April 17th, 2026
As we move through Q1 2026, the GTA Central Markets continue to demonstrate resilience amid an evolving economic landscape. The Toronto Central Markets comprising of Toronto, North York, Etobicoke, Scarborough, East York, and York have entered 2026 with renewed leasing momentum, though vacancy has continued its gradual upward drift. The region remains a stable anchor within the broader Greater Toronto Area industrial market, supported by constrained land supply, proximity to labour, and strong infrastructure connectivity.
In Q1 2026, the GTA Central Markets recorded a total inventory of 225,058,178 SF across 4,335 buildings. The overall availability rate rose modestly to 3.9%, up from 3.7% in Q4 2025, with lease availability at 3.5% and sale availability at 0.3%. The quarter saw negative absorption of 435,790 SF, driven primarily by new sublease additions in Etobicoke. Nevertheless, leasing activity remained solid at 1,287,178 SF for the quarter, an encouraging signal that occupier demand has not retreated.
The weighted average asking net rent declined to $15.05 PSF from $15.78 PSF in Q4, with additional rent at $4.34 PSF. The weighted average asking sale price edged up slightly to $375.92 PSF from $372.54 PSF, reflecting selective investor demand for well-located assets. These metrics continue to point to a market in transition moving through the repricing cycle toward more sustainable, fundamentals-based valuations.
Why Are GTA Central Markets So Sought-After?
The Toronto Central Markets remain highly prized by both investors and occupiers for compelling reasons:
- Proximity to Labour and Population Density: Direct access to a robust labour force and high-density residential centers reduces operational transportation costs significantly.
- Lower Development Charges: Compared to 905-region alternatives, development charges remain competitive, supporting both renovation and new development projects.
- Strategic Transportation Access: Major highways, public transit infrastructure, and proximity to major transportation nodes provide unparalleled connectivity.
- Modern Distribution Center Demand: Consistent developer interest in infill sites for modern distribution centres and industrial condominiums continues to drive value creation.
These factors collectively position Toronto Central as a magnet for investors hedging portfolio concentration risk, occupiers optimizing supply chain efficiency, and developers seeking infill redevelopment opportunities.
Key Takeaways from Q1 2026 – Toronto Central Markets
- The overall availability rate rose slightly to 3.9%, with lease availability at 3.5% and sale availability at 0.3%;
- There was 1,493,794 SF under construction, concentrated entirely in Scarborough;
- The quarter recorded negative absorption of 435,790 SF, largely driven by new sublease space entering Etobicoke
- Leasing activity totalled 1,287,178 SF, demonstrating continued occupier engagement;
- The weighted average asking net rent was $15.05 PSF, down from $15.78 PSF in Q4 2025, with additional rent of $4.34 PSF;
- The weighted average asking sale price was $375.92 PSF, relatively stable from Q4 2025.
Navigating Q1 2026: Market Dynamics and Forward Outlook
Through the first quarter of 2026, the Toronto Central Markets have displayed characteristic resilience amid trade policy uncertainty and cautious capital markets. Several key themes are shaping activity:
Leasing Momentum: Q1 2026 leasing activity remained healthy, with 1,287,178 SF of new commitments recorded across the GTA Central submarkets. Significant transactions occurred in Scarborough (175,217 SF at 755 Passmore Avenue and 110,396 SF at 150 Dynamic Drive) and Etobicoke (137,500 SF at 65 Skyway Avenue and 86,158 SF at 160 Claireville Drive). The continued preference for functional, well-located logistics space drove a steady stream of occupier commitments.
Rental Rate Continued Softening: The weighted average net asking rent for GTA Central declined to $15.05 PSF, extending the broader repricing trend now in its eighth consecutive quarter. However, the pace of decline has moderated. Properties with functional constraint, lower ceiling heights, limited truck access, or dated infrastructure continue to bear the steepest discounts, while modern, high-bay facilities maintain more stable rental rates.
Investment Activity: Sales transactions in Q1 2026 were concentrated in Scarborough and North York, with nine properties changing hands totalling approximately 275,771 SF. Pricing ranged from $216 PSF to $513 PSF, reflecting the widening spread between commodity industrial product and higher-value assets such as self-storage conversions and strategic user acquisitions. Well-capitalized investors continued to deploy capital selectively into the Central markets.
