Real estate debt markets will be more active this year as lenders look to deploy additional capital, according to two CBRE executives who expanded on the findings in the firm's 2026 Canadian Real Estate Lenders’ Report.

The report analyzed the responses of 47 domestic and foreign lenders, representing over $200 billion in commercial real estate loans under management combined, to a 30-question survey on activity expectations, lending terms and criteria, lender sentiment and preferences that was conducted from Dec. 10 to Jan. 16.

Findings were presented by CBRE Capital senior vice-presidents Jessica Harland and Joshua Sonshine at the CBRE Capital Lenders’ Forum, which kicked off the Feb. 24 RealCapital conference at the Metro Toronto Convention Centre.

“Most lenders were active throughout 2025, with the majority coming in at or above their budget plans for core real estate assets,” Sonshine said. 

“Lenders proved that they would be there for strong projects and my experience says it even applied to condo project financing if the project made sense and was in the right market,” Harland said. “That appetite and willingness to lend should help reassure everyone looking at an uncertain future.”

Increased lending volumes, competition

Eighty-one per cent of lenders expect to grow their volumes this year, increasing debt market liquidity and facilitating deal-making activity. 

While about two-thirds are looking to increase origination volumes by at least 10 per cent relative to 2025, more than a quarter of respondents intend to deploy at least 20 per cent more real estate lending capital.

Lender competition is set to intensify in 2026 as 21 per cent expect to very actively bid on real estate deals throughout the year and another 47 per cent plan to actively bid. This increased competition could result in tighter spreads and lower borrowing costs.

Multi-family and office

Purpose-built rental apartments remain the top asset class for which most lenders intend to increase budgets, signalling a long-term view of the sector amid short-term softness and market recalibration.

Lenders will be most sensitive to rental rates when underwriting multifamily loans in 2026. Sponsorship, lease-up velocity and vacancy assumptions are the next most important factors. 

There’s been significant pullback in lending intentions for condominiums as financing thresholds have become harder to meet and many projects have been delayed or cancelled.

For the first time in the past six surveys, appetite for office loans has rebounded and lenders on balance intend to increase budgets instead of decreasing them. Levels of concern have decreased with all office types aside from suburban class-B.

“It's tied directly to improving market and cash flow fundamentals, most notably renewed leasing momentum and a steady reduction in vacancy,” Sonshine said. “This matters because vacancy isn’t just a market statistic, it’s a central input in every lender's underwriting model.” 

Many lenders noted the obsolescence of older, lower-class product is the greatest challenge facing the office lending market. They’re concerned about the significant investment required to modernize, amenitize or repurpose these properties to attract quality tenants.

Retail, industrial and land

Retail continues to improve, with 55 per cent of lenders looking to grow their exposure in the asset class. That’s up from 48 per cent last year.

“Retail continues to be a strong, stable and defensive asset class,” Harland said. “Growth is trending more positively in secondary and tertiary cities, which currently offer the greatest runway for brands expanding into previously untapped markets.”

Despite tariffs being a persistent worry throughout the past year, few lenders strongly reduced their appetites for industrial financing. Most reported only a moderate reduction while 43 per cent saw no impact.

But the number of lenders planning to increase industrial budgets saw a marked decline in 2026, as weaker market fundamentals held back intentions to the lowest level in 11 years.

“Despite the slightly higher levels of concern, perspective on industrial is very important,” Sonshine observed. “Annual net absorption has been reliably positive for the last 16 years in a row and it's on the rise again. Even at today's rental rates, industrial loan sensitivity underwriting is generally solid, defensible and dependable.” 

For the second consecutive year, land remains the only asset class where no lenders want to grow their budgets. Forty-two per cent plan on cutting their exposure.

Alternative assets

Budget intentions for alternative assets — including self-storage, hotels, seniors housing, life sciences facilities and data centres — have improved as lenders seek higher returns.

“Data centres are so in vogue that 2026 just might be the year we move them out of the alternative asset category,” Harland noted. “They're the lifeblood of the economy in many ways.

“Canada is home to over 300 of these facilities with a market value estimated at $10.4 billion in 2024. That’s expected to reach $16.8 billion by 2030, all of it fuelled by the soaring demand for cloud services, data storage and AI.”

Self-storage showed the biggest increase in lending intentions because it's not that complicated, there’s significant demand and overall supply is still relatively low compared to population density.

“A 22 per cent decline in intentions for life sciences isn’t because there isn't belief in the asset class, it’s simply because it doesn't exist at scale,” Sonshine said. “Lenders are coming to terms with those limitations in the Canadian market and their underwriting experience.”

Top markets for lending

Vancouver’s strong property fundamentals enabled it to overtake Toronto as the Canadian market where there’s the highest appetite to lend. Toronto had held the top spot for 10 years. 

“Lenders are trying to diversify risk,” Sonshine said. “In recent years, we've seen lenders concentrate 50 per cent of their plans in the GTA, with the rest being spread across the country. 

“That results in a significant concentration of the loan book at the front line of the trade dispute with the U.S. Toronto is also seeing the biggest shift in international student populations and is a leader in affordability challenges.”

Calgary – backed by strong migration trends, a diversifying economy, less regulation, efficient development approvals and an energy sector largely shielded from American tariffs – moved up one spot to No. 3. 

Montreal and Ottawa rounded out the Top 5 of the 14 cities in the survey.