Quick Summary:
Industrial vacancy rates in the GTA have climbed from a historic low of 0.8% in late 2021 to 4.3% today, driven mainly by a surge in speculative development outpacing demand. Availability has risen to 6.3%, with GTA East and North GTA West seeing the largest jumps due to significant inventory growth and tariff pressures impacting manufacturing, particularly in steel and automotive. While warehousing demand may see some border-related benefits, overall fundamentals remain soft.
About 15.6M SF (1.7% of inventory) is under construction, with deliveries expected to drop sharply in late 2026. Rental growth peaked in 2022 but has since turned negative (-0.3% annual rate) and is expected to remain subdued for 12–18 months due to oversupply and economic uncertainty. Sales volumes over the past year reached $5.2B across 770 transactions, with cap rates at 4.75–5%. Liquidity remains strong, but many institutional owners are holding assets in anticipation of a market rebound.
