What is a good cap rate for commercial real estate in Canada?

Cap rates for commercial real estate in Canada vary by property type and location:

Industrial properties: 4.5% - 6.5% in major markets (Toronto, Vancouver), higher in secondary markets Retail properties: 5% - 8% depending on anchor tenant quality and location Office buildings: 5% - 7.5% for Class A, higher for Class B/C Multi-family residential: 3.5% - 5.5% in major markets

A 'good' cap rate depends on your investment goals:

• Lower cap rate (4-5%): Lower risk, prime location, strong tenant — but lower cash flow
• Higher cap rate (7-9%): Higher cash flow but typically higher risk — secondary locations, shorter leases, or value-add opportunities

Remember: cap rate is just one metric. Also evaluate DSCR, cash-on-cash return, and IRR for a complete picture.