April 12th, 2024

“Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.” 

  • Franklin D. Roosevelt

As the Greater Toronto industrial market continues to evolve, changing dynamics bring into focus different strategies for both owners and occupiers.

Per our previous newsletters, we have seen the stabilization of industrial rents due to a cooling in inflation, as well as an uptick in vacancies. One could also say that it was a matter of time as the after-effects of the economic lockdowns, insatiable demand for logistics space, and supply chain issues worked their way through the system. In any event, we find ourselves settling in to a more predictable market for industrial values.

Meanwhile, sales volumes have fluctuated as a result of sustained, higher interest rates; albeit we have seen some enormous portfolio sales and outright acquisitions of REITs themselves. That said, on a property-by-property level, industrial sales have become more difficult due to borrowing costs. In addition, because of elevated property values, as well as the cost to construct, there may be a lingering issue of spread between what an owner wants and what a buyer would be willing to pay; further slowing down the process.

Finally, when we examine the inventory of industrial product, we notice that relatively few small- and mid-bay space opportunities exist due to their scarcity, as well as the scale of new projects. It is this specific group of industrial users which, throughout the ‘golden era’ of ‘Big Box’ warehousing, has been the most underserved. Existing options tend to be older or obsolete, while modern specs require premium rents with size minimums.

And thus, another option has become more popular, with numerous developers bringing product to market. And that is: purchasing industrial condominiums.

Although they are more expensive than a freestanding building on a per-square-foot basis, they offer ownership and the resulting benefits, while providing many modern features, such as: clear heights up to around 28 feet, loading docks, access for 53’ trailers, moderate- to high-power, and size flexibility.

With that said, for this week’s newsletter, we will revisit the topic of industrial condo developments within the GTA West submarkets of Burlington, Oakville, Milton, Halton Hills, as well as the City of Hamilton, while taking a look at some of the major projects underway.

Halton Region and City of Hamilton – 2024 Industrial Condo Update

For more details, availabilities, and pricing on any of the industrial condos discussed, please contact our team.

Featured Industrial Condos

  1. 3200 South Service Road, Burlington – QMW Corporation
3200 South Service Road, Burlington. Source: QMW Corporation.
QMW Corporation is bringing to market a commercial condo development at 3200 South Service Road in Burlington. The project was slated to commence construction in Q1 of 2024 and will see 55 units totalling 99,500 SF with 3 use-types – industrial, medical, and general office. The industrial condos (of approximately 30 units totalling 63,480 SF in Building A) will have a clear height of 20’ and 10’ by 10’ drive-in doors with signage exposure directly facing the QEW. CBRE is marketing the asset.
  1. Heritage Green Business Park – 406 Pritchard Road, Hamilton – Urbancore Developments
Heritage Green Business Park – 406 Pritchard Road, Hamilton. Source: Urbancore Developments.

Urbancore Developments has completed the construction of Heritage Green Business Park at 406 Pritchard Road in Hamilton. The project was completed in two phases – with Phase 1 comprised of 29 units across 5 buildings totalling approximately 49,000 SF. Meanwhile, Phase 2 saw 26 units across 3 buildings totalling 44,400 SF. Units have a clear height of 22’6” with one rear man door and one overhead insulated shipping door. Blair Blanchard Stapleton is marketing the asset.

  1. Three Oaks Business Centre – 3303, 3313 & 3323 Superior Court, Oakville – Beedie

Three Oaks Business Centre – 3303, 3313 & 3323 Superior Court, Oakville. Source: Beedie.
Beedie is developing yet another premium industrial condominium dubbed the Three Oaks Business Centre at 3303, 3313 & 3323 Superior Court in Oakville. The project will see 26 units – ranging in size from 4,366 SF to 10,656 SF – across 3 buildings totalling 224,990 SF. Units offer a 28’ clear height, 10’ mezzanine, warehouse skylights, and a mix of dock- and grade-loading doors. Each building will also offer 2,000 amps at 600 volts power. Occupancy is expected for Q3/Q4 2024. Colliers is marketing the asset.

If you are looking to acquire small- or -mid-bay industrial space within the GTA Core, then an industrial condo may be your best option. While there are several great offerings on or coming to the market, these assets sell quickly, and at a premium to traditional industrial facilities.

On the development or conversion side, industrial condos are attractive as they can be constructed in infill sites, proximal to the Core’s consumer and economic base. With industrial vacancies still at relative lows, and with rental rates having increased so dramatically over the past 5 years, there are many industrial users who would welcome the opportunity to own well-located space.

If you are looking to break ground and move in sometime in 2024, you will need to engage with municipalities as soon as possible and if not then it is probably already too late, however, it is never too late to begin planning and exploring.

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.

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

Goran Brelih, SIOR

Executive Vice President, Broker
Cushman & Wakefield ULC, Brokerage.

Office: 416-756-5456
Mobile: 416-458-4264
Mail: goran.brelih@cushwake.com
Website: www.goranbrelih.com


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