The recent 90-day pause on U.S. tariffs represents a critical moment for Canadian restaurant owners and commercial real estate investors. This temporary reprieve creates a strategic window that requires careful navigation to maximize opportunities while preparing for potential future challenges. As specialists in hospitality and commercial real estate investment, we’ve been closely monitoring these developments to provide our clients with the most valuable insights during this uncertain period.
On April 9, 2025, the U.S. announced a 90-day suspension of newly proposed “reciprocal tariffs” that were set to impose a universal 10% rate on imports from all countries, with China facing a substantially higher rate of 125%. This pause provides temporary relief to Canadian businesses, but it’s crucial to understand that existing tariffs, such as the 25% duties on Canadian steel, aluminum, and certain lumber exports, remain in effect.
According to analysis from the Business Development Bank of Canada, this pause represents a diplomatic opening rather than a complete resolution of trade tensions. For restaurant owners and real estate investors, this creates a brief planning window to implement strategic adjustments before potential tariff reinstatement.
What makes this situation particularly complex is the uncertain nature of what follows the 90-day period. Will tariffs be permanently lowered, reimposed at original levels, or renegotiated? This uncertainty requires a balanced approach that prepares for multiple scenarios while capitalizing on the current reprieve.
Understanding the 90-Day Tariff Pause: What It Means for Canadian Businesses
For restaurant owners and investors in food service properties, the tariff situation creates several immediate and longer-term considerations that affect both operations and real estate values.
Supply Chain and Input Cost Dynamics
Restaurants relying on U.S. imports will experience short-term cost stabilization during this 90-day window. However, the existing tariffs on specific goods continue to affect pricing, particularly for items like certain spirits, specialized kitchen equipment, and food products that cross the border multiple times during processing.
Our experience working with restaurant owners across Ontario has shown that those with diversified supply chains have demonstrated greater resilience. Smart operators are using this 90-day window to evaluate alternative Canadian suppliers, negotiate longer-term contracts with current vendors, and explore menu engineering to reduce dependency on volatile-priced ingredients.
From a real estate perspective, these supply chain adjustments can significantly impact a property’s operational viability and therefore its valuation. Restaurants with flexible kitchen designs that can adapt to changing ingredient availability may maintain stronger lease covenant strength, protecting the underlying property value.
Consumer Spending and Market Segmentation
The uncertainty around tariffs has created noticeable shifts in consumer behaviour that directly impact restaurant performance. Our market analysis shows that mid-range restaurants have been most vulnerable to spending pullbacks, while both quick-service concepts and high-end dining have demonstrated better resilience.
This bifurcation in the market creates strategic opportunities for property investors. Restaurant spaces that can be easily converted between concepts or subdivided to accommodate multiple smaller operations provide flexibility in uncertain markets. We’ve helped several clients in the Toronto and Hamilton markets repurpose larger restaurant spaces into food halls or multi-concept venues that spread risk across different price points.
Commercial Real Estate Investment Strategies During the Pause
The 90-day tariff pause presents unique considerations for commercial real estate investors, particularly those focused on hospitality and restaurant properties.
Valuation Impacts and Negotiation Leverage
The temporary suspension of new tariffs may bolster confidence among tenants and investors, potentially stabilizing rental rates and property values in the short term. However, this confidence is tempered by the underlying uncertainty about what follows the pause.
Our recent transactions indicate that buyers are using this uncertainty as negotiation leverage, pushing for price reductions or favourable terms that account for potential future tariff impacts. Sellers who can demonstrate that their properties have built-in resilience to trade volatility—such as tenants with strong local supply chains or buildings with lower dependence on tariff-affected materials for maintenance—are better positioned to maintain value.
As noted in our research on How Toronto Restaurants are Overcoming US Tariffs, properties housing restaurants with flexible business models have retained stronger valuations despite market turbulence.
Geographic Considerations in Investment Decisions
The impact of tariffs varies significantly by region within Ontario. Border communities like Windsor and Niagara face unique challenges due to their integrated economies with U.S. neighbours. Conversely, areas with strong local agricultural connections, such as Guelph and Kitchener Waterloo, have demonstrated greater resilience as restaurants can more easily pivot to local sourcing.
This regional variation creates strategic investment opportunities. We’ve observed increased interest in restaurant properties in secondary markets with strong local food systems, as they offer better insulation from international trade disruptions. For investors willing to look beyond the GTA, these markets often provide better cap rates and more stable tenant prospects in the current environment.
Strategic Opportunities for Forward-Thinking Investors
While the tariff situation creates challenges, it also presents significant opportunities for strategic investors who can navigate the complexity.
Supply Chain Resilience as a Value Driver
Businesses that use this 90-day period to reassess and strengthen their supply chains will emerge stronger regardless of future tariff decisions. This creates an investment opportunity in properties that support local or non-tariffed supply sources, such as food processing facilities, distribution centres for Canadian producers, and restaurant concepts built around local sourcing.
We’ve helped several clients acquire properties that support this shift toward supply chain localization. For example, a recent transaction involved converting a former retail space in Hamilton into a combined restaurant and small-scale processing facility that allows the operator to prepare and preserve seasonal local ingredients, reducing reliance on imported goods.
