Ottawa’s industrial market is the tightest it has ever been. Vacancy sits at 2.1% — effectively zero for modern warehouse space. E-commerce, last-mile logistics, and government supply chains drive demand. For investors, this means cap rates have compressed to historic lows and replacement cost is the only way to add new supply.
Ottawa Industrial Submarkets
| Submarket | Vacancy | Avg Lease Rate (psf) | Profile |
|---|---|---|---|
| Sheffield/Glen/East Industrial | 1.5% | $12-$16 | Logistics parks, Amazon distribution, highway access |
| West/Ottawa River | 2.0% | $14-$18 | Kanata-adjacent, tech manufacturing, cleaner space |
| South/Merivale/Colonnade | 2.5% | $11-$15 | Flex industrial, auto service, showroom hybrids |
| Orleans/East End | 3.0% | $10-$13 | Older stock, value-add potential, LRT proximity |
Types of Industrial Property
- Warehouse/Distribution: 20,000+ sqft, 24-32 ft clear height, dock loading, truck courts. The most institutional asset type. Cap rates 4.75-5.5%.
- Flex Industrial: 3,000-15,000 sqft, 18-22 ft clear, mix of warehouse and office. Owner-user and small investor stronghold. Cap rates 5.5-6.5%.
- Light Manufacturing: 5,000-30,000 sqft, specialized power and ventilation. Longer lease terms. Cap rates 5.5-7%.
- Outdoor Storage/Industrial Land: Fenced yard for equipment, containers, or fleet parking. Scarce inside the Greenbelt. Premium pricing at 5-7% cap.
What to Look For in an Industrial Acquisition
- Clear height: Under 22 ft limits your tenant pool. Modern logistics tenants demand 28+ ft. A 16-ft clear building is functionally obsolete for warehouse use.
- Dock doors vs. grade doors: Dock-high loading is standard for distribution. Grade-level doors serve contractors and smaller tenants. The ratio matters for tenant mix.
- Truck court depth: 120-140 ft is minimum for 53-ft trailers. Measure it. A tight truck court kills warehouse utility.
- Power: 600V/3-phase is standard. 208V single-phase limits you to lighter uses. Check amperage — 400A vs 800A vs 1600A changes the tenant pool radically.
- Sprinklers: ESFR sprinklers allow high-pile storage. Standard sprinklers cap storage height. This alone can swing cap rate 50 bps.
Frequently Asked Questions
Why are Ottawa industrial cap rates so low?
Supply. Almost no new speculative industrial construction inside the Greenbelt. Land is scarce. Demand from logistics, government, and tech keeps vacancy near zero. Low supply + steady demand = compressed cap rates.
What’s the minimum size for institutional industrial?
Institutions target 50,000+ sqft multi-tenant or single-tenant net-leased. Below that, you’re in private investor territory — wider buyer pool but less liquidity.
Is outdoor storage a good investment?
Yes, if you can find it. Outdoor industrial storage yards inside the Greenbelt trade at a premium. Fleet parking, container storage, and equipment yards have few alternatives. Low capex, high barrier to entry.