Q1 2025: Toronto-Central Markets

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 Toronto Central Markets, comprising Toronto, North York, Etobicoke, and Scarborough, stand as a vital hub for industrial real estate within the Greater Toronto Area (GTA).

These regions are prized by investors and occupiers for their strategic benefits: proximity to a robust labor force, high population density, and exceptional connectivity via major highways and public transit.

This accessibility translates to lower transportation costs and savings on development charges compared to the 905 areas, making the Toronto Central Markets a prime target for industrial activity.

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.

Is it proximity to labour and a higher population density, and thus, a reduction in transportation cost? Or is it savings in development charges vs 905 areas, proximity to major transportation nodes, highways, public transportation, etc?… Or all of the above?

Well, one thing is for certain, the Toronto-Central Markets are highly sought-after by both Investors and Occupiers of commercial real estate and is an environment worth exploring for opportunities. 

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

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: 

GTA Central Markets (Scarborough)

GTA Central Markets (North York)

GTA Central Markets (North York)

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