Q2 2025 Insight, Toronto-East Markets

The most common questions among those deep in the industrial real estate market likely fall into the general pattern of “Where in the cycle are we?”

Or, “Have we hit the bottom yet?”

Or even, “When will things turn around?”

Because for the past several years now, the broader economic landscape has been marred by uncertainty. First it was the economic lockdowns, then the brief but spectacular boom in logistics and e-commerce; followed closely by supply chain bottlenecks and rising prices, and the resulting sharp increase in interest rates.

Since that initial wave of blockbuster deals and a behemoth pipeline of new inventory, things have trailed off, with a flurry of sublets, delayed projects, and a general mismatch in expectations between Buyers and Sellers; Landlords and Tenants.

Not that we needed it, but other headwinds, such as global conflicts and tariffs and trade talks have only made things less certain – with scores of businesses pushing off decisions while capital sat on the sidelines.

Transactions still took place, as they always do. People can’t wait forever. Yet overall confidence never really materialized that we were going to take another run into the next upswing.

That all said, it does feel like the market has probably come close to or already reached a bottoming out. Perhaps not in every submarket or asset class, nor for every class of property. But value plays are slowly popping up.

And those who were either priced out or who refused to partake in what they perceived were top-of-market valuations – the same groups who bought land at $500,000 per acre or $120 PSF – have now come out looking to redeploy capital and make their next moves.

Likewise, businesses that focused on efficiencies and operating profits might look to take advantage of stabilized rents and values to scoop up good deals for the next 5, 10, or 15 years. Everything always moves in cycles. It’s not quite certain where we currently sit, although for the first time in a long time, it feels as if the broader market is holding steady, albeit in the same cautious way.

So without further ado, let’s examine how each of the Greater Toronto Area regions performed in Q2 2025, and where we expect the market to go moving forward.

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…

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: 

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