Brookfield, Oxford and Cadillac Fairview: Canada’s Office Landlords After the Pandemic

Canada’s big commercial landlords survived the pandemic because their owners are pension funds with 30-year horizons, but those same owners have concluded that office and retail no longer deserve the share of capital they once commanded. Cadillac Fairview, wholly owned by the Ontario Teachers’ Pension Plan, manages $26 billion of assets including Toronto Eaton Centre and the TD Centre. Oxford Properties, the real estate arm of OMERS, runs a $79 billion global portfolio anchored by Yorkdale Shopping Centre and a dominant position in Calgary and Vancouver offices. Brookfield’s Canadian office business, now rebranded as part of BGRE, holds about 15 million square feet across 19 towers in Toronto and Calgary including Brookfield Place, First Canadian Place and Bay Adelaide Centre. This article examines how these three landlords came through the office downturn, why the recovery is concentrated in a handful of trophy buildings, what is happening to the older towers, and why the pension funds that own them are nonetheless retreating. It is part of the Canadian Company Stories hub.

Why are Canada’s biggest landlords owned by pension funds?

Canada’s largest commercial landlords are pension-owned because the country’s public-sector pension plans adopted direct real estate ownership in the 1990s and 2000s as a way to earn inflation-linked income without paying external managers. Ontario Teachers’ bought Cadillac Fairview in 2000 for about $2.3 billion and has held it ever since; OMERS built Oxford Properties into its wholly owned real estate platform after acquiring it in 2001.

The structure gave Canadian real estate a distinctive character. Unlike American office markets dominated by listed REITs that must report quarterly and face activist pressure, Toronto’s financial district and the country’s top malls were held by patient owners who could leave towers under-leased during downturns rather than sell at distressed prices. It also meant that when the pandemic emptied downtowns in 2020, there was no wave of Canadian office foreclosures comparable to the United States, because the owners did not have maturing CMBS debt.

Brookfield is the exception that proves the rule. Brookfield Property Partners, the listed vehicle that owned the Canadian towers, was taken private by Brookfield Asset Management in 2021 after several quarters of losses, precisely because public markets were valuing office exposure far below what the parent believed it was worth. In November 2024 the Canadian office operations were handed to CBRE under a “Brookfield Properties Operated by CBRE” arrangement, and in 2026 the Brookfield Properties brand itself was retired in favour of BGRE. Brookfield’s wider story, including its separation of the asset manager from the corporation, is covered in the Brookfield Asset Management profile.

The scale is large. Teachers’ real estate portfolio, held almost entirely through Cadillac Fairview, was $27.9 billion at the end of 2025, or 10% of the fund’s $279.4 billion. OMERS reported real estate at 15% of its $145.2 billion. CPP Investments, the largest of the Maple Eight funds, co-owns a substantial Canadian portfolio with Oxford, though it has been selling down office stakes.

How deep did the office downturn go?

National office vacancy rose from well under 10% before the pandemic to a peak of roughly 18.7% in 2025, with Toronto’s downtown rate touching 17% and Calgary’s exceeding 30%. The damage was slower than in the United States because Canadian leases are long and tenants kept paying, but by 2023 sublease space had reached record levels and valuations of older towers fell sharply.

The Globe and Mail reported in 2023 that Teachers’ real estate portfolio lost 3.5% in 2022 while its benchmark gained 6.7%, and that valuations of Canadian retail and office holdings had been marked down because of under-performance. Teachers responded by pulling its real estate investment function in-house, moving 37 investment professionals out of Cadillac Fairview and leaving CF as an owner-operator-developer. John Sullivan, who had run CF since 2011 and built out the Eaton Centre, stepped down on 1 November 2023 and was succeeded by Sal Iacono, previously head of operations.

OMERS felt the same pressure. Its real estate portfolio returned -4.9% in 2024 before recovering to +5.1% in 2025, and chief executive Blake Hutcheson repeatedly warned that high interest rates were pressing on values. Oxford brought Daniel Fournier out of retirement in 2023 to steer the business through the downturn, then appointed Eric Plesman, a former Oxford executive who had been running real estate at HOOPP, as chief executive from 3 November 2025.

