Market Update
U.S. Tariffs and Their Impact on Calgary’s Commercial and Industrial Real Estate
Published April 2025
The incoming 25% U.S. tariffs on Canadian goods and 10% on energy exports are set to reshape Calgary’s commercial and industrial real estate landscape.
From rising construction costs to shifting demand dynamics, these changes bring both challenges and opportunities for investors in InvestPlus REIT. Here’s how tariffs are influencing our focus sectors and where we see potential in the months ahead.
Key market impacts
Increased construction costs. Tariffs on materials like steel and aluminum could drive construction expenses up by 10–20%, slowing new industrial and commercial projects and elevating property costs in Calgary. We anticipate that replacement costs will go up, which means real estate values should follow.
Economic uncertainty. Trade tensions may dampen business investment, particularly in export-driven industries, potentially softening demand for certain industrial and office spaces. At InvestPlus REIT we invest exclusively in industrial, not office space, and our Tenant First philosophy means we have the strongest of relationships with our tenants. At this juncture, our tenants are sharing with us that it is business as usual. A particular reason for this is the diversification in tenants who lease our buildings that service various industries in the market.
Potential interest rate adjustments. Inflationary pressures from tariffs might prompt the Bank of Canada to continue to adjust interest rates. If inflation stays at bay then financing costs (interest rates) will stay stable or even go down. With some of our debt not due until 2026, we are already evaluating the possibility of renewing it today vs. next year due to the already-drop in rates. There is a risk, however — if inflation kicks in, we could see increasing financing costs for commercial and industrial real estate investments. Fortunately our debt is fixed for the long term.
Supply chain disruptions. Delays in imported materials and higher developer costs could limit new supply, tightening availability in Calgary’s already competitive industrial market. Ultimately this would lead to higher values and higher rents.
Sector-specific impacts. Industrial properties tied to cross-border trade face greater risks, while sectors less dependent on international flows — such as warehousing and tech-focused offices — may hold firm.
Top opportunities
Industrial real estate: warehousing & logistics. Tariffs are pushing businesses to increase local inventory to mitigate supply chain risks, while e-commerce growth continues to drive demand for distribution and fulfillment centres. Prioritize properties near Calgary International Airport or along key arteries like Deerfoot Trail and Stoney Trail for logistics efficiency.
Industrial land investments. Industrial-zoned land offers long-term value as supply tightens and inflationary pressures boost appreciation potential. Focus on parcels near the Calgary Ring Road or Calgary Logistics Park to capitalize on future industrial growth.
This is where InvestPlus REIT’s strengths come to light, especially with our Tenant First philosophy. We’ve worked tirelessly to sign long-term leases with our tenants and incorporated “step rents” (ensuring we are not outpricing ourselves in the market) to mitigate the negative effects of inflation and ensure sustained distributions to our unitholders for the long term.
Looking ahead
Calgary’s commercial and industrial real estate market faces tariff-related turbulence, but InvestPlus REIT is well-positioned to adapt. With industrial vacancy rates low, rents on the rise, and resilience in warehousing and tech offices, we see a path to value creation. Strategic focus on high-demand subsectors and proactive portfolio management will be key to navigating this period.
Talk to InvestPlus REIT about industrial real estate
Book a discovery call to learn how our Western Canadian industrial portfolio is positioned for the tariff environment.
BOOK A DISCOVERY CALLAbout InvestPlus REIT (as of April 2025): Calgary-based private real estate investment fund focused on industrial properties across Western Canada’s primary and secondary markets. $89 million in assets under management, 516,000 square feet of commercial space, 41 acres of land, and 17 buildings across Alberta, Saskatchewan, and British Columbia. InvestPlus REIT provides partial ownership to investors in an existing portfolio of revenue-generating industrial buildings, expertly managed by an experienced property manager.
Important note: Tariff details, portfolio figures (AUM, square footage, building count), and market conditions referenced in this article reflect the state of the market and the InvestPlus REIT portfolio as of April 2025. Tariff policy and market dynamics evolve rapidly — verify against current sources before relying on specific figures. This article is informational only and does not constitute an offer to sell or a solicitation of an offer to buy securities, nor does it constitute tax, legal, or investment advice. Investing involves risk. Speak with qualified advisors before making investment decisions.