Lenders are showing a significant shift in demand for retail as evidenced by the surge in intentions to increase budgets in 2025. Nearly half of lenders plan to grow their retail budgets this year, a notable jump compared to the average of 14% seen over the last seven surveys, according to the 2025 Canadian Real Estate Lenders’ Report by commercial real estate firm CBRE.
“After declining for five consecutive years, lender intentions to increase office budgets rebounded modestly from 0% last year to 7% of lenders in 2025. Intentions for growing industrial loan books continue to be relatively solid, accounting for 45% of lenders in 2025, but remain well below the average 63% of lenders seen over the 2018-2022 period. Notably, lender intentions for increasing hotel budgets for the year ahead have continued to steadily trend higher since the pandemic,” said the report.
So far lenders are not concerned about potential tariffs, and sentiment around commercial real estate lending has improved. According to CBRE’s new Canadian Real Estate Lenders’ Report, lenders are ready to support increased transaction activity and are gearing up for a much more active 2025. While some challenges persist for lending to certain property types and cities, borrowers can expect to see greater debt availability this year.
CBRE’s Lenders’ Report analyzes the responses of 37 domestic and foreign lenders, representing over $200 billion in commercial real estate loans under management combined, to a survey on activity expectations, lending terms and criteria, and lender sentiment and preferences. Lender sentiment matters because the availability of debt will determine if businesses can take on mortgages to grow their footprint or if investors can purchase properties.
“Lenders are feeling increasingly good about every asset class and property type, with levels of concern dropping across the board, except for land and condos,” says CBRE Senior Vice President Jessica Harland. “Nearly half of lenders intend to increase allocations to commercial real estate for a second year in a row and those looking to make a large increase is also up.”
In its Canadian Real Estate Market Outlook 2025 report, CBRE said retailer sentiment going into the new year remains positive, however, factors influencing the market will further entrench current trends and push change in the sector. Being forward looking and resilient will always be rewarded, and this has never been more true than in today’s competitive landscape.
Trends to Watch
Here’s what CBRE identified as trends to watch this year:
- A supply-constrained retail landscape is expected to persist and reshape the typical store format in Canada. Retailers will ultimately be strategic, expanding into secondary markets or modifying the scale of their typical store.
- Expanding where and how retailers access consumers may be what it takes to remain relevant in the year ahead. Diversifying sales methods may play a significant role in revenue generation, even if primarily used for branding.
- Sentiment going into 2025 remains positive, however, we are starting to see more normal growth levels following the boom pandemic years. Retailers that tap into savings, provide entertainment, or are innovative/experiential will continue to thrive during this time.
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