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Ghatan Commercial · HomeLife/Cimerman Real Estate Ltd., Brokerage
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Published Q2 2025 · Ghatan Commercial
Executive Summary
Industrial vacancy across the Greater Toronto Area remained elevated in Q2 2025 relative to the historic lows of 2021–2022, though corridor-level divergence is significant. Submarket selection is the primary driver of acquisition risk.
The GTA industrial vacancy rate tracked at approximately 4.8% entering Q2 2025, up from sub-1% levels observed at the peak of the 2021–2022 cycle. This represents a structural normalization rather than a fundamental deterioration in demand. Net absorption remains positive on a trailing twelve-month basis across most 400-series corridors, though new supply completions have outpaced take-up in certain submarkets.
Vacancy is not uniformly distributed. The Highway 7/Highway 50 corridor (Vaughan, Brampton North) continues to absorb new Class A inventory at a stronger pace than the 401/Mississauga corridor, where several large-format completions remain in lease-up. The 427 corridor (Etobicoke, North York) shows the tightest conditions given constrained land supply and limited pipeline.
Third-party logistics operators, e-commerce fulfillment, and light manufacturing continue to drive the majority of new lease activity. Requirements in the 50,000–150,000 sq ft range represent the deepest pool of qualified tenants. Big-box requirements above 300,000 sq ft have softened materially from peak levels. Small-bay industrial (under 10,000 sq ft) remains essentially fully occupied across all submarkets.
Net asking rents stabilized in the $18–$22 per sq ft range across most Class A GTA product, with premium achieved for proximity to Highway 427 and Highway 410. Incentive packages — including free rent and tenant improvement allowances — have returned to the market for the first time since 2019, particularly on larger format vacancy. Effective rents are 8–12% below headline asking on new leases.
For buyers underwriting income-producing industrial assets in Q2 2025, vacancy assumptions in the 5–7% range over a five-year hold period represent a defensible baseline for most GTA submarkets. Assets in the 427 and 400/Vaughan corridors warrant tighter vacancy assumptions given structural supply constraints. New GTA industrial acquisitions should be stress-tested against a rental rate scenario 10% below current market to account for lease rollover risk.
Advisory Services
All market intelligence is provided for context. For asset-specific analysis or acquisition advisory, engage directly.
Data compiled from publicly available sources and proprietary brokerage observations. All figures are approximate and subject to revision. Not investment advice. Kamyar Ghatan, Broker & Branch Manager · HomeLife/Cimerman Real Estate Ltd., Brokerage* · Independently Owned & Operated.