Sector unlikely to see a uniform recovery across all asset classes in the months ahead
Hopes may be growing that a commercial mortgage market rebound is on the way for 2026, but few are expecting asset classes to recover at the same pace across the board.
In the commercial sector, executives are earmarking the deal types they see thriving in the 12 months ahead while also quietly taking note of those they expect to take longer to recover.
They may not jump off the page, but some of the more “vanilla” product types could be a safe bet for growth in 2026, according to Reid Quan (pictured top), vice president at commercial lender ROI Group.
“2025 showed a lot of growth in retail and mixed-use, and even some industrial held strong,” he told Canadian Mortgage Professional. “The brick-and-mortar, income-producing type assets as a whole will continue to be top of mind and more favourable to borrowers, lenders and brokers.
“Brick-and-mortar can be kind of vanilla at times, but the nice part about vanilla is that it’s so dependable. That’s how I want to frame those asset classes – the ones that are a bit more vanilla, a bit more predictable, will do well this year.”
For other asset classes, the outlook is less rosy. The woes of Toronto’s condo market in recent years have been well documented – and Quan highlighted high-rise residential as one of the sectors that looks set to continue struggling this year.
Developments with sizable underground parking and large master-planned communities are expected to see another muted year, even in some secondary and tertiary markets.
“I just think there’s still too much uncertainty of buyers moving out to certain areas or putting their dollars into investment-type properties – condos or even single-family homes,” Quan explained. “The absorption level is not the same as it once was. There’s less disposable income for housing available right now.
“The struggle may be real to find good deals to put that money out there. So those brokers looking for the owners who have those properties – I think they’ll see a bit more turbulence in getting their deals refinanced or purchases to go through.”
Don’t rule out other asset class struggles this year
Of course, it’s too early to say for sure what’s in store for the commercial market this year – particularly with no end in sight to the global economic volatility that was a staple of 2025.
That means it’s difficult to predict for certain what’s in store for many asset classes beyond an educated guess, Quan noted.
“I still think there are other assets that may not perform as admirably as they have in the past,” he said. “But without being specific, I think a lot of that comes from factors that are out of our control, and it’s still too early in the year for me to throw any lottery picks out as to what those look like.
“But I still think there might be some other movements in other asset classes that may not perform as we all hope. But that’s just a hunch – and I think more because of factors that are outside of our control.”
How brokers can navigate another turbulent year
All that adds up to a potentially lucrative but also challenging year for brokers in the commercial space. Top of mind for those mortgage professionals, according to Quan, should be doubling down on relationship building and cultivating strong connections in the sector.
“I think the relationship aspect of commercial mortgage brokering and lending goes a long way,” he said. “I think with the way the landscape has changed in this sector over the last couple of years – fewer lenders doing this, more brokers leaving the space in general – having strong relationships and for brokers, having the willingness to grow and adapt is important.
“Whether it’s spending more time in commercial than residential, or going all in on commercial if you’re trying to make that 100% leap, I think new and/or existing relationships are going to support you to do that.”
Brokers who understand lenders’ parameters – asset classes, loan amounts, geographic criteria – will go a long way to being more successful, he added.
“Just keep top of mind how you’re approaching those lender relationships, how you’re approaching co-brokering situations. Have some kind of mentorships, work alongside those who maybe do more commercial than a traditional residential mortgage broker,” Quan recommended.
“‘Relationships’ is the word I’d circle. I think that’s going to be paramount this year for getting things done in an effective and efficient manner.”
This article is part of CMP’s Commercial sector focus for January, spotlighting the commercial mortgage market and the key trends and issues facing the space in 2026. Find all the rest of our special coverage here.
