Toronto Lab Market Fall 2023

The laboratory real estate market in the Greater Toronto and Hamilton Area (GTHA) is a tale of two stories amongst a finicky capital market that has tamped down the tsunami of demand that was previously brought on by free flowing 2021 capital.  

Key Findings:

–       Lab development is lagging thanks to economic headwinds facing both the development proforma and tenant dependent capital markets  

–       Developer concern around the ability for the tenant base to lease space at proforma driven pricing persists

–       A couple of key projects will serve as the proxy for the overall marketplace and its ability to absorb vacancy at market rates 

–       Employment in the sector continues to grow and capital, while seemingly more abundant than ever before, is being very selective in its investment

–        Articulated government support is needed under the current economic climate to support the growth of R&D in the region which will help spur on more CRO and CDMO development

–        Tenant demand, while cut in half from the peak in 2022, remains high and continues to outpace the availability of space

–       Multitenant wet lab facilities for R&D remains the greatest area of need

–       Incubation/accelerator operators are desperately needed to accommodate the large swath of small companies with nowhere to grow