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While the Canadian commercial real estate industry is facing a historic challenge in COVID-19, the conditions that produced the market’s decade of record results remain intact.
That’s worth remembering, as Canadian provinces begin to consider what restarting their economies might look like in the coming weeks and months.
We’ve created an overview of the market’s strengths, including insights from CBRE Vice Chairman Paul Morassutti as featured in CBRE’s inaugural Virtual Market Outlook webinar.
Heading into the COVID-19 pandemic, Canada boasted some of North America’s lowest office vacancy rates in Toronto and Vancouver. The country’s major industrial and multifamily markets also saw record demand amid limited availability.
“If we didn’t lease another square foot for 12 months, we would still be in historically good shape from a vacancy perspective in several markets and in several asset classes,” said CBRE Vice Chairman Paul Morassutti in the Virtual Market Outlook.
Though Canadian markets will face headwinds, some sectors, like industrial, could actually see increased demand in the wake of COVID-19.
Government Cooperation and Support
The business response to COVID-19 is only as strong as the government effort to tame the pandemic.
In this case, Canada is fortunate. There has been an unprecedented level of co-operation among federal, provincial and municipal governments, with consistent messaging to the public.
Aid programs to individuals and businesses have been initiated, with more still in development.
“The rollout of government relief packages has been relatively smooth,” said Morassutti. “We are putting money in the hands of individuals, where the need is arguably the greatest.”
We are just at the beginning of the pandemic, and many risks remain.
Policymakers could rush to reopen the economy too early, government stimulus packages may be insufficient, and the slowdown could still be sharper, deeper and longer-lasting than the current predictions.
But Morassutti remains positive about the balanced, experienced and creative commercial real estate industry.
“It is still early days and there are no clear answers,” he said. “Our industry was well positioned heading into the downturn and the brightest minds in science are focused on COVID-19 solutions which may come sooner than we expect.”