The commercial real estate (CRE) market has navigated a wide range of trends over the past decade, reshaping the behaviors and preferences of purchasers, vendors, tenants, and landlords. With the pandemic now in the rearview mirror, most market participants have adapted to external pressures such as the ever-looming threat of tariffs – recognizing them as unpredictable but unavoidable variables.
The AI boom (or potential bubble) has emerged as the market’s newest catalyst. Since the peak of the market in 2022, industrial availability across the Greater Toronto Area (GTA) has crept up to nearly 5%. This spike has caused developers to pause projects and slowed land transactions. However, the rising need for data centres offers a compelling new use case for industrial land. This demand could provide the spark the market needs to absorb availability and drive the higher valuations landlords and developers have been waiting for. On a broader level, the Canadian economy—currently facing stagnant GDP growth and lagging productivity—is also searching for a catalyst.
Data centres are poised to become one of the most vital sources of industrial real estate demand over the next decade. Ultimately, their long-term success in Canada will depend less on land availability and more on how governments, businesses, and communities collaborate to balance infrastructure costs with economic opportunity.