Market adjusts further amid continued softening in fundamentals

Market conditions weakened further in Q3 2025, with vacancy and rent trends indicating that Toronto’s industrial sector is still navigating a period of correction rather than stabilization. Vacancy rose to 4.3%, up 170 basis points (bps) year over year, while the average asking rent eased to $16.83 per square foot (psf), a 3.6% year-over-year decline. Although headline figures reflect ongoing normalization, this quarter was defined by improved market sentiment, signaling that conditions may be finding equilibrium in upcoming quarters. The Bank of Canada’s policy rate cut to a three-year low of 2.50% in September began to bolster confidence among occupiers and developers facing elevated financing costs. While leasing activity has yet to fully accelerate, this policy shift has softened the tone of caution that dominated much of the past year, as trade uncertainty persists.

Read the full report