October 27th, 2023

The future is now.

With the proliferation of new technologies such as artificial intelligence, automated warehouse management systems, and autonomous vehicles, we are experiencing first-hand many of the concepts we may have thought would never occur in our lifetimes.

And not only are we seeing incredible advancements on the cutting-edge side, but to reinforce the examples above, industries such as commercial real estate, logistics, manufacturing, and transportation are adopting and applying these technologies into their everyday operations.

While industrial real estate has traditionally been behind other asset classes (and sectors altogether), we have seen it catch up in terms of its prominence within society, the rents and values, and modern layouts and designs.

However, we have yet to see all of these concepts integrated into what we can abstractly term the “modern multi-storey warehouse” – with its five to twenty levels, multi-modal access, and ability to deploy trucks, vans, and drones direct to consumers.

Although this may be difficult to conceive, there are already projects around the world which have incorporated bits and pieces. From warehouses up to 24-storeys tall and with rail, highway, and port access to infill delivery stations with freight elevators providing access for vans and, in the near future, top-level access for drones.

The technology, vision, and in some cases, market economics exist to support these developments. Yet we have not quite yet caught up in the execution of them. That said, North America is seeing another wave of multi-storey warehouses, building upon the successes of previous facilities. It is only a matter of time, boldness, and perhaps further increases in rents and values before this niche industrial property becomes mainstream.

So with that said, let’s revisit a topic we originally profiled in 2020, and one which has never been closer to reality in the Greater Toronto industrial market.

When and Where Did Multi-Storey Warehousing Begin?

Multi-storey warehousing has its roots in Asia, with its vast populations and numerous urban centres. According to DailyHive, “warehouse distribution centres in Asia are as high as 12 storeys, and the tallest facility in Asia is a 22-year-old facility in Hong Kong with 22 storeys.” Meanwhile, Goodman erected the Goodman Interlink in 2020; a 24-level logistics industrial warehouse in Hong Kong, breaking the previous record.

Goodman Interlink Hong Kong, Source: CommercialRealEstate.com.au

According to a World Property Journal analysis, the phenomenon has “succeeded in Asia due to high land and construction costs, small site areas, limited industrial land availability, and the accessibility to serve city center populations.”

Further, it gives insight into the local markets, whereby “industrial land prices per developable area are approximately six times greater in land-constrained areas than in land-plentiful ones. Hong Kong records the most expensive land price at $240 USD per sq. ft., followed by Singapore and Tokyo at $90 per sq. ft. and $70 per sq. ft., respectively. China has the cheapest land price at $15 per sq. ft. in tier-one cities.”

While here in the Greater Toronto Area we see industrial land in certain pockets exceeding $4-million per acre… and might soon approach $5-million per acre ($115 CAD per SF). Compared with the above pricing,  Hong Kong land would be $10.4M USD per acre, Singapore at $3.9M USD per acre, and Tokyo at $3.05M USD per acre.

North America Finally Sees Multi-Storey Warehousing 

Chicago Industrial Market – Key Stats

  • Inventory: 1,230,096,109 SF
  • Vacancy Rate: 4.4%
  • Asking Net Rent: $7.14 PSF
  • YTD Net Aborption: 10,463,257 SF
  • Under Construction: 19,141,984 SF

1237 W Division, Chicago – 505,443 SF – Logistics Property Co. 

Rendering of 1237 W Division Multi-Storey Warehouse. Source: JLL.

While, on the surface, Chicago’s market stats don’t show all of the tell-tale signs that would necessarily support a multi-storey development, Logistics Property Co is bringing to market a 505,443 square-foot facility at 1237 W Division Street. The main floor is 252,706 SF in size with 36’ clear height, and 29 truck-level and 2 drive-in doors, as well as a mezzanine of approximately 110,00 SF, 16’ clear height, and 187 car/90 van parking spaces. The second floors is slightly larger at 252,737 SF with 34’ clear height and identical shipping door counts – and has a similar-sized mezzanine. Finally, the 292,530 SF roof support 813 auto or 448 van parking spaces, which exemplifies how no space goes to waste.

Given Chicago’s industrial market has over 1.2 billion square feet of industrial inventory, a 4.4% vacancy rate, and average industrial rents reportedly at just $7.14 per square foot (NNN), the project is certainly targeting specific users that are looking to take advantage of the excellent location within the City and broader Region, as well as access to national transportation routes (air, rail, ports and highways). 

On site at 1237 W Division. Source: Yours truly.

