Establishing True Valuations Across Differing Markets
Right now it feels like total gridlock; inching down the 401 on a hot summer night, alongside thousands of cars with nowhere to go.
Until the construction completes there will be little relief… much like the industrial market today.
We have buyers galore… Capital willing (and needing) to find a home to generate a positive return on investment.
Rents continue to go up further.
Creative real estate solutions are being strategized by savvy brokers, owners, and occupiers (typically off the market), and different tactics are being employed, such as industrial condo conversions and sale-leasebacks (if you missed our newsletters on those topics, simply let us know and we’ll forward you a copy)…
Some investors, owners, and landlords are now looking to:
(1) see if now is the right time to sell given their unique situations, and
(2) maximize the value they can receive if they decide to do so.
What’s different now is that with so little product and record-highs in valuations and rental rates… people are speculating whether now is the best time to sell.
What’s missing for most owners, however, is the ability to position their assets to their highest and best use to execute properly and know they are doing the best they possibly can.
And so, as we come to the end of another quarter, we have very few transactions to report given the market size.
When examining the values, rates, and happenings in such an out-of-equilibrium state, one should take these numbers with a grain of salt – as they may be both distorted and statistically insignificant.
If you are a landlord or investor looking to properly valuate and assess what your building is worth right now – today – it may be prudent to look deeper into each sub-market, as well as taking into accounting any prevailing trends.
Even then, many trades are occurring in uncharted territory; a place ripe for receiving multiple, competitive, record-breaking, firm offers… if you have the right strategy, timing, and team in place.
You may be wondering…
“How much is my property really worth?”
What rental rate can I expect? How much $/PSF would I be able to get if I sold my building?
These questions are being asked all the time.
The answer to this will depend on a range of factors, including:
- the age and size of the building,
- lot size,
- ceiling height,
- office component,
- parking,
- trucking access,
- truck parking if available, etc….
In order to get to the truth, we need to dig a bit deeper…
This week we are covering the Toronto-North Markets (Markham, Vaughan, Aurora, & Newmarket).
Statistical Summary – GTA Industrial Market Overview – Q2 2019
GTA Industrial Market Overview – Q2 2019 – Credit – Cushman & Wakefield ULC
Toronto North Market (Markham)
Properties Sold between April 2019 – June 2019, Size Range 20,000 SF plus
A total of 1 property is sold. The price achieved was $211 PSF, with a building size of 72,438 SF.
36 Apple Creek Blvd, Markham
Toronto North Market (Markham)
Properties Leased between April 2019 – June 2019, Size Range 20,000 SF plus
On the leasing side, a total of 3 properties were leased. The net rental rates achieved were from $7.00 – $10.00 PSF, with an average building size of 34,471 SF and an average net rental rate of $8.33 PSF.
4175 Fourteenth Avenue, Markham
Toronto North Market (Vaughan)
Properties Sold between April 2019 – June 2019, Size Range 20,000 SF plus
In Q2 2019, a total of 8 properties were sold. The prices achieved were in the range of $99 – $406 PSF, with an average building size of 60,601 SF and an average price of $217 PSF.
407 Basaltic Road, Vaughan
Toronto North Market (Vaughan)
Properties Leased between April 2019 – June 2019, Size Range 20,000 SF plus
On the leasing side, a total of 5 properties were leased. The net rental rates achieved were from $7.95 – $10.00 PSF, with an average building size of 27,632 SF and an average net rental rate of $9.07 PSF.
356 Four Valley Drive, Vaughan
Toronto North Market (Aurora)
Properties Sold between April 2019 – June 2019, Size Range 20,000 SF plus
A total of 2 properties were sold. The prices achieved were in the range of $186 – $202 PSF, with an average building size of 26,754 SF and an average price of $194 PSF.
99 Engelhard Drive, Aurora
Toronto North Market (Aurora & Newmarket)
Properties Leased between April 2019 – June 2019, Size Range 20,000 SF plus
On the leasing side, a total of 4 properties were leased, 1 property in Aurora and 3 properties in Newmarket. The net rental rates achieved were from $7.25 – $8.75 PSF, with an average building size of 37,991 SF and an average net rental rate of $8.13 PSF.
630 Newpark Boulevard, Newmarket
Conclusion
So, how much is your property really worth?
What rental rate can you expect or how much per SF would you be able to get if you sell your building? How much can we compress CAP rates to create even greater value?
For a confidential consultation or for 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 25 years.
Goran Brelih is a Senior Vice President for Cushman & Wakefield ULC in the Greater Toronto Area.
Over the past 27 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 currently serving as Immediate Past President of the SIOR ‐ Society of Industrial and Office Realtors, Central Canadian Chapter and on the Board of Directors of Muki Baum Accessibility Centre, a Toronto‐based NGO which provides support to children and adults with complex disabilities.
Specialties:
Industrial Real Estate Sales and Leasing, Investment Sales, Design-Build and Land Development
About Cushman & Wakefield ULC.
Cushman & Wakefield is a leading global real estate services firm that delivers exceptional value by putting ideas into action for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with 48,000 employees in approximately 400 offices and 70 countries.
In 2017, the firm had revenue of $6.9 billion across core services of property, facilities and project management, leasing, capital markets, advisory, and other services. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter.
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.