Calgary was the extreme case. CBRE put downtown Calgary vacancy at 30.4% in the fourth quarter of 2025 even after years of conversions, a legacy of the 2014–2016 oil-price crash compounded by energy-sector consolidation; the Whitecap–Veren, Cenovus–MEG and CNRL–Chevron Canada deals of 2024–25 each added space to the sublease market. Oxford’s exposure there is significant, which is why its 2025 move to take full control of its Calgary towers surprised some observers.

What does the 2026 recovery actually look like?

The 2026 recovery is real in the aggregate but extremely uneven by building quality: CBRE’s Q3 2026 report recorded national vacancy of 16.7%, downtown vacancy of 17.3% and 2 million square feet of positive net absorption, the fifth consecutive positive quarter, with nine of eleven markets growing. Sublease space fell by 1.3 million square feet in the quarter, the biggest drop since 2005, and is now about half its peak.

Downtown Toronto led the improvement with a 90-basis-point decline in vacancy, the largest of any downtown market. Its trophy (Class AAA) vacancy was just 2.7% in Q3 2026, against 3.0% in Montreal and 6.3% nationally. CBRE Canada’s research head Marc Meehan described a “landlord’s market” for premium space and called the recovery well-entrenched. CIBC Square Phase II, 1.4 million square feet delivered in late 2025, was virtually fully pre-leased, and Brookfield’s Bay Adelaide North, where Scotiabank took half the tower, had leased most of its space before opening.

The other end of the market is still in decline. Downtown Class B and C vacancy stood at 23.8% nationally in Q3 2026, against 13.8% for Class A. Older towers in Toronto’s periphery, Ottawa and Calgary are losing tenants to the trophy buildings as leases roll, a flight to quality that Hutcheson of OMERS anticipated when he said high-quality offices would eventually prove their value while lower-quality ones lost it.

Supply has been cut off. Only 1.4 million square feet was under construction nationally in Q3 2026, 23.2% pre-leased, and CBRE expects no significant new deliveries beyond 2027 and no meaningful completions until 2032. Since 2021, conversions have removed 9.6 million square feet of office space and demolitions another 3 million, shrinking national inventory by 2.7%. Seven conversion or demolition projects advanced in Q3 2026 alone across Toronto, London and Ottawa. The combination of no new supply and shrinking stock is what gives the trophy landlords pricing power.

How is Cadillac Fairview repositioning its portfolio?

Cadillac Fairview is shifting from a retail-and-office owner into a diversified landlord with multifamily and industrial targets of 20–25% and 15–25% of the portfolio respectively, funded by selling offices. CEO Sal Iacono told RENX in early 2026 that the company, which manages about 28 million square feet across 52 Canadian properties, had sold Montreal’s Tour Deloitte (495,000 square feet) to DekaBank and Toronto’s Yonge Corporate Centre (657,800 square feet) to a consortium of Europro, Arista, Fieldgate and Paradise, with a third office sale closing in March 2026.

The proceeds are going into apartments and warehouses. Carré Windsor in Montreal, a 35-storey, 512-unit rental tower, opened in February 2026; Rideau Registry in Ottawa (288 units) was due for occupancy in mid-2026; CF Carrefour Laval Phase I (365 units) is scheduled for 2027 and a 490-unit project on 61st Avenue in Calgary for 2028. On the industrial side CF bought four newly built, fully leased Mississauga buildings totalling 550,000 square feet from Carttera in February 2026, and is entitling a 3-million-square-foot master plan at Buttonville in Markham plus a 152-acre park at Balzac, Alberta.

The retail business, by contrast, is being reinvested rather than sold. CF Toronto Eaton Centre recorded $1,642 per square foot of sales in 2025, second only to Yorkdale nationally, with CF Pacific Centre ($1,593), CF Chinook Centre ($1,469) and CF Richmond Centre ($1,466) filling the next three places. The company’s answer to the 2025 collapse of Hudson’s Bay, which left anchor boxes empty across its malls, is the Eaton Centre’s former Nordstrom space, now split among Simons, Nike and Eataly. The Hudson’s Bay story explains why those boxes became available.

The ownership relationship is also changing. Teachers’ now runs real estate investment decisions through an internal group rather than through CF, and its 2025 results put the asset class at a -3.1% return against a 2.2% benchmark, with allocation cut to 10% from 11%. Chief executive Jo Taylor’s fund made 6.7% overall. CF’s job is to improve those numbers by operating better and holding a mix that is less exposed to the office cycle.

