Canadian real estate investment activity strengthened modestly in the third quarter after hitting a five-year low earlier this year. Multi-suite residential sales continued to recover, while office and industrial segments showed early signs of renewed stability.
BNN Bloomberg spoke with Keith Reading, senior director of research at Morguard, who said improved listing supply, select investor demand and shifting workplace trends helped support the recent pickup.
Key Takeaways
- Multi-suite residential investment is recovering modestly as lower rates, more listings and improved affordability draw investors back.
- National commercial property sales remain below historic highs but strengthened from earlier lows as buyers re-engaged.
- Private capital remains the dominant buyer of apartment assets, with REITs selectively recycling older properties.
- Downtown Toronto’s office market saw renewed activity, helped by return-to-office mandates and major trades in Vancouver.
- Industrial demand remains healthy despite slowing construction and a stabilization in e-commerce–driven activity.
Read the full transcript below:
ANDREW: We’ve had a slump in investments in Canada in the multi-suite residential business, such as condos and apartments. Earlier this year it hit a five-year low. However, our next guest says the market ticked higher in Canada last quarter. Let’s get more from Keith Reading, senior director of research at Morguard. Keith, thanks very much indeed for joining us. We’ve seen this weakness in condos, particularly in Toronto — too many small units were built — but lately we’ve been seeing something of a recovery in the multi-residential market.
KEITH: Yeah, it’s been, I would say, a modest recovery. Activity levels are still far below what we’d become used to. There was a lot of speculative activity when borrowing costs were very low for a substantial period of time, and so we had a market that was speculative in nature. In markets like Toronto, as you said, we had flipping of condos — people would purchase a condo as an investment with the hope of flipping that condo before it was completed, because we had this really excessive demand. We’ve since had a correction to that as interest rates increased, even though they’ve come down a bit over the past year. But we’re at a point where there are a lot of opportunities to buy, and there are more listings than we’re used to. Consumers and investors have more choice in the residential market, and some have gotten back into it.
ANDREW: And your numbers here are tracking transactions — sales of these buildings — with the cutoff being a $10-million price.
KEITH: Correct. Yeah, we tend to track the top end of the market, so the bigger sales of apartment buildings. These are purpose-built rental buildings. And yeah, we’ve seen an uptick in demand. Residential typically means people need a place to live regardless of the economic environment, and the rental sector has performed relatively well historically. So we’re seeing more and more investors — both private and, to a lesser extent, institutional — looking to get into the apartment market.
ANDREW: Who are the big buyers of apartment blocks these days? Can you generalize?
KEITH: I would say it’s large private groups. We’ve seen a bit of activity from some of the real estate investment trusts. What they’ve been doing is selling some of their older assets and purchasing newer assets that are less capital-intensive and tend to be attractive to renters. We’ve seen some portfolio recycling, particularly with names like Boardwalk REIT, where they’re looking to upgrade their portfolios for the long term. But there’s a lot of private capital out there that’s also interested in acquiring properties in premium locations. Perhaps they need a bit of capital injected into them to bring, as units become vacant, to upgrade them and then push rents a bit. So generally it’s private capital groups, but REITs have been active as well.
ANDREW: What about offices? You’re seeing something of a bounce in the downtown Toronto office market?
KEITH: Yes. We saw some of the major banks and some government agencies bringing their employees back on a more frequent basis to the office, and that’s generated real positive momentum we haven’t seen in the office market since the early part of this decade. Due to the pandemic, it’s been pretty choppy, but lately, with the return of employees to their offices, that has created some positive momentum. We’ve had a couple of significant trades of major office buildings — two in Vancouver recently — even though the market across the country had been very quiet. We saw the sale of The Post and also 750 West Pender — two pretty significant sales we really haven’t seen in the last few years.
ANDREW: And just quickly — we only have 30 seconds — what about warehouses? They were such a hot commodity during COVID for e-commerce. What’s happening there?
KEITH: We’ve had a bit of levelling in the industrial market. Over the last few years we saw a strong pickup driven by online shopping. Things have settled a little, but the picture for industrial is still quite healthy and stable. We’ve got more availability, but it’s still at low levels. Our construction cycle has slowed, so we’ve got decent demand and a slowdown in the delivery of new construction, and that’s had a stabilizing effect on the market.
ANDREW: Thanks very much for joining us. Really appreciate it, Keith. Keith Reading, senior director of research at Morguard.
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This BNN Bloomberg summary and transcript of the Dec. 4, 2025 interview with Keith Reading are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.