Establishing True Valuations Across Differing Markets 

February 2nd, 2024

“Constraints drive innovation and force focus. Instead of trying to remove them, use them to your advantage.”

  • 37Signals

As we reflect and follow along the broad narratives surrounding the industrial real estate market, it’s easy to pinpoint the various constraints, as we will outline below in a somewhat linear but non-exhaustive manner.

Thread #1: Economic shutdowns created a boom in logistics and trucking thanks to e-commerce sales, resulting in higher absorption and fewer availabilities of industrial space.

Thread #2: Economic shutdowns created a labour shortage, resulting in many issues; one of which saw manufacturers generally producing less raw, fabricated, and processed materials.

Thread #3: Investors moved to bring new industrial properties to market, however, delayed permitting and approvals, along with difficulties in securing materials and labour, exacerbated the supply-side shock, creating more competition amongst tenants for space – and amongst developers for suitable lands.

Thread #4: Rents and values skyrocket in the short- and medium-term as those who need product now have to pay a premium to secure it.

Thread #5: Strong demand, low interest rates, and explosive growth in valuations and business sales fuel an expansion of development pipeline and companies’ needs for warehousing.

Thread #6: Construction begins en-masse. Pre-leasing deals are cut 12 to 24 months out. Many occupiers wait for deliveries as the economy rages on.

Thread #7: Input costs rise. First energy, then materials, then wages. Operating costs balloon, margins shrink. Cost-cutting begins entering the conversation. Contracts are lost. Those who were over-extended begin to feel the squeeze.

Thread #8: Fears of inflation spiraling out of control begin the ascent of interest rates and signal the beginning of tighter monetary policy.

Thread #9: Investment sales plummet. Tenants renewing at double or triple their previous rates are swallowing a bitter pill, but options are still extremely limited. Creative solutions are employed.

Thread #10: Deals become harder to complete. Financing becomes more challenging. Growth plans are put on hold. Layoffs and downsizing become more prevalent. Outlooks dim.

Thread #11: A flood of new deliveries coupled with negative absorption bring more available space to market. Rents and values stabilize; softening further for older or obsolete product. The market moves towards a new equilibrium. Changing expectations have reached the majority. Opportunity still abounds, but it is less opportunistic.

>You Are Here<.

While you, dear Reader, may read the above and think all is lost, nothing could be further from the truth.

As mentioned, opportunity does still abound, however, it is more strategic and dependent on the preparation of the Parties involved. Now that interest rates have likely stabilized – and rents and values have followed suit – we begin to see predictability. Now that vacancies have seen an uptick, we see options. And as things take longer to come to fruition, we see more collaboration and purposefulness in transactions.

The fact remains that rents have more than tripled in the past decade and that we are at less than half the purported ‘healthy market availability rate.’ However, only the grizzled veterans may remember operating in less-than-ideal economic conditions and with interest rates above 4%. Population growth remains strong, and Ontario is making a massive push towards manufacturing independence, sustainability, and innovation.

The constraints are evident. Yet the future is bright.

With that said, let’s examine how each of the Greater Toronto Area regions performed in Q4 2023, and where we expect the market to go moving forward.

Key Takeaways from Q4 2023 – Toronto East Markets

  • The availability rate increased from 2.0% to 2.8%, with 2.4% available for lease and 0.4% available for sale;
  • We had 1,440,087 SF of new supply and 3,846,283SF still under construction; 
  • We had 496,564 of absorption; and
  • The weighted average asking net rent was $16.41 PSF, up from $15.55 PSF the previous quarter, with additional rent of $4.48 PSF (a decrease from $4.80 PSF).

Why are the GTA East Markets in such demand?

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…

“How much is my property really worth?” 

