BC’s commercial real estate market is entering a period of transition for 2025, driven largely by the US trade tensions. As the tariffs remain in place and potentially rise, BC faces a mix of challenges and opportunities.

Slower economic growth and reduced cross-border trade may lower activity in sectors such as manufacturing, logistics, and retail. At the same time, inflation and rising interest rates are increasing construction and financing costs—particularly as many building materials are imported and subject to tariffs. These added costs may delay new projects and drive up rents as developers pass on expenses. If the tariffs persist, the Canadian dollar could weaken, limiting investment and further straining trade ties.

The retail and hospitality sectors may face greater challenges. Higher prices on imported goods and cautious consumer spending could force retailers to downsize, close, or move online—reducing demand for physical retail space. The hospitality industry, especially in regions that rely on US visitors, may experience a downturn as higher travel costs and reduced disposable income in the US lead to decreased tourism. Hotels, restaurants, and popular attractions in tourism-dependent cities like Vancouver may be among the hardest hit.

In contrast, industrial real estate—such as warehouses and distribution centers—could remain strong as companies look to reduce their dependence on international supply chains. Coupled with the continued rise of e-commerce and a growing consumer shift toward Canadian-made products, BC may see stronger demand for domestic warehousing and logistics, supporting growth in industrial, office, and mixed-use asset classes. Demand for office space in the tech sector could also remain strong if businesses continue to invest in innovation and digital infrastructure.

Investment patterns are also changing. US investors may pull back due to uncertainty, but a weakened Canadian dollar could make BC properties more attractive to international investors—especially from Asia, where favourable exchange rates make BC real estate offer greater purchasing power. As a result, BC may look to diversify and strengthen its ties with other international markets. The province’s ports may become increasingly important for global trade, creating new opportunities for development and real estate investment.

Governments may also respond with policy tools such as tax incentives, support for emerging industries, and infrastructure investment to help offset the impact of trade disruptions. These measures could stimulate new development projects and support economic stability and growth.

While short-term challenges are real, BC’s commercial real estate market is proving to be adaptable. The province is positioning itself to weather the storm and potentially emerge stronger through smart investment, policy support, and global diversification. The future of BC’s commercial real estate market will depend on how quickly and effectively the province responds to shifting trade conditions. If businesses and policymakers adapt well, sectors like industrial and tech may continue to thrive, even as retail and tourism adjust to the changing landscape

Written by Cory Wright for William Wright Commercial