Five-year property trends show rentals and small business driving commercial growth in Ontario

New MPAC data highlights the properties powering Ontario’s business property sectors 

New data from MPAC (the Municipal Property Assessment Corporation) shows Ontario’s multi‑residential sector is the fastest‑growing business property group in the province. Development activity over the past five years has reached levels not seen since the 1970s. Over the same period, new development activity slowed in the office sector. 

“Ontario’s business property landscape continues to evolve responding to changing economic conditions, shifting business needs, consumer behaviours and regional growth,” says Greg Martino, Chief Assessor and Data Officer at MPAC. “Those changes are evident in how communities are evolving through the different property types being developed, bought and sold as Ontario’s business industry looks to meet the needs of communities across the province.” 

Released today, MPAC’s first-ever Business Properties Report examines activity over the last five years (2021–2025) across six key sectors: retail, standard industrial, small commercial, office, multi‑residential and hospitality. The report identifies trends in development activity, sales patterns and income performance across Ontario.  

High-rise and walk-ups drive historic multi-residential property development 

Multi-residential development reached levels not seen since the 1970s, driven largely by high-rise construction. However, recent data shows a growing balance of high‑rises and walk‑up building development. 

“New supply is increasingly being driven by one- and two-bedrooms units, while additions of larger units have declined from what we saw historically,” says Martino. “The shift reflects a balance between housing demands and rising construction costs.” 

In 2025, sales activity in the multi‑residential sector was driven by walk‑up apartments, accounting for 80 per cent of transactions. The median price per unit recorded a modest year-over-year decline (2.5 per cent), with Toronto exhibiting a similar trend.  

Rental markets across Ontario have generally strengthened since 2021, with Toronto and Ottawa maintaining the highest rents in 2025. These trends may partly reflect the availability of different unit types across markets. For example:  

• The limited supply of larger units appears to have contributed to rent growth, with the median rent for a four-bedroom unit in Western Ontario and Ottawa increasing by 60 per cent since 2021. 
• Meanwhile, an oversupply of small and micro-unit condos in more urban markets may be placing downward pressure on rent for smaller units, with one-bedrooms in Toronto experiencing a modest decline in median rental rates from $1,990 in 2024 to $1,945 in 2025. 

Office development shifts toward medical and dental buildings  

Ontario’s office sector inventory is largely made up of older‑aged buildings, with nearly half (49 per cent) of existing properties constructed between the 1970s and 1990s. New supply has been limited in recent decades; however, when development has occurred, it has increasingly taken the form of medical and dental office buildings. Since 2010, these properties have accounted for over 20 per cent of new buildings, compared to a historical average of 12 per cent. 

Recent development of office space has been highly concentrated in Toronto, with Downtown Toronto containing 53 per cent of the gross leasable space (GLA) built in Ontario since 2020. From 2020 to 2025, Downtown Toronto saw 8.4 million square feet of new office space built and now represents 33 per cent of the share across the province as of 2025 year-end. 

In 2025, Ontario’s office market saw softer sales activity alongside rising vacancy rates:  

• Office sales declined from recent highs, with most transactions involving multi-tenant office buildings.  
• Larger properties continued to sell in core urban markets such as Toronto, while mid-sized buildings saw more activity in secondary and tertiary markets. 
• Province-wide, the office vacancy rate rose steadily to 16.1 per cent, while median rents remained stable at approximately $17 per square foot.  
• Toronto continued to post the highest rental rates in Ontario, with a median rent of $24.05 per square foot, alongside a notable increase in vacancy. 

Small commercial properties saw modest growth in one-storey retail properties 

Ontario’s small commercial inventory remains primarily located in older mixed-use builds (retail/office with residential units), with more than half of these properties developed prior to 1950. Recent growth, however, has been more modest and largely driven by small, one-storey retail developments, accounting for most of the new building area since 2020. Over the past five years, Toronto, Ottawa, Oakville, Hamilton, and Whitby have led this growth, collectively accounting for 20 per cent of the total added building area. 

When it comes to sales, small mixed-use retail and office properties with residential units continued to dominate transactions in 2025. While overall transaction volumes remain below the 2021 peak, activity increased in specific segments, particularly small single-storey retail and single-occupant office properties.  

Standard industrial growth is increasingly driven by warehouse development 

The standard industrial sector has seen strong growth in recent years, with nearly as much building area added between 2020 and 2025 as the 10 years prior (between 2010 and 2019). Much of this growth has been driven by warehouses, which now account for over 40 per cent of the total area added in the sector.  

With the rise of e-commerce, shifting consumer demands, and the need for faster, last-mile delivery capabilities, the standard industrial sector’s growth has been driven, in part, by the expansion of the logistics sector, along well-developed transportation corridors. 

Sales activity for non-warehouse industrial properties improved in 2025, with higher prices and increased transaction volume. In contrast, warehouse properties experienced stabilization with prices per square foot and reduced sales activity. 

For more information, including insights on retail developments and the hospitality sector’s revenue gains, view our full Business Properties Report.  

Key takeaways: 

• Growth in the multi-residential sector: Multi-residential is Ontario’s fastest-growing business property sector, with recent development levels reaching highs not seen since the 1970s. 
• Office growth slows and shifts: Office vacancy rose provincially as new construction slowed, while the sector continues to reset following the pandemic.  
• Small commercial property sector sees modest growth: The inventory remains heavily anchored in older mixed-use builds, with more than half of these properties developed prior to 1950. 
• Standard industrial growth accelerates: The sector has seen strong expansion between 2020 and 2025, with warehouses driving much of the new building area added since 2020.     

About MPAC 

MPAC is an independent, not-for-profit corporation funded by all Ontario municipalities, accountable to the Province, municipalities, and property taxpayers through its 13-member Board of Directors. 

Our role is to accurately assess and classify all properties in Ontario in compliance with the Assessment Act and regulations set by the Government of Ontario. We are the largest assessment jurisdiction in North America, assessing and classifying over 5.7 million properties with an estimated total value exceeding $3.2 trillion.