Canada office market: Is the fog clearing?

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“As interest rates come down, it’ll help tenants make those decisions going forward,” he said. “The other thing about the office market is tenant demand has actually been fairly stable, but there are a lot of subsections of the market and tenants in the market that have put off or even cut space since the pandemic because of the return to office.

“What they’re realizing now is that they don’t have enough space and they may not have space that works for them in order to attract the people back.”

On the investor front, concerns about the office market mean there’s likely to be persistent demand for so-called alternative asset classes including health care, data centres, and student housing.

Still, canny market investors are also likely to see potential in the office space, particularly as values sink, with the likelihood of some intriguing purchases in the year ahead.

“What we have seen is some of the very shrewd investors in the market, very large global funds who are raising capital right now to get ready to invest in office,” Fieder said.

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