Q2 2026 Insight, Toronto East Markets

Navigating Q2 2026: Market Dynamics and Forward Outlook

Leasing Momentum-  Q2 2026 leasing activity in GTA East reached 559,354 SF, moderating from an exceptional Q1 but holding well above the submarket’s multi-year quarterly average and lifting first-half volume to a record 1,517,604 SF. Eight transactions of 20,000 SF or more were identified across the four submarkets, totalling 597,672 SF. Ontario Power Generation was the quarter’s most active occupier, committing to 191,079 SF at 1055 Squires Beach Road in Pickering on a 120-month term and a further 78,507 SF at 1900 Boundary Road in Whitby. Geodis Logistics expanded by 130,001 SF at Panattoni’s 1565 Thornton Road North in Oshawa, taking its footprint in that building to approximately 369,000 SF, in a transaction arranged by Cushman & Wakefield on both sides.

Vacancy Trends-  GTA East recorded its second consecutive quarterly decline in vacancy, and was one of only two GTA submarkets to compress quarter-over-quarter alongside GTA West. Pickering led the region with 130 basis points of compression to 7.6%, driven almost entirely by the Squires Beach transaction. Oshawa tightened again to 1.4%, and Ajax eased to 10.0%—though it remains the highest-vacancy submarket in the GTA. Whitby moved in the opposite direction, rising to 9.0% as new deliveries outpaced absorption. Sublease availability across the East stands at 424,870 SF, or 0.7%, concentrated in Ajax (227,267 SF) and Whitby (168,556 SF).

Rental Rate Observations-  The weighted average quoted asking rent fell 84 cents to $13.59 PSF. Achieved rents on new leases this quarter ranged from $10.50 PSF—for a 1999-vintage Pickering building on a 120-month term—to $16.75 PSF for 2025-completed Class A product in Whitby and Oshawa, a spread of more than $6.00 PSF that illustrates how sharply the market now differentiates on building specification. Weighted across the transactions where rates were disclosed, the average achieved net rent was approximately $13.99 PSF; excluding the single large legacy-building commitment in Pickering, that average rises to $15.81 PSF. The decline in quoted rates therefore reflects the mix of available inventory rather than a broad repricing of quality space.

Investment Activity- Q2 2026 was the strongest quarter for GTA East investment activity in recent memory. Five transactions over 20,000 SF closed, totalling 1,942,972 SF and approximately $565.6M on a 100% interest basis, at a weighted average of $291 PSF. Whitby accounted for three of the five: Pure Industrial’s $190.5M acquisition of the 777,040 SF multi-tenant facility at 4670 Garrard Road at $245 PSF; Brookfield Asset Management’s purchase of a 45% interest in the Amazon-occupied 518,731 SF building at 5185 Garrard Road from Concert Properties, implying $238 PSF on a 100% basis; and East Town Holdings’ $53.4M acquisition of 1702 Tricont Avenue at $230 PSF. In Oshawa, Pontegadea Group acquired the 379,000 SF purpose-built facility at 1680 Thornton Road North from Broccolini for $187M ($493 PSF)—the highest per-square-foot price recorded in the East this quarter and a clear signal of offshore appetite for long-leased, single-tenant Canadian logistics assets. Pickering recorded one transaction, the 36,000 SF building at 1135 Squires Beach Road at $313 PSF.

GTA East Markets (Ajax)

Properties Sold between April 2026 – June 2026, from 20,000 SF plus
No properties over 20,000 SF were sold in Ajax during Q2 2026. Recorded sales activity of 21,716 SF was confined to smaller-bay product.

Properties Leased between April 2026 – June 2026, from 20,000 SF plus

Address	Leased SF	Net Rent (PSF)
525 Finley Avenue	53,009	$13.00

In Ajax in Q2 2026, 1 property was leased totalling 53,009 SF. The freestanding 1969-vintage building at 525 Finley Avenue was leased to A Eco Friendly Pallet Inc. at $13.00 PSF net on a 60-month term, with $0.25 annual escalations and three months of free rent, after 176 days on market. TMI was $4.00 PSF. The building offers 20′ to 20’9″ clear height, five truck-level and three drive-in doors, and outside storage on a 5.99-acre site. Ajax vacancy eased to 10.0% from 10.4%, though it remains the highest of any GTA submarket, with 227,267 SF of sublease space representing a 1.8% sublease vacancy rate—the highest in the region and the principal overhang on the submarket’s recovery.

