Despite persistent economic headwinds, Q3 2025 brought a mix of cautious optimism and disciplined investing. While industrial properties continued to dominate, other sectors showed uneven performance, signaling a market still in a holding pattern.
Investment Volume: A Modest Uptick, But Still Below Last Year
According to Avison Young’s latest GTA Investment Review, total investment volume hit $2.9 billion in Q3 2025—a 6% increase from Q2, but still 6% lower year-over-year. This slight rebound reflects improving debt markets, yet uncertainty around tariffs and the auto sector continues to weigh on investor sentiment.
“Potential buyers remain optimistic, but the market stayed in a holding pattern longer than expected as stakeholders wait for clarity on economic conditions,” the report noted.
Industrial Assets: The Star Performer
Industrial properties remain the GTA’s powerhouse, accounting for 51% of all transactions and nearly $1.5 billion in sales—a 22% jump quarter-over-quarter and 27% year-over-year. The largest deal? A $152.5 million self-storage portfolio spanning Mississauga, Ajax, and Toronto.
“The industrial sector is constrained more by a lack of quality assets than by buyer demand,” Avison Young emphasized.
Multi-Residential: Demand Strong Despite Decline
Multi-residential investment fell 14% from Q2 and a steep 62% from Q3 2024, when large portfolio sales boosted results. Still, demand for both value-add and stabilized assets remains resilient, supported by improved financing conditions.
Retail Resurgence: Grocery-Anchored Assets Shine
Retail assets saw a comeback, with $420 million in deals, up 49% year-over-year. Investors favored necessity-based tenancies—think grocery-anchored strip malls—seen as safer bets during economic turbulence.
ICI Land & Office: Mixed Signals
- ICI Land Sales: Surged 64% year-over-year to $366 million, though still trailing 2024’s pace.
- Office Investment: Down 28% year-over-year, but improved leasing activity and urgency among large corporate tenants offer a glimmer of hope.
Key Market Drivers: Rate Cuts & Mortgage Expiries
Two consecutive Bank of Canada rate cuts have made debt markets more attractive. However, the looming expiry of five-year mortgages from 2020–21 could bring more assets to market in late 2025 and 2026.
Bottom Line: Cautious Optimism Prevails
Industrial and retail assets lead the way, but persistent uncertainty and disciplined underwriting are keeping transaction volumes below historical norms. For investors, the GTA market offers opportunity—but patience and precision are essential.