Rents Have Fallen for Eleven Quarters. Somebody Just Leased 984,176 Square Feet.
LG took nearly a million square feet at 40-foot clear in King City while GTA industrial asking rents fell for an eleventh consecutive quarter. Both are true, and the gap between them is where employment land gets repriced.
Urban Land Group · September 10, 2026
On August 24, Nicola Real Estate announced that LG Electronics Canada had leased 984,176 square feet — Buildings B and C at King Jane Business Park, in King City, Township of King. The park runs to 1.7 million square feet across five buildings, sits a kilometre from the Highway 400 interchange, and is being built at 40-foot clear with solar generation on the roofs, heavy power and Zero Carbon Building-Design Certification. Colliers acted for the landlord, CBRE for the tenant. The leased buildings complete in 2027.
It is Nicola’s largest leasing transaction by area, and it is not simply a relocation: more than 280,000 square feet of it is net new space for LG’s GTA operations.
Figure 1 — King Jane Business Park, as announced August 24, 2026.
Now look at the market it landed in
CBRE’s second-quarter figures for the GTA show industrial availability holding at 5.0% for a third consecutive quarter and net absorption of 1.3 million square feet — a fourth straight positive quarter. They also show asking rents falling for an eleventh consecutive quarter, though the rate of decline has moderated.
Figure 2 — GTA industrial, second quarter 2026.
Rents have now been falling for the better part of three years, and in the same quarter six buildings broke ground — 2.1 million square feet, every one of them speculative. Those two facts do not describe the same market, because they are not describing the same market.
It is a specification problem, not a demand problem
The building LG signed for is 40-foot clear with heavy power and certification. The Kamik lease circulating this week at Côte-de-Liesse in Saint-Laurent — a different province, and worth naming as such — is the same specification in miniature: 36.5-foot clear, fifteen truck-level doors, a 60-foot marshalling yard with parking for fifteen trailers, and 2,000-amp, 600-volt service, with Zero Carbon and LEED Silver certification.
None of that is a zoning question. Forty-foot clear requires a building envelope a by-law may not permit. A 60-foot marshalling yard plus trailer storage requires parcel depth. Heavy power requires distribution capacity that either exists in the ground or does not. A 1.7-million-square-foot park requires contiguous ownership. Zoned for employment and able to host modern industrial have come apart, and the distance between them is widening.
Figure 3 — What modern tenants require, against what excludes a parcel.
That is why the rent index and the leasing headlines disagree. The falling asking rent is being set by stock that cannot meet the specification. The million-square-foot lease is being signed on stock that can. A single average across both is describing a market that no longer exists as one thing.
| THE ULG VIEW On employment land, the zoning is the entry ticket, not the answer. Before you price a site, ask four physical questions: how deep is the parcel, can the ownership be assembled to a single large floor plate, what electrical capacity can actually be delivered, and how far is the 400-series interchange. A parcel that fails on depth or power is not competing for a tenant of this size at any rent, and should not be underwritten as though a rent recovery will rescue it. Do not price a modern-spec site off a market-wide rent index. Eleven consecutive quarters of falling asking rents is a real number, and it is being set largely by stock that cannot meet the specification. The reverse error is just as expensive: do not price a 26-foot-clear legacy building off a headline about a million-square-foot lease. The redevelopment case for obsolete industrial is getting stronger, not weaker. If a parcel cannot be brought to modern spec — height, yard depth, power — then industrial may no longer be its highest and best use, and the honest analysis is a conversion study rather than a leasing assumption. That is the same logic now running at 420 South Service Road in Oakville, and there are more of these sites across Halton and Peel than there are buyers willing to take on the environmental file. Watch the speculative starts more closely than the rent line. Six buildings, 2.1 million square feet, broke ground in the second quarter with no tenant attached. Developers are betting that the shortage of modern-spec space outlasts the rent decline. That bet, not the rent index, is the clearest available read on where industrial land value is heading. |
| ON THE SOURCES, AND ON THE MONTREAL COMPARISON The King Jane figures are from Nicola Real Estate’s own release of August 24, 2026. The market figures are CBRE brokerage data, not a public statistical agency — useful and widely used, but proprietary and not independently auditable. The right-hand column of Figure 3 is Urban Land Group’s assessment of what excludes a parcel from this tenant pool; it is analysis, not a published standard. The Côte-de-Liesse building referenced for comparison is in Saint-Laurent, Quebec, not Ontario, and its specifications are as reported in trade press rather than independently verified. It appears here only as a specification benchmark. |
Sources
· Nicola Real Estate — “LG Electronics Canada signs nearly one million square-foot lease,” August 24, 2026. https://www.globenewswire.com/news-release/2026/08/24/3349769/0/en/lg-electronics-canada-signs-nearly-one-million-square-foot-lease-in-one-of-canada-s-largest-distribution-developments.html
· York Region (YorkLink) — LG Electronics Canada lease in the Township of King, August 25, 2026. https://yorklink.ca/2026/08/25/lg-electronics-canada-signs-nearly-one-million-square-foot-lease-in-the-township-of-king-in-one-of-canadas-largest-distribution-developments/
· CBRE — Toronto Industrial Figures, Q2 2026 (availability, absorption, asking rents, construction). https://www.cbre.ca/insights/figures/toronto-industrial-figures-q2-2026
· CBRE — Canada Industrial Figures, Q2 2026 (national context). https://www.cbre.ca/insights/figures/canada-industrial-figures-q2-2026
Charts by Urban Land Group from the sources listed above. Market statistics are brokerage data and are proprietary. Urban Land Group has no involvement in the transactions described. General market commentary; not investment, financial or planning advice.