For commercial-property investors, renewed buying confidence could create opportunities, but financing depends on cash flow, equity and risk. What could change in 2027?
Why does a 15-year high matter?
The October 27 PwC Canada and Urban Land Institute report says investors’ buying intentions are at their strongest in 15 years. CBRE separately recorded $16.2 billion in commercial property investment during Q2 2026, the highest quarterly volume since early 2022.
Buying intentions measure investor sentiment, whereas the CBRE figure measures completed activity. PwC describes a selective recovery, not a uniform rise in commercial property prices. Results differ by sector, location and asset quality. For a contrasting residential example, our GTA bulk-condo transaction analysis explains how large-volume purchases can produce discounts without establishing commercial-property values.
Which industrial and retail properties stand out?
Industrial buildings remain attractive, with PwC highlighting smaller and mid-sized warehouse units. Large facilities relying on one tenant face greater concentration risk if that occupant leaves. Investors should examine lease length, tenant strength and competing space.
Retail property is drawing renewed interest as tenant demand improves and new development remains limited. PwC says prospects have broadened beyond grocery-anchored shopping centres. Inference: A strong sector outlook does not eliminate lease-renewal risk for a particular plaza.
What about offices and data centres?
Premium downtown offices in Toronto show strength: PwC cites CBRE’s 2.6% vacancy for downtown Class AAA space in Q2 2026. That figure applies to a specific office category, not every office building. Building quality and local tenants remain crucial.
Data centres are attracting interest linked to AI and infrastructure spending. PwC notes that access to electric power increasingly shapes site selection. Investors must evaluate utility capacity, development cost and operating requirements. Our AI data-centre infrastructure analysis examines related municipal servicing and potential tax implications, not verified residential property-tax increases.
Which Canadian markets lead?
PwC ranks Calgary, Toronto and Edmonton as leading markets to watch in 2027. In Toronto, Colliers reported a 2.2% industrial vacancy rate for Q2 2026, cited in PwC’s outlook. These measures do not predict every building’s performance. Our 2027 Ontario regional housing outlook examines a different, residential market and also highlights how local conditions can vary.
Inference: Low local vacancy may support rental income, but transaction values also depend on interest rates, lease terms and supply. Compare recent commercial sales within the same property type and submarket.
What do commercial mortgage lenders want?
PwC finds lenders more willing to supply debt, but they still favour experienced sponsors and income-producing assets. A sponsor is the investor or borrowing group responsible for the transaction. Greater debt availability does not guarantee a particular loan.
Lenders may assess net operating income—property revenue less operating costs, before financing—and the building’s leases, value and condition. They also use debt-service coverage to compare accepted income with required loan payments. Each lender sets its own requirements. Our guide to announced insured apartment-financing parameters outlines eligibility for a specific property type, not a general rule for all commercial buildings.
Why could refinancing be harder in 2027?
PwC anticipates a refinancing wave in 2027 as commercial loans taken at lower rates mature. Even with lenders available, owners may need more equity if their building’s value or income cannot support the requested debt. Our IMF bond-yield explainer describes another potential source of borrowing-cost pressure without forecasting any particular commercial mortgage rate.
Some transactions are using preferred equity or mezzanine debt to fill financing gaps. These arrangements generally sit between senior mortgage debt and common owner equity, with differing repayment priorities. Their costs and conditions require careful review; they are not guaranteed solutions.
What should commercial investors check?
Review tenant concentration, lease expiries, vacancy, maintenance, environmental risks, taxes and insurance before committing. Compare a conservative operating forecast with the proposed debt, and obtain a credible property valuation. Lender interest does not replace transaction-specific due diligence.
The important distinction is between growing investor appetite and the performance of an individual commercial building. PwC’s outlook signals selective opportunities, not guaranteed returns or universally easier refinancing.
Sources: PwC Canada and ULI, October 27, 2026; PwC, capital trends; Canadian Mortgage Trends, November 10, 2026.
Originally published: November 14, 2026
