What is net operating income in industrial real estate?

Net operating income is gross operating income minus operating expenses such as property taxes, insurance, repairs, and management fees. It excludes debt service and income taxes, making it a property-level performance measure used to calculate cap rates and assess investment value.

What cap rates should GTA industrial investors expect in 2026?

GTA industrial cap rates generally range from 4.5% to 7% depending on submarket and asset quality. Core Mississauga and Toronto properties trade at the lower end, while secondary markets like Hamilton or Oshawa offer higher cap rates reflecting different risk profiles and tenant demand depths.

How is economic vacancy different from market vacancy?

Market vacancy measures physically unoccupied space as a percentage of total inventory. Economic vacancy adjusts for tenant concessions such as free rent periods and credit loss, revealing the actual income shortfall. Relying only on market vacancy often overstates effective NOI in underwriting.

What does net absorption tell an industrial investor?

Net absorption measures the change in occupied industrial space over a period. Positive absorption signals that tenants are taking up more space than they are vacating, which typically leads to tightening vacancy and upward rent pressure. It is one of the most reliable leading indicators of near-term rent growth.

Why does tenant credit quality matter as a real estate metric?

Tenant credit quality directly affects the reliability of your NOI. A tenant with thin margins and a high occupancy cost ratio presents renewal and default risk that does not appear in headline vacancy or rent statistics. Assessing tenant financial health is a core part of how to analyse industrial real estate with accuracy.

May 21, 2026

Key industrial real estate metrics: 2026 investor guide

By Michael Law · Industrial Real Estate Broker, Lennard Commercial Realty

Unlock success with key industrial real estate metrics! This 2026 guide reveals essential indicators for informed investment decisions.

About Michael Law

Managing Partner and Industrial Real Estate Broker at Lennard Commercial Realty. Representing tenants and landlords across Toronto and the GTA for 15+ years.

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Key industrial real estate metrics: 2026 investor guide

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