January 2026 – Executive Summary
Surrey, BC | Commercial Rental Market Outlook
Market Overview by Performance Property Management

Surrey’s commercial real estate market entered 2026 in a transitional phase, characterized by
softening office fundamentals, moderating industrial conditions, and continued strength in
necessity-based retail. Elevated interest rates and slower economic growth in 2025 tempered
demand; however, population growth, infrastructure investment, and constrained land supply
continue to support long-term fundamentals across select asset classes.

Supply & Availability Snapshot
Office:
Approximately 510,000 sq ft available (11% availability). Availability increased due to
negative net absorption and tenant downsizing.
Industrial:
Approximately 2.1 million sq ft available (4.4% availability). New supply outpaced
absorption, though fundamentals remain historically strong.
Retail:
Approximately 400,000 sq ft available (~3%). Retail availability remained tight,
supported by service-based tenant demand and limited new supply.

Demand & Leasing Velocity
Office demand remained negative at approximately –2% annually, implying a 15–18
month lease-up period.
Industrial absorption remained positive at approximately 0.6%–1.0% annually, with
lease-up periods of 5–7 months.
Retail absorption remained strong at approximately 1.5% annually, with most space
leasing within 4–6 months.

Median Rental Rates (Derived from Local brokerage listings, CoStar/Altus market data, and
recent leasing comparables)

• Office (AAA)
  • Median $/Sq Ft: $35.00
  • Median CAM/Sq Ft: $15.00
  • Avg Sq Ft: 3,260 Sq Ft
• Office (AA-A)
  • Median $/Sq Ft: $24.00
  • Median CAM/Sq Ft: $14.00
  • Avg Sq Ft: 2,304 Sq Ft
• Industrial
  • Median $/Sq Ft: $22.00
  • Median CAM/Sq Ft: $7.20
  • Avg Sq Ft: 8,228 Sq Ft
• Retail
  • Median $/Sq Ft: $45.00
  • Median CAM/Sq Ft: $14.17
  • Avg Sq Ft: 3,905

Business-Relevant Wildcards (Q4 2025–2026)

Flight to Functional Space: Businesses are prioritizing efficient, flexible, and cost-
controlled space, benefiting small-bay industrial and service retail.
Capital Discipline & Development Slowdown: Higher borrowing and construction costs
have slowed speculative development, limiting future oversupply.
Employment Growth Concentrated in Services & Logistics: Job growth in healthcare,
logistics, and personal services continues to support industrial and retail demand.

Investment Implications
Most Attractive: Small and mid-bay industrial, grocery-anchored and service retail.
Opportunistic: Select office assets with repositioning potential.
Higher Risk: Large-format commodity office assets.

Conclusion:
Industrial and necessity-based retail present the strongest risk-adjusted opportunities entering