Q3 2026 Insight, Toronto-East Markets

As we move through the third quarter of 2026, the GTA East Markets — comprising Ajax, Pickering, Whitby, and Oshawa — continue to work through the wave of new-generation supply delivered over the past two years. Unlike the Toronto Central Markets, where vacancy is concentrated in aging stock, the East is a lease-up story: more than half of the region’s vacant space sits in buildings less than five years old. The encouraging news this quarter is that those buildings are leasing. Absorption was positive for another quarter, vacancy edged lower, and one of the GTA’s five largest new leases of the quarter was signed in Whitby.

In Q3 2026, the GTA East Markets recorded a total inventory of 57,648,758 SF across 581 buildings. The overall vacancy rate eased to 6.1%, down from 6.2% in Q2 2026 and well below the 7.6% recorded a year ago, with lease availability at 6.0% (including 0.7% sublease) and sale availability effectively nil at 0.0%. The quarter posted positive absorption of 72,472 SF, bringing the year-to-date figure to a positive 1,036,479 SF — one of the stronger absorption performances across the GTA regions. Leasing activity totalled 279,059 SF for the quarter, lifting year-to-date volume to 1,796,772 SF.

The weighted average asking net rent stood at $14.71 PSF, with additional rent of $3.93 PSF — a meaningful discount to the GTA average of $15.90 PSF. The weighted average asking sale price was $385.43 PSF, a figure driven primarily by industrial condominium listings. Investment activity over 20,000 SF was measured this quarter, with two closed transactions totalling 91,091 SF and $22,275,000, following an exceptionally active close to Q2 that saw several large-format assets change hands.

Key Takeaways from Q3 2026 – Toronto East Market

• The overall vacancy rate eased to 6.1% from 6.2% in Q2 2026 (7.6% a year ago), with lease availability at 6.0% (including 0.7% sublease) and sale availability at 0.0%;
• There was 576,330 SF under construction, concentrated in Whitby (385,866 SF) and Pickering (190,464 SF), with 396,762 SF of new supply delivered year-to-date;
• The quarter recorded positive absorption of 72,472 SF, bringing year-to-date absorption to 1,036,479 SF;
• Leasing activity totalled 279,059 SF, bringing year-to-date 2026 leasing to 1,796,772 SF;
• The weighted average asking net rent was $14.71 PSF, with additional rent of $3.93 PSF;
• The weighted average asking sale price was $385.43 PSF, based primarily on industrial condominium listings;
• Two sales over 20,000 SF closed in the quarter, totalling 91,091 SF and $22,275,000, while Durham Pallet’s 126,498 SF commitment at 230 Water Street in Whitby ranked among the five largest new leases in the GTA this quarter.

Navigating Q3 2026: Market Dynamics and Forward Outlook

Across the broader GTA, new leasing activity moderated in Q3 2026 to a level broadly consistent with the 10-year third-quarter average of 6.2 MSF, while overall GTA vacancy ticked up to 5.0%. The GTA East moved against that trend, with vacancy edging lower on the strength of new-building lease-up. Several key themes are shaping activity in the East:

Leasing Momentum: The quarter’s headline transaction was Durham Pallet’s 126,498 SF, 12-year commitment at 230 Water Street, Building B in Whitby — a 40′ clear facility completed in December 2024 that had been on the market for more than three years. In Pickering, Acme Freight Sales leased 45,812 SF at the newly completed 1575 Clements Road, and in Ajax, 41,886 SF was leased at 453–463 Fairall Street after 531 days on the market. Whitby led the region with 148,364 SF of leasing activity, and its vacancy fell from 9.0% to 8.1%.

Rental Rates and Incentives: Achieved rates for new-generation, 40′ clear product were in the $14.95 to $15.75 PSF net range, but landlords are clearly buying occupancy with incentives — 5 to 8 months of net free rent, fixturing periods, and tenant improvement allowances of up to $7.00 PSF were all in evidence this quarter. Rents vary widely across the region: Pickering ($15.36 PSF) and Ajax ($16.08 PSF) command the highest asking rents, while Oshawa, at $11.13 PSF, remains the GTA East’s value market despite having the region’s tightest vacancy at 1.5%.

Investment Activity: Two properties over 20,000 SF closed in Q3, totalling 91,091 SF and $22,275,000, at an average of $245 PSF. Both were functional, older-generation assets: 1125 Burns Street East in Whitby (70,091 SF) sold to an owner-occupier for $17,250,000 ($246 PSF), and 171 Fuller Road in Ajax (21,000 SF) traded as an investment for $5,025,000 ($239 PSF) at a reported 5.0% cap rate. The quieter quarter follows a very active close to Q2, when Pontegadea’s $187 million acquisition of the newly built 1680 Thornton Road North in Oshawa and the $53.4 million sale of 1702 Tricont Avenue in Whitby signalled strong institutional and private appetite for Durham logistics assets.

