Article
What 2026 Might Bring for Toronto’s Industrial Market
March 3, 2026 4 Minute Read
The Greater Toronto Area industrial real estate market saw availability tick upward in the first half of 2025, then decrease slightly to end the year at 5.0%. The increase was driven in large part by the delivery of 11.1 million sq. ft. of new industrial supply throughout the year, with another 7.7 million sq. ft. under construction as of Q4 2025.
We checked in with CBRE Toronto West Managing Director Adrian Lee to see what he’s got his eye on in the GTA industrial market this year.
Steady As She Goes
As we headed into 2025, confidence was up. Interest rates were going down to the point that there was positive business sentiment behind it. We were expecting leasing and renewals to be strong. Then the Trump tariffs hit and became a rollercoaster. By the second quarter we saw a 60 basis points (bps) increase in availability that we still haven’t fully recovered from.
At the outset of 2026 we’re in a way better place than we were a year ago. Momentum is there and deals are starting to happen; big ones and small or mid-sized deals, too. Barring anything crazy happening economically, I think we’re in a stronger position heading into 2026.
As one of our top industrial brokers Fraser McKenna puts it, It’s the return of emotional confidence to the market. People seem much more invested in it now. Overall, it’s steady as she goes.
Deals Are About the Details
GTA industrial demand is chipping away at the oversupply of new large bay space. Few developments are being built. We finished 2025 with 11.1 million sq. ft. of new supply, versus 14.3 million sq. ft. in 2024 and 17.0 million sq. ft. in 2023. It means there is less product in the marketplace and strong demand but fewer options. So by mid-2026 our brokers expect industrial vacancy to go back to a more typical level and we’ll see a far more normalized market.
Demand is not only coming from the typical third-party logistics and manufacturing firms; it’s coming from all sectors. It’s a sign that the fundamentals of the GTA industrial market are very strong. Deals are getting more expensive and complicated to do and it’s taking longer to get them done but demand is still there and it’s quite healthy.
There are 19 distinct industrial submarkets in the GTA, including Milton, Brampton or Mississauga. So it’s tough to paint them all with one broad brush. They all operate differently. You could have two buildings on the same street and one is asking $15 per square foot (psf) net rent and two blocks away a similar building might be seeking $19 psf net rent. It might just boil down to, say, how long the landlord has owned that land. So we need to understand the specific details, the motivation of landlords and their perspective in order to represent tenants properly.
Opportunity Abounds for Renewals
We are seeing a tremendous amount of opportunity for renewals. Landlords are offering all kinds of incentives to get deals done. The GTA market will see a substantial number of industrial leases expiring in the next three years, according to our local research. So there will be plenty of options versus how things were moving so quickly in the depths of the pandemic.
Today it’s a different discussion, which gives our brokers the chance to leverage their experience and market intelligence to develop a holistic strategy for clients and deliver real value for clients.
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