GTA East Markets (Oshawa)

Properties Sold between April 2026 – June 2026, from 20,000 SF plus

Address	Size (SF)	Lot (Ac)	Sale Price	$/PSF	Type
1680 Thornton Road North	379,000	18.56	$187,000,000	$493	Investment

In Oshawa in Q2 2026, 1 investment property was sold (379,000 SF). Pontegadea Group acquired the two-storey, 2024-completed facility at 1680 Thornton Road North from Broccolini for $187M ($493 PSF), with the vendor having assembled the 18.56-acre site in November 2021 for $11M. The pricing reflects a purpose-built, long-leased single-tenant asset and should be read as a covenant-driven trade rather than a general warehouse benchmark. Oshawa’s vacancy rate tightened further to 1.4%—the lowest of any submarket in the GTA—with no sublease space available and nothing under construction.

Properties Leased between April 2026 – June 2026, from 20,000 SF plus

Address	Leased SF	Net Rent (PSF)
1565 Thornton Road North	130,001	$16.51
980 Thornton Road South, Unit 4	21,936	$16.75

In Oshawa in Q2 2026, 2 properties were leased totalling 151,937 SF at a weighted average net rent of $16.54 PSF—the highest achieved average of any East submarket this quarter. Geodis Logistics (Canada) Inc. expanded by 130,001 SF at Panattoni’s 1565 Thornton Road North, a 2025-completed, 499,665 SF Class A facility offering 40′ clear height and 2,500 amp service on 23 acres. The 47-month term commences at $16.51 PSF net and escalates to $18.30 PSF, producing an effective rent of $17.41 PSF; Cushman & Wakefield acted on both sides of the transaction. At 980 Thornton Road South, Unit 4, a 21,936 SF unit in Dream Summit Industrial’s institutionally managed multi-unit building was leased at a $16.75 PSF net rate with TMI of $4.67 PSF, after 84 days on market. The unit offers 32′ clear height with four truck-level and one drive-in door.

GTA East Markets (Pickering)

Properties Sold between April 2026 – June 2026, from 20,000 SF plus

Address	Size (SF)	Lot (Ac)	Sale Price	$/PSF	Type
1135 Squires Beach Road	36,000	3.01	$11,250,000	$313	Investment

In Pickering in Q2 2026, 1 property was sold (36,000 SF) at $11.25M ($313 PSF). Hamilton Capital Commercial Estate Inc. acquired 1135 Squires Beach Road from long-time owner-occupier Prenco Progress and Engineering Corporation Limited, which had held the 3.01-acre E1-zoned site since 1997. Pricing above $300 PSF for a 1989-vintage building with four truck-level and four drive-in doors underscores the continued depth of demand for well-located small-bay Durham product.

Properties Leased between April 2026 – June 2026, from 20,000 SF plus

Address	Leased SF	Net Rent (PSF)
1055 Squires Beach Road	191,079	$10.50

In Pickering in Q2 2026, 1 property of 20,000 SF or more was leased (191,079 SF)—the largest lease transaction recorded in the GTA East this quarter and the seventh-largest in the GTA overall. Ontario Power Generation Inc. committed to the 209,603 SF, 1999-built facility at 1055 Squires Beach Road on a 120-month term, structured at $10.50 PSF net in year one, stepping to $12.75 PSF in year two and escalating 2.75% annually thereafter. TMI was $3.07 PSF. The building offers 28′ clear height, 17 truck-level doors and 2,000 amp service on 9.41 acres, and had been marketed for 915 days at an asking rate of $13.50 PSF net. The below-market first-year rate reflects the length of term and the tenant’s covenant strength. Pickering vacancy compressed 130 basis points to 7.6% on the strength of this single transaction, with 190,464 SF remaining under construction.