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: 

  • the age and size of the building, 
  • lot size, 
  • ceiling height, 
  • office component, 
  • parking, 
  • trucking access, 
  • truck parking if available, etc….
In order to get to the truth, we need to dig a bit deeper…

This week we are covering the Toronto-East Markets
(Pickering, Ajax, Whitby, Oshawa & Clarington) 

Statistical Summary – GTA East Markets – Q4 2023 

Q4 2023 GTA Industrial Market Overview – Source: Cushman & Wakefield
Q4 2023, Industrial Market Overview – Source: Cushman & Wakefield
So let’s take a closer look at how the different Toronto East Markets performed during Q4 2023…
GTA East Markets 
Properties Sold between October 2023 – December 2023, from 20,000 SF plus
In the GTA East submarkets (of Pickering, Ajax, Whitby, and Oshawa) in Q4 2023, 4 properties were sold (totalling 240,947 SF); three were investment sales and one was a user sale. The prices achieved were in the range of $180 PSF – $285 PSF, with an average building size of 60,237 SF and an average price of $244 PSF.

660 Monarch Avenue, Ajax.
GTA East Markets
Properties Leased between October 2023 – December 2023, from 20,000 SF plus
In the GTA East submarkets (of Pickering, Ajax, Whitby, and Oshawa) in Q4 2023, 6 properties were leased (totalling 545,177 SF). The net rental rates achieved were from $12.95 PSF to $19.50 PSF, with an average building size of 90,863 SF and an average net rental rate of $15.33 PSF.

575 Harwood Avenue North, Ajax.

Major Development Projects Ongoing in GTA East Markets

1. Pure Industrial REIT – Lakeridge Logistics Centre

Lakeridge Logistics Centre, Ajax. Source: Avison Young.

Pure Industrial REIT is developing the Lakeridge Logistics Centre at 537 Kingston Road East in Ajax. Delivering in Q4 2024, the site will support up to 1.2 million square feet of “ultra-modern Class-A zero carbon industrial space” with demisable options.

The behemoth warehouse will have a clear height of 40 feet with 207 truck-level and 4 drive-in doors, as well as approximately 250 trailer parking spaces. Fronting on Highway 401, and less than a 10-minute drive from Highway 407 and the Ajax GO Station, the property offers excellent connectivity. Avison Young is marketing the asset for lease.

2. Nicola Wealth/First Gulf – Hopkins Logistics Hub

901 Hopkins Street, Whitby. Source: C&W.

Nicola Wealth and First Gulf are bringing to market the Hopkins Logistics Hub in Whitby, Ontario. With occupancy slated for July 2024, the proposed warehouse will be 293,251 SF in size, situated on 22.21 acres (13.5 developable acres).

The property will have a clear height of 40 feet with 30 truck-level and 2 drive-in doors and 21 trailer parking stalls. Located in proximity to Highway 401 and the Whitby GO Station, Hopkins Logistics Hub will provide access to major transportation routes, the labour pool, and consumers throughout the GTA. Cushman and Wakefield is leasing the asset.

3. Crestpoint – Ajax Industrial On the Park – 221 Church Street S, Ajax

Ajax Industrial on the Park. Source: Crestpoint.

Crestpoint Real Estate Investments is constructing a three-property industrial park totalling approximately 1.1-million square feet and surrounded by 82 acres of natural green space.

Building A will be 698,301 square feet with 118 truck-level and 2 drive-in doors, as well as 96 trailer parking spaces. Buildings B and C will be 198,946 square feet and 195,853 square feet, respectively, with 53 truck-level and 2 drive-in doors each.

All assets will have 40 foot clear heights with 60 foot staging bays, and will target LEED Gold and Zero Carbon Ready building design certifications. CBRE is marketing the project with target delivery of Q3 2024.

4. CapLink – 745-815 Highway 7, Pickering – Proposed 1MSF FGF Brands Campus

745-815 Highway 7, Pickering. Source: UrbanToronto.

FGF Brands, with Caplink as the partner developer, is constructing the “FGF Food Manufacturing Campus” (also known as the “Wonderbrands Innovation Business Park”) at 745-815 Highway 7 in Pickering, ON.

