Cap Rate Outlook 2026Alberta & British Columbia
Stabilization across most Alberta and BC commercial markets, with selective compression in industrial and multifamily — a current read on where pricing, spreads, and lender appetite are heading through 2026. Learn more about Cap Rate Outlook 2026.
Executive Summary
Stabilization, with selective compression.
After 24 months of repricing driven by higher policy rates, most Alberta and BC commercial cap rates have found a floor. Bond market stability through Q1 2026 has given lenders room to tighten spreads modestly, and the bid-ask gap that defined 2023–2024 has narrowed materially.
We expect multifamily and industrial to lead compression through the balance of 2026, supported by CMHC MLI Select pricing, continued population growth in Alberta, and replacement-cost economics that anchor valuations. Retail remains bifurcated between necessity and discretionary, while office continues to require asset-by-asset underwriting. Call us for more details on Cap Rate Outlook 2026.
2026 Cap Rate Ranges
By market and asset class.
| Market | Multifamily | Industrial | Retail | Office | Trend |
|---|---|---|---|---|---|
| Edmonton | 5.25% – 5.75% | 6.00% – 6.75% | 6.25% – 7.25% | 7.50% – 8.50% | Stable |
| Calgary | 5.00% – 5.50% | 5.50% – 6.25% | 6.00% – 7.00% | 7.25% – 8.50% | Compressing |
| Vancouver | 3.75% – 4.25% | 4.25% – 4.75% | 4.75% – 5.50% | 5.50% – 6.50% | Tight |
| Kelowna | 4.75% – 5.25% | 5.25% – 6.00% | 5.75% – 6.75% | 6.75% – 7.75% | Firming |
| Victoria | 4.25% – 4.75% | 4.75% – 5.50% | 5.25% – 6.25% | 6.25% – 7.25% | Stable |
| Red Deer | 6.25% – 7.00% | 6.75% – 7.75% | 7.00% – 8.00% | 8.00% – 9.00% | Opportunistic |
Edmonton
- Multifamily
- 5.25% – 5.75%
- Industrial
- 6.00% – 6.75%
- Retail
- 6.25% – 7.25%
- Office
- 7.50% – 8.50%
Calgary
- Multifamily
- 5.00% – 5.50%
- Industrial
- 5.50% – 6.25%
- Retail
- 6.00% – 7.00%
- Office
- 7.25% – 8.50%
Vancouver
- Multifamily
- 3.75% – 4.25%
- Industrial
- 4.25% – 4.75%
- Retail
- 4.75% – 5.50%
- Office
- 5.50% – 6.50%
Kelowna
- Multifamily
- 4.75% – 5.25%
- Industrial
- 5.25% – 6.00%
- Retail
- 5.75% – 6.75%
- Office
- 6.75% – 7.75%
Victoria
- Multifamily
- 4.25% – 4.75%
- Industrial
- 4.75% – 5.50%
- Retail
- 5.25% – 6.25%
- Office
- 6.25% – 7.25%
Red Deer
- Multifamily
- 6.25% – 7.00%
- Industrial
- 6.75% – 7.75%
- Retail
- 7.00% – 8.00%
- Office
- 8.00% – 9.00%
Asset Class Outlook
Where lenders are leaning.
Multifamily
Compression continues
Purpose-built rental remains the lender favourite. CMHC MLI Select pricing keeps multifamily cap rates 50–100 bps tighter than conventional product, particularly in Vancouver, Victoria, and core Calgary.
Industrial
Selective compression
Logistics, last-mile, and small-bay industrial in Calgary, Edmonton, and the Lower Mainland are seeing renewed bidding from institutional capital. Secondary markets remain priced for higher yields.
Retail
Bifurcated
Grocery-anchored and necessity retail are pricing tighter; unanchored strip and tertiary-market retail still trade at 7%+ cap rates with limited bank appetite.
Office
Cautious
Class A urban office is stabilizing on flight-to-quality leasing. Class B and suburban office remain capital-light, with most lenders requiring lower LTVs and stronger covenants.
2026 Market Drivers
What's moving cap rates this year.
Bond yields & spreads
GoC 5- and 10-year yields stabilizing in 2026 have given lenders room to tighten spreads, supporting modest cap rate compression in core asset classes.
Population growth
Alberta continues to lead Canada in interprovincial migration. BC's Okanagan and Vancouver Island markets are seeing renewed inbound demand supporting rental fundamentals.
Construction cost normalization
Replacement cost remains elevated, anchoring valuations on existing product and supporting cap rate floors across multifamily and industrial.
CMHC MLI Select
Insured take-out pricing for purpose-built rental continues to set the floor on multifamily cap rates and is driving most new construction activity.
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The MaxCap Group Market Outlook 2026 report outlines a highly cautious but strategic landscape for real estate, characterizing 2026 as a pivotal period of mild stagflation with sluggish economic growth and stubbornly elevated inflation. Central bankers face limited flexibility, prompting a shift away from rate cuts as investors prepare for potential rate hikes. Within this environment, real estate credit continues to outperform equity returns, making private debt a resilient choice for capital preservation. To navigate these macroeconomic challenges, the outlook emphasizes strict sector selection, favoring the high demand and inflation-hedging properties of the residential, “living,” and logistics/industrial sectors, while predicting that commercial office spaces will continue to lag behind. call us today for more details on Cap Rate Outlook .
