According to a report by CBRE Group, Inc., Canada’s commercial real estate debt markets will be more active this year, and competition for real estate loans will intensify, with Vancouver as the top market of choice and multifamily as the top asset class.
“Origination volumes are rising, balance sheets are opening up, and we’re seeing a clear intention from lenders to deploy more capital this year,” said Joshua Sonshine, CBRE senior vice president, in a press release.
Per the report, 68 percent of lenders surveyed planned to actively or very actively bid on deals this year, with the share of those intending to bid very actively at the highest point in four years. CBRE noted the increased competition could lead to lower borrowing costs.
“Bidding is more active, credit spreads are tightening, and lenders now have a clearer read on how to price risk across sectors,” said Jessica Harland, CBRE senior vice president, in the press release. “That visibility is translating into a more competitive and ultimately healthier lending environment.”
According to the report, 81 percent of lenders polled expected to increase their origination volumes in Canadian real estate this year, which might boost debt market liquidity and promote dealmaking activity.
Among lenders, most aimed to raise their origination volumes by 10 percent in 2026 compared with 2025, while over a quarter sought to deploy 20 percent or more real estate lending capital this year.
“The main challenge to the lending environment is economic uncertainty, but lenders are starting to realize that uncertainty is the new normal,” Harland said in the press release.
For its report, CBRE surveyed 47 domestic and foreign lenders – representing a total of more than $200 billion in commercial real estate loans under management – from Dec. 10, 2025, to Jan. 16, 2026.
The survey, which CBRE has been running since 2014, aims to address the year’s activity expectations, lending terms and criteria, and lender sentiment and preferences. CBRE is a commercial real estate services and investment company headquartered in Dallas, US.
Asset classes
According to CBRE, in terms of preferred asset classes for lenders in 2026, the report revealed that:
- More lenders intended to raise their budgets for office loans, with appetite rebounding for the first time in six surveys
- Lenders viewed the multifamily market in the long term, amid short-term softness and recalibration
- 55 percent of lenders sought to increase their exposure to retail assets
- Although not many expressed concerns regarding industrial assets, interest in the market was at its lowest level among the last 11 surveys
- No lenders planned to grow their budgets for land assets
“Lenders are back in the market with conviction across most asset classes, most notably office,” Sonshine said in the press release.
Per CBRE, despite the surge in interest in the office market, many lenders considered older, obsolete, and lower-class office product a major obstacle. They expressed concerns about having to shell out significant sums to modernize, amenitize, or repurpose such properties to draw in quality tenants.
According to CBRE, while some property types might encounter challenges, lenders expressed an openness and a willingness to fund most commercial property types.
“Even with renewed momentum, underwriting discipline isn’t going anywhere,” Sonshine said in CBRE’s press release. “There are fewer ‘sure things’ in this market, and lenders are taking a measured, fundamentals-first approach across all asset classes.”
Markets of choice
Per CBRE, in terms of lenders’ markets of choice in 2026, the report found that:
- Vancouver overtook Toronto in the rankings for the first time in a decade, with the former benefiting from strong property fundamentals and geographic constraints, which impacted tenant demand
- Lenders were possibly seeking to diversify their loan portfolios that leaned heavily in favour of Toronto, which took second place in the survey
- Jumping two spots, Calgary ranked third, supported by strong migration trends and an energy sector that generally protected the economy from US tariffs
- Advancing one spot, Edmonton was in sixth place
- For Hamilton and London in Ontario, sector-specific tariffs on steel and automotives significantly affected lender appetites