British Columbia investment review

01. Capital rotation and selective risk appetite

Capital is rotating rather than expanding broadly. Institutional buyers have re-entered the office market, drawn by relative value and limited supply, while remaining focused on grocery-anchored retail and cautious in multi-family. Private capital is more active in smaller office, strip retail, and value-add rental assets, while owner-users dominate industrial and ICI land. Non-profits have stepped back amid tighter funding criteria. 

Across asset classes, capital remains available but highly selective, with elevated underwriting discipline. Buyers prioritize scale, quality, and durable income over speculation, resulting in narrower criteria and more competitive bidding for stabilized, well-located assets.

02. Price discovery and resetting vendor expectations

Transaction velocity is still uneven as markets work through price discovery. Office volumes rebounded, particularly downtown, while retail continues to trade steadily but selectively. Industrial sales remain thin despite an uptick in leasing activity, and land volumes are historically low amid persistent buyer-seller disconnect.

In several instances, development sites have traded at significant discounts to peak pricing, often below original cost. Broad expectation resets are underway, and more realistic pricing is beginning to clear transactions. However, larger sites and speculative product will continue to be challenged until underwriting metrics and vendor expectations converge.

03. Stable rates amid rising cost pressures

Interest rates stabilized following the 2025 reductions, giving investors and lenders more clarity. While debt markets are steadier, lenders are cautious and approval standards are stricter. Tariffs still affect some industrial and retail businesses, though many have adjusted their supply chains and pricing.

The bigger challenge now is not interest rates, but rising costs and slower approvals. Municipal and regional development charges have increased, and entitlement timelines remain lengthy. Environmental reviews and consultation requirements add further uncertainty. Across asset classes, managing costs and navigating approvals will matter more than small shifts in rates.

Total commercial real estate sale volume during H2 2025: $4.5B