Establishing True Valuations Across Differing Markets 

May 10th, 2024

“Negotiation is not an act of battle; it’s a process of discovery. The goal is to uncover as much information as possible.”

  • Chris Voss

Few statements could be as true or relevant right now within the context of the Greater Toronto industrial market.

Although said market remains incredibly robust and sought after, it is not running at the same blistering clip that it did coming out of the economic lockdowns and throughout the boom in e-commerce and logistics.

From around mid-2020 and through 2022, there wasn’t much negotiation to be had if you were looking for warehousing and distribution space. Especially if we use Mr. Voss’ definition as quoted above.

There was space – and not much of it available.

And if you wanted it, you had to act quickly; often times paying a premium to secure it.

Time spent going into too great of discovery was counterproductive; the nature of the business landscape at that time being more opportunistic and expansionary than hyper-strategic.

That all said, in Q1 2024, we saw the industrial vacancy rate break the 3%-mark, alongside the lowest leasing activity in 14 quarters with a total volume of just 4 million square feet.

Rents appreciated just 4% year-over-year – and although reasonable – are a far cry from the 22.3% year-over-year average over the past five years.

Meanwhile, renewals continue to come up as normal as we experience an economic slowdown and continued increases in operating costs. Although businesses can smell a market in flux with potential deals to be had and price reductions hitting the MLS, for those coming off 10-year terms, they are still facing a doubling or tripling of rents from the $5-8 PSF net range to anywhere in the mid- to high-teens.

Sales regained momentum at 8.6 million square feet of volume in Q1 2024 despite elevated borrowing costs as both users and investors alike seek shelter through ownership of high-quality assets.

As we look forward, decisions will have to be made. Negotiations will be had.

And these discussions will be grounded in discovery and strategy; understanding the options and market rates while thinking outside the box to make footprints as efficient as possible. That is where a trusted advisor can assist; in leveraging the data and applying a deep insight of these relational and market-based dynamics to create opportunity that may not readily exist on the surface.

So without further ado, let’s examine how each of the Greater Toronto Area regions performed in Q1 2024, and where we expect the market to go moving forward.

Key Takeaways from Q1 2024 – Toronto East Markets

  • The availability rate increased from 2.8% to 3.8%, with 3.3% available for lease and 0.5% available for sale;
  • We had 425,389 SF of new supply and 3,950,559 SF still under construction; 
  • We had 109,481 SF of negative absorption; and
  • The weighted average asking net rent was $16.68PSF, up from $16.41 PSF the previous quarter, with additional rent of $4.78 PSF (an increase from $4.48 PSF).

Why are the GTA East Markets in such demand?

Generally, the Toronto-East markets have strong economics – relatively inexpensive land compared to other markets in the GTA, better availability of land, better located industrial land with proximity to the City, relatively low development charges, and great access to major highways.

We have seen a number of major Users and Developers step in and make commitments on large pieces of land for spec development and design build, which amounts to millions of square feet being built and in the pipeline.

So, if you are an Investor, Landlord, or Owner-Occupier you may be wondering…

“How much is my property really worth?” 

What rental rate can I expect? How much $/PSF would I be able to get if I sold my building?

These questions are being asked all the time.

The answer to this will depend on a range of factors, including: 

  • the age and size of the building, 
  • lot size, 
  • ceiling height, 
  • office component, 
  • parking, 
  • trucking access, 
  • truck parking if available, etc….
In order to get to the truth, we need to dig a bit deeper…

This week we are covering the Toronto-East Markets
(Pickering, Ajax, Whitby, Oshawa & Clarington) 

Statistical Summary – GTA East Markets – Q1 2024 

Q1 2024 GTA Industrial Market Overview – Source: Cushman & Wakefield
Q1 2024, Industrial Market Overview – Source: Cushman & Wakefield
So let’s take a closer look at how the different Toronto East Markets performed during Q1 2024…
GTA East Markets 
Properties Sold between January 2024 – March 2024, from 20,000 SF plus
In the GTA East submarkets (of Pickering, Ajax, Whitby, and Oshawa) in Q1 2024, 3 properties were sold (totalling 416,406 SF); two were investment sales and one was a user sale. The prices achieved were in the range of $123 PSF – $440 PSF, with an average building size of 138,802 SF and an average price of $216.14 PSF.

240 South Blair Street, Whitby.
GTA East Markets
Properties Leased between January 2024 – March 2024, from 20,000 SF plus
In the GTA East submarkets (of Pickering, Ajax, Whitby, and Oshawa) in Q1 2024, 3 properties were leased (totalling 202,622 SF). The net rental rates achieved were from $10.00 PSF to $19.50 PSF, with an average building size of 67,541 SF and an average net rental rate of $14.33 PSF.

689 Salem Road N, Bldg C, Ajax.

Portfolio Sale

In February 2024, Dream REIT purchased four sites with seven properties totalling 316,813 SF from Fiera Real Estate for $71,750,000. The portfolio sale had an average building size of 45,259 SF and an average price PSF of $226.47.

1910 & 1920 Clements Road, Pickering.
What Lies Ahead:
  1. Rental Rates: The Toronto-East markets now have a weighted average rental rate of $16.68 PSF net, the lowest across the GTA regions. That said, rents across the GTA have levelled off and, in some cases, we have seen rate reductions. We expect this to continue. Likewise, annual rental escalations have plateaued and may decrease. Leasing is slower and it is taking longer to complete a deal as Tenants have become more cautious. Finally, as vacancies are increasing (see the jump from 2.8% to 3.8% this last quarter) alongside a flood of new deliveries, Tenants have more options. These dynamics are putting further downward pressure on rents, specifically on Class B or C industrial buildings. Overall, we are heading towards a more balanced market between Landlords and Tenants. 
  2. Property Values: The Toronto-East markets typically have the lowest weighted-average asking sale price in the GTA. As rental rates plateau, and as we see rents decrease in certain properties, coupled with upward pressure on cap rates, we are going to see a decrease in the value of investment properties. For users, even though the Buyer pool may have thinned due to increased interest rates, we expect to see values remain elevated as supply is extremely limited. Finally, due to the aforementioned interest rates, the value of development land has decreased.
  3. Development Opportunities: We are seeing strong development continue in the East with a current pipeline of 1,970,287 SF. Big players such as Panattoni, Carttera, Crestpoint, Blackwood, PIRET, etc. (to name a few) are all involved… and it will continue. 

So, how much is your property really worth?

What rental rate can you expect or how much per SF would you be able to get if you sell your building? How much can we compress CAP rates to create even greater value?

Well, the answers to these questions will depend on a variety of factors, many of which we can quickly uncover in an assessment of your situation. And with our rental rates and valuations at all-time highs, and vacancy rates low, finding the right property is a real challenge.

Having said that, a lot of transactions are being done off the market.. and to participate in that, you should connect with experienced brokers that have long-standing relationships with property owners.  

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

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, or visit

Connect with Me Here! – Goran Brelih’s Linkedin Profile:

Goran Brelih, SIOR

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

Office: 416-756-5456
Mobile: 416-458-4264


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