Greater Montreal's industrial market just turned a corner. After three years of steady climbing, vacancy dropped in the second quarter. It's a small number, but it changes the math if you own a warehouse or are hunting for one on the South Shore.
The number that changed direction
For a long time, one trend defined the Montreal industrial market: vacancy rising, quarter after quarter, as the many projects launched during the pandemic came out of the ground. That movement has now reversed. According to Colliers, Greater Montreal's vacancy rate fell 10 basis points in the second quarter of 2026, to 5.7%. That's the first decline since the post-COVID surge.
Availability, for its part, held steady at 6.5%. In other words, the new space brought to market was offset by leasing, especially for large-bay distribution units. The market is finally absorbing what it built. This isn't a boom, it's balance coming back. And for a region where the industrial parks of Longueuil, Boucherville and Saint-Bruno have been running full for years, that's the kind of news worth pausing on.
Rents, meanwhile, keep correcting
Here's the nuance that matters. Vacancy is falling, but rents aren't climbing back yet. The average net asking rent sits at $13.94 per square foot, down about ten cents on the quarter. That's the continuation of a gentle correction that has erased part of the peaks reached after the pandemic, when the smallest warehouse bay would go in a matter of days at record prices.
This combination is rare and it favours the tenant. You have both choice, because availability is still around 6.5%, and negotiating power, because landlords know the market has cooled. On the ground, that shows up as free months of rent, a contribution to leasehold improvements or a more flexible lease term. A year or two earlier, those terms simply didn't exist.
Why the policy rate stays at the centre of the picture
None of this reads without the cost of money. On July 15, the Bank of Canada held its policy rate at 2.25%, a sixth pause in a row. For an investor financing the purchase of an industrial building or a small rental property, that stability is worth a lot: it makes the return calculation reliable over five years. When the rate stops surprising you, you can structure an offer without guessing what the next announcement will do to the monthly payment.
On the value side, CBRE notes that multifamily cap rates held roughly flat in the second quarter. Translation for the seller: a good, well-kept building holds its value, and buyers still pay up for solid product. I broke down the financing mechanics in my piece on the MLI Select program, and the office and rental picture in my mid-2026 commercial update.
What this means for you
- You own an industrial building on the South Shore: demand for large units is holding up and vacancy has stopped rising. A well-located building, with good clear heights and truck-level doors, still leases quickly. Before you renew a lease below market or sell, get the real rental and market value of your asset established.
- You're looking to invest: the window is in buildings to reposition and in second-hand industrial, where recent supply still weighs on prices. With a stable policy rate, the return calculates cleanly. Rental stays solid, but cap rates won't do you any favours on an already-optimized building.
- You're a business owner looking for space: this is your moment. Net rent around $13.94, availability at 6.5%, landlords open to negotiating. You have choice and real leverage today, two things that falling vacancy could erase within a year.
I work both sides of the market, residential and commercial, and it's often where the two intersect that the best opportunities on the South Shore reveal themselves. Want to know the value of your building or assess a project? Request a free evaluation or write to me directly. I answer personally.