The six-building industrial and office development sits on 151 acres and will total over 1-million square feet upon completion; the largest food manufacturing campus in the GTA and one of the most cutting-edge in terms of technology with robotics, integrated AI systems, machine learning, and supply chain innovations.

The park will host approximately 3,000 new employees and will potentially see Wonder Bread, D’Italiano, Country Harvest, Casa Mendosa, Gadoua, Stonefire, and other FGF-brand products manufactured and distributed through its doors.

5. Panattoni – 1565 Thornton Rd N, Oshawa – Proposed 500,000 SF Development

1565 Thornton Road N, Oshawa. Source: Panattoni.
Pannatoni is developing a 499,665 square-foot warehouse at 1565 Thornton Road North in Oshawa. The Class A facility will have a 40 foot clear height with 104 truck-level and 8 drive-in doors, alongside 104 trailer parking spots. Delivering in Q4 2024, the site is easily accessible through Highways 401, 407, 412, and 418. 
6. Panattoni – 5360 Thickson Road, WhitbyProposed 1.MSF Development
5360 Thickson Road, Whitby. Source: Panattoni.

Panattoni is proposing the development of a 1.6-million SF industrial campus at 5360 Thickson Road in Whitby. With expected delivery in 2025, and available for sale or for lease, the park will comprise of 5 buildings with 40 foot clear heights and ample trailer and car parking stalls.

  • Building A will be 436,650 SF with 60 truck-level and 4 drive-in doors.
  • Building B will be 616,268 SF with 106 truck-level and 8 drive-in doors.
  • Building C will be 385,770 SF with 52 truck-level and 4 drive-in doors
  • Building D will be 75,865 SF with 11 truck-level and 2 drive-in doors.
  • Building E will be 56,886 SF with 12 truck-level and 2 drive-in doors.

7. Fieldgate/First Gulf – Brooklin Gate Business Park, Whitby

Brooklin Business Park, Whitby. Source: Colliers.

Fieldgate Commercial Properties and First Gulf are constructing the Brooklin Gate Business Park in Whitby, Ontario. With occupancy expected in Q4 2024, the 311,680 square foot warehouse offers a 40 foot clear height, and 52 truck-level and 2 drive-in doors. Colliers is marketing the asset for lease.

What Lies Ahead:

  1. Rental Rates: The Toronto-East markets now have a weighted average rental rate of $16.41 PSF net, the lowest across the GTA regions. That said, rents across the GTA have levelled off and, in some cases, we have seen rate reductions. We expect this to continue. Likewise, annual rental escalations have plateaued and may decrease. Leasing is slower and it is taking longer to complete a deal as Tenants have become more cautious. Finally, as vacancies are increasing (see the jump from 2% to 2.8% this last quarter) alongside a flood of new deliveries, Tenants have more options. These dynamics are putting further downward pressure on rents, specifically on Class B or C industrial buildings. Overall, we are heading towards a more balanced market between Landlords and Tenants. 
  2. Property Values: The Toronto-East markets typically have the lowest weighted-average asking sale price in the GTA. As rental rates plateau, and as we see rents decrease in certain properties, coupled with upward pressure on cap rates, we are going to see a decrease in the value of investment properties. For users, even though the Buyer pool may have thinned due to increased interest rates, we expect to see values remain elevated as supply is extremely limited. Finally, due to the aforementioned interest rates, the value of development land has decreased.
  3. Development Opportunities: We are seeing more development than ever before as the GTA East has a larger construction pipeline than the Central and North Regions combined at 3,846,283 SF. As featured above, big players such as Panattoni, Carttera, Crestpoint, Blackwood, PIRET, etc. (to name a few) are all involved… and it will continue. 

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.

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

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, or visit

Connect with Me Here! – Goran Brelih’s Linkedin Profile:

Goran Brelih, SIOR

Executive Vice President, Broker
Cushman & Wakefield ULC, Brokerage.

Office: 416-756-5456
Mobile: 416-458-4264


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