Q3 2026 Insight, Toronto-Central Markets

As we move through Q3 2026, the GTA Central Markets continue to demonstrate resilience amid an evolving economic landscape. The Toronto Central Markets — comprising Toronto, North York, Etobicoke, Scarborough, East York, and York — remain a stable anchor within the broader Greater Toronto Area industrial market, supported by constrained land supply, proximity to labour, and strong infrastructure connectivity. Vacancy rose more noticeably this quarter and asking rents softened again, but the transaction record tells a more constructive story: owner-occupiers stepped in decisively, accounting for nine of the fourteen sales over 20,000 SF.

In Q3 2026, the GTA Central Markets recorded a total inventory of 225,566,919 SF across 4,336 buildings. The overall availability rate rose to 4.5%, up from 4.0% in Q2 2026, with lease availability at 4.1% (including 0.4% sublease) and sale availability at 0.4%. The quarter saw negative absorption of 579,168 SF — the third consecutive quarter of negative absorption — bringing the year-to-date figure to negative 1,433,232 SF. Leasing activity totalled 909,275 SF for the quarter, lifting year-to-date volume to 3,361,649 SF.

The weighted average asking net rent declined to $14.53 PSF from $14.75 PSF in Q2, with additional rent at $4.59 PSF. The weighted average asking sale price firmed to $368.98 PSF from $360.55 PSF. Sales activity totalled 866,111 SF for the quarter, including 14 closed transactions over 20,000 SF totalling 728,852 SF and approximately $184.1 million — a quieter quarter than Q2’s institutional surge, but one with a markedly deeper bench of user buyers.

Why Are GTA Central Markets So Sought-After?

As we move through Q3 2026, the GTA Central Markets continue to demonstrate resilience amid an evolving economic landscape. The Toronto Central Markets — comprising Toronto, North York, Etobicoke, Scarborough, East York, and York — remain a stable anchor within the broader Greater Toronto Area industrial market, supported by constrained land supply, proximity to labour, and strong infrastructure connectivity. Vacancy rose more noticeably this quarter and asking rents softened again, but the transaction record tells a more constructive story: owner-occupiers stepped in decisively, accounting for nine of the fourteen sales over 20,000 SF.

In Q3 2026, the GTA Central Markets recorded a total inventory of 225,566,919 SF across 4,336 buildings. The overall availability rate rose to 4.5%, up from 4.0% in Q2 2026, with lease availability at 4.1% (including 0.4% sublease) and sale availability at 0.4%. The quarter saw negative absorption of 579,168 SF — the third consecutive quarter of negative absorption — bringing the year-to-date figure to negative 1,433,232 SF. Leasing activity totalled 909,275 SF for the quarter, lifting year-to-date volume to 3,361,649 SF.

The weighted average asking net rent declined to $14.53 PSF from $14.75 PSF in Q2, with additional rent at $4.59 PSF. The weighted average asking sale price firmed to $368.98 PSF from $360.55 PSF. Sales activity totalled 866,111 SF for the quarter, including 14 closed transactions over 20,000 SF totalling 728,852 SF and approximately $184.1 million — a quieter quarter than Q2’s institutional surge, but one with a markedly deeper bench of user buyers.

Key Takeaways from Q3 2026 – Toronto Central Market

• The overall availability rate rose to 4.5% from 4.0%, with lease availability at 4.1% (including 0.4% sublease) and sale availability at 0.4%;
• There was 1,826,701 SF under construction, concentrated entirely in Scarborough, with 451,669 SF of new supply delivered year-to-date;
• The quarter recorded negative absorption of 579,168 SF, the third consecutive negative quarter, bringing year-to-date absorption to negative 1,433,232 SF;
• Leasing activity totalled 909,275 SF, bringing year-to-date 2026 leasing to 3,361,649 SF;
• The weighted average asking net rent was $14.53 PSF, down from $14.75 PSF in Q2 2026, with additional rent of $4.59 PSF;
• The weighted average asking sale price was $368.98 PSF, up from $360.55 PSF in Q2 2026;

Sales activity totalled 866,111 SF for the quarter — 14 closed transactions over 20,000 SF totalling approximately $184.1 million, nine of which were user purchases

