Report | Intelligent Investment
Canadian Cap Rates & Investment Insights Q3 2026
October 21, 2026 15 Minute Read
Investment Trends
Real estate investment activity was building momentum as investor conviction strengthened on generally improving real estate fundamentals. But the recent rapid increase in long term bond yields has raised the cost of debt and pressured cap rate spreads. The economic growth outlook has also been clouded by the re-escalation of trade tensions with the U.S. and a global central bank pivot to an interest rate hike cycle. Full year investment volumes are still on track to hit a new record high, aided by merger and acquisitions activity, but investor confidence will likely be tested over the next couple quarters.
The national average all-properties cap rate continued to steadily decline in Q3 2026, compressing 2 bps quarter-over-quarter to 6.56%. However, the Canada 10-year bond yield surged by 62 bps over the same period and had shrunk the real estate cap rate spread to a three-year low of 256 bps.
Modest cap rate compression was seen in the national office and retail yields in Q3 2026, while industrial, seniors housing and hotel cap rates held flat quarter-over-quarter. Multifamily was the only asset class to record slightly higher cap rates, under pressure from higher bond yields.
Regional Investment Trends
Explore national cap rates by office, industrial, retail, multifamily, seniors housing, and hotel sectors, as well as local market cap rates in Victoria, Vancouver, Calgary, Edmonton, Saskatoon, Winnipeg, London, Kitchener-Waterloo, Toronto, Ottawa, Montreal, Quebec City, and Halifax.
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Research Contacts
Capital Markets Contacts
Peter Senst*
President Canadian Capital Markets, National Investment Team
Lic. *Sales Representative
