A Major HBC Vacancy Just Cleared — in British Columbia. Scarborough’s 740,657 Feet Are Still Listed.
Industrial absorption has turned positive and CoStar forecasts rent growth returning by late 2027. Asking rents have now fallen for eleven straight quarters, and the GTA’s biggest HBC box is being offered divisible from 100,000 square feet.
Urban Land Group · September 30, 2026
Pure Industrial has leased the former Hudson’s Bay distribution centre at 18111 Blundell Road in Richmond, B.C. — 411,000 square feet on 26 acres, 119 dock doors, a 30-door cross-dock wing, parking for 256 trailers, at $23.50 per square foot net. When HBC entered creditor protection in March 2025 it vacated four Canadian distribution centres, and this one alone pushed Metro Vancouver’s availability rate up 50 basis points when it hit the market.
For Ontario readers the relevant sentence is the one further down the release: the Scarborough and Toronto space is still available.
Figure 1 — The HBC industrial space, and where it stands.
100 Metropolitan Road sits at Warden Avenue and Highway 401 with 740,657 square feet, 99 truck-level doors, three drive-ins and roughly four acres of excess land for trailer parking. It is listed divisible from 100,000 square feet — which is how a landlord prices in the absence of a single large tenant. 145 Carrier Drive offers up to 274,000 square feet, short term.
The market underneath it
The wider numbers are genuinely better than a year ago, and worse than the headline suggests.
Figure 2 — Toronto industrial, second quarter 2026.
Availability has been flat at 5.0% for three quarters with 1.3 million square feet of positive absorption in the quarter — the fourth consecutive positive quarter. But asking rents have fallen for eleven consecutive quarters. Occupancy is recovering ahead of pricing, which is what a tenant’s market looks like on its way out.
What is being forecast, and by whom
CoStar’s September 21 release puts national industrial vacancy at 4.5%, down from 4.75% a year earlier against a 1.5% trough in 2022, and forecasts below 4% by the end of 2027 and 3.25% by the end of 2028, with quarterly net absorption rising from about 5 million to 7.5 million square feet. Rent growth is forecast to turn positive in late 2027 — not now.
Figure 3 — CoStar’s vacancy path.
| WHOSE NUMBERS THESE ARE There is no government vacancy or rent series for Canadian industrial property. Everything in Figures 1 to 3 is brokerage, listing or vendor data: the Richmond lease and the status of the Ontario space are from Connect CRE Canada; the building specifications are from the JLL listing for 100 Metropolitan Road; the GTA statistics are CBRE’s second-quarter figures; the vacancy forecast is CoStar’s, published September 21, 2026. Availability and vacancy are different measures and are defined differently by different firms — do not combine them. What is official: Hudson’s Bay filed for creditor protection in the Ontario Superior Court of Justice on March 7, 2025 (Court File CV-25-738613-00CL), with 96 stores, roughly 9,364 employees and three unionized distribution centres, per the Monitor’s First Report. Statistics Canada’s July 2026 data has investment in industrial building construction at $1.5 billion nationally, up $40.6 million on the month. The conclusions in the ULG View are ours. |
| THE ULG VIEW Read the dateline before you read the headline. The HBC box that came off the market is in Richmond, British Columbia — 411,000 square feet, leased by Pure Industrial at $23.50 per square foot net. It is a genuine milestone for Metro Vancouver, where that single vacancy moved the availability rate when it hit the market. It tells you nothing about Ontario supply, because Ontario’s HBC space is still listed. The GTA still carries roughly a million square feet of it. 100 Metropolitan Road in Scarborough — 740,657 square feet at Warden and the 401, 99 truck-level doors, about four acres of excess trailer land — remains available, and it is being offered divisible from 100,000 square feet. That divisibility is the market telling you something: nobody expects one tenant for a three-quarter-million-foot box in east Toronto. Add up to 274,000 short-term square feet at 145 Carrier Drive and the overhang is intact. Space is filling. Pricing is not. CBRE has GTA availability flat at 5.0% for a third quarter, with a fourth consecutive quarter of positive absorption at 1.3 million square feet — and asking rents down for an eleventh straight quarter. That is a market clearing space by discounting it. On any lease comparable this cycle, get the net effective rent, not the face rent: free rent and improvement allowances are doing the work, and they do not show up in a posted asking rate. Two live implications for land. First, six buildings broke ground in the GTA last quarter and every one was speculative — developers are underwriting CoStar’s late-2027 rent recovery today. If you are buying industrial land, you are bidding against that forecast, not against current rents; run the residual on today’s achievable net rent and a realistic 2028 lease-up, not on the forecast. Second, for users and for clients with expiries in 2027 and 2028, this is the cheap end of the cycle — the leverage in negotiations goes away if vacancy does what CoStar says it will. |
Sources
· Connect CRE Canada — “Pure Industrial Fills 411K-SF Former HBC Distribution Centre,” September 2026 (Richmond lease at $23.50 net; Scarborough and Carrier Drive still available). https://www.connectcre.ca/stories/pure-industrial-fills-411k-sf-former-hbc-distribution-centre/
· JLL — 100 Metropolitan Road listing (740,657 sq. ft., divisible from 100,000 sq. ft., 99 truck-level doors, about 4 acres of excess trailer land). https://property.jll.com/en-ca/listings/100-metropolitan-road
· CBRE — Toronto Industrial Figures, Q2 2026 (5.0% availability, 1.3 million sq. ft. net absorption, 2.1 million sq. ft. of speculative starts, eleventh straight quarterly rent decline). https://www.cbre.ca/insights/figures/toronto-industrial-figures-q2-2026
· CoStar Group — “Canada’s Industrial Market Recovery Expected to Translate Into Positive Rent Growth by Late 2027,” September 21, 2026. https://investors.costargroup.com/news-releases/news-release-details/canadas-industrial-market-recovery-expected-translate-positive
· Alvarez & Marsal, Monitor — First Report in the Hudson’s Bay CCAA proceeding, Ontario Superior Court of Justice, Court File CV-25-738613-00CL, March 16, 2025 (filing March 7, 2025; 96 stores; about 9,364 employees). https://www.alvarezandmarsal.com/sites/default/files/canada/First%20Report%20of%20the%20Monitor%20-%20A&M%20-%20HBC%20et%20al%20-%2016-MAR-2025.pdf
· Alvarez & Marsal — Hudson’s Bay Canada CCAA proceeding, Monitor’s reports and court materials. https://www.alvarezandmarsal.com/HudsonsBay
· Statistics Canada — The Daily, Investment in building construction, July 2026 (industrial construction investment $1.5 billion, up $40.6 million). https://www150.statcan.gc.ca/n1/daily-quotidien/260921/dq260921b-eng.htm
Charts by Urban Land Group from brokerage, listing and vendor data, which are not official statistics; the CCAA facts are from the Monitor’s court filings. Urban Land Group has no involvement in the properties described. General market commentary; not investment, financial, leasing or legal advice.