GTA East Markets -Ajax

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

In Ajax in Q3 2026, 1 property was sold being 171 Fuller Road, a 21,000 sf freestanding building on 2.68 acres with substantial yard space, traded for $5,025,000 ($239 PSF) as an investment sale at a reported 5.0% cap rate.

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

* asking rental rate

In Ajax in Q3 2026, 1 property was leased (totalling 41,886 SF) at an asking net rental rate of $15.00 PSF*. The 18′ clear, 1970-built facility on 2.09 acres leased after 531 days on the market. Ajax continues to carry the highest vacancy rate in the GTA East at 10.2%.

453-463 Fairall Street

GTA East Markets- Pickering

Properties Sold in Q3 2026 from 20,000 SF plus
No properties over 20,000 SF were sold in Pickering in Q3 2026

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

In Pickering in Q3 2026, 1 property was leased (totalling 45,812 SF) at a net rental rate of $15.75 PSF.  Acme Freight Sales committed to a 65-month term at 1575 Clements Road, a newly completed 40′ clear distribution facility.

GTA East Markets -Whitby

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

In Whitby in Q3 2026, 1 property was sold: 1125 Burns Street East, a 70,091 SF single-tenant warehouse and distribution building on 3.62 acres, traded for $17,250,000 ($246 PSF) as a user sale.

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

In Whitby in Q3 2026, 1 property was leased (totalling 126,498 SF) at a net rental rate of $14.95 PSF. Durham Pallet’s 12-year commitment at 230 Water Street, Building B — a 40′ clear facility completed in December 2024 — was among the five largest new leases in the GTA this quarter.

GTA East Markets -Oshawa 

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

Properties Leased in Q3 2026 from 20,000 SF plus
No properties over 20,000 SF were leased in Oshawa in Q3 2026

Oshawa remains the tightest industrial market in the GTA East, with vacancy of just 1.5% and the region’s lowest average asking net rent at $11.13 PSF. With limited availability, transaction volume over 20,000 SF was constrained this quarter rather than demand.

What Lies Ahead: Market Outlook

1. Rental Rates – Rental rates in the GTA East have repriced to a level that is clearly attracting occupiers, but landlords of new-generation buildings are still competing on incentives. We anticipate:

• Quality Assets: Modern 36’–40′ clear facilities will stabilize first — Q3 achieved rates of $14.95 to $15.75 PSF net for this cohort set the current benchmark.
• Incentives: Free rent, fixturing, and tenant improvement allowances will remain the key negotiating levers until the remaining new-build vacancy is absorbed.
• Annual Escalations: Escalations of 2.5% to 2.75% per year achieved on Q3 deals indicate that landlords are protecting long-term value even while offering upfront concessions.
• Market Balance: The East remains a tenant-favourable market overall, though tightening conditions in Oshawa and Whitby point toward greater balance ahead.

2. Property Values – Investment demand for Durham assets remains firmly established:

• Investment Properties: Large institutional and foreign trades of new-generation assets in Q2 have set strong pricing benchmarks, while smaller older-generation assets are trading in the $240 PSF range.
• User Properties: With sale availability effectively at zero, owner-occupiers face very limited choice — the user acquisition of 1125 Burns Street East illustrates the competition for available freestanding buildings.
• Development Land: Patient capital continues to target Durham employment lands along the Highway 401 and 407 corridors for long-term value.

3. Development Opportunities – The GTA East remains one of the GTA’s most active development regions:

• Pipeline Discipline: With 576,330 SF under construction across Whitby and Pickering, the near-term pipeline is measured relative to the region’s 3.5 MSF of vacant space, supporting continued absorption of existing availability.
• Infrastructure Advantage: Highway 407 East and the 412/418 links continue to unlock employment lands across Whitby, Oshawa, and north Pickering.
• Distribution Centre Demand: Modern, purpose-built logistics facilities continue to win the region’s largest commitments, as the 230 Water Street and 1575 Clements Road leases demonstrate.

Conclusion

The GTA East Markets enter the final quarter of 2026 on a constructive footing. Vacancy has fallen 150 basis points over the past year, absorption remains positive, and the new-generation buildings delivered over the past two years are now finding tenants. While investment volume was light in Q3, the large trades that closed at the end of Q2 confirm that institutional and private capital view Durham as a long-term logistics growth market.

For Investors: Durham offers yield and growth potential at a discount to the established 905 nodes, with a moderating supply pipeline supporting a recovery in occupancy.

For Landlords: Well-structured incentive packages are winning commitments on new space. Competitive, flexible terms remain essential to secure quality tenants in a market still absorbing new supply.

For Owner-Occupiers: Freestanding buildings for sale are extremely scarce. Owner-occupiers should be prepared to act quickly when suitable opportunities arise, often before they reach the open market.

For Developers: Employment lands with direct highway access remain strategically valuable as Durham’s population and infrastructure continue to grow.
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