Canadian Commercial Real Estate: 5 Reasons To Invest Now

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The time to invest in Canadian commercial real estate is now, and here’s why…

There are many ongoing benefits of investing in commercial real estate in Canada. These five factors suggest right now could be the best time to get in and expand portfolios.

Rising Rate Environment

The Bank of Canada just hiked interest rates again. The US appears to be on a rate hiking spree for the foreseeable future. While investment capital is still more than plentiful right now, smart leverage can be beneficial. Lower cost financing for acquisitions and funding improvements can deliver more value for those who are investing and redeveloping retail and mixed-use projects today.

Demand for Retail Space is Resurging

Amazon is proving that brick and mortar shopping is not only important but a big part of the future too as it continues to build its offline presence. Many of the startups which have launched over the past few years are now bringing their businesses to market and need retail storefronts, office space and warehouse and distribution space. Many are very well funded. The new marijuana boom is only going to fuel competition for commercial space even further. Alberta has received over 450 pot shop applications in the last 3 months alone. 100 of those are centered in Edmonton.

Shoppers are Still Filling Local Shops

The new shops at the Edmonton airport saw at least 1,000 shoppers lining up and waiting for 10 hours, starting at midnight the day before, just to be the first in. Services like Uber Eats may be great for augmenting the profitability of local shops, but this proves people still love getting out and browsing in person.

Oil Prices Heading Up

Oil prices have already shot up to over $70 a barrel. That’s more than a 25% improvement from recent lows. There is a lot of pressure and expectation aiming to push those prices well over $100 a barrel in the near future too. They may not stay there long-term, but we all know that when the oil and gas industry is doing well, it’s good news for Alberta in terms of more jobs and higher wages, as well as demand for commercial property and consumer spending.

Trending from Residential to Commercial Property Investment

The world’s residential market may not be faring as well as commercial today. That makes it more likely that many property investors will begin pulling away from residential condos and homes, and put that capital into local shopping plazas, which perform better during these times.

Summary

Commercial real estate is a staple of savvy investors’ portfolios for its returns, passive income, wealth preservation, and ability to control asset value through improvements and smart management. While timing any market can be difficult, the above factors certainly seem to suggest that this is a great time to get in and add portfolios with more of this asset class.