{"id":28032,"date":"2026-07-13T11:11:40","date_gmt":"2026-07-13T18:11:40","guid":{"rendered":"https:\/\/www.roryc.ca\/blog\/?p=28032"},"modified":"2026-07-13T08:42:32","modified_gmt":"2026-07-13T15:42:32","slug":"smaller-tranches-of-space-dominate-vacancies-as-industrial-market-shifts","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2026\/07\/smaller-tranches-of-space-dominate-vacancies-as-industrial-market-shifts\/","title":{"rendered":"Smaller Tranches of Space Dominate Vacancies as Industrial Market Shifts"},"content":{"rendered":"<p style=\"text-align: justify;\">Vancouver\u2019s industrial market is seeing strong demand for a limited supply of large-format space, with Grosvenor Canada signing its largest-ever lease on Annacis Island.<\/p>\n<p style=\"text-align: justify;\">S&amp;S Activewear Canada Inc., a distributor of branded merchandise, has leased Millennium 6, a 162,650-square-foot warehouse at 1005 Derwent Way built in 2014. Previously occupied by two tenants, the property will now have a single tenant in S&amp;S.<\/p>\n<p style=\"text-align: justify;\">The deal more than doubles S&amp;S\u2019s regional footprint, with the company expecting to handle $50 million worth of inventory when it opens in the fourth quarter.<\/p>\n<p style=\"text-align: justify;\">\u201cThis investment represents much more than square footage and broader inventory; it\u2019s an investment in our people, our customers, and the long-term future of our company,\u201d Josh Clark, chief operating officer of S&amp;S, said in a statement announcing the deal. \u201cExpanding our Vancouver operations strengthens our ability to serve customers across Canada while creating a more scalable and efficient network for future growth.\u201d<\/p>\n<p style=\"text-align: justify;\">The lease represents 18 per cent of Grosvenor\u2019s total built space on Annacis, part of a portfolio of nearly 185 acres on the island.<\/p>\n<p style=\"text-align: justify;\">\u201cS&amp;S\u2019s decision to relocate to Annacis Island reinforces the asset as a core, high-performing industrial node advancing our broader objective of driving value through strategic leasing and aligns with our refined strategy centred on investing in Canada for the long-term,\u201d said Grosvenor executive vice-president Robert Duteau, who leads Grosvenor\u2019s investment and asset management activities across Canada.<\/p>\n<p style=\"text-align: justify;\">The deal is part of a broader uptick in industrial leasing in Vancouver, with large-format space driving much of the recent activity.<\/p>\n<p style=\"text-align: justify;\">Overall vacancies in Metro Vancouver ended the second quarter at 4.4%, according to Cushman &amp; Wakefield, which represented S&amp;S in its quest for space. But vacancies in large-format space dropped below 1%.<\/p>\n<p style=\"text-align: justify;\">While overall leasing activity moderated from the previous quarter, according to Cushman &amp; Wakefield, seven new leases greater than 50,000 square feet were completed, totalling nearly 700,000 square feet and accounting for 29% of total new lease commitments of 2.4 million square feet.<\/p>\n<p style=\"text-align: justify;\">Besides S&amp;S, Toyota Canada Inc. signed a lease for 171,875 square feet in the 19000 block of 20 Avenue, Surrey.<\/p>\n<p style=\"text-align: justify;\">Beyond the Lower Mainland, Toyota is planning to expand its footprint in Calgary while Amazon acquired a property in Edmonton last fall for a new distribution facility.<\/p>\n<p style=\"text-align: justify;\">The demand from larger occupiers helped push net absorption across Metro Vancouver to 624,297 square feet in the second quarter, its highest level in three years.<\/p>\n<p style=\"text-align: justify;\">The tenants that require large format space typically have large portfolios running across Canada or North America. Despite economic uncertainties, it\u2019s easier for these larger occupiers to make sense of a new commitment within the scope of their portfolio than it would be for some smaller users.<\/p>\n<p style=\"text-align: justify;\">\u201cS&amp;S occupy more than 10 million square feet across North America,\u201d said Sean Ungemach, executive vice-chairman of Cushman &amp; Wakefield. \u201cWhen you\u2019re averaging across a portfolio of properties, it\u2019s not as difficult to deal with.\u201d<\/p>\n<p style=\"text-align: justify;\">The demand for space larger than 100,000 square feet is enough that options have dropped to 17 today, and those that remain are typically not Class A space.<\/p>\n<p style=\"text-align: justify;\">Meanwhile, there are more than 100 options for mid-sized space.<\/p>\n<p style=\"text-align: justify;\">This transaction at Millenium 6 supports Grosvenor\u2019s plans to begin construction on Millenium 7, a new 156,000 square foot industrial building.<\/p>\n<p style=\"text-align: justify;\">While no one is building on spec, space under construction has inched back over the past two quarters and now stands at 3.6 million square feet. This compares to a high of 13.1 million square feet at the end of 2022 and 2.8 million square feet at the end of 2025<\/p>\n<p style=\"text-align: justify;\">\u201cThere are a number of groups ramping up to build spec on large format [space],\u201d he said, noting that builders remain cautious. \u201cIt\u2019s a balanced market.\u201d<\/p>\n<p><a href=\"https:\/\/www.biv.com\/news\/real-estate\/vancouver-industrial-space-driven-by-large-format-users-in-q2-12494611\" target=\"_blank\" rel=\"noopener\">Vancouver Industrial Space Driven by Large-Format Users in Q2-2026<\/a> by Peter Mitham | BIV<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Vancouver\u2019s industrial market is seeing strong demand for a limited supply of large-format space, with Grosvenor Canada signing its largest-ever lease on Annacis Island. S&amp;S Activewear Canada Inc., a distributor &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2026\/07\/smaller-tranches-of-space-dominate-vacancies-as-industrial-market-shifts\/\">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":[8,13],"tags":[],"class_list":["post-28032","post","type-post","status-publish","format-standard","hentry","category-market-updates","category-real-estate"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.0 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Smaller Tranches of Space Dominate Vacancies as Industrial Market Shifts &#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\/2026\/07\/smaller-tranches-of-space-dominate-vacancies-as-industrial-market-shifts\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Smaller Tranches of Space Dominate Vacancies as Industrial Market Shifts &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"Vancouver\u2019s industrial market is seeing strong demand for a limited supply of large-format space, with Grosvenor Canada signing its largest-ever lease on Annacis Island. 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