PIRET is now leasing this new, almost 300,000-square-foot industrial facility at 75 Venture Dr. in Toronto. (Courtesy PIRET)
The redevelopment of a property in East Toronto is the latest result of Pure Industrial Real Estate Trust‘s (PIRET) strong focus on its three primary markets, Vancouver, Montreal and the Greater Toronto Area.
PIRET acquired the 14.82-acre site and existing 150,000-square-foot DuPont manufacturing plant in July 2017 for $16.1 million in cash. It leased the facility back to DuPont through January 2018, before demolishing the building and enlisting Hopewell Development to redevelop the site on a speculative basis.
There’s now a 295,087-square-foot facility with 36-foot clear heights at 75 Venture Dr., near the northeast corner of Morningside Avenue and Sheppard Avenue East.
PIRET liked the location for several reasons: access to public transit; an available local labour force and warehouse wages lower than some other Greater Toronto Area (GTA) submarkets; and a lack of quality competing industrial buildings in the area.
No pre-leasing for 75 Venture Dr.
“The acquisition price with the existing building, plus demolition, is lower than what the land is trading at today on a stand-alone basis,” PIRET chief operating officer David Owen told RENX. “It was our decision not to pre-lease it mainly because of the way the market has been moving.”
Now that the building is up and running, Avison Young has been brought on board to target logistics, e-commerce and warehouse users.
A lease rate of $10 per square foot was recently posted. For comparison sake, Avison Young said in its most recent Q3 2019 Toronto industrial report average asking industrial rents in Toronto were $8.95 per square foot – a rate that had risen rapidly through the year.
While PIRET is open to single or multiple tenants at 75 Venture Dr., the preference is to lease it all to one company.
“We really don’t see a discount on rent for a single tenant versus a multi,” said Owen. “We’re patient enough to know that there’s probably demand on a larger scale, given the lack of big-box space in Scarborough.”
Montreal portfolio acquired from HOOPP
In other recent developments PIRET purchased an 11-property, 1.5-million-square-foot portfolio of warehouses, distribution centres and logistics buildings in the Greater Montreal Area from Healthcare of Ontario Pension Plan (HOOPP) for $249 million last September. Owen said the integration of those properties has been going well.
“Given the lack of availability and given the lack of speculative construction and supply, a class-A portfolio like HOOPP’s really positions itself to attract large-bay major distributors. That’s why we targeted it and paid what we paid, and why it’s so exciting for us.”
The properties are well-located, with the majority on the island of Montreal, and were largely built in the early 2000s. All of the buildings have 28-foot-plus clear heights and some have heating- ventilation- and air-conditioning-controlled interiors.
Availability of industrial properties is at an all-time low in Montreal, but rents haven’t yet seen a significant spike. Owen views Montreal as being earlier in its cycle than Toronto and Vancouver, but sees parallels between the three markets.
CBRE was enlisted to assist with leasing the portfolio.
“Leasing has been going well,” said Owen. “We don’t have a lot of interim rollover but, with the ones that have rolled, there’s been positive momentum.
“Given that the market is still in early innings, there’s always a pause for tenants, but we’re going to stick to our strategy. We really believe in the real estate.”
PIRET’s move out of Alberta
Toronto-headquartered PIRET sold a 3.3-million-square-foot Alberta portfolio for $588 million to Summit Industrial Income REIT in November.
It included 37 single- and multi-tenant light industrial properties (22 in Edmonton, 14 in Calgary and one in Grand Prairie) and a 12,649-square-foot parcel of leased land in Edmonton.
“That was in line with our broader strategy of targeting infill, highly land-constrained cities in Canada, which is really Toronto, Montreal and Vancouver,” said Owen. “In Vancouver it’s difficult to find opportunities due to the size of the market. But, Montreal is certainly a focus and Toronto will always be a focus of ours just because of how large it is.
“The majority of opportunities that we see across our desks, being located downtown, are in Toronto.”
Owen said PIRET has a very strong deal pipeline in its three target markets.
“Our internal leasing presence really helps to facilitate that among the industrial brokers in the communities that we actively participate in. As we continue to expand those relationships, opportunities breed other opportunities.
“That’s really important for us and we can’t thank our key brokers enough for that.”
PIRET had a portfolio of 159 properties encompassing 27.2 million square feet at the end of 2019.
Blackstone and Ivanhoé Cambridge own 62 per cent and 38 per cent, respectively, of PIRET.
Owen said PIRET has made more than $1 billion in acquisitions in Toronto, Montreal and Vancouver since going private and has probably been Canada’s largest industrial property purchaser over that time.
“They’re extremely knowledgeable about industrial warehouse space and are one of the largest owners in the world,” Owen said of Blackstone, which is active in North America, Europe, Asia and Australia.
“We’re going to continue to execute on our business plan to be a rent leader, but also to hopefully be viewed as a top-tier landlord.
