GTA Industrial Market Report - Q1 2026

The Turn Begins

Two weeks ago I represented a buyer for a 20,000 SF building in Mississauga that had been previously sitting on the market for over a year.

Before my client and I submitted the offer, the building had been tied up by another buyer. As soon as that buyer dropped the deal, we moved forward with an offer only to find that 2 other groups had also submitted alongside us.

A property that had gone a year without much traction suddenly drew a competitive bidding process. My group’s offer was ultimately selected, but after aggressive competition.

That moment captures where the GTA industrial market is right now: sentiment has shifted, and both Colliers' Q1 data and what I'm seeing on the ground back it up.

The Shift in the Sales Market

The Mississauga deal I mentioned above isn't isolated. In conversations with listing brokers across the 15K–25K sq. ft. segment, nearly every functional asset on the market has seen an uptick: some were tied up in the last few weeks, others drawing multiple offers after long quiet stretches.

• GTA-wide, Colliers tracked a four-year high in transaction count (172 deals), with average pricing now hovering between $300 PSF - $333 for freestanding, and $498 for condo/strata

• In the freestand segment, transactions are up 58% compared to this time last year (41 vs. 26) and dollar volume has climbed roughly 10% as well.

• Pricing is more measured than activity - average price per sq. ft. is up 4–7%, but the median is flat at $365/SF compared to last year. In other words, liquidity has returned, but pricing is still rigid

• Average deal size is down ~30%. This is largely a result of private capital and owner-occupiers coming back to the market in droves, while larger institutional players continue to be more selective. Cadillac Fairview's $195.2M Mississauga portfolio acquisition was an exception this quarter.

Leasing: A new market cycle is beginning

For the first time since Q2 2022, GTA availability declined - albeit modestly, by 10 basis points to 4.6%, but it's a meaningful inflection after nearly four years of steady increases.

Net absorption hit 2.7M sq. ft., which is the third-highest quarterly total in 4 years, with the West and East submarkets driving multiple 400,000+ SF leases.

Notable Q1 leases include Geodis at 470,000 SF in Ajax and TJX at 270,000 SF in Brampton.

Rents tell a more measured story. Asking net rents are at $16.30 per sq. ft., which is down 6.2% year-over-year and now in their tenth consecutive quarterly decline, driven by an influx of second-generation space coming available.

Tenant incentives are no longer as frothy:

Landlords are partially offsetting the asking rate drop by trimming concessions, so effective rents are holding up better than the asking number suggests.

Two things that are worth watching:

• Sublease availability rebounded from 4.8M SF to 6.2M SF after three quarters of decline, as several large blocks hit the market.

• The construction pipeline is heavily West-weighted right now. 10.1M SF is underway GTA-wide, with almost 70% of it concentrated in the West (vs. ~50% a year ago).

Could this create a potential supply imbalance down the line as those deliveries land? Likely, but time will tell how demand balances that force out.

Looking Ahead

I expect deal count to stay strong through Q2 as small-bay and owner-occupier demand holds firm. The bigger questions are:

a. Whether institutional capital will re-engage and

b. How the West's construction pipeline will land as deliveries arrive through 2026

If you're weighing an acquisition, disposition, or repositioning, or just want to compare notes on a specific submarket, I'd love to chat.

Until next time.