Establishing True Valuations Across Differing Markets 

November 17th, 2023

“In the classic old business cycle, there would be a diminution in sales; it would take a little while for this information to reach corporate headquarters. And there would be an inventory pileup. And then – bam – businesses would react, sometimes violently, by cutting production.”

  • Alan Blinder, Professor of Economics, Princeton University

While we cannot say that economic conditions have impacted businesses quite so deeply or universally across geographic markets, there has undoubtedly been a pullback in space needs by industrial users; specifically warehousers that expanded aggressively during the post-pandemic boom.

Although these shelved plans or sublet spaces may not be large in number, when they do hit the market, they’re at hundreds of thousands of square feet at a time – due simply to the scale of the operations shedding them.

At the same time, we have seen record levels of new deliveries on the mid- to tail-end of the GTA industrial market’s largest-ever construction pipeline.

Looking back just a single year, the Greater Toronto industrial market had only 0.8% of availability across its 800-million-plus of inventory.

Today, that figure has more than doubled to 1.9%; still well below the ‘equilibrium’ rate of approximately 4 percent, but – nonetheless – a significant uptick and reversal of its previous trajectory.

Meanwhile, the bite of borrowing costs has gutted industrial sales volumes and resulted in the dissuasion or deferral of purchasing decisions for stakeholders whose primary strategy lies outside of deploying dry powder. Despite the holding pattern by Central Banks, the damage has already been done; a move deemed necessary to combat accelerating inflation.

Now that both inflation and expectations of future rate hikes seem to be diminished, we can expect more stability in pricing and costs. Stability is good. Flat – or slowly declining – rates means businesses can more accurately forecast their financials and budget for their real estate expenses and investments. It also helps investors regain confidence.

The only question remaining is – going back to the quote above – what the long-term impact of diminished consumer demand may have on the market. Because, up until now, most newsworthy sound bites have revolved around e-commerce or logistics giants letting go of one or two facilities in the region to rightsize their footprints.

However, will these decisions be replicated by small- and medium-sized enterprises? And, with many 5- and 10-year lease renewals coming due in 2024 at significant increases right as we see – for the first time in a long time – a modicum of available space, will rents finally see some downward pressure?

How this plays out remains to be seen. Well-capitalized businesses will continue to make bold moves. Aggressive investors will deploy capital to scoop up income-producing assets. And well-oiled developers will be bringing to market some of the largest, modern, high-clear facilities we’ve ever seen. What we may begin to see, however, are more challenges, more time needed to transact, and a more balanced dynamic for buyers and tenants.

So with that said, let’s examine how each of the Greater Toronto Area regions performed in Q3 2023, and where we expect the market to go moving forward.

Key Takeaways from Q3 2023 – Toronto East Markets

  • The availability rate increased from 0.9% to 2.0%, with 1.5% available for lease and 0.4% available for sale;
  • We had 497,642 SF of new supply and 3,240,085 SF still under construction; 
  • We had negative absorption of 150,781 SF;
  • The weighted average asking net rent was $15.55 PSF, down from $16.46 PSF the previous quarter, with additional rent of $4.80 PSF (an increase from $4.74 PSF); and
  • The weighted average asking sale price remained at $199.99 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 – Q3 2023 

Q3 2023 GTA Industrial Market Overview – Source: Cushman & Wakefield
Q3 2023, Industrial Market Overview – Source: Cushman & Wakefield
So let’s take a closer look at how the different Toronto East Markets performed during Q3 2023…
GTA East Markets 
Properties Sold between July 2023 – September 2023, from 20,000 SF plus
In the GTA East Markets of Pickering, Ajax, Whitby, and Oshawa in Q3 2023, a total of 2 properties were sold (totalling 201,467 SF); 1 was an investment sale. The prices achieved were in the range of $236 PSF – $313 PSF, with an average building size of 100,734 SF and an average price of $274.50 PSF.

1840 & 1842 Clements Road, Pickering.
GTA East Markets (Ajax)
Properties Leased between July 2023 – September 2023, from 20,000 SF plus
In the GTA East Markets of Pickering, Ajax, Whitby, and Oshawa in Q3 2023, 3 properties were leased (totalling 458,749 SF). The average space leased was 152,916 SF at an average net rental rate of $16.50 PSF.

1680 Thornton Road North, Oshawa. Source: Lactalis Canada.

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.” 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.
  1. 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. 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.

  1. Panattoni – 4680 Garrard Road, Whitby 
4680 Garrard Street, Whitby. Source: Panattoni.

Panattoni is developing 2 industrial facilities totalling 770,000 SF at 4680 Garrard Road in Whitby. Building A will offer 645,000 SF of space with a 40’ clear height, 105 truck-level and 8 drive-in doors, while Building B will be 125,000 SF in size with a 36’ clear height and 22 truck-level and 1 drive-in doors. Delivering in late 2023, we expect this project to attract one of the many retailers and 3PLs looking for high-quality space with excellent access to Highway 401 and the labour pool.

  1. Panattoni – 5360 Thickson Road, WhitbyProposed 1.6M SF Development
5360 Thickson Road, Whitby. Source: Panattoni.

Panattoni is proposing the development of a 1.6-million SF industrial facility at 5360 Thickson Road in Whitby. With expected delivery in 2025, the project is slated for 5 buildings with a 40 foot clear height; with available space from 56,000 SF through 616,000 SF as built-to-suit, for sale or lease. 

  1. 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 $15.55 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 increase and we see negative absorption, Tenants are beginning to have options, which may spur more movement and breed competition, putting more downward pressure on rents, specifically in 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 have the lowest weighted-average asking sale price in the GTA at $199.99 PSF. Looking at the Q3 figures, the weighted average sold price was $247.91 PSF. 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 a lot more development than ever before as the GTA East now has more pipeline than the Central and North Regions (almost more than the two combined) at 3,240,085 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


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