June 21st, 2024

It was only a few short years ago that industrial land across the Greater Toronto Area was outperforming every other asset class by a mile. And it wasn’t even close. Or reasonably debatable. Heck, it even gave Bitcoin a run for its proverbial virtual money.

Sites that had been acquired and held for three to five years were sold to major developers for double, triple, even ten times their value.

Case in point: the 200 acres at 5244 Tremaine Road in Milton was purchased in September of 2021 for $165 million from a syndicate of investors who had scooped up the site for just $15 million in July 2015.

Even at that astronomical appreciation (likely due to the lands being brought into the secondary plan and/or being serviced), $826,732 per acre would be considered an amazing deal in today’s market, especially for a quality location and shovel-ready status.

Fast-forward past the post-lockdown boom and waves of economic uncertainty and we find ourselves in an industrial market with more ‘healthy slack’, stabilizing rents and values, and a softer appetite for large land deals and speculative development.

Ultimately, it was the sub-1% vacancies, construction bottlenecks, and delirious demand which drove the industrial land sales market to new heights. That emotional mania no longer exists. Rather, we see a more consistent and methodical approach from developers.

On the other hand, those that had land banked a little too aggressively have looked to piece off parcels or partner with tenants looking to do design builds. Even those who were not over-extended by any means are doing so to spread risk and cash out on lands that have, at worst case, appreciated by multi-double-digit percentage points.

It feels a bit like we’re ‘back to our regular programming,’ when looking at the trades in 2024-to-date, where we see a healthy range of pricing and circumstance; from the high-prized trophy sites and big name joint ventures down to systematic land banking and the odd power of sale.

Land sales at $4 million and up per acre are more the exception now than the rule, and are left to high-density, infill projects rather than big box warehouse developments. With the abundance of existing inventory now available to tenants, those getting involved in pre-leasing or design-builds are doing so because they want to, not because they need to.

Exceptional locations. Zero net carbon certifications. Rare features such as contiguous space of over 1,000,000 square feet, ultra-heavy power, cold storage, high door ratios or cross docks, or proximity to rail, air, or intermodal. These are the attributes commanding premiums. Essentially anything that cannot be easily changed or retrofitted into an asset.

As we move forward, it will be interesting to see if and where the development pipeline stabilizes, and what the trickle-up effect will be on the industrial land market.

So without further ado, let’s look at some notable industrial land leasing options and deals across the Greater Toronto Area.

Notable GTA Industrial Land Lease Deals

Below are some of the more prominent industrial land lease deals completed. For more details, please contact us.

Notable GTA Industrial Land Available For Lease

Below are a select few industrial lease opportunities from each of the regions across the Greater Toronto Area. For further details, please contact our team.
  1. 155 First Ave, Oshawa – $7,000 per acre per month gross

155 First Ave, Oshawa. Source: Cushman & Wakefield.
Our team is offering for lease 14.17 acres of industrial land – which is divisible to smaller configurations – at 155 First Avenue in Oshawa, Ontario. Permitted uses included outside storage. Located just north of Highway 401 and in close proximity to Highways 412, 418, and the Oshawa GO Station, the opportunity would cater well to a transportation firm requiring trailer parking. For more information, contact us.
  1. 495 Commissioners St, Toronto – $25,000 per acre per month gross

495 Commissioners St, Toronto. Source: Colliers.
Colliers is marketing 4.3 acres of industrial land for lease in downtown Toronto at 495 Commissioners Street. The parcel is graded, compacted, lit, and fenced with key-pad controlled security gates. Located just south of Lakeshore Blvd, the site is in proximity to major film studios and food facilities, as well as major transportation routes and the City core.
  1. 5730 2nd Line, King – $5,000 per acre per month gross

5730 2nd Line, King. Source: Colliers.
As part of a larger offering, Colliers is presenting 800 trailer parking spots over 20 acres for lease at 5730 2nd Line in King, Ontario. The site is gated, secured, and fenced and is well-located with access to major transportation routes and just 20 minutes to the Highway 400 interchange. 
  1. 16574 Steeles Ave, Halton Hills – $16,950 per acre per month gross

16574 Steeles Ave, Halton Hills. Source: GeoWarehouse.

The 1.77-acre truck yard at 16574 Steeles Ave in Halton Hills is offered at a rate of $30,000 per month gross (or $16,950 per acre per month gross) and is fully paved and fenced with flood lights and cameras. Located at Steeles Ave and 10th Line, it is in close proximity to Highways 401 and 407. 

  1. 2525 Dixie Rd, Mississauga – $12,500 per acre per month gross

2525 Dixie Rd, Mississauga. Source: GeoWarehouse.
Colliers is marketing the 1.42-acre industrial parcel at 2525 Dixie Rd for lease at $12,500 per acre per month gross. Located close to Dundas St E and Dixie Rd, the fully-secured lot is minutes from major highways; offering direct access to industrial nodes as well as the City’s core.

Although industrial real estate across the GTA remains highly sought-after, the market is generally slower-moving than what it was at its peak. Longer leasing and sales times mean developers are likely to wait until lease-up or closing before kicking off the next project. This also may mean passing on or delaying acquisition plays further up the pipeline.

Changes to pro formas, such as increases in development charges and construction costs, along with lower rents and slower escalations mean lower land values and potentially unfeasible projects.

Ultimately, and as mentioned above, trophy assets will always be coveted. Location, location, location rings true as always. For developers, a willingness to partner with the right tenant to construct their dream operation may be the most prudent exit strategy in an economic landscape that is seeing tenants have all the negotiating power amongst undifferentiated assets. And for those tenants that were crowded out during the peak, now may be the most opportune time to build the facility you have wanted but could not secure up until now. It all begins with the foundation; the right parcel of land.

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

Until next week…

Goran Brelih and his team have been servicing Investors and Occupiers of Industrial properties in Toronto Central and Toronto North markets for the past 30 years.

Goran Brelih is an Executive Vice President for Cushman & Wakefield ULC in the Greater Toronto Area.

Over the past 30 years, he has been involved in the lease or sale of approximately 25.7 million square feet of industrial space, valued in excess of $1.6 billion dollars while averaging between 40 and 50 transactions per year and achieving the highest level of sales, from the President’s Round Table to Top Ten in GTA and the National Top Ten.

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.

Connect with Me Here! – Goran Brelih’s Linkedin Profile: https://ca.linkedin.com/in/goranbrelih

Goran Brelih, SIOR

Executive Vice President, Broker
Cushman & Wakefield ULC, Brokerage.

Office: 416-756-5456
Mobile: 416-458-4264
Mail: goran.brelih@cushwake.com
Website: www.goranbrelih.com


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