the mississauga & brampton report spring 2016€¦ · the mississauga & brampton report....
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THE MISSISSAUGA& BRAMPTON REPORT
JOHN LAFONTAINE’S
SPRING 2016
Heather DeBruin*Coordinator/ Executive Assistant Role: Senior Coordinator and Program Administrator416 798 [email protected]
TOM MANDEL Project Director416 798 [email protected]
Tiffany Noble*Client Services CoordinatorRole: Transaction Management and Administrative Assistant 416 798 [email protected]
Michael RintoulSales TraineeRole: Cold Calling and Territory Management 416 798 [email protected]
Laurie Hartl*Client Services AssistantRole: Valuations and Property Showings416 798 [email protected]
Lisa Maharaj*Client Services AssistantRole: Transaction Management and Administrative Assistant416 798 [email protected]
Monika DzambaClient Services AssistantRole: Graphics and Marketing Specialist416 798 [email protected]
Fraser McKenna*Senior Sales AssociateRole: Transaction Strategist, Deal Intermediary416 798 6275 [email protected]
Shawn McGinn*Senior Sales AssociateRole: Business Development, Transaction Strategist 416 798 6209 [email protected]
John LaFontaine*Vice Chairman416 798 [email protected]
In today’s market there are two recurring obstacles with respect to new industrial developments. Firstly, the price of serviced ICI land is surging to upwards of $1M/acre in some areas of the GTA forcing firms to move further from the City. Secondly, Development Charges are higher than they have ever been and continuing to rise in all of the suburban markets, resulting in Tenants who require first-class facilities to pay above market rents in undesirable locations. We see this as an opportunity for Landlords in prime locations to convert older product into newer, more appealing facilities and collect higher rental incomes with better covenants.
The common misconception of redeveloping existing properties is the cost of demolition. Our experience has proven that a facility with a conventional steel structure can be demolished at little to no cost (i.e. less than $0.50/sq. ft.). Demolition costs increase slightly for a much older building with little to no steel or other salvageable materials. This type of building can be demolished for approximately $3.00/sq. ft. Once a building is demolished, the pricing in Figure 1 can be used to approximate the cost of a new facility to modern standards based on square footage.
THE SOLUTION – PART 1 – REDEVELOPMENT
REDEVELOPING EXISTING FACILITIES TO MAXIMIZE POTENTIALCURRENT DEVELOPMENT MARKET
THE PROBLEM
*Sales Representative
Landlords in markets such as Mississauga and Brampton are consistently faced with the same inefficiencies when their existing properties are evaluated by prospective new Tenants:• Clear height• Shipping configurations• Parking layoutsToday’s trend for an Industrial Tenant looking for new space is pushing towards a minimum clear height of 32’, 1 T/L door per 7,000 sq. ft., 52’ bay spacing, bigger office areas and more energy efficient buildings to lower operating costs.
• Office space allocations• Bay sizes• Energy efficiency
Our experience has shown that a Tenant’s needs can be met by expanding an existing facility along with some minor renovations. This type of redevelopment can address the concerns of energy efficiency, office space allocations and parking/shipping layouts. Figure 2 shows the approximate cost of expanding a warehouse to modern standards in the GTA.
Every building/property contains specific challenges and restrictions. As part of our turnkey services, Giffels can assist in the analysis of all aspects of your property to lay out the most efficient approach to a redevelopment or expansion project at no cost to the Owner. With over 30 years in the industry we have the experience and capabilities to help you reposition your assets and maximize your returns.
THE SOLUTION – PART 2 – EXPANSION
HOW CAN GIFFELS HELP?
SQ.FT.
SQ.FT.
