Canadian investment in U.S. commercial real estate (CRE) has dropped this year, with the U.S. now accounting for 30% of Canadian foreign investment, down from a historical average of 56%, according to MSCI. This decline is linked to challenges that arose during President Trump’s administration, including steep tariffs and contentious rhetoric, which strained relations. Nevertheless, the U.S. remains Canada’s top investment destination.

In retail, despite inflation and a shaky labor market, Americans spent $11.8 billion online on Black Friday (up 9.1%) and $6.4 billion on Thanksgiving. Foot traffic, however, dropped by 3.6%. Retail sales saw a 10.4% rise online and a 1.7% increase in-store, driven by value sales at companies like TJX and Walmart. The use of AI shopping assistants surged by 300% year-over-year, boosting spending.

Investment in the industrial sector accelerates. Domestic investors, REITs, private equity funds, and global investors are all getting back in the game. Investment volume is on pace to finish with its third-strongest year in the sector’s history, with a second consecutive year of growth following a sharp volume decline in 2023.

The AI boom is creating challenges for the insurance industry. Data center developers are pouring billions into mega campuses in Tornado Alley, posing risks that insurers are not equipped to handle. If a major storm hits in 2026, it could significantly strain global insurance capacity.

Looking ahead, 2025 did not go as planned for CRE, but predictions for the upcoming year are already surfacing, with hopes that the market may stabilize by 2026.

Source: Bisnow.com

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