GTA East Markets (Whitby)

Properties Sold between April 2026 – June 2026, from 20,000 SF plus

Address	Size (SF)	Lot (Ac)	Sale Price	$/PSF	Type
4670 Garrard Road	777,040	35.60	$190,500,000	$245	Investment
5185 Garrard Road*	518,731	55.24	$123,400,000*	$238	Investment / Portfolio
1702 Tricont Avenue	232,201	10.75	$53,400,000	$230	Investment

*5185 Garrard Road reflects the transfer of a 45% interest for $55,530,000. Sale price and $/PSF shown on a 100% interest equivalent basis. The asset formed part of the Concert Properties – Brookfield GTA Industrial Portfolio 2026.

In Whitby in Q2 2026, 3 investment properties were sold totalling 1,527,972 SF at approximately $367.3M on a 100% interest basis—a weighted average of $240 PSF. The headline transaction was Pure Industrial’s $190.5M acquisition of 4670 Garrard Road, a 777,040 SF multi-tenant warehouse and distribution facility completed in 2023 on 35.60 acres, at $245 PSF; the vendor had acquired the land in September 2019 for $7.4M. Brookfield Asset Management acquired a 45% interest in the Amazon-occupied, 2022-built 518,731 SF facility at 5185 Garrard Road from Concert Properties for $55.53M, implying $123.4M and $238 PSF on a 100% basis. Finally, East Town Holdings Inc. acquired the 232,201 SF single-tenant building at 1702 Tricont Avenue from White Rock REIT for $53.4M ($230 PSF). The clustering of three large-format institutional trades in a single submarket at $230 to $245 PSF establishes a clear and defensible pricing band for modern big-box product in Durham Region.

Properties Leased between April 2026 – June 2026, from 20,000 SF plus

Address	Leased SF	Net Rent (PSF)
1900 Boundary Road, Unit 3	78,507	$16.75
1701 Tricont Avenue	60,174	$15.15
1850 Boundary Road	39,267	Not disclosed
185 William Smith Drive, Unit 4	23,699	$15.95

In Whitby in Q2 2026, 4 properties were leased totalling 201,647 SF—the highest transaction count of any East submarket. Ontario Power Generation Inc. took 78,507 SF at 1900 Boundary Road, Unit 3, a 2025-completed building with 40′ clear height and 4,000 amp service, at $16.75 PSF net with TMI of $3.90 PSF—the highest achieved rate in the East this quarter. TDG leased 60,174 SF at 1701 Tricont Avenue on a 90-month term at $15.15 PSF net with six months of gross free rent, in a 2025-completed building offering 32′ clear height and 14 truck-level doors. Alstom Transport Canada Inc. committed to 23,699 SF at 185 William Smith Drive, Unit 4 on a 72-month term at $15.95 PSF net with 3% annual escalations, producing an effective rent of $17.20 PSF; the transaction was arranged by Cushman & Wakefield on behalf of The Equitable Life Insurance Company of Canada. A fourth lease of 39,267 SF was completed at 1850 Boundary Road, a 1990-vintage Class C building, at an undisclosed rate. Despite this activity, Whitby was the only East submarket to record rising vacancy, moving to 9.0% from 8.3% as 163,611 SF of new supply was delivered, with a further 385,867 SF under construction.

What Lies Ahead: Market Outlook

1. Rental Rates –  The gap between older functional product and new Class A space in GTA East widened again in Q2 2026. We anticipate:

• New Class A Facilities: 2025-vintage, 40′ clear product in Whitby and Oshawa is clearing at $15.15 to $16.75 PSF net. With 576,331 SF still under construction, landlords of new supply should expect to compete on free rent and improvement allowances rather than face rate until the current deliveries are absorbed.
• Functional Secondary Stock: Older buildings continue to clear at discounts of $3.00 to $5.00 PSF below comparable new product. The Squires Beach transaction demonstrates that covenant tenants can extract materially below-market first-year rates in exchange for term—landlords should model whether a stepped-rent structure delivers a stronger net effective outcome than holding out for face rate.
• Quoted Rates: The 84-cent quarterly decline in quoted asking rent to $13.59 PSF reflects the mix of available inventory rather than a broad repricing of quality space. Achieved rates on Class A product held firm through the quarter, and we expect quoted averages to firm as secondary availability is absorbed.

