{"id":13545,"date":"2019-09-05T10:10:31","date_gmt":"2019-09-05T17:10:31","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=13545"},"modified":"2019-08-28T09:54:08","modified_gmt":"2019-08-28T16:54:08","slug":"strata-industrial-development-deals-dominating-the-transactions-in-tight-sector","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2019\/09\/strata-industrial-development-deals-dominating-the-transactions-in-tight-sector\/","title":{"rendered":"Strata Industrial Development Deals Dominating the Transactions in Tight Sector"},"content":{"rendered":"<p style=\"text-align: justify;\">Projects where space is sold \u2013 not leased \u2013 are dominating Metro Vancouver\u2019s industrial market for the first time as property transactions fall sharply from the record investments level of 2018.<\/p>\n<p style=\"text-align: justify;\">In the first six months of this year, industrial investment struggled to reach $272 million, and it \u201cwill likely fall far short of its five-year average,\u201d according to JLL and Altus Group.<\/p>\n<p style=\"text-align: justify;\">The slide began in the first quarter, with a 54% plunge in industrial transactions compared with the record-setting pace seen in the fourth quarter of 2018.<\/p>\n<p style=\"text-align: justify;\">But the bigger story is the transformation of industrial into a strata market as tenants seek shelter from a spike in leasing costs and developers try to cover high land costs.<\/p>\n<p style=\"text-align: justify;\">\u201c52% of investment volume this year has gone towards industrial strata,\u201d JLL reported in a Q2 Capital Market Insights report. \u201cHigh land values are making it easier to justify developing and selling at today\u2019s strata prices, which have reached an average of $300 per square foot.\u201d<\/p>\n<p style=\"text-align: justify;\">\u201cVancouver is the national leader in industrial strata space, and the prices there are higher than in Toronto, the only other market where it is widely used,\u201d said Scott Figler, national manager of JLL capital markets research, in an interview from Toronto.<\/p>\n<p style=\"text-align: justify;\">In fact, some new light-industrial space in Vancouver is already demanding more than $1,000 per square foot.<\/p>\n<p style=\"text-align: justify;\">Yet businesses appear willing to pay for strata space because of ascending lease costs for industrial that are up about 10% from a year ago in a market with a 1.2% vacancy rate.<\/p>\n<p style=\"text-align: justify;\">According to Q2 data from Avison Young, the average industrial lease rate in Metro Vancouver is now $12.70 per square foot and spikes to $19.36 per square foot in Vancouver, by far the highest in North America.<\/p>\n<p style=\"text-align: justify;\">In Surrey, where only 1.3% of its 32.5 million square feet of industrial space is vacant, lease rates are up 13.5% from a year ago to $10.80 per square foot.<\/p>\n<p style=\"text-align: justify;\">Garth White, a principal at Avison Young who specializes in industrial, said Surrey businesses are seeking strata space, which has driven those prices up at least 15% over the past year.<\/p>\n<p style=\"text-align: justify;\">\u201cBusinesses are now looking to strata to provide ownership opportunities,\u201d White said.<\/p>\n<p style=\"text-align: justify;\">To meet that demand, PC Urban Properties has just launched the second-biggest industrial project in Surrey with its 10.45-acre IntraUrban Crossroads development on Highway 10 in Cloverdale.<\/p>\n<p style=\"text-align: justify;\">With three buildings totalling 185,000 square feet, the space will all be sold and includes a mix of industrial and commercial space. Unit sizes range from 2,600 to 76,000 square feet.<\/p>\n<p style=\"text-align: justify;\">\u201cWe are transforming an underutilized, dormant property into a new business hub in Surrey that has the potential to generate 265 full-time jobs,\u201d said Brent Sawchyn, CEO of PC Urban Properties.<\/p>\n<p style=\"text-align: justify;\">All units are being built to industrial standards, with grade loading (larger units feature dock-level loading), 26-foot ceiling heights, high-efficiency lighting and fire sprinklers.<\/p>\n<p style=\"text-align: justify;\">Strata prices have not been released, but Sawchyn is confident that Crossroads will be a success.<\/p>\n<p style=\"text-align: justify;\">He noted that other IntraUrban developments sold out before construction completion in Vancouver, Richmond and Burnaby.<\/p>\n<p style=\"text-align: justify;\"><a href=\"https:\/\/biv.com\/article\/2019\/08\/condos-dominating-metro-industrial-development\" target=\"_blank\" rel=\"noopener noreferrer\">Condos Dominating Metro Industrial Development<\/a> by Frank O&#8217;Brien | Business in Vancouver<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Projects where space is sold \u2013 not leased \u2013 are dominating Metro Vancouver\u2019s industrial market for the first time as property transactions fall sharply from the record investments level of &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2019\/09\/strata-industrial-development-deals-dominating-the-transactions-in-tight-sector\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-13545","post","type-post","status-publish","format-standard","hentry","category-market-updates"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Strata Industrial Development Deals Dominating the Transactions in Tight Sector &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2019\/09\/strata-industrial-development-deals-dominating-the-transactions-in-tight-sector\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Strata Industrial Development Deals Dominating the Transactions in Tight Sector &#8226; 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