September 25th, 2026
Every square foot under construction in the Central Markets is in Scarborough, and most of it sits on one corridor
Scarborough is the only Central submarket where cranes are up at scale. Four projects are under construction, and three of them line Steeles Avenue East along the Markham border. They bring 905-style logistics formats to a City of Toronto address, where development charges are limited to education levies of about $1.17 PSF. This week we look at what is being built, who is building it, and what it means for owners and occupiers in Scarborough’s older industrial parks.
- Investment led the quarter: Seven properties over 20,000 SF sold, totalling 618,547 SF, at $110 to $401 PSF with an average of $310 PSF. Five were investment sales and two were user sales.
- A new benchmark: GWL Realty Advisors acquired 2750 Morningside Avenue (333,638 SF) from Oxford Properties for $112.35 million, or $337 PSF, at a 5.0% cap rate.
- Leasing was selective: Three deals over 20,000 SF totalled 104,816 SF, at net rents of $12.75 to $15.50 PSF and an average of $14.30 PSF.
| Project | Size (SF) | Developer | Clear | Delivery | Highlights |
|---|---|---|---|---|---|
| Steeles Connect Industrial Campus | 700,000+ | Olea/ BMO | 40′ | Phased | Two buildings on 30.8 ac between Victoria Park & Pharmacy |
| Scarborough Powercore (5705 & 5755 Steeles Ave E) |
498,313 | Carttera | 40′ | Q2 2027 | Two speculative buildings |
| 5951 Steeles Avenue East | 383,324 | Pattison Developments | 40′ | TBC | Speculative construction of a single building |
| 1845 Birchmount Road | 268,598 | Secure Capital | 36′ | Q4 2026 | Divisible from 86,425 sf, 32 truck-level doors; 3,000A; Zero Carbon Ready; direct Hwy 401 access |
What the Pipeline Tells Us
- Steeles Avenue East is becoming a logistics corridor. Three projects totalling about 1.58 million SF sit within a few kilometres of one another near Highway 404. That creates a modern distribution cluster on the city’s northern edge, with Toronto’s labour pool and cost advantages.
- Power is the new differentiator. Projects are offering 3,000 to 6,000 amps. That capacity matters for fleet electrification, cold storage, automation and advanced manufacturing, and most older Scarborough buildings cannot match it.
- 1845 Birchmount is a textbook infill play. Secure Capital bought an existing 161,000 SF warehouse on the site in 2024 for $26.5 million, or $165 PSF, and is replacing it with a modern 36′ building. The land was worth more than the building.
- Flexible demising widens the tenant pool. With units starting in the 40,000 to 48,000 SF range, these projects are not only for big-box users. Mid-size occupiers in older Scarborough buildings now have a modern alternative.
What the Pipeline Tells Us
- For Investors: The 5.0% cap rate at 2750 Morningside sets the benchmark for stabilized, modern Scarborough product. Well-leased new buildings on Steeles are likely future institutional targets.
- For Developers: Older, low-clear buildings on large lots near Highway 401 and 404 are the next generation of infill sites. Trades well below replacement cost are worth watching as land plays.
- For Landlords: New 36′ to 40′ product with heavy power will compete directly for mid-size tenants in 2026 and 2027. Owners of older stock should plan capital upgrades, or price to their building’s functionality.
- For Tenants: Choice in Scarborough will be at a cyclical high through 2027. Occupiers with lease expiries in the next 24 months are well placed to compare new-build options against renewals.
Coming Up
Next week we head west to Etobicoke, the most active leasing submarket in the Central Markets, where new-generation product is being absorbed and a major new design-build site has just come to market. A lot of transactions are being done off the market.
For a confidential consultation or a complimentary opinion of value of your property, please reach out to our team.
Until next week…
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.
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
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.
Goran Brelih, SIOR
Executive Vice President, Broker
Cushman & Wakefield ULC, Brokerage.
www.cushmanwakefield.com
Office: 416-756-5456
Mobile: 416-458-4264
Mail: goran.brelih@cushwake.com
Website: www.goranbrelih.com
