Selling a industrial.

FAQ

Industrial FAQ — what sellers ask

Direct answers about industrial selling in the GTA. Specific numbers, Ontario regulations, 2026 market data.

• What's the cap rate for industrial in the GTA in 2026?

  Stabilized industrial cap rates remain among the tightest in Canadian commercial real estate at 4.5%-5.5%. Small-bay industrial (5,000-15,000 sqft) trades 5.0%-5.5%. Modern logistics / distribution (50,000+ sqft, 32'+ clear height) trades 4.5%-5.0%. Older 1960s-70s industrial in Etobicoke or Scarborough trades 5.5%-6.5% with capex upside if you can re-zone or modernize.

• Why is GTA industrial so expensive?

  GTA vacancy is among the lowest in North America — sub-3% in 2025-2026. Drivers: e-commerce demand for last-mile distribution, lack of new development land (most GTA industrial parks are built out), and the conversion of older industrial to residential which removes inventory. Effective net rents have risen 6-8% annually for 5 consecutive years.

• What should I check when buying small-bay industrial?

  Three things matter most: (1) clear ceiling height (under 22' limits forklift use and rental value), (2) loading — truck-level vs. grade-level doors, drive-in capability, trailer parking. (3) Power capacity (200A vs. 600A vs. 1200A — limits manufacturing tenants). Also verify zoning permits the intended use (E-zoning vs. M-zoning vs. P-zoning all have different permitted uses). Environmental Phase I is mandatory for industrial.

• What's a typical net rent for industrial in the GTA?

  Modern logistics + distribution: $14-18/sqft net + $4-5 TMI = $18-23 gross. Older small-bay industrial: $11-15/sqft net + $4-5 TMI. Flex space (industrial + office mix): $14-20/sqft net. Yard / outdoor storage: $2,500-$4,500/acre/month. Note that GTA net rents have risen at 6-8% annually for 5 years and showed no sign of plateauing through 2026.

• Are there opportunities to convert old industrial in Toronto?

  Yes — Toronto has actively permitted industrial-to-employment-lands and industrial-to-residential conversions in select wards. Best candidates: Liberty Village, the Junction, parts of Etobicoke and Scarborough that were re-zoned MCR (Mixed Commercial-Residential) since 2021. Conversion economics work when acquisition is sub-$300/sqft and re-positioning yields $500+/sqft. Major capex: new structural slab penetrations, fire-rating, life-safety, parking strategy.

• How long does it take to sell a commercial property in the GTA?

  Highly variable by asset type: small multi-family (5-19 units) typically 60-120 days from listing to close; office and retail 90-180 days; industrial 60-100 days due to current low vacancy + strong demand. Development land 90-365+ days depending on the planning approval status (raw vs. zoned vs. permitted). Marketing process usually includes confidential teaser + signed NDA before full information memorandum is shared.

• What does a typical commercial marketing process look like?

  Seven-step sequence: (1) Confidential teaser sent to qualified buyer list. (2) NDA + full Information Memorandum to interested parties. (3) Property tours (often staged in 3-5 day windows). (4) First-round offers due (usually 30 days from market). (5) Best-and-final bid. (6) Conditional purchase agreement with 30-90 day due diligence. (7) Close. Listing brokerage commission typically 3-5% of sale price.

• How do I maximize my commercial property's sale value?

  Stabilize the asset before sale: bring vacant space to lease, renew expiring tenants, document deferred maintenance with capital plan, clean the rent roll (collect arrears, terminate non-paying tenants if legally feasible), and present an audited or accountant-reviewed financial package. A property listed with 95% occupancy + 3-year average leases trades for 25-50% more than a vacant or under-leased version.