Why is Oxford doubling down on Calgary and Vancouver offices?

Oxford is concentrating rather than retreating in Western Canadian offices because it believes the best buildings in supply-constrained downtowns will command rising rents once the flight to quality runs its course. In June 2025 Oxford paid C$730 million to buy CPP Investments’ 50% stake in a seven-building portfolio of about 4 million square feet, valued at roughly C$1.5 billion in total, taking full ownership of Eau Claire Tower, Centennial Place and 400 Third in Calgary and The Stack, Guinness Tower, Marine Building and MNP Tower in Vancouver.

The logic is building-specific. The Stack, completed in 2023, and Eau Claire Tower (2016) are the newest large towers in their markets; Centennial Place is the largest Class AA asset in Calgary. With Calgary’s downtown vacancy still around 30% and Vancouver’s rising in Q3 2026 after a tech tenant consolidated, the headline numbers look poor, but the premium segment is tight in both cities. Lululemon’s 300,000-square-foot commitment at Pacific Centre and the steady removal of obsolete Calgary stock through the city’s conversion programme (29 projects covering 3.2 million square feet, of which 13 are complete) support Oxford’s view that the top tier is a different market from the average.

For CPP Investments, the sale fitted a strategy of redeploying out of mature office holdings. Head of real estate Sophie van Oosterom said the deal would allow capital to go into new opportunities, and CPP has been visibly lighter on Canadian office since. The two funds still co-own a large portfolio across Canada, so the transaction was a reallocation between partners rather than a market exit.

Oxford’s bigger engine remains retail. Its three GTA shopping centres set records in 2025: Yorkdale at $2,368 per square foot (up 34% since 2021 and more than $700 ahead of any other Canadian mall for the tenth consecutive year), Square One at $1,396 and Scarborough Town Centre at $1,073, its first year above $1,000. A Gucci boutique at Yorkdale was scheduled to open in late 2026. Those numbers explain why Oxford, unlike CF, has not been a net seller of Canadian retail.

What happened to Brookfield’s Canadian office towers?

Brookfield’s Canadian office portfolio, about 15 million square feet in 12 Toronto and seven Calgary towers, stayed inside the group through the downturn but changed hands operationally. In November 2024 CBRE took over property management, accounting and procurement for most of the portfolio under the “Brookfield Properties Operated by CBRE” partnership, extending a US arrangement to Canada so that Brookfield could focus on asset management and capital decisions.

The Toronto assets are among the country’s best: Brookfield Place, First Canadian Place, Exchange Tower and the three Bay Adelaide Centre towers. Brookfield’s practice has been to sell passive stakes while retaining management, and Victor Dahdaleh’s Dadco Group paid about $850 million for 50% interests in Bay Adelaide East and West before taking a similar stake in Bay Adelaide North at a reported $850 to $950 per square foot, well above the roughly $500 average for the financial core at the time. The 32-storey North tower opened with Scotiabank as anchor and was mostly pre-leased.

Calgary is Brookfield’s harder market. Brookfield Place Calgary, completed in 2017 as Western Canada’s tallest building, along with Bankers Hall, Suncor Energy Centre and Fifth Avenue Place, form the core of the downtown premium segment. These buildings have retained tenants through the energy consolidation wave better than the Class B stock being converted, but Calgary’s 30% vacancy caps rent growth in a way Toronto’s 2.7% trophy vacancy does not.

At the group level, Brookfield Corporation’s Q2 2026 interim report showed a modest $50 million decline in investment-property fair values, with gains in its Super Core portfolio offset by write-downs in Value Add assets, and it reported distributable earnings of $1.55 billion for the quarter. Canadian office is a small line within that, and the 2026 rebrand to BGRE signals that the former Brookfield Properties is being positioned as an institutional operating company rather than a Canadian landlord.

Where are the office conversions and what do they achieve?

Conversions have removed 9.6 million square feet of Canadian office space since 2021, with Calgary the most aggressive market and Toronto, Ottawa and London the most active in 2026. Calgary’s downtown incentive programme, launched in 2021, had 29 conversion projects by early 2026 covering 3.2 million square feet, 2.4 million of it downtown: 13 complete (ten residential, two hotels, one school), nine under construction and seven in planning.

