Establishing True Valuations Across Differing Markets 

May 12th, 2023

About a decade ago, the industrial market was a critical yet often overlooked asset class within the economy. Manufacturing, logistics, and transportation firms still provided the same services as they do today, however, much of the world’s attention was focused on urban development, globalization, rising technology and internet startups, and lavish retail malls.

Today, news headlines offer a different story.

Predictions of future commercial real estate loan defaults are rippling through discussions, just as stakeholders brainstorm the future of office, coupled with Ontario’s housing shortage. Technology companies are being rocked by the rise of Artificial Intelligence – both positively and negatively – and economic concerns have seen wave after wave of layoffs. Furthermore, near-shoring and e-commerce have flipped the script on global supply chains and the way consumers shop.

Meanwhile, all of the Parties above have become acutely aware of the importance of industrial assets; whether as a means to receive goods the same day, a key component of their logistics and fulfilment operations, or as a hedge against potential investment risks stemming from traditional and/or alternative asset classes.

The first quarter of 2023 was pegged to be a litmus test after the ongoing interest rate hikes and broader woes of inflation and consumer demand.

We posed the question late last year: “Was the investment volume slump of mid-2022 simply a period of re-adjustment? Or was it a systemic shift in overall investments throughout the economy?” These questions were particularly pertinent given the phenomenal bounce-back in Q4 2022, and are hypotheses we will examine in-depth in coming issues.

However, on top of these concerns was an underlying flirtation with the idea that possibly – just quite possibly – these macro forces may spillover into industrial tenant demand at the same time we see enormous amounts of inventory come online.

How will this play out? The jury is out until further data can confirm either way. What we have seen so far, though, is a modest amount of negative absorption and an uptick in availabilities. Similar to the investment volume recovery, we do expect this slack to be re-absorbed as new businesses expand and take market share. How quickly this occurs is difficult to predict.

So with that said, let’s examine how each of the Greater Toronto Area regions performed in Q1 2023, and where we expect the market to go moving forward.

Key Takeaways from Q1 2023 – Toronto East Markets

  • The availability rate was 0.6% with 0.5% available for lease and 0.2% available for sale;
  • We had no new supply and 2,046,282 SF still under construction;
  • We had 156,935 SF of negative absorption;
  • The weighted average asking net rent was $16.04 with additional rent of $4.14 PSF; and 
  • The weighted average asking sale price was $333.94 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) 

Statistical Summary – GTA East Markets – Q1 2023 

Q1 2023 GTA Industrial Market Overview – Source: Cushman & Wakefield
Q1 2023, Industrial Market Overview – Source: Cushman & Wakefield
So let’s take a closer look at how the different Toronto East Markets performed during Q1 2023…
GTA East Markets (Pickering)
Properties Sold between January 2023 – March 2023, from 20,000 SF plus
Two properties were sold in Pickering in Q1 2023 (totalling 239,545 SF); both were investment sales. The prices achieved were in the range of $239 PSF – $273 PSF, with an average building size of 119,773 SF and an average price of $256 PSF.
GTA East Markets (Pickering)
Properties Leased between January 2023 – March 2023, from 20,000 SF plus
In Q1 2023, 2 properties were leased in Pickering (totalling 81,718 SF). The net rental rates achieved were from $14.50 PSF to $14.95 PSF, with an average building size of 40,859 SF and an average net rental rate of $14.73 PSF. 

827 Brock Road, Pickering
GTA East Markets (Ajax)
Properties Sold between January 2023 – March 2023, from 20,000 SF plus
In Ajax in Q1 2023, just one property was sold with a building size of 342,830 SF and a price of $292 PSF.

777 Bayly Street West, Ajax
GTA East Markets (Ajax)
Properties Leased between January 2023 – March 2023, from 20,000 SF plus
In Ajax in Q1 2023, one property was leased with a building size of 21,489 SF.

675 Harwood Avenue North, Ajax
GTA East Markets (Whitby)
Properties Sold/Leased between January 2023 – March 2023, from 20,000 SF plus
In Whitby in Q1 2023, we saw a single, 2-building investment sale (totalling 130,967 SF); an investment sale. The average building size was 64,483 SF with an average price of $266 PSF. No properties were leased during the same period.
1601-1635 Tricont Avenue
GTA East Markets (Oshawa)
Properties Sold/Leased between January 2023 – March 2023, from 20,000 SF plus
In Oshawa in Q1 2023, we saw one industrial property sale with a building size of 369,935 SF and at a price of $251 PSF. No properties were lease during the same period.

1001 Thornton Road South, Oshawa

Portfolio Sale

This sale was a business transaction between Summit Industrial Income REIT and a joint venture between GIC (90% interest) & Dream Industrial REIT (10% interest), in which the latter parties acquired the former’s business for $5.9 billion. It is our understanding that the real estate assets were a component of the overall acquisition of the business, which included 158 properties broken down as follows: 
Below are assets from that portfolio that lie within the East markets.
What Lies Ahead:
  1. Rental Rates: Currently, rental rates average $16.04 PSF net in the GTA East – almost $1.50 PSF net higher than in Q4 2022 – but still the lowest of all GTA submarkets; where all of the others are already well over $17.00 PSF net. We have already seen quite an increase in rental rates and land values in the East as they catch up to other Regions, however, we expect rents to increase at a slower, decelerating rate. 
  2. Property Values: Property values, like rental rates, are considerably lower relative to the other GTA submarkets at $333.94 PSF (where all other regions are over $420 PSF)… but also increasing as investors and developers act on the opportunities and relative discount. 
  3. Development Opportunities: We are seeing a lot more development than ever before as the GTA East now has more pipeline than the Central and North Regions at 2,046,282 SF under construction. 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


Join our mailing list to receive the latest news and updates from our team.

You have Successfully Subscribed!