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Market correction continues despite positive absorption; uncertainty remains top of mind
Montreal’s industrial market continues to face downward pressure on rental rates due to an oversupply of big box space, coupled with the significant economic impact of U.S. tariffs. Occupiers are re-evaluating their real estate strategies, which has disrupted leasing activity. The Greater Montreal Area (GMA) experienced a rise in vacancy of 130 basis points (bps) from last year. The Laval and West Island submarkets saw some of the largest increases in vacancy year over year, at 360 and 170 bps, respectively. The GMA recorded its first quarter of positive absorption after 10 consecutive quarters of negative absorption, driven by a handful of large tenants occupying their space. Montreal will likely experience further net negative absorption in 2025 as the market adjusts to Amazon’s departure and the continued impact of U.S. tariffs.