Premium Properties Drive Real Estate Recovery As Older Assets Struggle

October 14, 2026 - 05:01

The commercial real estate market is showing a clear split in performance, with high quality properties in prime locations gaining ground while older buildings face ongoing challenges. According to insights from Colin Lynch of TD Asset Management, this pattern reflects a broader shift in what tenants and investors value most in the current environment.

Premium office spaces are drawing strong interest from companies that want to attract employees back to the workplace. Buildings with modern amenities, efficient layouts, and access to transit are seeing better occupancy rates compared to older stock. The same trend applies to retail, where destination centers that offer a mix of shopping, dining, and entertainment continue to perform well.

Older properties, by contrast, are dealing with higher vacancy and rising costs for renovations. Many of these assets were built for a different era of work and shopping, and bringing them up to current standards requires significant capital. Some owners are choosing to convert these buildings to residential or mixed use rather than compete in a market that favors newer spaces.

Lynch points out that this divide is not just a short term reaction but a structural change in how real estate is valued. Location remains critical, but so does the quality of the building itself. Investors who focus on well positioned, modern assets are finding opportunities, while those holding outdated properties may need to rethink their strategies. The rebound, in other words, is not lifting all boats equally.