Navigating Q3 2026: Market Dynamics and Forward Outlook

Through the third quarter of 2026, the Toronto Central Markets continued to absorb the effects of trade policy uncertainty and cautious occupier decision-making. Across the broader GTA, new leasing activity of 6.0 MSF was broadly in line with the 10-year third-quarter average, while overall GTA vacancy edged up to 5.0%. Notably, Toronto Central’s vacancy is an aging-stock story: 79.3% of vacant space sits in buildings more than 40 years old. Several key themes are shaping activity in the Central Markets:

Leasing Momentum: Q3 2026 leasing totalled 909,275 SF across the GTA Central submarkets. Among transactions over 20,000 SF, Etobicoke again led the way — highlighted by 99,524 SF at 137 Horner Avenue, 74,091 SF at 100 Ronson Drive, and the full 72,764 SF building at 100 North Queen Street on a 124-month term — while Scarborough recorded a strong run of mid-size deals including 63,295 SF at 150 McLevin Avenue. In North York, ABL Ceramica committed to 68,593 SF at 400 Flint Road.

Rental Rate Continued Softening: The weighted average net asking rent for GTA Central declined to $14.53 PSF, extending the repricing trend. The spread by asset quality is now pronounced: older, lower-clear and promotionally priced space transacted in the $9.95 to $11.95 PSF range, functional 18’–22’ product achieved $14.25 to $16.50 PSF, and newer high-clear buildings such as 400 Carlingview Drive (31’ clear) were marketed at $17.95 PSF.

Investment Activity: Fourteen properties over 20,000 SF closed in Q3, totalling 728,852 SF and approximately $184.1 million. Pricing ranged from $133 PSF to $407 PSF. Where Q2 was defined by institutional capital, Q3 belonged to owner-occupiers: Willowdale Subaru (772 Warden Avenue), Grand Empire Holdings (2220 Midland Avenue), Midland Power (94 Brockport Drive), M-C Dairy (120 North Queen Street) and eStruxture Data Centers (20 Pullman Court) were among nine user buyers. On the investment side, TriVan Capital acquired 40 Millwick Drive and 3NP Asset Management completed a sale-leaseback of 16 Upton Road.

GTA Central Markets (Scarborough)

Properties Sold in Q3 2026, from 20,000 SF plus

Address	Size (SF)	Lot (Ac)	Sale Price	$/PSF	Type
285 Midwest Road	21,937	1.13	$8,925,000	$407	User
1355 Huntingwood Drive	39,924	1.88	$9,900,000	$248	User
70 Maybrook Drive	40,703	1.87	$12,130,000	$298	User
20 Pullman Court	41,163	3.86	$16,500,000	$401	User
16 Upton Road	44,939	2.00	$11,000,000	$245	Investment
772 Warden Avenue	85,613	3.91	$21,250,000	$248	User
2220 Midland Avenue	149,553	6.86	$19,850,000	$133	User

In Scarborough in Q3 2026, 7 properties were sold (totalling 423,832 SF); 6 were user sales and 1 was an investment sale. The prices achieved ranged from $133 PSF to $407 PSF, with an average building size of 60,547 SF and an average price of $283 PSF. Owner-occupiers dominated the quarter: Willowdale Subaru acquired 772 Warden Avenue for $21,250,000, Grand Empire Holdings purchased the vacant 149,553 SF facility at 2220 Midland Avenue for $19,850,000 ($133 PSF, reflecting its age and scale), and eStruxture Data Centers bought its 20 Pullman Court data centre from Granite REIT. The lone investment trade, 16 Upton Road, was a sale-leaseback to 3NP Asset Management, with Bedrocan Canada remaining in occupancy.
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Properties Leased in Q3 2026, from 20,000 SF plus

Address	Leased SF	Ceiling Height	Net Rent (PSF)
44 Rolark Drive #3	24,859	20’	$15.00
100 Middlefield Road	28,914	18’	$16.50
1399 Kennedy Road #7	31,313	18’	$14.25
25 Grand Marshall Drive	32,880	24’	$18.95 *
5621–5631 Finch Avenue East #4–5A	41,864	18’	$15.75
150 McLevin Avenue #1–6	63,295	18’	$16.50

In Scarborough in Q3 2026, 6 properties were leased (totalling 223,125 SF). The net rental rates ranged from $14.25 PSF to $18.95 PSF (*asking), with an average size of 37,188 SF and an average net rental rate of $16.16 PSF. Achieved rates on functional 18’ product clustered tightly between $14.25 and $16.50 PSF, led by 150 McLevin Avenue and 100 Middlefield Road at $16.50 PSF, while Promotional Alliance Group renewed 41,864 SF at 5621–5631 Finch Avenue East at $15.75 PSF with annual escalations.