The economics only work for a specific kind of building. Conversions suit older Class B and C towers with small floor plates, operable or replaceable windows and low acquisition prices; the large, deep-floor-plate 1980s towers that make up much of Calgary’s vacancy are poor candidates, which is why demolitions (3 million square feet nationally since 2021) are also part of the toolkit. Calgary offered grants of up to $75 per square foot to make the numbers close, and the city’s vacancy still sat near 30% at the end of 2025, a measure of how large the overhang was.

Toronto’s conversions are happening without subsidy because residential land values are high enough, and because the market has polarised. With the trophy segment at 2.7% vacancy and the Class B and C segment above 20%, the gap in value between the two is wide enough that an obsolete tower near a subway is worth more as apartments. Several 2026 projects in Toronto, London and Ottawa are in that category.

The national effect is that supply is being removed at both ends: no new towers are being built, and old ones are being taken out. CBRE’s Keith Reading of Morguard and Marc Meehan of CBRE both point to the same consequence, which is that when demand recovers further, rents in the surviving stock rise faster than they otherwise would. For the pension owners, that is the bull case for the trophy assets they have kept.

Why are the pension funds still retreating from real estate?

The funds are reducing real estate because the asset class has under-performed its benchmarks for several years, because other private assets have delivered more, and because the return of long-term bond yields above 3% makes the inflation-hedging argument for property weaker. Teachers’ real estate lost 0.7% in 2024 and 3.1% in 2025 while the fund as a whole made 9.4% and 6.7%; that gap is the reason its allocation fell to 10%.

OMERS is a more nuanced case. Its real estate returned 5.1% in 2025 after -4.9% in 2024, and it holds a higher 15% allocation, but Hutcheson has been open that rates and valuations remain a headwind. CPP Investments, the largest fund, has been the most visible seller of Canadian office stakes, and its co-ownership agreements with Oxford are being unwound asset by asset. The retreat is also visible in the sale of 30% stakes in the TD Centre and 16 York Street to the Ontario Pension Board, a long-standing CF strategy of recycling capital from mature trophy assets.

Within real estate, the money is moving from office and retail toward apartments and logistics. CF’s targets, Oxford’s European and Asian logistics platforms and Brookfield’s reclassification of Canadian office as a small component of a global real estate business all point the same way. Multifamily in particular offers CMHC-insured financing and demographic demand, as the apartment REITs have demonstrated, although 2026 rent softening has tempered the enthusiasm.

What the funds are not doing is dumping the trophy assets. Yorkdale, the Eaton Centre, TD Centre, Brookfield Place and the new Bay Street towers are exactly the properties that 2026 data say are winning, and ownership of them remains concentrated in the same few hands. The retreat is from the average Canadian commercial building, not from the best ones.

What can founders and investors learn from Canada’s office landlords?

The first lesson is that ownership structure determines behaviour in a downturn. Canada’s pension-owned landlords could hold, reposition and selectively sell because they had no quarterly earnings pressure and no maturing securitised debt. American REIT peers, and Canadian developers financed by presales, did not have that luxury. For founders raising capital, the identity and time horizon of the investor matter as much as the valuation.

The second is that averages hide bifurcation. National office vacancy of 16.7% describes a market that barely exists: the trophy segment is nearly full and the obsolete segment is emptying. Any analysis of a Canadian commercial property, or of a business that depends on one, has to start from the building’s position in that hierarchy rather than from the city-wide figure.

The third is that the best operators are redeploying before the cycle turns rather than after. CF sold offices in 2025–26, at prices below peak but into a recovering market, to fund apartments and warehouses that will take until 2028 to deliver. That is patient capital doing what it is designed to do, and it contrasts with Brookfield’s approach of selling passive stakes at premium prices while retaining the operating platform and fee income. Both are defensible; neither involves waiting for the market to come back on its own.

The fourth is that physical retail was never the problem people assumed. Canada’s top malls posted record sales in 2025, and the Hudson’s Bay collapse created re-leasing opportunities for the best-located boxes rather than a vacancy crisis. Businesses that write off an entire category because of a visible failure within it, whether department stores or downtown offices, usually miss where the value has actually gone. Investors looking at other markets can compare the trajectory with the UK Company Stories hub, where London’s office recovery has followed a similar trophy-led pattern.

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