Vancouver Industrial Market Report – Q1 2025
The City of Vancouver’s industrial submarket is currently experiencing a vacancy rate of 5.1%, a figure that has seen an uptick of 1.8% over the preceding twelve months. This increase slightly outpaces the broader market’s rise in vacancy, which registered at 1.5% during the same period. Contributing to the current landscape, approximately 620,000 square feet of new industrial space has been delivered to the market in the last year, while absorption has lagged behind at 130,000 square feet. When factoring in sublease options, the total availability within this submarket reaches 6.9% of the overall industrial inventory.
A closer look at the composition of the submarket reveals that logistics space constitutes the most significant portion, boasting 15.4 million square feet. This is followed by flex space, accounting for 5.8 million square feet, and specialized industrial space, which comprises 5.3 million square feet. The average rental rates in this submarket hover around $24.00 per square foot. This represents a marginal decrease of 0.7% compared to the rates observed a year prior. However, despite this recent slight dip, rental values have demonstrated substantial growth over a longer three-year horizon, having increased by a notable 17.6%.
The City of Vancouver’s industrial submarket is also characterized by its higher cost relative to the wider market, where average rents stand at $20.00 per square foot. Looking ahead, there is ongoing construction activity, with approximately 730,000 square feet currently under development. This pipeline of new supply represents a 2.8% expansion of the existing inventory. Furthermore, the total industrial inventory in this submarket has grown by 750,000 square feet over the past three years, indicating a consistent pattern of expansion.
Transactional activity in the submarket has been robust, with 101 sales recorded over the last twelve months. These sales have averaged $510 per square foot, contributing to an estimated overall value for the submarket of $489 per square foot. Interestingly, the most frequent type of transaction during this period involved flex space, with 83 sales, despite logistics being the largest subtype by square footage. Over a longer three-year period, a total of 232 sales have occurred, with these transactions collectively amounting to approximately $670 million in value.
Finally, the market capitalization rate for the City of Vancouver industrial submarket currently stands at 4.1%. This figure is moderately higher than its trailing three-year average of 3.8%, suggesting a potential shift in investor sentiment or market dynamics.
Key Indicators
Net Absorption, Net Deliveries & Vacancy
PAST 8 QUARTERS DELIVERIES, UNDER CONSTRUCTION, & PROPOSED
SALES VOLUME & MARKET SALE PRICE PER SF
The latest chart on the City of Vancouver industrial submarket reveals interesting trends. While sales volume (orange bars) has fluctuated since 2019, the market sale price per square foot (blue line) has shown a clear upward trajectory, diverging from the broader Vancouver market price (green line) particularly after 2021. Forecasts suggest continued price growth in both, with Vancouver City maintaining a premium.
Examining sales volume and price per square foot in Vancouver’s industrial sector, recent data (up to 2024) shows a dynamic market. Despite some volatility in sales volume, the City of Vancouver’s price per square foot has steadily climbed. Looking ahead, forecasts indicate a continued rise in prices for both the City and the broader Vancouver market through 2028.
A look at Vancouver industrial sales volume and price trends shows the City submarket experiencing strong price growth since 2019, outpacing the overall Vancouver market. Forecasts point to continued price appreciation for both in the coming years, despite some fluctuations in sales volume.
Source: Costar, Chart showing Sales Volume (in Millions), City of Vancouver Price/SF, and Vancouver Price/SF from 2019 to 2028 (forecasted).
Sale Comparable Summary Statistics
A snapshot of recent comparable sales reveals an average sale price of approximately $4.8 million, translating to around $497 per square foot. These properties had an average building size of nearly 15,000 SF and a cap rate of 6.3%.
Recent comparable sales show a wide range, with sale prices spanning from $1.75 million to $15.5 million. The median sale price was $3.786 million, with a median price per square foot of $660. The median building size was 4,648 SF.
Key metrics from recent comparable sales include an average sale price of $4.8 million, an average price per square foot of $497, and an average cap rate of 6.3%. The median time since sale was 3.5 months.
