, so they can look beyond market volatility and focus on building real, lasting value.”

Current market conditions have created a unique environment where private investors can capitalise on four high-opportunity sectors that generate both immediate cash flow and long-term appreciation.

The question isn't whether you should be investing in Canadian commercial real estate. It's whether you can afford to miss out while market dynamics remain in your favour. 

Negative sentiment has created a disconnect between office property prices and their actual performance. “We’re seeing sustained demand for office space as return-to-office mandates have become the norm across major employers,” notes Jackson Safrata, senior vice president at JLL Canada. “Through 2025 and into 2026, the Greater Toronto Area has continued to post strong leasing activity, and with development starts at multi-decade lows, the supply pipeline remains essentially empty – landlords in premier locations are beginning to regain pricing power.”

Well-located urban office properties are exiting the slump after having traded in recent years at historically low levels. Flight-to-quality trends have only intensified amongst tenants across all markets, emphasizing demand for high-quality, amenity-rich office space. The formula is simple: target renovation-ready assets in premier locations, modernize with flexible layouts and amenities and then capture premium rents. In a market where quality office space remains limited and new supply is years away, the right properties are positioned for exceptional returns.

Downtown Toronto retail is experiencing favourable market dynamics that create opportunities for investors with longer time horizons.

“Downtown Toronto retail is emerging as a compelling investment opportunity, according to Philip Traikos, executive vice president of Capital Markets at JLL Canada. The market conditions are aligning favorably for several key reasons. Office workers are returning downtown, and the population continues to grow. At the same time, rental rates, acquisition costs and land costs have adjusted to more attractive price points. What makes downtown Toronto particularly attractive is the area's strong local retail culture, featuring unique shopping experiences that encourage people to explore and spend time downtown.”

Traikos recommends targeting properties with established foot traffic patterns and proximity to existing and future transit hubs in recovering urban markets. Investors who enter at current pricing levels will be well-positioned to capture substantial returns before broader market interest drives values higher.

Industrial properties continue delivering solid opportunities, backed by Canada's diverse economic base. “The real strength behind our industrial demand is our diverse workforce,” says Ryan Murphy, vice president of Capital Markets at JLL Canada. “We have skilled workers across many fields and experience levels who can meet different industrial tenants' needs. This diversity in the workforce points to a healthy market where investors can expect rent growth and continued demand.”

Properties that can be upgraded to modern standards—improved loading docks, higher ceilings, better layouts—are particularly attractive as tenants increasingly demand efficient, flexible spaces, creating valuable improvement opportunities.

Calgary's multifamily sector offers steady returns supported by population growth and favourable regulatory conditions.

Calgary's growing and diversifying economy continues to attract residents, creating sustained rental demand for well-maintained properties in desirable neighbourhoods.

Target properties with improvement potential. Focus on assets where you can add value through renovations, repositioning or operational improvements. Your ability to take on longer-term strategies creates competitive advantages.

Consider emerging regional markets. While major metropolitan areas remain competitive, markets like Calgary offer attractive risk-adjusted returns with less competition for quality assets.

Be flexible when it comes to timing your investments. Your ability to move quickly when opportunities arise, combined with longer hold periods, allows you to capitalise on market timing that others might miss.

Current market dynamics favour investors who can act decisively while maintaining longer-term perspectives. The most successful investors understand that market cycles create different advantages at different times. Today's conditions favour those who can move quickly and hold for value creation.

Ready to capitalise on Canada's CRE transformation? The right advisory partnership can help turn vision into a long-term strategy.