This type of vertical integration represents a growing trend in the hospitality real estate sector, as detailed in our guide to Restaurant Property Negotiation Strategies.
Identifying Less Tariff-Vulnerable Investments
Investors might consider properties in regions less affected by trade volatility. Areas with robust domestic supply chains or specialized local products face lower risk from international trade disruptions. Additionally, concepts that rely primarily on labor rather than imported goods as their primary value driver (like service-focused establishments) demonstrate greater resilience.
Ghost kitchens and delivery-focused operations have emerged as particularly resilient models. These concepts often require less premium real estate, can adjust menus quickly in response to input cost changes, and aren’t as dependent on imported decor or building materials that might be subject to tariffs.
The Commercial Real Estate Daily analysis suggests that investors are increasingly prioritizing operational flexibility in tenant selection, favouring businesses that can quickly adapt to changing cost structures.
Practical Steps for Navigating the 90-Day Window
For both restaurant operators and real estate investors, the 90-day pause provides a critical opportunity to implement strategic changes that will position them for success regardless of future tariff decisions.
For Restaurant Operators
This is the ideal time to conduct a comprehensive supply chain audit. Identify which of your inputs are most vulnerable to current or potential future tariffs and develop contingency plans. This might include identifying alternative Canadian suppliers, reformulating menu items to reduce dependency on tariff-vulnerable ingredients, or negotiating longer-term contracts that lock in current prices.
Restaurant operators should also consider how their real estate decisions intersect with tariff impacts. Locations that offer flexibility for concept adjustments, provide access to local supplier networks, or reduce dependency on imported building materials for maintenance will prove more resilient.
Our experience working with operators across the hospitality spectrum has shown that those who view their real estate as a strategic asset rather than merely a fixed cost are better positioned to navigate trade uncertainties, as outlined in our research on US Tariffs and Their Impact on Hospitality.
For Real Estate Investors
The 90-day window provides an opportunity to reassess portfolio exposure to tariff risks. This includes evaluating tenant mix to identify businesses with high exposure to imported goods and considering strategic acquisitions in sectors less impacted by trade volatility.
Investors should also consider how lease structures might be adjusted to account for tariff uncertainty. For example, some forward-thinking landlords are exploring indexed lease provisions that account for documented increases in input costs due to tariffs, helping to share risk with tenants and maintain occupancy during volatile periods.
This approach to lease structuring has become increasingly important in markets with high exposure to trade fluctuations, as detailed in our Guide to Leasing a Restaurant in Toronto.
Looking Beyond the 90-Day Horizon
While immediate actions during the 90-day window are crucial, strategic investors must also position themselves for longer-term success regardless of the tariff environment that emerges after this period.
Preparing for Multiple Scenarios
Prudent investors and operators are developing contingency plans for three possible scenarios: full reinstatement of tariffs, permanent reduction, or a negotiated middle ground. Each scenario requires different approaches to property acquisition, lease negotiations, and operational planning.
Our market analysis suggests that properties offering operational flexibility will command premium valuations regardless of which scenario unfolds. Restaurants with adaptable kitchen layouts, multi-use spaces that can shift between dining and retail, and locations with strong connections to local supply networks represent particularly strategic investments in this environment.
Long-term Structural Change in the Market
Beyond the immediate tariff situation, we’re seeing evidence of fundamental shifts in how restaurant and hospitality businesses approach supply chains and real estate decisions. The experience of navigating tariff uncertainty has accelerated trends toward localization, supply chain transparency, and operational flexibility that will likely persist regardless of future trade policies.
For real estate investors, this suggests long-term value in properties that support these evolving business models. Distribution facilities for local food networks, mixed-use spaces that allow restaurants to incorporate production or retail components, and properties in areas with strong local agricultural connections may represent particularly strategic acquisitions.
According to Mortgage Professional America, this structural shift is already influencing financing decisions, with lenders showing greater appetite for projects that demonstrate resilience to international trade disruptions.
Conclusion: Strategic Opportunity in Uncertain Times
The 90-day tariff pause presents a valuable window for strategic action by both restaurant operators and commercial real estate investors. Those who use this period to strengthen supply chains, reevaluate property strategies, and implement resilience measures will emerge stronger regardless of future trade policy decisions.
At CHI Real Estate Group, our experience as HOSPITALITY BUSINESS BROKERS™ positions us uniquely to help clients navigate these complex intersections of trade policy, restaurant operations, and commercial real estate investment. We understand that uncertainty creates both risk and opportunity—and our approach helps clients identify strategic moves that create value even in volatile markets.
For restaurant owners considering selling or repositioning their businesses, or investors looking to capitalize on emerging opportunities in the hospitality real estate sector, this 90-day window represents a critical time for strategic action. Our team’s combination of deep hospitality industry knowledge and commercial real estate expertise provides the guidance needed to make informed decisions in these uncertain times.
While the path forward may not be entirely clear, one thing remains certain: businesses and investors who approach the current situation with strategic flexibility and advance planning will find opportunities even amid the challenges of an evolving trade landscape.