GTA Central Markets (Scarborough)
Properties Sold between January 2026 – March 2026, from 20,000 SF plus
| Address | Size (SF) | Lot (Ac) | Sale Price | $/PSF | Type |
| 2340 Morningside Ave #8 | 21,696 | – | $10,522,560 | $485 | User |
| 1220 Birchmount Road | 27,612 | 1.66 | $8,225,000 | $298 | User |
| 51 Scottfield Drive | 22,408 | 1.80 | $11,500,000 | $513 | Investment |
| 3860 Midland Avenue | 30,028 | 1.00 | $6,980,000 | $232 | User |
| 90 Production Drive | 55,673 | 2.61 | $12,000,000 | $216 | Investment |
In Scarborough in Q1 2026, 5 properties were sold (totaling 157,417 SF); 3 were user sales and 2 were investment sales. The prices achieved ranged from $216 PSF to $513 PSF, with an average building size of 31,483 SF and an average price of $349 PSF.
Properties Leased between January 2026 – March 2026, from 20,000 SF plus
| Address | Leased SF | Ceiling Height | Ach. Net Rent (PSF) |
| 124 Milner Avenue #3–5 | 26,827 | 18’2” | $16.50 |
| 50 Dynamic Drive #1–3 | 45,639 | 18’ | $18.50 * |
| 150 Dynamic Drive | 110,396 | 22’ | $16.25 |
| 755 Passmore Avenue | 175,217 | 28’ | $16.50 |
In Scarborough in Q1 2026, 4 properties were leased (totaling 358,079 SF). The net rental rates achieved ranged from $16.25 PSF to $18.50 PSF (*asking), with an average building size of 89,520 SF and an average net rental rate of $16.94 PSF.
GTA Central Markets (North York)
Properties Sold between January 2026 – March 2026, from 20,000 SF plus
| Address | Size (SF) | Lot (Ac) | Sale Price | $/PSF | Type |
| 5 Vanley Crescent | 20,103 | 1.32 | $5,449,000 | $271 | User |
| 230 Eddystone Avenue | 27,800 | 1.07 | $7,260,000 | $261 | User |
| 355 Garyray Drive | 40,455 | 1.97 | $14,680,000 | $363 | User |
In North York in Q1 2026, 3 properties were sold (totaling 88,358 SF); all were user sales. The prices achieved ranged from $261 PSF to $363PSF, with an average building size of 29,452 SF and an average price of $298 PSF.
Properties Leased between January 2026 – March 2026, from 20,000 SF plus
| Address | Leased SF | Ceiling Height | Net Rent (PSF) |
| 82–86 St Regis Crescent N. | 22,520 | 15’8” | $15.00 |
| 42 Dufflaw Road | 23,317 | 16’ | $15.00 |
| 377 Canarctic Drive | 25,900 | 18’ | $16.25 |
| 400 Flint Road #1 | 31,674 | 18’ | $15.50* |
| 84 Kenhar Drive | 41,678 | 18’8” | $11.85 |
| 35 Mobile Drive #1 | 46,718 | 14’ | $18.00* |
| 473–475 Garyray Drive | 61,000 | 18’ | $11.50 |
In North York in Q1 2026, 7 properties were leased (totaling 252,807 SF). The net rental rates achieved ranged from $11.50 PSF to $18.00 PSF (*asking), with an average building size of 36,115 SF and an average net rental rate of $14.73 PSF.
GTA Central Markets (Etobicoke)
No properties over 20,000 SF were sold in Etobicoke during Q1 2026.
