North York Industrial Market: An In-Depth Look

“Deciding what not to do is as important as deciding what to do.”

• Steve Jobs

With all of the distractions out in the world, social media, and our general daily lives – not to mention the constant bombardment of new information – it would be virtually impossible to function without putting filters in place.

And just as we are subject to external influences vying for our attention, we must also make decisions in our professional careers on what to do next with our limited time and energy. Developing general skills is important, however, it is the deep, focused, studious work which can generate enormous momentum.

Similarly, in commercial real estate, we often see investors, developers, analysts, and brokers find success from being able to pair a comprehensive, broad-stroked knowledge of the broader market and economics with a deep understanding of a specific industry vertical or geographic territory.

Throughout many of our issues, we have examined macroeconomic trends and explored various strategies. In our upcoming newsletters, we will try to complement this by diving deeper into a few of our key submarkets.

For this week’s newsletter, we’ll feature the Municipality of North York and examine the state of its industrial market, including notable opportunities and ongoing developments. 

North York Industrial Market Snapshot – Q1 2024

Looking at the current inventory numbers, we have over 822M SF of industrial space across the GTA; yet North York’s share is just over 73M SF (about 8.8%). In Q1 2024, however, North York had approximately 178,944 SF of absorption and no new supply.

The availability rate in North York sits at 2.4% and – based on what we are seeing in the broader market – is expected to increase over the coming quarters. Furthermore, we have seen price reductions in properties available for sale or lease. Depending on the individual asset and market trajectory, we expect to see further price reductions or inducements offered by Landlords to fill their space.

North York Industrial Properties Available for Lease – 50,000 SF+

North York Industrial Properties Available for Sale – 50,000 SF+

4 Interesting Facts about North York’s Industrial Market

Leon’s 40-acre site slated for redevelopment. Source: LFL.

2. 840-842 York Mills Road – The Hub at York Mills – Proposed Development

One of many renderings of 840-842 York Mills Road. Source: Northbridge, Nicola Wealth, Colliers.

Northbridge Capital and Nicola Wealth have partnered to develop a last-mile warehousing and distribution centre at 840-842 York Mills Road. The 15.86 acre site is  located at York Mills and Lesmill Road, just minutes from Highways 401 and 404.

The speculative build is being touted as a ‘blank canvas’ with numerous concept designs with buildings ranging from 35,000 SF to 226,240 SF; a flexibility strategy to cater to potential users‘ needs, which includes the potential for a multi-storey warehouse.

With transportation costs rising and greater emphasis placed on access to consumers and the labour pool, this centrally located facility will be a phenomenal option for a wide range of tenants. Colliers is representing Northbridge and Nicola. For further information, please contact us.

Rendering of the Beltline Yards. Source: BlogTO.

4. Downsview Parklands Redevelopment Making Progress

Downsview Park Redevelopment site. Source: Streets of Toronto.

While the overall GTA industrial market is in the midst of a correction following a decade-plus expansion, each region and submarket has its own factors and constraints. Since we last profiled North York, we have seen industrial rents and values stabilize; with an increase in vacancies, price reductions, and a longer deal cycle.

Opportunities to purchase and lease industrial space are more plentiful than before, however both Buyers and Tenants remain cautious due to a softening economy and sustained increases in borrowing costs.

That said, because of North York’s central location, we are also seeing a number of cases of redevelopment to high-density, mixed-use projects in an attempt to supply much-needed housing.

In the coming weeks, we will continue our examination of various submarkets with the aim of uncovering potential opportunities and strategies for industrial Owners and Occupiers. In the meantime, if you are an owner of industrial land or property with redevelopment potential, there are plenty of institutional and private buyers who would be willing to take it off your hands.

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.

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.

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