GTA Construction Pricing: What Construction Activity Is Telling Us
Updated: Sep 27
Five signals on GTA construction pricing right now, and what each one means.
Office construction is near zero
Almost no new office towers are being built. Activity is limited to interior fit-outs, lobby upgrades and system retrofits.
Pricing impact: no new supply is coming, but it is not enough to lift rents yet. Existing vacancy still dominates pricing. Source: CBRE office pipeline data.
Industrial starts are slowing
Fewer new industrial projects are breaking ground in early 2026, and developers are prioritising pre-leased or build-to-suit projects only.
Pricing impact: in the short term more supply is completing, so rent growth is slowing. Over two to three years, fewer starts support rent stability or increases. Sources: CBRE and Colliers GTA industrial pipelines.
The industrial pipeline is still delivering 2024-2025 projects
Projects started during peak demand are completing now, temporarily increasing available space.
Pricing impact: more tenant choice right now, and downward pressure on aggressive rent growth. Source: Colliers market reports.
Retrofit and repositioning work is increasing
Pricing impact: this creates competition between buildings rather than a shortage. Buildings without upgrades will see pricing pressure. Source: CBRE leasing trends.
Construction costs are holding high
Material and labour costs have stabilised but remain elevated, and fewer contractors are bidding aggressively compared with pre-2022.
Pricing impact: new industrial space is still expensive to build, which supports a rental floor. Office retrofits require capital, which shapes landlord leasing strategy. Source: Statistics Canada construction cost data.
What to watch
New industrial permits: if they stay low, expect upward rent pressure ahead.
Pre-leasing on new builds: a key indicator of demand strength.
Volume of retrofit projects: signals how competitive the office market is.
Contractor backlog: a tight backlog means upward pressure on costs.
What this means for tenants
Today: more availability and stronger negotiating leverage.
Forward view: slower construction will tighten supply over time.
Bottom line: this is a window of opportunity, not a long-term condition.
Common questions about GTA construction pricing
Is now a good time to sign an office lease in the GTA?
For a tenant, the leverage is better now than it is likely to be in two or three years. Vacancy is still doing the work on pricing, and almost nothing new is being added. That combination favours tenants today and reverses slowly.
Why are construction costs still high if activity has slowed?
Material and labour costs stabilised rather than fell, and fewer contractors chasing work does not automatically mean cheaper bids. A thinner bid list often means less aggressive pricing, not more.
Will slower construction starts push rents up?
Over two to three years, probably, because supply completing now was started in 2024 and 2025 and there is little behind it. In the short term the opposite is happening: those completions are adding choice.
What should a tenant watch over the next year?
New industrial permit volumes, pre-leasing rates on new builds, how many retrofit projects landlords are funding, and contractor backlog. Those four say more about where pricing is going than headline vacancy does.
Originally shared as a LinkedIn post. See the original discussion at https://www.linkedin.com/in/carolee-w-turner-2002417
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