The industrial market for the third quarter of 2023 continued to see vacancy rates of sub-one percent levels, while availability continued to sit at 1.6 percent. Lease rates, quarter over quarter, increased marginally by 1.3 percent, and the average asking rents remained relatively consistent at $18.57 per square foot.
We are starting to see the signs of a softening market, with demand cooling off, and deals taking longer to be completed. The market appears to be waiting to see if the Bank of Canada moves its rates as the last rate increase resulted in a decrease in the number of transactions and price.
Looking ahead, we anticipate vacancy rates slowly starting to climb. Developers don’t want to flood the market with supply, particularly as demand is showing signs of cooling, so many developers have stopped new projects. Furthermore, we will see a small increase in availability as new space is slated to hit the market in 2024, likely resulting in rental rates leveling off.
Download the full report to learn how the current market conditions may affect industrial tenants.
We are starting to see the signs of a softening market, with demand cooling off, and deals taking longer to be completed. The market appears to be waiting to see if the Bank of Canada moves its rates as the last rate increase resulted in a decrease in the number of transactions and price.
Looking ahead, we anticipate vacancy rates slowly starting to climb. Developers don’t want to flood the market with supply, particularly as demand is showing signs of cooling, so many developers have stopped new projects. Furthermore, we will see a small increase in availability as new space is slated to hit the market in 2024, likely resulting in rental rates leveling off.
Download the full report to learn how the current market conditions may affect industrial tenants.