Montreal’s commercial real estate market improved in 2024. While the momentum is expected to continue this year, much uncertainty exists about the future for interest rates, Canada’s federal election, and the threat of tariffs and U.S. trade policies.
“There are a lot of moving parts but, generally speaking, the fundamentals of the economy remain relatively sound and real estate is an asset class looking increasingly attractive as interest rates come down,” Scott Speirs, vice-chairman and practice lead for CBRE Montreal’s national investment team, told RENX.
“There are lots of reasons to be optimistic, but we do have some fog in the near term.”
Investment volume increased in the multifamily, industrial and retail asset classes and there’s a sense the office sector has reached the bottom of a cycle from both leasing and investment perspectives and is beginning its long climb back up.
“We are seeing a significant number of trades,” Speirs said of the office activity. “Typically, the trades are smaller and many are driven by users or for conversion.”
CBRE Montreal was involved in nine office transactions last year and four of the buildings were purchased for conversion purposes while three were acquired by users, Speirs added.
Investor mix
Speirs expects to see larger and higher-quality office assets move this year and for institutional capital to become involved in the asset class again after being on the sidelines in recent years.
Institutional investors have remained active in acquiring multifamily, industrial and grocery-anchored retail properties in the Greater Montreal Area (GMA).
Real estate investment trusts were generally quiet in 2024 with the exception of CAPREIT, Chartwell Retirement Residences and InterRent, according to Speirs.
“We had foreign interest in different assets, but ultimately they were not the top bidders,” Speirs observed. “I would expect to see relatively strong foreign interest in Canada in 2025 given the relative strength and stability of the Canadian economy, the strength of the demographics, and the lower Canadian dollar.”
GMA’s top 10 CRE transactions
Listed here are the 10 largest (by dollar value) commercial real estate transactions of 2024 in the GMA, according to CBRE.
1. Cadillac Fairview bought back its 50 per cent interest in the 1.2-million-square-foot, 266-store CF Carrefour Laval shopping centre in Laval from TD Asset Management, for $553.21 million in August. TD had acquired the stake from Cadillac Fairview in tranches between 2020 and 2022.
2. Chartwell acquired five seniors residences with a combined 1,428 suites in Gatineau, Terrebonne, St-Jean-sur-Richelieu, St-Jerome and Sherbrooke from Blackstone for $297 million in July. The residences had an average age of six years and were 95 per cent occupied.
3. Three private investors acquired a portfolio (known as the Norgate portfolio) of approximately 70 older, small apartment buildings in Saint-Laurent from Starlight Investments and KingSett Capital for $197.5 million in December.
4. Alberta Investment Management Corporation acquired five industrial properties in Dorval and Lachine from Pure Industrial for $149.7 million in June.
5. CAPREIT acquired three apartment buildings in Ville-Marie from Mondev for $144 million in an off-market transaction in December. Sales have closed for two of the properties while the third is scheduled to close this quarter.
6. Groupe Mach acquired three industrial buildings totalling 681,748 square feet in Laval and Varennes from water sports accessories designer Pelican for $136.5 million in June.
7. JADCO acquired Galeries Laval shopping centre from Fonds de Solidarité FTQ for $126 million in an off-market deal in December. Galeries Laval includes a retail portion of about 530,000 square feet — with more than 40 stores and services and major tenants IGA Extra, Tanguay and RONA — plus 61,000 square feet of office space. The property is expected to be redeveloped for residential or mixed-use purposes.
8. Sobeys acquired 56 acres of industrial land in Terrebonne from Rosefellow for $113.3 million in April. Rosefellow acquired the land between late 2023 and early 2024 from Le Versant Golf Centre before selling it to Sobeys, which intends to expand its warehousing and distribution site situated next door.
9. InterRent and Crestpoint Real Estate Investments acquired the one-year-old, 20-storey, 248-unit Alba apartment building in Ville-Marie from Mondev and Hillpark Capital for $107 million in October.
10. Groupe Dumont acquired the La Noblesse seniors housing complex encompassing 656 suites in St-Jerome from a private owner for $105 million in March.