Why Canada "Went Deep" on US Investment

TORONTO—Most Americans may not think about Canada much, but this week NAIOP went north to Toronto for its fall conference and helped emphasize the country’s growing importance to the world of commercial real estate. It is the first time the organization has held the conference here since the 1990s, and the biggest change since then has been the emergence of Canada as a crucial supplier of capital to the American market. In a Wednesday morning session, the organization brought together a panel of several key players in Canadian real estate to get their take on why so much money has flowed south in recent years. And all agreed the onset of the financial crisis was the key event.

Most importantly, however calamitous the recession’s impact in the US, “there wasn’t distress in the Canadian market,” said Peter Ballon, managing director and head of real estate investments for the Americas at the Canada Pension Plan Investment Board. “It didn’t do anything; it was the complete opposite of the US.” Canada’s real estate market is also much more stable than its US counterpart, and historically properties trade less frequently. Therefore, when they have funds to invest Canadians often look abroad, and that usually means properties down south.