- What Industry pros are worried a trade war with the U.S will imperil future industrial deal activity
- Why Cross-border trade is worth $1.3tr annually
- What next Industrial buyers could rethink their investment plans if the dispute lingers
The possibility of a protracted trade war with the U.S. is fueling concerns in the industrial broker community about stalled commercial property deals.
The decision by U.S. President Donald Trump to impose 25% tariffs on most Canadian goods — and the Canadian government’s decision to slap new levies on U.S. imports — could contract the national economy, economists warn. Following the tariff announcements, commercial real estate pros began to register their concerns.
In the near term, Green Street’s Canada research team expects the tariffs to create further downward pressure on industrial transaction activity, deepening a “holding pattern” for an asset class that already is facing oversupply and waning demand.
Even amid those troubles, the sector managed to remain a darling of Canadian commercial real estate last year. Altus Group reported that the asset class comprised the largest volume nationally of commercial property sales during the final quarter of 2024, despite a 12% drop in value year over year.
While any significant effects from the tariffs remain to be seen, they already may be starting to play a role in depressed activity. A senior broker for a midsize commercial brokerage based in the GTA said an industrial tenant set to renew a property lease worth $1m asked for a pause solely due to the uncertainty over the tariffs.
“The tenant is now in a wait-and-see [mode],” the broker said. “Their business has synergy with the U.S., and the tariffs are the issue.”
Although other pros said their deals are not currently imperiled due to the tariffs, there are concerns that a long standoff between Canada and the U.S. over trade ultimately could delay industrial deals from getting done.
A managing director overseeing industrial deals for a large private Canadian commercial property investor told Green Street News his firm has no plans at the moment to change its investment strategy. But he did not rule out a rethink if the economic climate worsens due to the tariffs.
“In the short term, there will be some choppiness, and there needs to be more diligence in our underwriting and assumptions about the market,” the managing director said.
Logistics firms providing cross-border transport and shipping already have reported cancelled business in the lead-up to the tariff announcement, the Canadian Trucking Alliance said.
“Consequently, carriers have already begun laying off employees. As many as one in three fleets surveyed in Ontario … indicated layoffs — a number which is expected to grow in the aftermath of the tariffs,” the group said in a statement.
According to the Canadian Chamber of Commerce, $3.6bn worth of goods and services cross the border daily, representing a $1.3tr yearly trade value that has a direct impact on 2.3m domestic jobs.
Download the Green Street News App
Get real-time alerts on all the news that matters most to you, straight to your mobile. Personalise your news feed and enable push notifications to stay up to date with the latest breaking news, property deals, people moves and more.
Search Green Street News in your device’s app store, click the links below, or scan the QR code.
