Retail storefronts: the market is stabilizing, and what that means for investors

I've been told plenty of times that retail is finished. That everything happens online now, that storefronts will just sit empty. The 2026 numbers tell a different story. Retail is stabilizing, good space stays scarce, and investors are looking at the sector closely again. Here's how to read that turn when you own or are eyeing a commercial storefront on the South Shore.

Retail is stabilizing

Let's start with the national picture. According to CBRE's retail rent survey, Canada's retail property market entered 2026 on firmer footing, after pockets of volatility in 2025. Demand from brands stayed active across most categories, and rents rose in 37 of the 120 formats or urban areas the firm tracks, in the second half of 2025. It isn't a tidal wave, but it's a clear direction, and it points up.

One point matters more than the rest: supply is tight. High construction costs stalled new projects for years, so good locations don't free up often. When a unit does come available, it goes fast. CBRE notes that grocery-anchored suburban centres are among the top performers, and that value banners like Winners, Marshalls, HomeSense and Structube, along with athleisure, keep opening stores. Everyday, close-to-home retail is holding up very well.

Montreal is moving, and the South Shore benefits

Montreal sets the tone. CBRE sees renewed activity, with brands relocating into new flagship stores on Sainte-Catherine Street West. Demand from national and international retailers is rising as the Sainte-Catherine revitalization advances, and a new phase of the work is shifting west this month. When major banners reinvest downtown, it sends a confidence signal that eventually reaches the suburbs.

And the suburbs are exactly where South Shore retail lives. Our commercial strips and neighbourhood centres run on the same engine as the survey's top performers: a grocery store that anchors traffic, a pharmacy, a clinic, a café, everyday services. Quartier DIX30 draws the big banners, but the opportunity for a private investor is often somewhere else, in the well-placed small unit on a busy artery in Brossard, Longueuil or Saint-Hubert, the kind a local business will want to lease for a long time.

Returns, rates and borrowing costs

On returns, the news is good for owners. According to CBRE, national average cap rates compressed in the second quarter of 2026 across most categories, and retail was among the sharpest declines. A cap rate that falls means values rising for the same income. In other words, a good commercial storefront is worth a little more today than it was a year ago.

Borrowing costs help. On September 2, the Bank of Canada held its policy rate at 2.25%, a sixth pause in a row. For anyone running a five-year return calculation on a building, that stability is worth a lot. One nuance: nationally, the dollar volume invested in retail stayed more cautious than in multi-residential early in 2026. The capital is flowing, but it's choosy. It goes to location, a solid lease and a tenant who pays. I laid out the state of the Greater Montreal commercial market and the office recovery in two recent pieces.

What this means for you

• You own a storefront or commercial building on the South Shore: your asset is probably steadier than online retail's reputation suggests, especially if it's anchored by an everyday tenant on a long lease. The real question is the quality of the lease and the gap between your current rent and the market. Before you renew or sell, get your building's value and its renewal-income potential established.
• You're looking to invest: aim for location before discount. A small unit on a busy artery, anchored by everyday foot traffic, leases and re-leases far better than a large, poorly placed space offered cheap. With a stable policy rate at 2.25% and values firming, the math works cleanly, provided you read the lease and the tenant carefully.
• You're a business owner who rents: tight supply works against you at renewal. If your location is good and your rent is still reasonable, consider locking in a longer lease, or look at buying your own unit instead of paying someone else's mortgage. That conversation is worth having before the market tightens further.

I work both residential and commercial, and the commercial storefront sits right where the two meet. That's where I can be most useful to you on the South Shore. Want to know what your building is worth or assess a purchase? Request a free evaluation or write to me directly. I answer myself, every time.