Q1 2024 TORONTO INDUSTRIAL MARKET REPORT

Availability rates also increased from 2.2% to 2.8%. 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. Landlords are still unwilling to concede to changes in the market, leaving it in a state of flux. We are seeing tenants of varying sizes reaching impasses with landlords, leading to delays in transactions. With velocity decreasing, we anticipate that rental rates will fall.

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This is a flux seen for the first time in over a decade, leaving the market in uncertainty of what the next six months to one year will entail in terms of pricing. As such, 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 won’t 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 quite a gap in terms of tenant and landlord expectations.

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