Toronto, ON

CBRE Survey: 93% of Lenders Say They Plan to Deploy More Capital to Commercial Real Estate Assets in 2023

November 29, 2022

Lenders Plan to Deploy More Capital to Real Estate in 2023

Toronto, Vancouver, Montreal will see the most willing lenders, while Logistics, Grocery-Anchored Retail, and Apartments are the asset classes most in favour with lenders

Despite an uncertain global economic outlook and heightened concerns about most real estate asset classes, access to debt capital is not expected to dissipate in 2023. According to CBRE’s new Canadian Real Estate Lenders’ Report, 93% of lenders plan to grow their loan books by deploying more capital for those looking to buy commercial property in 2023.

While vendors and purchasers still need to align on values – a sticking point in a changing market – once they do they will find that 66% of lenders are planning to increase their lending capital by an additional 10% next year, compared to the 53% that sought to grow by up to 30% last year. This pace of growth does, however, reflect a moderation of lender intentions relative to this time last year, when 53% sought to grow by 20% to 30%.

Akin to the reality facing many current and aspiring homeowners, commercial property buyers will find the cost of debt for real estate has risen versus a year ago, and nearly two-thirds of lenders expect spreads to widen further in 2023. In terms of magnitude, 66% of lenders see 5-year term spreads rising by 10 to 30 bps, and 52% project a 20 to 40 bps increase in 10-year term spreads.

CBRE’s Canadian Real Estate Lenders’ Report surveys both domestic and foreign lenders to gauge lender confidence in commercial real estate and offers insights for borrowers on what to expect as they look to access financing for real estate investments.

Toronto, Vancouver, Montreal and Ottawa remain the top real estate markets of choice, attracting the strongest levels of lender appetite over the past year. As asset classes go, Industrial - Modern Logistics; Retail - Grocery Anchored; and Residential - Apartments were listed as the property types causing the least concern for lenders and with the most available financing.

“With the winds of a recession circulating, lenders will lean on the multifamily sector for growth next year,” noted Carmin Di Fiore, Executive Vice President of CBRE's Debt and Structured Finance team. “Industrial is likely to shrug off recession concerns as lenders have no intention of reducing exposure. In fact, many are looking for even more.”

Here are five additional takeaways from the survey:

1. Sentiment shifts on office

The office sector recorded the most significant shift in lender sentiment, with over half of lenders intending to lower exposure to the asset class in 2023. The shift in lender sentiment on the office sector has been acute and largely stems from the persistence of low office attendance rates in the market. Class B assets in particular are seeing the highest levels of concern as office tenants across Canada are taking advantage of this period to relocate to best-in-class buildings.

Top Three Property Types with Most Lender Concern

  1. Office - Suburban, Class B
  2. Office - Core, Class B
  3. Retail - Regional Malls, Secondary Markets

2. Multifamily in demand

Multifamily continues to be among the most popular asset classes with lenders, as 54% of those surveyed intend to increase budgets to multifamily in 2023. Land recorded the most significant decline in sentiment year-over-year, with 52% of lenders concerned about this asset class given heightened valuations and no cash flow.

Top Three Property Types Most Favoured by Lenders

  1. Residential - Apartments
  2. Retail - Grocery Anchored
  3. Industrial - Modern Logistics

3. Condo financing conditions tighten

With headwinds facing the residential condo sector and potentially heightened risk profiles, 89% of lenders active in the sector have implemented tighter conditions on development financing. The most common adjustment in the current environment has been greater up-front equity requirements for development projects, as reported by 67% of lenders. Other changes include lenders requiring greater deposit levels with shorter payment schedules and limiting the number of presale assignments. “This could be a game changer for many projects in the pipeline,” says Di Fiore. “The condo market could see a slowdown based on the changing arithmetic.”

4. Alberta is more attractive

Toronto, Vancouver, Montreal and Ottawa remain the top real estate markets of choice for lenders, attracting the strongest levels of lender appetite in 2022. Sentiment on the Alberta markets of Calgary and Edmonton have significantly improved year-over-year, bolstered by energy markets and some diversification. Meanwhile lender appetite for certain secondary markets has declined, namely Waterloo Region and London, Ont.

Top Four Cities for Lending:

  1. Toronto
  2. Vancouver
  3. Montreal
  4. Ottawa-Gatineau

5. ESG gathers steam

Environmental, Social and Governance (ESG) issues remain top of mind among lenders, with 86% of those surveyed reporting they either already have or plan to incorporate some form of ESG criteria into their real estate lending decisions.

However, the current economic environment has led to some uncertainty, with 39% of lenders potentially delaying their adoption of ESG criteria and 11% reconsidering the scope of the implementation. Only 14% of lenders say they have decided to forgo incorporating ESG criteria over the near to medium term.

Download our 2022 Canadian Real Estate Lenders’ Report and watch the video presentation here.

About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2021 revenue). The company has more than 105,000 employees (excluding Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at

In Canada, CBRE Limited employs 2,200 people in 22 locations from coast to coast. Please visit our website at