Toronto Industrial Market Report

Demand momentum meets easing supply. Toronto’s industrial market began to stabilize in 2025 following a multiyear correction, with vacancy rising just 20 basis points to 3.1 per cent. Conditions are expected to firm further in 2026, with vacancy forecast to edge back below 3 per cent as new supply tapers and absorption improves. On the demand side, increased clarity on interest rates and tariffs is beginning to support business investment and leasing activity, particularly among logistics and distribution users. Meanwhile, reduced construction activity is helping balance supply and demand. That said, risks remain. Toronto’s role in global trade and its exposure to automotive and steel manufacturing leave the market sensitive to tariff headwinds and the upcoming USMCA renegotiation, which could delay a full recovery.