2. Property Values

• Investment Properties: The three Whitby trades establish a $230 to $245 PSF band for large-format, modern distribution product in Durham Region—meaningfully below GTA West and Central comparables. The Oshawa transaction at $493 PSF is a purpose-built, long-leased outlier and should not be applied as a general benchmark.
• Capital Depth: Q2 confirmed institutional, public and offshore appetite for Durham industrial within a single quarter. Vendors of well-located, well-tenanted assets are now meeting genuine competition—a materially different environment than twelve months ago, and a consideration for owners who have deferred disposition decisions.
• User Properties: Supply of quality owner-user buildings remains constrained across Durham Region. The 1135 Squires Beach Road sale at $313 PSF confirms sustained pricing for small-bay product, and owner-occupiers should expect to compete for the limited stock that reaches the open market.

3. Development Opportunities

• Pickering and Whitby Pipeline: All 576,331 SF of GTA East construction sits in Pickering (190,464 SF) and Whitby (385,867 SF). With Whitby vacancy at 9.0%, near-term deliveries will face direct competition and pre-leasing should be prioritised over speculative completion.
• Oshawa: At 1.4% vacancy, with no sublease space and nothing under construction, Oshawa is functionally full. Occupiers with Oshawa requirements should be planning 18 to 24 months ahead, and the submarket presents the clearest case in the East for speculative or build-to-suit development.
• Ajax: With vacancy at 10.0% and 227,267 SF of sublease space to clear, Ajax will absorb existing availability before further development is warranted. The Salem and Church Street corridor nonetheless remains the region’s strongest land position for the next development cycle.

Conclusion

Q2 2026 confirmed the GTA East as a market moving from recovery into genuine strength. Vacancy has now compressed for two consecutive quarters and stands 80 basis points below year-ago levels, absorption remains firmly positive, and capital markets activity reached a level not seen in years—with more than half a billion dollars of institutional and offshore investment committed to Durham Region industrial in a single quarter. The one caution is Whitby, where new supply has temporarily outpaced demand.
For Investors: The Q2 transaction set has established a credible pricing band for large-format Durham product at $230 to $245 PSF, well below GTA West and Central comparables. With vacancy improving and institutional competition now demonstrable, the window to acquire at a discount to replacement cost is narrowing.
For Landlords: The bifurcation between new Class A product and secondary stock accelerated this quarter. Investment in building improvements—clear height, shipping infrastructure, and power capacity—will increasingly determine competitive positioning. Landlords in Whitby in particular should be prepared to transact ahead of the 385,867 SF still to be delivered.
For Owner-Occupiers: With pricing still below GTA West comparables and small-bay product trading above $300 PSF, owner-occupiers face a narrowing window to acquire quality assets before values adjust to reflect improving fundamentals and demonstrated institutional demand.
For Tenants: Oshawa is effectively full at 1.4% vacancy, and requirements there must be planned well in advance. The better near-term leverage sits in Whitby and Ajax, where new supply and sublease availability give tenants genuine choice—and where the strongest concession packages of the quarter were negotiated.
A significant volume of transactions—both leases and sales—continue to be negotiated off-market in GTA East. To participate in these opportunities, connect with experienced brokers who maintain active relationships across the Durham Region industrial ownership community.

For Investors: GTA North continues to offer the GTA’s highest average asking rents and was the only region to record rent growth this quarter, supporting income quality for well-positioned assets. Institutional re-entry through portfolio transactions signals renewed confidence in the region’s fundamentals.
For Landlords: Maintaining competitive specifications—ceiling heights, dock capacity, and power infrastructure—is essential to commanding premium rents and minimizing vacancy duration. With days on market extending in submarkets carrying sublease competition, early and realistic positioning is critical. Properties with functional obsolescence will face continued pricing pressure.
For Owner-Occupiers: The Combined Metal Industries and Canadian Fire Fabrication acquisitions underscore the strategic value of industrial real estate ownership, particularly for land-intensive operations. Well-located user product continues to trade quickly and at firm pricing.
For Developers: GTA North’s structural fundamentals—Highway 400/404 access, labour depth, and institutional-quality tenant demand—continue to support long-term development value. The successful absorption of newly delivered 40-foot clear product at $18.00 PSF net validates continued investment in modern, high-specification facilities.