December 2nd, 2022
In much of the business world, times are changing.
Major announcements have recently been made around downsizing and layoffs, from tech companies to manufacturers, and to the surprise of many, real estate landlords and global brokerages.
We find ourselves in an uncanny position because, if you were to ask a crowd of people whether or not we are in a recession you would get a range of responses, with caveats, exceptions, and assumptions. The truth is, nobody really knows for certain at this point in time.
On the surface, things are slowing down, and there is tremendous uncertainty towards the future, however, we are all carrying on relatively similar to normal. The industrial market, particularly across the Greater Toronto Area, has not shown any major signs of slowing down, although its astronomical growth is likely to stabilize and march forward at a more reasonable pace.
And thus, it’s difficult what to make of all the data points. We do know that, even in a worst-case scenario, the GTA industrial market will remain tight for years to come. And despite a record-setting level of new construction in the pipeline, space will be difficult to lease or acquire.
As a result, occupiers and investors continually have their finger on the pulse of the market for new opportunities. Looking for these opportunities within the broader context is all we can really do.
Looking at the market right now, we see different angles and considerations for where occupiers may be moving given rising costs and lack of industrial inventory, coupled with a constant need to tap into the labour pool and retain access to key transportation routes.
While many are going west into secondary markets, east into Durham Region, or looking for infill sites within the Core, one interesting play is to follow the main arterial routes in and out of the City, such as Highways 400, 404, 407, the QEW, and future Bradford Bypass and GTA West Highways.
That is why, today, we will conclude our examination of some of the more prominent GTA industrial developments along the Highway 404 Corridor.
Highway 404 Corridor Industrial Developments
In last week’s issue, we highlighted five key projects planned or underway along the Highway 404 Corridor.
What You Need to Know – Key Highway 404 Corridor Industrial Developments
Below are some more in-depth commentary regarding these key developments. For further details or intel on leasing rates and occupancy timelines, please contact our team.
1. 17225 Leslie St, Newmarket – Birock Investments – 216,995 SF
17225 Leslie Street, Newmarket. Source: Birock Investments.
Birock Investments Inc. is constructing two industrial properties at 17225 Leslie Street in Newmarket with Q1 2024 occupancy. Building 1 will be 102,764 SF in size, while Building 2 will stand at 114,231 SF. The site, which sits at the corner of Stackhouse Road and Harry Walker Parkway, is approximately 11 acres in size and has excellent access to Leslie Street and Highway 404.
- Green Lane West/Northwest, Newmarket – Rice Group – 700,000 SF+
Rice Group is developing six industrial facilities over two adjacent parcels situated at a Highway 404 interchange at 1656 Green Lane East and 18363 Leslie Street in East Gwillimbury.
Green Lane West (1656 Green Ln E) consists of Buildings A, B, and C, which sit on 28 acres with direct exposure to Green Lane Avenue East. Green Lane Northwest (18363 Leslie St) consists of Buildings D, E, and F which sit on 42 acres to the north. Available space ranges from 10,000 SF to 700,000 SF with occupancy in Q3 2024.
- 18574 Woodbine Ave, East Gwillimbury – Rice Group – 1,900,000 SF+
18574 Woodbine Avenue, East Gwillimbury. Source: Rice Group.
Rice Group is also developing the Woodbine Business Park, located at 18574 Woodbine Avenue in East Gwillimbury. With direct exposure to Highway 404, the site will support up to 1.9 million SF of Class-A industrial space over 154 acres.
Currently, Loblaws has committed to opening their new 1.2 million SF “automated multi-temperature” distribution centre on part of the site in Q1 2024, and has acquired a 75% ownership interest via its real estate business Choice Properties REIT. The remainder of the business park site will support a facility of approximately 700,000 SF in size with Q2 2025 expected delivery.
- Woodbine Ave & Glenwoods Ave, Keswick – Panattoni – ~3,800,000 SF
Woodbine Avenue & Glenwoods Avenue, Keswick. Source: Panattoni.
Panattoni is developing the 404 Logistics Park located at Woodbine Avenue and Glenwoods Avenue in Keswick, Ontario. The multi-phase project will support approximately 3.8 MSF SF on 200 acres – with final figures to be confirmed – about 3km from the Highway 404 interchange.
Phase 1 will consist of three industrial properties of 369,461 SF, 634,296 SF, and 687,534 SF. Building 1 is a 369,461 SF speculative development with 62 truck-level and 4 drive-in doors, as well as 104 trailer parking spots, and is being offered for lease and with Q4 2023 occupancy. Buildings 2 and 3 are currently proposed with further details expected in the near future.
Phase 2 will expect to see two additional properties constructed that are 1,175,161 SF and 987,331 SF in size. Finally, Blocks 2 and 3 will consist of two future industrial properties in the southwest portion of the site.
Despite the economic uncertainty and difficulty in securing space across the GTA, demand for industrial space from Occupiers remains strong.
And, should we find ourselves in a downturn, what industrial Tenants really need is the right strategy to balance costs while securing space that will allow them to continue operating and growing.
This strategy begins with site selection – a process driven largely by costs and location, with the former seeing development move further out of the Core, and the latter pushing this movement along the major highway network.
For investors and developers, there remain many opportunities waiting to be uncovered as private investors continue to cash out or enter into a JV to add value to their assets.
With that said, if you would like a confidential consultation or a complimentary opinion of value of your industrial asset, 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 a Senior 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.
Goran is a Past President of the SIOR ‐ Society of Industrial and Office Realtors, Central Canadian Chapter.
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 firstname.lastname@example.org, or visit www.goranbrelih.com.
Goran Brelih, SIOR
Senior Vice President, Broker
Cushman & Wakefield ULC, Brokerage.