FOR MORE INFORMATION CONTACT:
Fig. 1
Fig. 2
COMING TO HALTON HILLS
JANUARY 201736’
CLEAR90 TL
DOORS28.7
ACRES
LOCATION MAP
VAUGHANAVAILABILITIES
Fraser McKenna*Senior Sales Associate416 798 6275 [email protected]
UP TO 41,556 SQ. FT. FOR LEASE
5055 SATELLITE DRIVEUNITS 3 & 4, MISSISSAUGA
2,056 SQ. FT. FOR LEASE
294 WALKER DRIVE UNIT 1, BRAMPTON
7,269 SQ. FT. OF OFFICE FOR LEASE 8,300 SQ. FT. FOR LEASE
25,840 SQ. FT. FOR LEASE
5101 ORBITOR DRIVEMISSISSAUGA
1704 MEYERSIDE DRIVEUNITS 5-6, MISSISSAUGA
6420 KESTREL ROADMISSISSAUGA
:: Built in 1999:: Airport Corporate Centre location:: 1DI & 3 TL shipping doors
:: Renovated office space:: Close access to public transit and major highways
:: 2nd floor space; 6 private offices:: Mississauga Transit bus stop in front of the building
:: Airport area industrial unit:: Newer office with laminate floors:: 2 TL doors; 18’ clear height
:: Recently renovated industrial unit:: Roof replaced in 2006:: 2 TL doors; 18’ clear height
JOHN LAFONTAINE*Vice Chairman416 798 [email protected]*Sales Representative
RECENT BIG TRANSACTIONS
3
18,423 SQ. FT. FOR LEASE
INDUSTRIAL AVAILABILITIESMISSISSAUGA &BRAMPTON
2400 SKYMARK AVENUEUNIT 7, MISSISSAUGA
UP TO 90,000 SQ. FT. FOR SUBLEASE
7035 ORDAN DRIVEMISSISSAUGA
:: Newer construction, metal cladding :: Dock levelers; racking available:: 7 TL & 1 DI door; 35’ clear height
+/- 5 Acresof Extra Land
BUS STOP
LAK
ESHO
RE RD W
9
49,343 SQ. FT. FOR SUBLEASE
4 KENVIEW BOULEVARDBRAMPTON
:: Ample trailer parking :: TL doors have hydraulic levelers:: 4 TL & 2 DI doors; 18’ clear height
7
:: Class A building; built in 1999:: Airport Corporate Centre location:: 1 TL door; 24’7” clear height
UP TO 564,824 SFFOR LEASESTATE-OF-THE-ART LOGISTICS FACILITY
COMING TO HALTON HILLS JANUARY 2017
2 CLEVE COURT
“36’ Clear Height; On-Demand Expansion”
P A R K W A YLOGISTICS CENTRE
SEEKING LEED-NC
SILVER CERTIFICATION
:: 8 cranes, interior rail access:: Long run providing contiguous flow :: 2 TL & 5 DI doors; 33’ clear height
7 BLAIR DRIVEBRAMPTON
174,668 SQ. FT. FOR SALE OR LEASE
400
2
1
1 2
6AVAILABLE
2 TL DOORS
5 8
62,420 SQ. FT. FOR LEASE
1575 SOUTH GATEWAY RDUNITS AB, MISSISSAUGA
:: Newer, precast construction:: Public transit along Dixie Rd:: 6 TL & 1 DI door; 24’4” clear height
216,846 SQ. FT. FOR SALE
560 HENSALL CIRCLEMISSISSAUGA
:: Access to the QEW at Cawthra Road:: Full roof replacement in 2010:: 34 TL doors; 27’ clear height
10
106,630 SQ. FT. FOR SALE
2457 LAKESHORE ROAD W MISSISSAUGA
:: 10.49 acre property:: Approximately 5 acres extra land:: 3 TL & 8 DI doors; 23’5”-35’ clear
11 12
4
New for Sale
49,229 SQ. FT. Outstanding frontage on Jane St East access to Hwy 400, 407 & 4014 TL & 2 DI doors, 20’ clear
150 CALDARI ROAD
FOR LEASE
2
107,467 SQ. FT.
