April 25th, 2025
Another week has gone by and investors and occupiers alike remain uncertain about how the economic landscape will unfold in the coming weeks and months.
A looming federal election, along with tense international events are permeating into stakeholder expectations; which, if you’re a student of economics you may realize is often a greater contributor to outcomes than the underlying fundamentals themselves.
In any event, we notice and see market players making moves to hedge short-term risks with respect to their industrial assets. As a whole, the sentiment seems to be that we are potentially going to see some near-term volatility; with optimists hoping for a regenerative period in the latter half of 2025 going into the new year.
As such, Tenants are looking for low-cost options to bridge any gaps in their footprint needs, while also looking to mitigate rent increases or consolidate their operations where possible. Sublease opportunities, whether on- or off-market are out there – and we notice businesses making quick, short-term deals to optimize their space for the balance of the year.
Likewise, Investors are doing their best to quickly lease-up vacant space with significant discounts and incentives – which they are willing to stomach until we get to the other side of this uncertain period.
For those Parties well-positioned to acquire assets, there may not have been a better time to do so in the last 5-10 years. Prices have fallen and, following the softer market in 2023 and 2024, owners are now more amenable to the fact that values are not where they were following the post-lockdown boom.
The GTA North markets of Vaughan, Markham, Richmond Hill, Aurora, Newmarket, and East Gwillimbury are sought-after for access to labour, transportation routes, robust industrial base, and strategic proximity to both the Toronto core as well as neighbouring industrial-heavy, GTA West submarkets.
So without further ado, let’s examine how each of the Greater Toronto Area regions performed in Q1 2025, and where we expect the market to go moving forward.
- The availability rate increased from 3.2% to 3.3%, with a lease availability rate of 3.1% and a sale availability rate of 0.2%;
- We had 752,555 SF of new supply year-to-date and 2,604,092 SF still under construction;
- We had 568,858 SF of absorption;
- The weighted average asking net rent was $17.79 PSF, up from $17.59 PSF the previous quarter, with additional rent of $4.24 PSF (an increase from $4.14 PSF); and
- The weighted average asking sale price increased from $478.56 PSF to $548.83 PSF (figures heavily influenced by industrial condo sales).
Why are the GTA North Markets in such demand?
Generally, the Toronto-North markets have newer product with higher ceiling heights and better shipping access. Further, there are benefits from access to major transportation routes.
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….
This week we are covering the Toronto North Markets (Vaughan, Markham, Richmond Hill, Aurora, Newmarket)
Statistical Summary – GTA North Markets – Q1 2025
Q1 2025 GTA Industrial Market Overview – Source: Cushman & Wakefield
Q1 2025 Industrial Market Overview – Source: Cushman & Wakefield
GTA North Markets (Vaughan)
50 Locke Street, Vaughan.
9501-9601 Highway 50, Vaughan.
201 Whitehall Drive, Markham.
In Markham in Q1 2025, 5 properties were leased (totalling 365,939 SF). The net rental rates achieved were from $17.00 PSF to $19.00 PSF, with an average building size of 73,188 SF and an average net rental rate of $18.59 PSF.
1 Steelcase Road West, Markham.
GTA North Markets (Aurora/Newmarket)
In Aurora and Newmarket in Q1 2025, 2 properties were sold (totalling 94,384 SF); 1 was an investment sale and 1 was a user sale. The prices achieved were in the range of $309.61 PSF – $514.00 PSF, with an average building size of 47,192 SF and an average price of $411.81 PSF.
190 Harry Walker Pkwy, Newmarket.
In Richmond Hill, Aurora, Newmarket, and East Gwillimbury in Q1 2025, 7 properties were leased (totalling 689,684 SF). The net rental rates achieved were from $11.25 PSF to $17.50 PSF, with an average building size of 98,526 SF and an average net rental rate of $14.45 PSF.
195 Harry Walker Pkwy N, Newmarket.
- Rental Rates: The Toronto-North markets now have a weighted average rental rate of $17.79 PSF net – once again the highest across the GTA regions. Rents have levelled off and, in many cases, have resulted in rate reductions. We expect this to continue. Likewise, annual rental escalations have decreased. Leasing is slower and it is taking longer to complete a deal, especially with the uncertainty of tariffs and the elections. Finally, increased vacancies have provided Tenants with more options, putting downward pressure on rents, specifically in Class B or C industrial buildings. Overall, we are in a more balanced market between Landlords and Tenants.
- Property Values: The Toronto-North markets have highest weighted-average asking sale price across the GTA at $548.83 PSF; an inflated and somewhat skewed metric due to industrial condo data). However, historically, the North markets have led the GTA due to the lack of availabilities and cost to develop. For users, the recent and continued interest rate cuts coupled with extremely limited supply will keep values elevated. The aforementioned rate cuts are expected to spur investor activity, especially as they push below cap rates.
- Development Opportunities: The Toronto-North markets still have quite a bit of land available for development in Vaughan-West along Highway 50. We are also going to see further development along Highway 400 – such as the 1.7MSF King-Jane Business Park – as land sites in more central areas become more scarce.
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.
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
Goran Brelih, SIOR
Executive Vice President, Broker
Cushman & Wakefield ULC, Brokerage.
www.cushmanwakefield.com
Office: 416-756-5456
Mobile: 416-458-4264
Mail: goran.brelih@cushwake.com
Website: www.goranbrelih.com
