Ontario Commercial Cap Rates, 2026: By Market and Property Type
Current ranges for the markets Aion appraises, the national trend, and how an appraiser reads them.
Updated October 15, 2026
By Ashita Chandra, AACI, P.App — Director of Valuations
A capitalisation rate is the yield a buyer accepts on a property's net income, and it is the single number that moves commercial values most. Nationally, CBRE's all-property average was 6.58% in Q2 2026, down 3 basis points on the quarter, about 320 basis points above the Canada 10-year bond. Within Ontario the range is wide: urban multi-unit at the low end, secondary-market retail and older office at the high end. This page gives the published figure for each asset class in the Ontario markets we appraise, where it came from, and how to read it against the property in front of you.
National trend
| Period | All-property average cap rate | Note | Source |
|---|---|---|---|
| Q2 2026 | 6.58% | Down 3 bps quarter over quarter; spread to the Canada 10-year bond about 320 bps. | CBRE, Canada Cap Rates & Investment Insights Q2 2026 |
| Q1 2026 | 6.61% | Spread to the 10-year about 317 bps. | CBRE, Canada Cap Rates & Investment Insights Q1 2026 |
The spread between the all-property average and the Canada 10-year bond yield is the premium investors require for property over a government bond; it was about 320 basis points in Q2 2026.
By market and asset class
Toronto
| Asset class | Cap rate | Period | Note | Source |
|---|---|---|---|---|
| Class A office, core | 6.00% | Q2 2026 | Benchmark; held flat in Q2 2026. | Avison Young, Q2 2026 cap rate survey, as reported by Canadian Mortgage Professional |
| High-density urban multifamily | 3.90% | Q2 2026 | Tightest of any major market surveyed. | Avison Young, Q2 2026 cap rate survey, as reported by Canadian Mortgage Professional |
| Downtown Class A office | 7.05% | Q3 2025 | Suburban Class A 8.10% in the same quarter. | Avison Young, Q3 2025 cap rate report (trade-press summary) |
| Multi-residential, urban and suburban | 4.35% to 4.70% | Q3 2025 | Avison Young, Q3 2025 cap rate report (trade-press summary) | |
| Industrial | 5.90% to 6.35% | Q3 2025 | Avison Young, Q3 2025 cap rate report (trade-press summary) | |
| Neighbourhood strip retail | 5.80% | Q3 2025 | Avison Young, Q3 2025 cap rate report (trade-press summary) |
Hamilton and Niagara, Waterloo Region, London, Simcoe County and Kingston: CBRE publishes London and Kitchener-Waterloo ranges inside its quarterly Canada Cap Rates & Investment Insights report (https://www.cbre.ca/insights/reports/canada-cap-rates-investment-insights-q2-2026); no public quarterly series exists for the other markets. Until a published figure is cited here, start from the national average and let the comparable sales in that market set the rate.
What the published figures say, October 2026
The national average has compressed for several quarters in a row, by a few basis points at a time, while bond yields have been volatile. The spread, not the headline rate, is what to watch: a spread above 300 basis points is wide by the standard of the last decade, and it is where buyers price uncertainty about rents and refinancing.
The gap between asset classes is larger than the quarter-to-quarter moves. Toronto urban multifamily at 3.90% and core Class A office at 6.00% are 210 basis points apart in the same quarter and the same city; suburban Class A office sat at 8.10% in Q3 2025. The property type and its location matter more than the quarter.
A published range is a starting point, not a value. The cap rate that applies to a specific property comes from comparable sales of similar property in the same market, adjusted for lease terms, tenant covenant and condition. Half a point of cap rate moves a value by about eight percent, which is why the comparables, not the survey, set the number.
Ashita Chandra, AACI, P.App
Worked example
A property earning $180,000 of net operating income is worth $3,000,000 at a 6.00% cap rate and $2,769,000 at 6.50%: half a point of yield is $231,000 of value. Run your own figures in the cap rate calculator, and see how the income approach fits with the other two methods on the valuation methods page.
Cite this page
Aion Appraisals, Ontario Cap Rate Tracker, https://aionappraisals.ca/resources/ontario-cap-rates, accessed October 16, 2026. Each figure belongs to the source named beside it; cite that source as well.
If you use this data, link to this page.
Ontario cap rate FAQ
What is a cap rate?
Net operating income divided by price, expressed as a percentage: the yield a buyer accepts on the property's income. A lower cap rate means a higher price for the same income.
What are cap rates in Ontario right now?
The national all-property average was 6.58% in the second quarter of 2026 (CBRE). In Toronto, core Class A office was 6.00% and high-density urban multifamily 3.90% in the same quarter (Avison Young); older office and secondary-market retail sit well above the average.
Why do industrial cap rates differ from office?
Buyers price risk. Industrial space has had low vacancy and rising rents for a decade, so its income is treated as safer; office carries higher vacancy and tenant-improvement cost, so buyers demand a higher yield.
How do bond yields move cap rates?
A cap rate is a bond yield plus a risk premium. When the Canada 10-year yield rises, cap rates tend to follow with a lag; the spread between them, about 320 basis points nationally in mid-2026, is the premium investors require for property.
Which cap rate does an appraiser use for my property?
One extracted from comparable sales of similar property in the same market, adjusted for the lease terms, tenant quality and condition, not a published average. The published figures set the range; the comparables set the number.
How often does this page update?
Within two weeks of each quarter's reports from CBRE and Avison Young, usually late January, April, July and October. Every figure carries its period and source.
AACI, P.App
Ashita Chandra is an AACI-designated appraiser and Director of Valuations at Aion Appraisals & Consulting, preparing commercial property appraisals across Ontario.
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