Institutional investment in Canadian commercial real estate began to rebound last year and is projected to keep ticking up in 2026. JLL reports institutional investors — including fund managers, pension funds, REITs and foreign investors — deployed nearly $15 billion toward Canadian assets in 2025, representing about one third of investment deal volume for the year and their largest share of acquisitions since 2021.
“Since these groups generally encompass the largest and most experienced investment funds in the market, this resurgence underscores a consensus that Canada is entering a new capital cycle characterized by stronger market fundamentals and improving returns,” observes the real estate advisory firm’s newly released overview of 2025 performance and expected 2026 trends.
CBRE Canada likewise identifies institutional investors as a driving component of acquisitional momentum this year. The firm is forecasting an 8 per cent year-over-year increase in deal volume, pushing it up to about $56 billion worth of activity over the course of 2026.
“Global capital is also increasingly looking to Canada as a market of relative stability amid rising geopolitical tensions. Meanwhile, a significant rebound in real estate debt markets has supported greater liquidity across all asset classes, including the office sector,” CBRE analysts state in the firm’s recently released 2026 outlook report.
On the flipside, Canadian institutional investors pulled back from the United States last year. MSCI chief economist, Jim Costello, charted the decline while speaking in Toronto in conjunction with the release of the 2025 results of the MSCI REALPAC Canada Property Index earlier this month. While Canadian investors as a whole continue to hold more assets in the U.S. than any other foreign market, activity decreased to a record low share of outbound capital last year.
“Canadians were net sellers of U.S. real estate in 2025. They sold a whole lot more than they bought,” Costello reported.
Nevertheless, a surge in data centre investment, to the tune of about CAD $2 billion, somewhat masked that imbalance. Costello identified the emergent alternative sector as one alluring element of an otherwise less-than-compelling investment landscape.
“The returns have turned positive, but still not so fantastic. You can earn more investing in debt in the United States today than you can investing in the equity stack,” he said. “That’s a good reason for Canadian investors to not be thinking about the United States at the moment, and when you pile all the uncertainty coming from the geopolitics on top of it, it’s not surprising to me that you see a pullback.”