2050 DREW ROAD MISSISSAUGA
LEASED
12
145,142 SQ. FT
11 KENVIEW BLVD BRAMPTON
SOLD
14
946 EDGELEY BOULEVARD
FOR SALE
42,691 SQ. FT. High profile precast constructionCan accommodate 53’ trailers2 TL & 2 DI doors, 22’ clear
1
JUST SOLD
SOLD
5648 MCADAM ROADMISSISSAUGA (40,462 SQ. FT.)
1213 LORIMAR DRIVEMISSISSAUGA (25,100 SQ. FT.)
165 ORENDA ROADBRAMPTON (57,055 SQ. FT.)
MARKETAVERAGE NET RENTAL RATE($ per sq. ft.)
AVERAGE SALE PRICE
($ per sq. ft.)
AVERAGE TMI
($ per sq. ft.)
AVERAGE LAND PRICE($ per acre)
REALTY TAXES
($ per sq. ft.)
INVENTORY (sq. ft.)
AVAILABILITY RATE (sq. ft.)
ABSORPTIONQ1 (sq. ft.)
AVERAGE DAYS ON MARKET
ETOBICOKE $4.56 $82.79 $3.55 $950,000 $2.39 81.3 million 3.4% 81,019 412
MISSISSAUGA $5.82 $146.86 $3.45 $885,000 $2.22 156.7 million 4.2% -7,575 354
BRAMPTON $6.18 $111.09 $3.20 $865,000 $2.32 83.2 million 3.7% 649,302 254
INDUSTRIAL MARKET UPDATEGTA WEST
+ Average days on market have been trending downward since Q2 2015. The Q1 2016 DOM stand at 354 days, lowest figure in 9 quarters.
+ The Mississauga submarket exhibited a 4.2% availability rate for the second straight quarter. As the 5-year average is 5.1%, Mississauga is showing strong demand as of late, which is further supported by the 2.2 million sq. ft. of positive net absorption recorded in 2015.
+ Although both leasing and selling activity remain strong in the West end, only the average asking sale prices have shown significant growth in the last 2 years. The selling prices in Mississauga escalated by almost 15% since Q1 2015 and currently stand at $146.86 per sq. ft.
+ After posting a very strong 2015, Brampton sustained its high demand levels and recorded 649,302 sq. ft. of positive net absorption in Q1 2016. This marks the 9th consecutive quarter of positive absorption for the submarket.
+ The average asking net rental rate in Brampton remained above the $6.00 per sq. ft. mark for the 2nd straight quarter. The Q1 2016 figure in that regard is $6.18/sq. ft., which is well above the 3-year avg. of $5.44/sq. ft. The recent uptick in demand from large bay users, coupled with increased supply of new product in the submarket is leading to the inflation of average rents particularly for distribution space.
+ There were 7 transactions recorded in Q1 2016 that were in excess of 100,000 sq. ft. with many warehouse/distribution users active in the ‘big box’ market.
MARKETVIEW SNAPSHOT | Q1 2016
MISSISSAUGA MARKET HIGHLIGHTS MISSISSAUGA SUPPLY & DEMAND
BRAMPTON MARKET HIGHLIGHTS BRAMPTON SUPPLY & DEMAND
RECENT MISSISSAUGA & BRAMPTON TRANSACTIONS
Toronto Industrial, Q1 2016
Mississauga
Inventory Average Net Rental Rate Average Sale Price(sq. ft.) ($ per sq. ft.) ($ per sq. ft.)156.7 million $5.82 $146.86
Availability Rate TMI Average Land Price(sq. ft.) ($ per sq. ft.) ($ per acre)4.2% $3.45 $885,000
Absorption Q1 Realty Taxes Average Days on Market(sq. ft.) ($ per sq. ft.)-7,575 $2.22 354
Recent Transactions
Lease Transactions
Tenant Address Size (sq. ft.) Deal Type
Walmart Canada Inc. 200 Courtneypark Drive W, Mississauga 649,914 RenewalNational Logistics Services Inc. 7045 Beckett Drive, Mississauga 149,629 New
Sale Transactions
Purchaser Address Size (sq. ft.) $ per sq. ft.