GTA Central Markets (North York)

Properties Sold in Q3 2026 from 20,000 SF plus

Address	Size (SF)	Lot (Ac)	Sale Price	$/PSF	Type
30 Gordon Mackay Road	22,000	1.18	$5,875,000	$267	Investment
16 Benton Road	28,903	1.42	$7,700,000	$266	User
40 Millwick Drive	94,090	4.62	$23,500,000	$250	Investment

In North York in Q3 2026, 3 properties were sold (totalling 144,993 SF); 1 was a user sale and 2 were investment sales. The prices achieved ranged from $250 PSF to $267 PSF, with an average building size of 48,331 SF and an average price of $261 PSF. The headline trade was TriVan Capital’s $23,500,000 acquisition of the 94,090 SF multi-tenant building at 40 Millwick Drive ($250 PSF) — up from the vendor’s September 2021 purchase price of $18,618,000, a gain of roughly 26% over five years.

Properties Leased in Q3 2026, from 20,000 SF plus

Address	Leased SF	Ceiling Height	Net Rent (PSF)
101–105 Wingold Avenue #3–4	20,697	14’	$16.95 *
53 Bakersfield Street #1	21,614	20’	$14.50
130 Sparks Avenue	22,059	18’	$17.50 *
100 Tempo Avenue #15	24,700	22’	$15.00 *
170 Bartor Road	34,164	18’	$11.95 *
400 Flint Road	68,593	18′	$14.95 *

* asking rental rate   † sublease

In North York in Q3 2026, 6 properties were leased (totalling 191,827 SF). The net rental rates ranged from $11.95 PSF to $17.50 PSF (*asking), with an average size of 31,971 SF and an average net rental rate of $15.14 PSF. The largest commitment was ABL Ceramica’s 68,593 SF lease at 400 Flint Road (asking $14.95 PSF). Highway 404-corridor units at 130 Sparks Avenue and 100 Tempo Avenue continued to command asking rates of $15.00 to $17.50 PSF.

GTA Central Markets (Etobicoke)

Properties Sold in Q3 2026, from 20,000 SF plus

Address	Size (SF)	Lot (Ac)	Sale Price	$/PSF	Type
1 City View Drive ‡	25,689	2.66	$8,500,000	$331	Investment
120 North Queen Street	34,000	4.58	$12,250,000	$360	User
94 Brockport Drive	76,338	3.51	$20,750,000	$272	User

In Etobicoke in Q3 2026, 3 properties were sold (totalling 136,027 SF); 2 were user sales and 1 was an investment sale. The prices achieved ranged from $272 PSF to $360 PSF, with an average building size of 45,342 SF and an average price of $321 PSF. Midland Power acquired 94 Brockport Drive for $20,750,000 against a $21,980,000 asking price, and M-C Dairy purchased 120 North Queen Street for $12,250,000 ($360 PSF). 1 City View Drive traded through a court-ordered (vesting order) sale at $8,500,000 — below both its $9,700,000 asking price and the vendor’s 2022 purchase price of $11,450,000.

Properties Leased in Q3 2026, from 20,000 SF plus

Address	Leased SF	Ceiling Height	Net Rent (PSF)
879 Islington Avenue	23,912	14’	$16.50 *
488 Carlingview Drive §	24,650	18’	$10.74
80–92 Carrier Drive	37,942	18′	$15.95
225 Rexdale Boulevard	45,000	28’6”	$15.95
400 Carlingview Drive	47,040	31’	$17.95 *
160 Bethridge Road	51,281	20’	$10.25
100 North Queen Street	72,764	14’–18’6”	$16.19
100 Ronson Drive	74,091	22’	$15.25
137 Horner Avenue #1	99,524	22’6”	$9.95 *

* asking rental rate   † sublease   § three-month short-term renewal

In Etobicoke in Q3 2026, 9 properties were leased (totalling 476,204 SF) — once again the most active Central submarket by volume. The net rental rates ranged from $9.95 PSF to $17.95 PSF (*asking), with an average size of 52,912 SF and an average net rental rate of $14.30 PSF. Notable transactions included the 99,524 SF lease at 137 Horner Avenue (promotional asking rate of $9.95 PSF), 74,091 SF at 100 Ronson Drive at $15.25 PSF, and a 124-month commitment for the full 72,764 SF at 100 North Queen Street at $16.19 PSF. Newer, higher-clear product held its premium: CANEXS Supply Chain leased 45,000 SF of 28’6” space at 225 Rexdale Boulevard at $15.95 PSF, and the newly completed 31’ clear building at 400 Carlingview Drive leased against a $17.95 PSF asking rate.

