This week, we’re digging into Cushman & Wakefield’s March 2026 Emerging Trends report on the GTA’s large-bay industrial market—and the headline is a strong one: leasing is back. After bottoming out at a 12-year low in 2024, the GTA industrial market roared back in 2025 with 26.9 million square feet of new leasing activity. But the recovery isn’t uniform—it’s a tale of two markets, bifurcated by building size and vintage, each telling a different story about where occupier demand is really coming from.

The Big Picture: From 12-Year Low to Third-Best Year on Record

GTA industrial leasing totalled 26.9 MSF in 2025, recovering sharply from the 20.2 MSF recorded in 2024, the weakest year since 2012. The rebound places 2025 just 6.5% below the 2021 peak of 28.9 MSF, ranking it as the third strongest year on record. Critically, this wasn’t a broad-based recovery, it was highly polarized. Demand concentrated at the two ends of the size spectrum: very large blocks in brand-new buildings, and small-bay deals in older, more affordable product.

Absorption also turned meaningfully positive, reaching 6.5 MSF after the market posted negative absorption of -2.7 MSF in 2024. This is the clearest signal yet that the GTA industrial market has passed its inflection point.

A Tale of Two Markets: Large-Format vs. Small-Bay

The most important insight from this report is how the recovery happened. Activity didn’t return uniformly across the size spectrum—it polarized into two very distinct demand profiles.

The bifurcation tells you something important about the market right now. Tenants chasing efficiency and scale are gravitating to premium new product with high clear heights and they’re willing to pay for it. Tenants managing costs are gravitating to legacy product with more competitive rents. The middle of the market, mid-box deals in 5–15 year old buildings is the most challenged segment.

3PLs Lead the Recovery

The third-party logistics (3PL) sector drove the recovery. 3PLs leased nearly 7.0 MSF in 2025, more than 2.5 times their 2024 volume of 2.7 MSF and jumped from third to first in the industry rankings. Activity spanned both new and legacy buildings, with the greatest concentration in properties with 32’+ clear heights.

Manufacturing held relatively steady year-over-year at 4.6 MSF, making it the only top-five sector not to record a meaningful increase. This reflects the more measured, longer-cycle decision-making that characterizes manufacturing space selection.

Warehousing & retail distribution was the other standout, doubling its 2024 volume to 3.3 MSF. Demand in this sector concentrated in more cost-effective legacy buildings with clear heights below 32’, consistent with the small-bay, legacy-building trend identified above. Technology & data and construction rounded out the top five, both posting moderate increases from their 2024 levels.

What This Means for the Market

• For tenants seeking large-format space: Competition is returning. With 26 deals over 200,000 SF transacted in 2025—nearly three times 2024—the window of maximum leverage for big-block users is narrowing. If you’re in the market for 100,000 SF+, the time to move is now, before availability tightens further.
• For small-bay and mid-market occupiers: You remain in a position of relative strength. Legacy product is plentiful, rents are competitive, and the 596 deals completed in 2025 signal a liquid, active market. There is genuine choice.
• For landlords of modern, large-format product: Demand has returned with conviction. 3PLs and distribution occupiers are back at scale. Pricing power is recovering, particularly for 32’+ product built in the last five years.
• For landlords of legacy product: Your buildings are moving. The small-bay resurgence is real. Focus on competitive net rents and operational flexibility—these are what cost-sensitive tenants are optimizing for.
• For investors and developers: Absorption turning positive at 6.5 MSF after a negative 2024 is the signal the market needed. The fundamentals are intact. The recovery is real. Long-term industrial demand in the GTA remains structurally supported.

My team and I have been advising investors and occupiers in the GTA Central and GTA North industrial markets for over 30 years. Whether you’re looking to lease, acquire, dispose of, or reposition industrial assets in today’s market we’re here to help

For a confidential consultation or a complimentary opinion of value of your property please give us a call.

Specialties:
Industrial Real Estate Sales and Leasing, Investment Sales, Design-Build and Land Development

About Cushman & Wakefield ULC.
Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with approximately 53,000 employees in 400 offices and 60 countries.

In 2020, the firm had revenue of $7.8 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. To learn more, visit www.cushmanwakefield.com.

For more information on GTA Industrial Real Estate Market or to discuss how they can assist you with your real estate needs please contact Goran at 416-756-5456, email at goran.brelih@cushwake.com, or visit www.goranbrelih.com.

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