2486666 Ontario Inc. 1550 Caterpillar Road, Mississauga 177,2001218934 Ontario Ltd. 3125 Wolfedale Road, Mississauga 92,601
Market Highlights
Supply & Demand Weighted Average Occupancy Costs
Q1 2016 CBRE Research © CBRE Limited
Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE.
$62.09$49.00
• The Mississauga submarket exhibited a 4.2% availability rate for the second straight quarter. As the five-year average is 5.1%, Mississauga is showing strong demand as of late, which is furthersupported by the 2.2 million sq. ft. of positive net absorption recorded in 2015.
• Average days on market have been trending downward since Q2 2015. The Q1 2016 DOM stand at 354 days, which is the lowest figure in nine quarters.
• Although both leasing and selling activity remain strong in the West end, only the average asking sale prices have shown significant growth in the last two years. The selling prices in Mississauga escalated by almost 15% since Q1 2015 and currently stand at $146.86 per sq. ft.
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2011 2012 2013 2014 2015 Q1 2016
Sale
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sq. ft
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per s
q. ft.
)
Net Rent Average Asking Sale Price
MARKETVIEW SNAPSHOT
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2011 2012 2013 2014 2015 Q1 2016
Avail
abilit
y (%
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sq. ft
.
Absorption New Supply Availability Rate
Toronto Industrial, Q1 2016
Brampton
Inventory Average Net Rental Rate Average Sale Price(sq. ft.) ($ per sq. ft.) ($ per sq. ft.)83.2 million $6.18 $111.09
Availability Rate TMI Average Land Price(sq. ft.) ($ per sq. ft.) ($ per acre)3.7% $3.20 $865,000
Absorption Q1 Realty Taxes Average Days on Market(sq. ft.) ($ per sq. ft.)649,302 $2.32 254
Recent Transactions
Lease Transactions
Tenant Address Size (sq. ft.) Deal Type
UTi Canada Contract Logistics Inc. 250 First Gulf Boulevard, Brampton 300,458 RenewalSolutions 2 GO Inc. 7900 Airport Road, Brampton 215,003 New
Sale Transactions
Purchaser Address Size (sq. ft.) $ per sq. ft.
2494747 Ontario Ltd. 98-102 Rutherford Road S, Brampton 295,200FGF Brands (Caplink Limited) 10 Woodslea Road, Brampton 150,681
Market Highlights
Supply & Demand Weighted Average Occupancy Costs
Q1 2016 CBRE Research © CBRE Limited
Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE.
$102.52$52.51
• The average asking net rental rate in Brampton remained above the $6.00 per sq. ft. mark for the second straight quarter. The Q1 2016 figure in that regard is $6.18 per sq. ft., which is well above thethree-year average of $5.44 per sq. ft. The recent uptick in demand from large bay users, coupled with increased supply of new product in the submarket is leading to the inflation of average rentsparticularly for distribution space.
• After posting a very strong 2015, Brampton sustained its high demand levels and recorded 649,302 sq. ft. of positive net absorption in Q1 2016. This marks the ninth consecutive quarter of positive absorption for the submarket.
• There were 7 transactions recorded in Q1 2016 that were in excess of 100,000 sq. ft. with many warehouse/distribution users active in the 'big box' market.
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2011 2012 2013 2014 2015 Q1 2016
Sale
Price
(per
sq. ft
.)
Net R
ent (
per s
q. ft.
)
Net Rent Average Asking Sale Price
MARKETVIEW SNAPSHOT
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2011 2012 2013 2014 2015 Q1 2016
Avail
abilit
y (%
)
sq. ft
.
Absorption New Supply Availability Rate
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7 SELBY ROADBRAMPTON (23,500 SQ. FT.)
SOLD
SUBLEASED
LEASED