A couple weeks ago, I had the privilege of visiting the site itself. The size and scope of development such as this is simply unbelievable. From all of the site work and structural support, to the ramps, grading, usability, and safety measures built-in, the value of a multi-storey facility – and required rents to support it – are evident. 

On site at 1237 W Division. Source: Yours truly.

Vancouver Industrial Market – Key Stats

  • Inventory: 238,605,640 SF
  • Vacancy Rate: 1.6%
  • Asking Net Rent: $21.12 PSF
  • YTD Net Aborption: 3,497,564 SF
  • Under Construction: 9,335,448 SF

Riverbend Business Park, Vancouver – 707,056 SF – Oxford Properties

Oxford’s Riverbend Business Park, Vancouver. Source: Skyrise Vancouver.

The first of its kind in Canada, Oxford Properties developed the Riverbend Business Park – a multi-storey industrial warehouse with 707,000 square feet of space over two floors. The main floor is 437,000 square feet in size with 32’ clear heights, 78 truck-level and 4 drive-in doors, while the second floor is 270,000 square feet with 28’ clear heights, 303 parking stalls, and 40 truck-level and 2 drive-in doors. Given the landlocked nature of the Greater Vancouver Area, as well as the historically, relatively higher industrial rents and land values, the economics of such an undertaking make a lot more sense on paper.

New York City (Outer Boroughs) Industrial Market – Key Stats

  • Inventory: 138,169,638 SF
  • Vacancy Rate: 4.4%
  • Asking Net Rent: $26.02 PSF
  • YTD Net Aborption: -351,623 SF
  • Under Construction: 3,469,358 SF
The 1.3 MSF, multi-storey Bronx Logistics Center. Source: JLL.

Similar to Oxford’s Vancouver project, as well as the general economics seen in Asia, New York City is well-known for its expensive land, rents, and massive population. Given most product within Manhattan is office, retail, and multifamily, it is more logistically challenging to find the right location for industrial properties, nevermind one as challenging and as large as this multi-storey facility.

Delivered in Q2 2023, Dune Real Estate Partners and Turnbridge Equities developed a 1.3-million square foot multi-storey warehouse just five minutes from Manhattan’s Upper East Side and just twenty minutes away from the rest of New York City, Westchester, and Long Island. The project boasts “two market-leading, 250,000 SF warehouse floors” with separate, exclusive entrances, 32 foot clear heights, 48 truck-level and 72 drive-in doors, and 730,000 SF of total parking.

Is the Greater Toronto Industrial Market Ready for Multi-Storey Warehousing?

Greater Toronto Industrial Market – Key Stats

  • Inventory: 813,957,670 SF
  • Vacancy Rate: 1.9%
  • Asking Net Rent: $18.31 PSF
  • YTD Net Aborption: 445,772 SF
  • Under Construction: 17,725,920 SF

Although the Greater Toronto Area has yet to see a multi-storey project unfold… it may just be a matter of time. Developers need to hit a certain return to green-light a project of this scale, and initial cost estimates put that number in the $40 PSF to $50 PSF net range. While this may have been inconceivable just a few short years ago, industrial rents have increased significantly to an average of $18.31 PSF net, with some modern warehouses asking in excess of $22 PSF net.

Despite the remaining gap, we may still see a multi-storey facility where land is expensive – requiring the added density and cubic volume – and where logistically, the access to a growing consumer base outweighs the cost of battling traffic and shipping goods from regional hubs into a global metropolis with worsening traffic.

One last factor to consider are the different designs and configurations that a prospective builder may utilize. The above examples show variations of similar designs, however, it would be possible to include an attached manufacturing portion, or even additional storeys (as has been successfully done in Asia) with freight elevators to support van delivery fleets and, even, drone deliveries.

Such a concept could be realized adjacent to the downtown Core or within a pocket in midtown Toronto, and could provide the efficiencies and access to consumers that would make the enormous rents easier to stomach.


The concept of a multi-storey industrial warehouse is one of creativity, imagination, and ingenuity. Its existence and operation within our society will be one of necessity and financial incentive… either that or an initiative carried out by a progressive and risk-taking developer. So far, the Greater Toronto Area does not have a backer, but, given the forces at play, the Region would likely make a great candidate.

Extremely dense pockets of the urban core may be well served by these futuristic buildings and their ability to connect with consumers. The only roadblocks right now are economics and experience. With few understanding the former, and even fewer possessing the latter, it may take a bold move to get the ball rolling. However, once successfully completed, the pioneers should inspire the early majority. From there, it will not be unreasonable to see them spaced throughout the City of Toronto. 

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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