Experts are warning that Canada’ssector could be a “canary in the coal mine” for a steeper downturn in the economy as an uncertain return to the workplace leaves many office landlords in a precarious position.
So how could this result in a wider economic collapse? Here’s what they said about the situation, and how Canada might fare.Craig Alexander, an independent economist who previously was chief at Deloitte Canada, says that while Canadians have seen the impact of rising interest rates on the slowing housing market already, the commercial side is “of equal importance.”“There’s a lot of reasons to be concerned about the commercial real estate sector,” he says.
Gomez says there’s a fundamental question in the markets today about whether the traditional office market will ever return to pre-pandemic levels. That means commercial landlords’ cash flows are likely to be affected as they’re unable to rely on the same growth in rent they could in the past, he says.