AI is expected to be a major growth driver for Vancouver’s tech industry and office space demand over the next decade, according to a new report.

The commercial real estate market could be reshaped as AI adoption scales across industries and transforms business, said the 2026 Tech Gateway Office Markets report by CBRE Ltd.

The report, released Monday, examined how a tech growth cycle is accelerating leasing activity in 17 markets in the U.S., Canada and Europe.

Vancouver saw greater tech industry office leasing activity in 2025 compared to 2023, said the May 11 report.

It was among 12 of the 17 markets that saw increased tech leasing activity, with the largest percentage gains in Manhattan, Toronto and Boston, said the report.

Vancouver saw a rising vacancy rate over the past two years—it increased by about 16 per cent during that period—but the city recorded positive net absorption growth and positive annual rent growth in 2025, said the report.

In Canada more broadly, the tech industry accounted for 14.7 per cent of total leasing in 2025 or 2.8 million square feet. This volume was 55 per cent higher than 2023 but well below peak levels in 2019, similar to the U.S., the report said.

The tech industry share of total Canadian office leasing increased to 32.2 per cent or 1.4 million square feet in the first quarter of 2026, up from 15 per cent in 2025, said the report.

CBRE said AI will create entirely new business opportunities much like mobile devices enabled the app economy more than a decade ago.

It said venture capital (VC) funding reached a record high in 2025 in the U.S., Canada and Europe, and that AI is accounting for a rising share of VC funding.

“The technology industry is in the early stages of what could be a large growth cycle driven by AI development and deployment,” said the report.

“AI innovation will likely create more jobs than it replaces and increase office space leasing demand in tech gateway office markets,” it said.

Still, the report noted that AI-related job cuts are increasing as many tech companies reposition their workforces and capital expenditures.

Online shopping has been the bogeyman of brick-and-mortar retailers since well before the COVID-19 pandemic forced everybody online.

But the reports of the death of in-person retail were greatly exaggerated.

“We’re always talking about the demise of retail because of e-commerce, but it’s persevered over the years,” said Raymond Wong, vice-president of data solutions with Altus Group.

A survey of investment intentions Altus Group conducted last fall indicated that retail was the top choice, thanks to the promise of steady cash flow and appreciation due to few purchase opportunities.

“Number one on the list is still retail – especially food-anchored retail strips – followed by apartments, industrial and office,” Wong said.

Jon Buckley, senior managing director of Marcus & Millichap’s Western Canada NNN Group, which specializes in single-tenant triple-net (NNN) assets, believes transaction volumes and investor interest are now past pre-pandemic levels across all retail asset classes.

“What we’ve noticed post-pandemic is that because there was a negative view towards retail assets for so long, there wasn’t a lot of new supply coming online,” he said. “If anything, you’d see older retail centres being redeveloped into mixed-use residential with retail in the podium, but there wasn’t a lot of new product coming online. And as retailers have continued to perform well, we’ve seen excess tenant demand and limited new supply, so that’s created upward pressure on lease rates. Strong fundamentals and strong metrics have driven a lot of investor demand back towards retail now.”

While grocery-anchored centres and open-air retail strips have shown particular strength, the NNN properties his team specializes in have also performed exceptionally well. Quick service restaurants with drive-thrus are a case in point, thanks to the scarcity of locations.

“There’s just not a lot of corners remaining where you can go and put a drive-thru,” he said. “So, in those existing facilities, they’ve seen upward pressure in rents.”

Drive-thru restaurants have replaced financial institutions as tenant of choice for buyers of single-tenant assets thanks to their reliable income, exceptional covenants and long-term leases.

Most of the big banks have sold their real estate in recent years, Buckley said, so most bank locations are owned by private investors – also the most active type of retail investor in 2025.

This is the case not just for single-tenant assets but also some of B.C.’s largest retail deals last year, including the $140 million acquisition of 798 Granville St., Vancouver, by GJ Group Robson Inc. and Shato Holdings’ $137 million acquisition of Willowbrook Park in Langley.

On the Prairies, one of the most active buyers in recent months has been Montreal-based real estate investment firm Leyad, which acquired St. Vital Centre in Winnipeg for $160.5 million earlier this year as it focuses on properties delivering consistent returns in growth markets.

“This acquisition embodies everything we look for in a community shopping centre,” said Leyad president and CEO Henry Zavriyev in announcing the purchase. “St. Vital Centre is dominant in its market, anchored by essential retail, deeply embedded in the daily lives of the community, and positioned for many decades of continued success. We are proud to become its long-term steward.”

Originally built in 1979, St. Vital Centre underwent a comprehensive renovation and expansion in 1998. It is now one of the top-performing shopping centres in Manitoba, with 926,310 square feet of gross leasable area and 160 retailers, including Indigo, SilverCity, Dollarama, London Drugs and Walmart.