Q1 2024 Toronto Industrial Market Report

In the first quarter of 2024, industrial market vacancy rates increased from 1.0 percent to 1.4 percent, and are projected to continue rising over the following quarters in the GTA. Availability rates also increased from 2.2 percent to 2.8 percent. We are seeing escalators over terms decreasing to the sub-4% levels now.

With vacancy rates continuing to increase, the market is in a state of change with landlords still unwilling to concede to changes in the market. Tenants of varying sizes are reaching impasses with landlords, leading to delays in transactions. With velocity decreasing, rental rates may deaccelerate or even slightly decline.

The current market uncertainty is the first in over a decade, leaving the market in uncertainty of what the next six months to one year will entail in terms of pricing, and we are expecting to see many discrepancies in pricing. Landlords are reorganizing their portfolios which are at an all-time high, which may mean they may not immediately feel the pains the current market could cause. We do not anticipate seeing many transactions happening over the next six months as there is a gap in terms of tenant and landlord expectations.

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