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To our Investors and Partners,
As we release our Q4 2025 reports, the Canadian commercial real estate market looks materially different than it did a year ago. Improved price discovery has enhanced market clarity, capital markets continue to recalibrate, and conditions have improved relative to prior quarters, though uncertainty remains amid an evolving global backdrop.
Operating fundamentals, especially for well-located, high-quality assets, are showing clear signs of recovery. While this is not a return to prior-cycle conditions, it represents a more workable environment than the one we been navigating over the past several years. Against this backdrop, Crown’s focus remains unchanged: disciplined execution, active and hands-on management, and selective deployment where pricing and fundamentals are aligned.
Market Backdrop
In 2025, the office markets in which we operate showed more consistent signs of stabilization supported by return-to-office mandates from Canada’s largest employers. For the second consecutive year, CBRE reported positive net absorption, with momentum accelerating through the second half of the year. Vacancy also declined for a third consecutive quarter, with Class A downtown vacancy at a three-year low. At the same time, new supply remains historically constrained, and sublease availability continues to trend downward.
These conditions are increasing competition for high-quality space and reinforcing the importance of proactive asset management and targeted capital investment. A clear divide is emerging between assets that meet current tenant requirements and those that do not. Demand continues to concentrate in buildings that offer strong locations, modernized space, abundant amenities, sustainability features, and professional management. This trend is consistent across major Canadian markets and continues to support Crown’s value-add investment thesis.
2025 Highlights
Looking Ahead
As we enter 2026, our focus remains firmly on execution rather than market timing. As one of the few vertically integrated investment managers in our sector, our operating platform continues to be a clear competitive advantage in the current environment, enabling us to identify, underwrite, and reposition assets with precision.
We are in the final stages of deploying our current value-add fund and are preparing for our next fund, CR VI LP, at a point in the cycle that is increasingly favorable for experienced, hands-on operators. We remain selective and disciplined in our approach, prepared to act where opportunities align with our underwriting and return objectives.
We appreciate your continued trust and partnership and look forward to keeping you informed as we build on this momentum in the year ahead.
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