GTA Central Markets (East York)

No properties over 20,000 SF were sold in East York during Q3 2026.

Properties Leased in Q3 2026 from 20,000 SF plus

Address	Leased SF	Ceiling Height	Net Rent (PSF)
119 Vanderhoof Avenue	20,800	14′	$25.00 *
6 William Morgan Drive †	27,840	14’	$15.17

* asking rental rate   † sublease

In East York in Q3 2026, 2 properties were leased (totalling 48,640 SF). Net rental rates ranged from $15.17 PSF to $25.00 PSF (*asking). The 27,840 SF sublease at 6 William Morgan Drive achieved $15.17 PSF — above its $14.50 PSF asking rate — while 119 Vanderhoof Avenue in Leaside, a 1942-built building, leased against a $25.00 PSF asking rate that reflects its specialized, infill location rather than conventional warehouse pricing.

GTA Central Markets (York)

Properties Sold in Q3 2026, from 20,000 SF plus

Address	Size (SF)	Lot (Ac)	Sale Price	$/PSF	Type
88 Industry Street	24,000	1.18	$6,000,000	$250	Investment

In York in Q3 2026, 1 property was sold: 88 Industry Street, a 24,000 SF single-tenant building on 1.18 acres, traded for $6,000,000 ($250 PSF) to a private investor.

Properties Leased in Q3 2026, from 20,000 SF plus

Address	Leased SF	Ceiling Height	Net Rent (PSF)
77 Union Street #1	49,172	23’8”	$10.85 *

* asking rental rate   † sublease

In York in Q3 2026, 1 property was leased: 49,172 SF at 77 Union Street, with 23’8” clear height, against an asking rate of $10.85 PSF net — accounting for all of York’s leasing activity this quarter

What Lies Ahead: Market Outlook

1. Rental Rates – Rental rate softening continues for the Central Markets, with the weighted average now at $14.53 PSF. The bifurcation between asset classes remains clearly visible in transaction data. 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 — Q3 deals at 225 Rexdale Boulevard and 400 Carlingview Drive support that view.
• Secondary Stock: Older buildings with suboptimal characteristics will continue to face rent reductions and promotional pricing as occupiers prioritize efficiency and modern operations.
• Annual Escalations: Escalations remain embedded in longer-term deals — Q3 renewals at 5621–5631 Finch Avenue East and 100 Ronson Drive carry roughly 3% annual steps — though they 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 – The weighted average asking sale price firmed to $368.98 PSF, suggesting values are finding support even as rents soften:

• Investment Properties: Values have moderated from post-pandemic peaks, but repeat-sale evidence is constructive — 40 Millwick Drive traded roughly 26% above its 2021 purchase price.
• User Properties: Values remain relatively elevated given limited supply of quality owner-occupied buildings. Nine of fourteen Q3 sales were user acquisitions, confirming that strategic owner-occupiers are acting while pricing remains favourable 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 centres 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. The 1,826,701 SF under construction remains concentrated entirely in Scarborough.
• Distribution Centre Demand: With nearly 80% of Central vacancy sitting in 40+ year-old buildings, modern, purpose-built logistics facilities with high ceilings and efficient truck access remain in structural short supply.

Conclusion
The Toronto Central Markets close out the third quarter of 2026 with softer headline fundamentals — vacancy at 4.5% and a third straight quarter of negative absorption — but with clear evidence of conviction from the occupiers who know this market best. Owner-occupiers accounted for nine of fourteen sales over 20,000 SF, and asking sale prices firmed even as rents eased. Vacancy remains below the GTA average of 5.0%, and the limited new supply pipeline in the Central Markets supports a constructive medium-term outlook.

For Investors: Rationalized asset pricing and stabilizing rents for quality product create an attractive entry point for capital deployed strategically, while repeat-sale evidence supports the long-term value thesis.

For Landlords: Maintaining well-maintained, modern facilities is essential. Older product is increasingly competing on incentives and promotional rates — quality assets in prime locations command premium positioning and stable tenancy.

For Owner-Occupiers: Supply constraints and moderate pricing continue to present a favourable window for tactical acquisition — as this quarter’s user buyers demonstrated — 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.

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