As we step into 2026, BC’s commercial real estate market seems to be slowly finding its rhythm again. Activity over the past four to five years reflected a period of uncertainty, marked by inflationary issues, supply chain issues, US tariffs, and other global challenges. Current market activity suggests a period of stabilization rather than contraction.

New construction activity has declined across most asset classes and delivery pipelines are drying up. As a result, market activity is increasingly centered on existing product, with pricing, financing, and leasing decisions emphasizing stability and quality. Momentum that developed in the latter half of 2025 has carried into 2026, particularly in retail, while office conditions show signs of recovery.

Markets to Watch in 2026

Nanaimo continues to attract attention due to its affordability, livability, and accessibility. With limited new development and high building replacement costs, well-positioned retail and industrial assets continue to see steady demand. 

Kelowna remains one of the most active markets in BC, particularly for retail and industrial assets. Retail, quasi-industrial retail, and properties with below-market leases continue to attract investor interest, offering opportunities with long-term potential. 

Abbotsford has shown relative stability in multifamily and retail, while industrial activity has moderated following several years of growth. Overall market conditions reflect a more balanced environment. 

Coquitlam and the Tri-Cities area continue to benefit from large-scale developments in the town centre. Retail and mixed-use assets are among the most active sectors. 

Vernon is a market that keeps moving. The market continues to experience steady leasing activity for retail and industrial, highlighting the value of secondary markets with limited supply.

Asset Class Overview

Office market conditions are showing gradual recovery, following hybrid and return-to-work mandates. Tenant demand is showing a flight to quality, as amenity-rich, AAA assets lead absorption while Class B and C assets are moving more slowly. In downtown Vancouver, vacancy declined slightly in Q4 and sublease availability reached its lowest level since the pandemic. Secondary markets, such as Langley and Burnaby, are also showing healthy absorption and are maintaining strong lease rates.

Recent high-profile transactions, including including QuadReal Property Group’s sale of The Post at 349 W Georgia Street for $1.2 billion to Pontegadea Group and Cadillac Fairview’s sale of 700 & 750 W Pender Street for $125 million to Kingsett Capital, reflect renewed investor appetite for high quality office buildings.

Retail remains one of the most resilient asset classes across the province. Leasing and investment activity remains high, particularly in prime locations. Limited new supply is putting pressure on existing assets, with performance heavily dependent on location and tenant mix.

Industrial market conditions have adjusted after several years of rapid growth post-pandemic. Lease rates have moderated and vacancy has increased modestly as recently completed projects come to market. With new development slowing, conditions point towards a period of stabilization rather than continued expansion.

Multifamily conditions softened through 2025 as new supply and changes to immigration and international student policies impacted rental performance. Pricing expectations for 2026 remain relatively flat and activity has been more concentrated in smaller deals. 

Development land activity remains selective and dependent on the location. Commercial development sites continue to move in conditions where pricing aligns with construction costs and demand, whereas residential land has faced challenges due to population decline, construction costs, and financing.

Outlook

Overall, 2026 is shaping up to be a steady year with a normalization of market conditions. Transaction activity remains present across all asset classes, with retail continuing to show resilience and office gaining momentum. A decline of new supply will put a focus on existing product, which will define the market this year.