I’ve been thinking a lot about immigration lately. Not just the political debates that seem endless, but something more concrete: the actual impact newcomers have on our buildings, our business districts, our commercial spaces. Everyone talks about immigrants buying homes, but what about the other side of real estate? The strip malls, office buildings, warehouses, and retail centers that make up our commercial landscape?
There’s a story here that doesn’t get enough attention. After walking through Toronto’s diverse commercial districts last month, I couldn’t help but notice how many businesses had been started by people who weren’t born here. The same patterns repeat across Montreal, Vancouver, New York, Miami… pretty much any major North American city.
Let me share what I’ve observed about this relationship between immigration and commercial real estate – both the obvious connections and the surprising ones.
Immigration as an Economic Catalyst
Population growth drives real estate demand – that’s Real Estate 101. But immigration brings something extra to the equation.
Have you noticed how immigrants tend to start businesses at higher rates? The numbers back this up. In Canada, immigrants are nearly twice as likely to become entrepreneurs compared to people born here. In the US, about 25% of new businesses come from immigrants, despite them making up only around 13% of the population. That’s pretty remarkable when you think about it.
I remember talking with a property manager in Vancouver who told me that nearly 40% of his commercial tenants were first-generation immigrants. “They don’t just rent apartments,” he said. “They rent storefronts, offices, warehouse space. They create businesses that need physical locations.”
This entrepreneurial energy translates directly into demand for commercial space. Each new business needs somewhere to exist physically, whether it’s a small office, a restaurant kitchen, or a retail storefront.
Beyond just starting businesses, immigrants create ripple effects throughout local economies. They need services, they buy products, they hire people. All these activities support other businesses that also need commercial space.
This becomes particularly important in cities facing demographic challenges. Birth rates are dropping across North America. The population would actually shrink in many regions without immigration. That would be bad news for real estate values of all types.
For investors looking at commercial properties, immigration patterns might be one of the most useful indicators of future market strength. Not the only factor, of course, but an important piece of the puzzle that sometimes gets overlooked.
Retail Sector: The Immigrant Entrepreneur Boom
Walk through almost any thriving retail district in a major North American city, and you’ll likely see the immigrant influence firsthand. I find this particularly evident in the retail sector.
Take areas like Richmond in Vancouver or Flushing in Queens, New York. These commercial districts buzz with activity largely because of immigrant entrepreneurs who’ve established businesses there. Many of these areas maintain remarkably high occupancy rates even when retail struggles elsewhere.
What strikes me about these districts isn’t just their vibrancy but their resilience. During economic downturns, many immigrant-owned businesses manage to hang on when others fold. Family support networks, community loyalty, and sheer determination seem to help them weather difficult periods.
The food sector stands out as particularly influenced by immigration. Restaurant spaces that might otherwise sit empty find new life as eateries offering cuisine from around the world. Food courts in malls have been completely transformed by this diversity. Even food trucks and temporary market stalls – which sometimes graduate to permanent locations – often represent immigrant entrepreneurship.
I talked with a commercial leasing agent in Los Angeles last year who mentioned something interesting. She said immigrant business owners often make excellent tenants because they tend to pay on time and stay in locations longer. “They’re building something for their families,” she explained. “There’s a different level of commitment.”
This doesn’t mean these businesses don’t face challenges. They absolutely do. Access to capital remains difficult for many immigrant entrepreneurs. Language barriers can complicate lease negotiations. Cultural differences sometimes create misunderstandings with landlords or regulatory authorities.
Yet despite these hurdles, immigrant-owned businesses continue to fill commercial spaces across North America, creating demand that might not otherwise exist.
Office Space Demand from New Businesses
The connection between immigration and office space might be less visible than retail, but it’s just as real.
Many immigrant entrepreneurs start with small office footprints – perhaps a desk in a coworking space or a modest suite in a Class B building. As their businesses grow, they expand into larger spaces. This creates demand across different office categories.
I visited a shared office facility in Toronto where the manager estimated about 30% of their members were immigrants building new businesses. Many focused on professional services – legal practices specializing in immigration law, accounting firms handling international tax issues, marketing agencies targeting multicultural audiences.
Technology represents another significant area. Immigrant founders have played major roles in tech ecosystems from Silicon Valley to Toronto’s growing tech corridor. These companies typically need modern office environments that support collaboration and creativity.
There’s also an indirect effect worth mentioning. Major corporations increasingly make location decisions based partly on access to international talent. Cities with strong immigration flows often attract corporate offices precisely because they offer diverse talent pools. This creates demand for premium office space that might not develop otherwise.
The pandemic and remote work have complicated this picture, admittedly. Office demand patterns are changing for everyone. Yet even with hybrid models becoming common, businesses still need physical spaces. Markets with strong immigration patterns continue attracting companies because of their talent advantages.
Industrial Real Estate: The Logistics Boom
Industrial real estate has been on fire lately, and immigration plays a role in this success story through several channels.