Properties Leased between January 2026 – March 2026, from 20,000 SF plus
| Address | Leased SF | Ceiling Height | Ach. Net Rent (PSF) |
| 93 Claireville Drive | 20,400 | 18’ | $24.50 |
| 342 Munster Avenue | 21,600 | 12’ | $21.00* |
| 111 Westmore Drive #B | 38,032 | 22’ | $14.50* |
| 450 Evans Ave Bldg 2 #102 | 63,009 | 36’ | $18.50 |
| 160 Claireville Drive | 86,158 | 22’ | $15.00 |
| 65 Skyway Avenue | 137,500 | 20’6” | $14.00 |
In Etobicoke in Q1 2026, 6 properties were leased (totaling 366,699 SF). The net rental rates achieved ranged from $14.00 PSF to $24.50 PSF, with an average building size of 61,117 SF and an average net rental rate of $17.92 PSF.
GTA Central Markets (East York)
No properties over 20,000 SF were sold in East York during Q1 2026.
Properties Leased between January 2026 – March 2026, from 20,000 SF plus
| Address | Leased SF | Ceiling Height | Ach. Net Rent (PSF) |
| 55 Esandar Drive | 27,810 | 24’6” | $15.95 |
In East York in Q1 2026, 1 property was leased (27,810 SF) at a net rental rate of $15.95 PSF. The limited transaction volume reflects the submarket’s tight 4.1% vacancy rate and constrained available supply.
What Lies Ahead: Market Outlook
1. Rental Rates – Rental rate softening is entering its mature phase for the Central Markets. While the overall weighted average has declined to $15.05 PSF, the pace of decline has slowed meaningfully. We anticipate:
- Quality Assets: Newer buildings and fully modernized facilities with optimal specifications (28+ ft clear heights, truck-friendly design, e-commerce infrastructure) will stabilize first and begin to see modest rental rate recovery.
- Secondary Stock: Older buildings with suboptimal characteristics will continue to face rent reductions as occupiers prioritize efficiency and modern operations.
- Annual Escalations: Modest escalations will resume as market confidence improves, though they will remain below historical norms.
- Market Balance: The market has transitioned to a more balanced environment between landlords and tenants—a healthy dynamic supporting rational transaction activity.
2. Property Values – As rental rates approach a floor for quality assets, property valuations will follow:
- Investment Properties: Values have moderated from elevated post-pandemic levels. Cap rate expansion reflects both reduced lease rates and market risk repricing. Selective opportunities exist for investors targeting stabilized, well-tenanted assets.
- User Properties: Values remain relatively elevated given limited supply of quality owner-occupied buildings. Strategic owner-occupiers should continue to evaluate acquisition opportunities while pricing remains favorable relative to peak.
- Development Land: Valuations remain significantly below peak levels. Developers with patient capital should continue monitoring infill sites for long-term value accumulation.
3. Development Opportunities – The Toronto Central Markets remain a compelling development target:
- Infill Redevelopment: Strong developer interest continues for purchasing infill sites and redeveloping obsolete industrial facilities into modern distribution centers and industrial condominiums.
- Central Location Premium: The region’s proximity to major highways, labour markets, and transit infrastructure ensures sustained demand for well-positioned projects.
- Distribution Centre Demand: Modern, purpose-built logistics facilities with high ceilings, efficient truck access, and e-commerce capabilities remain in structural demand.
Conclusion
The Toronto Central Markets enter the balance of 2026 positioned for gradual stabilization. After two years of rental rate repricing and value adjustment, the region has established a foundation from which measured, fundamentals-driven recovery can take shape. Vacancy remains well below the GTA average, leasing activity is solid, and the limited new supply pipeline in the Central Markets supports a constructive medium-term outlook.
For Investors: The market presents compelling risk-adjusted opportunities. Rationalized asset pricing combined with stabilizing rents create an attractive entry point for capital deployed strategically.
For Landlords: Maintaining well-maintained, modern facilities is essential. Quality assets in prime locations command premium positioning and stable tenancy.
For Owner-Occupiers: Supply constraints and moderate pricing present a favorable window for tactical acquisition before the market moves toward recovery.
For Developers: Infill redevelopment sites in central locations remain strategically valuable. The region’s structural fundamentals—labour proximity, highway access, transit connectivity—support long-term value creation.
A lot of transactions are being done off the market. To participate in these opportunities, connect with experienced brokers who maintain long-standing relationships with property owners and occupiers.
For a confidential consultation or a complimentary opinion of value of your property, please reach out to our team.
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
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