GTA industrial is not one market correcting — it is two markets diverging, and the blended rent print hides a modern-product floor that is already in

Interest rates

A tenth consecutive quarterly rent decline, but a decelerating one: brokers put the GTA average net asking rent between $16.30 (Colliers, -6.2% year-over-year) and $16.52 (JLL), with Cushman & Wakefield at a three-year low of $16.36 and noting quarterly softening has slowed to 1.4% since Q2 2025 from 1.8% over the prior four quarters. The decline is not evenly distributed. Avison Young's clear-height breakdown has 30-foot-plus space commanding $17.03 psf against $15.23 for sub-18-foot product, and Cushman & Wakefield states plainly that rent softening 'has been largely concentrated in older buildings with lower ceiling heights.' The brokers disagree on concessions: JLL reports free rent persisting and expanding to include racking allowances, while Colliers reports reduced transaction incentives lifting effective net rents — a live dispute over whether the reset is finishing or hiding.

Vacancy

The headline spread is definitional, not contradictory: Cushman & Wakefield reports overall vacancy of 5.1% — an 11-year high on its broad universe — with JLL at 5.0% and CBRE's availability rate steady at 5.0%, while Avison Young's tighter vacancy measure reads 3.0% (availability 4.4%) and Colliers' 2.5% (availability 4.5%). What all six agree on is direction: the rate has held within a narrow band for roughly four quarters rather than climbing. Submarket moves diverged — Cushman & Wakefield has GTA East improving 70 bps to 6.5% on a doubling of leasing, GTA North up 50 bps to 4.3% on new supply, West and Central roughly flat. One warning light: CBRE reports sublease space rising 796,000 sf quarter-over-quarter to 6.0M sf, its highest since Q2 2025.

Demand

New leasing surged to an eight-year high of 8.7M sf on Cushman & Wakefield's count, 970,000 sf ahead of Q4 2025, with nine large-format deals of 200,000 sf or more — already a third of 2025's full-year total. The anchor remains small- and mid-bay: deals under 50,000 sf were 51.5% of transactions, with another 29.2% between 20,000 and 50,000 sf. Activity concentrated in GTA West (5.0M sf, 58% of the market, seven of the nine large-format deals). Net absorption was positive on every broker's count — a seventh straight quarter on Cushman & Wakefield's measure — spanning 903,000 sf (C&W) to 4.5M sf (Avison Young) on coverage differences. The quarter's marquee leases were logistics-led: Shein's 535,100 sf at 400 Anatolian Drive in Vaughan, Geodis' 470,000 sf at the recently completed 537 Kingston Road East in Ajax, and DP World's 362,248 sf at 587 Avonhead Road in Mississauga, with Amazon and Ontario Power Generation renewing in the East.

Supply

The pipeline kept contracting — and re-composed toward committed, modern product. Under-construction estimates span 8.0M sf (CBRE, its lowest since 2018) to 10.5M sf (Avison Young: 24 buildings, down from 73 buildings and 17.9M sf three years ago), with Colliers at 10.1M sf and JLL near 8.9M sf. Roughly 6.0M sf is scheduled to deliver by year-end 2026 against a 13.4M sf annual average over the prior three years, and 75.6% of those 2026 deliveries remain available (Cushman & Wakefield). JLL counts pre-committed construction rising to 33.9%, and CBRE reports design-builds now 43% of the pipeline versus 5% a year ago. Construction is overwhelmingly a West story — roughly 70% of the pipeline per Colliers (up from ~50% a year earlier), 75% per Avison Young — and Colliers notes developers have begun restarting previously shelved projects.

Cap rates

Colliers' national read: industrial cap rates 'have not changed significantly over the past year,' with the Bank of Canada's target rate unchanged since October 2025 and tariff impacts muted under CUSMA. Transaction activity recovered off its lows — Colliers counts 172 sales, a four-year high, though total value rose only 3.7% versus Q4 2025 as condo and strata deals kept pricing above $300 psf; Avison Young has dollar volume up 16% quarter-over-quarter and 10% year-over-year. The quarter's marquee trades: Cadillac Fairview's acquisition of a 546,108 sf Mississauga portfolio from Carttera for $195.2M ($358 psf), Crombie's $115.4M purchase of 100 Nordeagle Avenue in Whitby (~$275 psf), and the $134.7M sale of 2777 Langstaff Road in Vaughan.

REIT exposure

REIT capital was on both sides of the tape this quarter. Crombie REIT bought 100 Nordeagle Avenue in Whitby from Sobeys Capital for $115.4M (~$275 psf); Dream Industrial REIT acquired 1100 Thornton Road South for $32.5M (roughly $322 psf on Avison Young's figures; brokers' reported psf for the deal differs); and Pure Industrial monetized 2777 Langstaff Road for $134.7M while signing Geodis as tenant at its newly completed 537 Kingston Road East. The positioning question the quarter poses is product age: owners weighted to modern, high-clear big-box and mid-bay sit in the segment commanding $17.03 psf and drawing the mega-deals, while owners of older, sub-18-foot stock hold the product where brokers say the rent softening is concentrated.