First, immigrant-owned businesses appear frequently in manufacturing, wholesale trade, and logistics – all sectors requiring industrial space. From food processing facilities serving ethnic markets to import/export businesses leveraging international connections, these enterprises create direct demand for industrial properties.
Second, immigration helps address labor shortages in logistics and manufacturing. In many markets, immigrant workers fill crucial roles in warehousing, transportation, and production. Companies often locate facilities where they can find available workers, including areas with significant immigrant populations.
Third, immigrant communities create demand for specialized goods that flow through supply chains. This supports warehouse and distribution facilities, particularly near ports of entry or transportation hubs.
I toured a distribution center near Toronto last year where the operator pointed out how many of their clients were importing goods specifically for immigrant communities – everything from specialty foods to cultural items. “These aren’t huge corporations,” he noted. “They’re often family businesses serving niche markets, but together they lease a lot of square footage.”
The connection between immigration and industrial real estate becomes particularly evident in gateway cities and border regions. Markets like Southern California, the Greater Toronto Area, and New York/New Jersey have seen industrial property values increase dramatically, partly due to their role in facilitating international trade flows connected to immigrant communities.
Challenges and Opportunities for CRE Investors
Like any market factor, immigration presents both challenges and opportunities for commercial real estate investors.
Challenges:
The political uncertainty around immigration policies creates risk. I’ve seen projects stall when immigration patterns shift due to policy changes. Long-term investments become trickier when you can’t predict population flows with confidence.
Cultural understanding matters too. Investors who lack familiarity with immigrant communities might miss important details about property design, tenant mix, or marketing approaches. I remember a developer who built a shopping center aimed at Asian immigrants but included design elements that actually conflicted with cultural preferences. The project struggled until they made adjustments.
Financing sometimes creates complications. Immigrant entrepreneurs may have different credit profiles or business models than lenders typically expect. This can affect their ability to lease premium spaces or commit to longer terms.
There’s also concentration risk to consider. Markets heavily dependent on specific immigrant communities might face challenges if immigration patterns change or if economic conditions shift in source countries.
Opportunities:
Identifying emerging neighborhoods early provides perhaps the biggest opportunity. Investors who recognize areas beginning to attract new immigrant populations can often secure properties before values appreciate significantly.
Adaptive reuse projects work well in these markets too. Immigrant entrepreneurs frequently demonstrate creativity in repurposing existing commercial spaces. I’ve seen outdated office buildings transformed into vibrant mixed-use facilities with retail on the ground floor and business services above, all driven by immigrant-owned businesses.
Properties designed with specific immigrant communities in mind can command premium rents and experience lower vacancy rates. This might mean incorporating relevant cultural elements, business needs, or community spaces.
Immigration also creates international investment networks. Newcomers maintain connections to their countries of origin, sometimes facilitating capital flows into North American real estate. Investors who connect with these networks gain access to additional funding sources and potential partners.
Perhaps most importantly, including immigrant-owned businesses in tenant rosters can enhance property resilience. These businesses often demonstrate strong commitment to locations and communities, helping properties maintain occupancy through market cycles.
Looking Forward
I expect immigration will become even more significant for commercial real estate performance across North America in coming years. Several factors point in this direction.
Both Canada and the United States face demographic challenges that increase reliance on immigration for population growth. Canada has already announced immigration targets exceeding 400,000 new permanent residents annually. The U.S. situation remains more politically complicated, but economic pressures may eventually push policy toward addressing labor market needs through immigration.
Global mobility continues increasing, with talented individuals increasingly able to choose their destination. Cities and regions creating welcoming environments for immigrants will likely capture more of this mobile human capital.
Technology enables immigrant entrepreneurs to leverage international connections more effectively than ever before. This supports business models bridging markets and creates demand for commercial spaces facilitating global commerce.
Climate change might accelerate migration patterns in coming decades, potentially increasing immigration flows to North America from regions facing environmental challenges.
For commercial real estate investors, these trends suggest immigration-related factors deserve central consideration in long-term strategy. Markets, property types, and development approaches aligning with immigration patterns will likely outperform those ignoring these demographic and economic forces.
The next time you drive through a commercial district in any major North American city, take a closer look at the businesses occupying those spaces. How many were started by people who weren’t born here? How many serve communities with international connections? How many employ people from diverse backgrounds?
The answers might surprise you. Immigration shapes our commercial real estate markets in profound ways that extend far beyond the familiar residential housing story. Through entrepreneurship, consumer demand, labor force contributions, and international connections, newcomers influence retail, office, and industrial property markets across the continent.
The commercial property sectors most responsive to the needs and opportunities created by immigration will likely show the greatest resilience and strongest performance in coming years. For investors willing to look beyond conventional market analyses to understand these demographic dynamics, immigration offers not just interesting social observations but practical insights for commercial real estate investment.
I’ve seen this play out in markets across North America, and the pattern seems clear: where immigrants go, commercial real estate opportunities follow. Not always immediately, not always obviously, but consistently enough to merit serious attention from anyone invested in the future of commercial property.