Metro Vancouver Industrial Cap Rates — An Investor's Read
A cap rate is a snapshot of yield on day one. In Metro Vancouver industrial, the better question is what the rent roll does at rollover.
July 2, 2026 · 2 min read · By Samuel Brahem, in association with NAI Commercial
What the number says and what it hides
A warehouse earning $500,000 of net operating income and trading at $10,000,000 is a 5.0% cap. That figure ignores financing, rent growth, capex and rollover risk. With rents up sharply through 2023 and many in-place leases still below market, a compressed cap rate can understate total return. Investors here price the spread between in-place and market rent first.
Where cap rates sit
Multi-tenant, older or short-term-lease assets trade wider to reflect leasing risk and management load.
- Core Vancouver and Burnaby: 4.25% to 4.75% for institutional assets with strong covenants and term
- Richmond: 4.50% to 5.00% near YVR and established nodes
- Surrey, Delta and Annacis Island: 4.75% to 5.25%
- Tilbury and Port Kells: 5.00% to 5.50%
- Port Coquitlam: 5.00% to 5.50% for functional distribution product
- Langley, Campbell Heights and Abbotsford: 5.25% to 5.75% for stabilized assets
What compressed them
The ALR, the mountains and a built-out urban core cap new land. Asking rents roughly doubled over the cycle, from $10 to $12 per sq. ft. to a peak near $22 in 2023, before easing to about $19.10 in Q2 2026. Pension funds, REITs and private equity raised industrial allocations. Vacancy sat under 2% for most of the cycle and, at 4.3% now, is still low by North American standards.
A 5.0% cap in Campbell Heights and a 5.0% cap on a 30-year-old Burnaby building with a lease expiring next year are not the same investment.
Rates and leverage
Higher Bank of Canada rates should push cap rates out, but quality assets with long leases kept trading at compressed yields while volume slowed. Positive leverage is harder to find, so the focus has shifted to assets with mark-to-market upside or a value-add angle.
How to use this
Owners weighing a sale should locate their asset inside these ranges before setting a price. Buyers should underwrite remaining term, covenant, building function, rent relative to market and submarket supply alongside the yield. The headline cap rate starts the analysis. It does not finish it.
