From Farm to Fork: Industrial Real Estate’s Role in Feeding the GTA (and the World)

“Civilization as it is known today could not have evolved, nor can it survive, without an adequate food supply.”

• Norman Borlaug, American agronomist and recipient of Nobel Peace Prize

There has been a shift.

What was once gridlocked by indecision and a tough business environment has suddenly opened up.

Sentiment has taken a turn upwards, while interest rates have gone in the opposite direction. Businesses are finally giving a green-light to growth plans and begun gearing up to hit the ground running in 2025 with key end-of-year moves.

A couple months ago, we explored how converging trends have led to the on-shoring and re-shoring of manufacturing. While we had looked at various industries such as automotive, chemical and pharmaceutical, metal fabrication, plastics and textiles, data centers and AI, and electronics and high-tech manufacturing, there is one other key vertical making a big comeback.

It’s no secret that the cost to buy these goods at your local store have increased dramatically since the pandemic. 

Whether due to increased input costs of labour and energy, supply chain shortages, and the general inelastic and difficulty of substitution towards other goods…

The fact is that the food and beverage industry is not only in need of suppliers to meet the demands of a growing populous, but also to adapt to changing consumer preferences, as well as to help bring pricing down as much as is reasonably possible.

As part of this, the Province of Ontario’s food industry relies on a complex network of industrial facilities alongside agricultural land from farm to processing and from packaging to storage and distribution… and everything in between. 

From traditional farming to cutting-edge vertical farms, food processing plants, and cold storage warehouses, the industrial real estate sector plays a vital role in keeping our food supply chain running smoothly.  

That is why, for this week’s newsletter, we will embark on an examination of how industrial real estate serves the food and beverage industry, showcasing the complexities involved in bringing your favourite dishes to your dining table.  

Key Segments of the Food Industry and Their Facility Needs:

Traditional farming. Source: CBC.

Vertical Farming:

• As urbanization accelerates, vertical farming is emerging as a sustainable solution for food production. These facilities are typically located in urban industrial buildings with high ceilings, climate-controlled environments, and robust HVAC systems to support hydroponic or aeroponic growing systems. Vertical farming reduces land use and transportation costs, making it a key player in urban food security.

Vertical farming. Source: FCC.

2. Food Processing and Packaging:

Processing Facilities:

• Large-scale processing plants transform raw agricultural products into finished goods. These facilities require significant power capacity to support automated equipment such as grinders, mixers, ovens, and pasteurizers. They also include sloped floors and drainage systems for sanitation, ensuring compliance with strict food safety standards.

Food processing facility. Source: Southern Green.

Packaging Facilities:

• Efficient packaging is critical to preserve product quality and extend shelf life. Facilities often include specialized machinery for sealing, labeling, and boxing products, as well as areas for quality control and palletizing. Proximity to transportation hubs ensures swift movement through the supply chain.

Food Packaging. Source: Packaging Strategies.

Canning and Bottling Facilities:

• These facilities focus on preserving and packaging food and beverages in cans, jars, or bottles. They require heavy-duty equipment for sterilization, filling, sealing, and labeling. Access to high water pressure, energy-efficient sterilization systems, and streamlined logistics for storage and distribution are key considerations for these properties.

Canning and Bottling Facilities. Source: Pet Food Processing.

3. Baking and Cooking Facilities:

Commercial Kitchens and Bakeries:

• Large-scale food preparation requires facilities with advanced ventilation systems, gas connections, and food-grade surfaces. Commercial kitchens may be standalone or part of a multi-use industrial property. Bakeries, in particular, demand precision in temperature control and humidity management for consistent product quality.

Commissary Kitchens. Source: Food Truck Operator.

4. Cold Storage and Distribution:

Cold Storage Warehouses:

• Cold storage facilities are vital for preserving perishable goods like dairy, meat, and frozen foods. These properties feature insulated walls, sloped floors and drains, specialized refrigeration systems, and multiple temperature zones to accommodate a variety of products.

Cold Storage Warehouse. Source: Advanced Manufacturing.

In summary, specialized industrial real estate helps drive the production, processing, packaging, and distribution within the food and beverage industry to help feed and nourish our entire society. The right facility can help with:

• Operational Efficiency: Specialized industrial spaces ensure smooth workflows and compliance with strict food safety regulations.
• Economic Growth: Toronto’s food sector contributes significantly to the local economy, supported by purpose-built facilities.
• Consumer Demand: From farm-to-table trends to global exports, these facilities underpin the food supply chain that feeds the GTA and beyond.

Overall, industrial real estate (which includes industrial operations on or adjacent to agricultural land) is the backbone of Toronto’s food ecosystem. As demand for diverse and efficient facilities grows, understanding the nuances of these properties is critical for developers, investors, and food businesses alike. 

In our next issue, we’ll delve deeper into the specific features that make these facilities effective, including clear heights, heavy power requirements, insulated walls, and more. Stay tuned as we break down the essential elements of food industry real estate.

In the meantime, for a confidential consultation or a complimentary opinion of value of your property please give us a call.

Until next week…

Goran Brelih and his team have been servicing Investors and Occupiers of Industrial properties in Toronto Central and Toronto North markets for the past 30 years.

Goran Brelih is an Executive Vice President for Cushman & Wakefield ULC in the Greater Toronto Area. 

Over the past 30 years, he has been involved in the lease or sale of approximately 25.7 million square feet of industrial space, valued in excess of $1.6 billion dollars while averaging between 40 and 50 transactions per year and achieving the highest level of sales, from the President’s Round Table to Top Ten in GTA and the National Top Ten.

Specialties:
Industrial Real Estate Sales and Leasing, Investment Sales, Design-Build and Land Development

About Cushman & Wakefield ULC.
Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with approximately 53,000 employees in 400 offices and 60 countries.

In 2020, the firm had revenue of $7.8 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. To learn more, visit www.cushmanwakefield.com.

For more information on GTA Industrial Real Estate Market or to discuss how they can assist you with your real estate needs please contact Goran at 416-756-5456, email at goran.brelih@cushwake.com, or visit www.goranbrelih.com.

Connect with Me Here! – Goran Brelih’s Linkedin Profile: https://ca.linkedin.com/in/goranbrelih