Many Canadian offices are empty. It could be the economy’s ‘canary in the coal mine’

interest rates are putting stress on Canadian real estate — but it’s not just homeowners feeling the pinch.Experts are warning that Canada’s commercial real estate sector could be a “canary in the coal mine” for a steeper downturn in the economy as an uncertain return to the workplace leaves many office landlords in a precarious position.Much of the fears for commercial real estate — a sector that includes office towers, retail spaces, warehouses and production plants — stem from the United States and recent instability in the banking industry.First Republic, a regional bank that catered to a wealthy clientele, was the latest casualty of the instability that has seen shockwaves spread beyond the U.S.

to global banking institutions.It was Charlie Munger, vice-president of Berkshire Hathaway and right-hand man to investment magnate Warren Buffett, who rang alarm bells over the weekend about the state of U.S.

banks with exposure to the commercial real estate sector.Munger told the Financial Times on April 30 that he felt U.S. banks were “full of” what he deemed “bad loans” tied to commercial property prices that are falling in value.Experts who spoke to Global News this week said the situation for commercial real estate, and offices specifically, could worsen significantly as higher interest rates put pressure on loans and banking fears see landlords unable to access the credit they need to avoid selling off their buildings.So how could this result in a wider economic collapse?

Here’s what they said about the situation, and how Canada might fare.Craig Alexander, an independent economist who previously was chief at Deloitte Canada, says that while Canadians have seen the impact of rising interest rates on the slowing housing.