Availability & Vacancy: The availability rate has climbed to 6.6%, and the vacancy rate is 4.3%, driven by a surge in new supply outpacing demand. This is significantly higher than the five-year average availability of 2.5%. Availability saw a slight drop of 10 basis points to 5.1% in Q3 due to adjusted rental rates.
Leasing Activity: Leasing activity is stabilizing, though momentum is uneven due to new tariffs and trade tensions. Renewals currently dominate the leasing landscape. However, Q3 recorded the highest year-to-date volume of new leases over 90,000 sq. ft.. Toronto West was the most active, with 1.8 million sq. ft. of net absorption in the quarter.
Sales Market: The sales market remains resilient with strong liquidity, better than many other asset classes. Industrial sales in the past year totaled $5.1 billion. Cap rates have risen and are currently between 4.75% and 5% , while the average sale price is $360 per square foot.
Pricing: Asking rental rates continue to ease, dropping another 2.0% compared to the previous quarter. Rents are expected to stay flat or decline modestly over the next 18 months.
