While Canada’s office real estate sector stands to benefit from certain tailwinds, one research director says it faces a reckoning regarding its risk profile and status as a core asset.
Adam Jacobs, senior national director of research at Colliers Canada, said in an interview with BNNBloomberg.ca Wednesday that office real estate was previously viewed as a “core asset” with a low-risk profile over the longer term. With hybrid working arrangements staying in place beyond the COVID-19 pandemic, he said the market is grappling “with the fact that office clearly does have some risk now.”
“We’re seeing that technology can disrupt office also, and it has a lot more risk as a long-term investment. So that’s part of the reckoning happening in the market, trying to figure out what’s the price of this?” he said.
“What’s the value of it? How risky is it compared to a warehouse or a hotel