“Going from public to private really allows us to be more flexible with our capital. As a public REIT, we were really focused on occupancy and AFFO growth, which really meant minimizing your capital spend.”
Owen said PIRET is now looking at things from a total return perspective. It is spending “significant amounts of capital” on its buildings and customer service to attract quality tenants and keep them happy, while also getting the best rents possible.
More emphasis on development
The move from public to private ownership has also made development a higher priority for PIRET. It has an active development pipeline worth more than $500 million.
“That’s really a function of our knowledge of land costs and construction costs and where we want to be within our core markets,” said Owen. “We don’t have in-house construction or development, so we really rely on our partners and on brokers to bring us opportunities.”
PIRET just finished developing a 107,590-square-foot warehouse with a 32-foot clear height at 980 Thornton Rd. in Oshawa, just east of Toronto. CBRE has already leased 21,518 square feet of the building.
PIRET owns a 20-acre site in Vancouver and another site at 260 Eighth St. in the Toronto suburb of Etobicoke that will be developed further down the road.
“We’re actively looking at other stuff in the GTA right now,” said Owen. “The development pipeline is strong.
“Our core focus is always going to be existing buildings in infill markets, but if we can acquire land at a reasonable price and we feel we can substantially increase rents, we’re going to execute.”
TORONTO – The Toronto Regional Real Estate Board says home sales in October surged as buyers continued moving off the sidelines amid lower interest rates.
The board said 6,658 homes changed hands last month in the Greater Toronto Area, up 44.4 per cent compared with 4,611 in the same month last year. Sales were up 14 per cent from September on a seasonally adjusted basis.
The average selling price was up 1.1 per cent compared with a year earlier at $1,135,215. The composite benchmark price, meant to represent the typical home, was down 3.3 per cent year-over-year.
“While we are still early in the Bank of Canada’s rate cutting cycle, it definitely does appear that an increasing number of buyers moved off the sidelines and back into the marketplace in October,” said TRREB president Jennifer Pearce in a news release.
“The positive affordability picture brought about by lower borrowing costs and relatively flat home prices prompted this improvement in market activity.”
The Bank of Canada has slashed its key interest rate four times since June, including a half-percentage point cut on Oct. 23. The rate now stands at 3.75 per cent, down from the high of five per cent that deterred many would-be buyers from the housing market.
New listings last month totalled 15,328, up 4.3 per cent from a year earlier.
In the City of Toronto, there were 2,509 sales last month, a 37.6 per cent jump from October 2023. Throughout the rest of the GTA, home sales rose 48.9 per cent to 4,149.
The sales uptick is encouraging, said Cameron Forbes, general manager and broker for Re/Max Realtron Realty Inc., who added the figures for October were stronger than he anticipated.
“I thought they’d be up for sure, but not necessarily that much,” said Forbes.
“Obviously, the 50 basis points was certainly a great move in the right direction. I just thought it would take more to get things going.”
He said it shows confidence in the market is returning faster than expected, especially among existing homeowners looking for a new property.
“The average consumer who’s employed and may have been able to get some increases in their wages over the last little bit to make up some ground with inflation, I think they’re confident, so they’re looking in the market.
“The conditions are nice because you’ve got a little more time, you’ve got more choice, you’ve got fewer other buyers to compete against.”
All property types saw more sales in October compared with a year ago throughout the GTA.
Townhouses led the surge with 56.8 per cent more sales, followed by detached homes at 46.6 per cent and semi-detached homes at 44 per cent. There were 33.4 per cent more condos that changed hands year-over-year.
“Market conditions did tighten in October, but there is still a lot of inventory and therefore choice for homebuyers,” said TRREB chief market analyst Jason Mercer.
“This choice will keep home price growth moderate over the next few months. However, as inventory is absorbed and home construction continues to lag population growth, selling price growth will accelerate, likely as we move through the spring of 2025.”
This report by The Canadian Press was first published Nov. 6, 2024.
HALIFAX – A village of tiny homes is set to open next month in a Halifax suburb, the latest project by the provincial government to address homelessness.
Located in Lower Sackville, N.S., the tiny home community will house up to 34 people when the first 26 units open Nov. 4.
Another 35 people are scheduled to move in when construction on another 29 units should be complete in December, under a partnership between the province, the Halifax Regional Municipality, United Way Halifax, The Shaw Group and Dexter Construction.
The province invested $9.4 million to build the village and will contribute $935,000 annually for operating costs.
Residents have been chosen from a list of people experiencing homelessness maintained by the Affordable Housing Association of Nova Scotia.
They will pay rent that is tied to their income for a unit that is fully furnished with a private bathroom, shower and a kitchen equipped with a cooktop, small fridge and microwave.
The Atlantic Community Shelters Society will also provide support to residents, ranging from counselling and mental health supports to employment and educational services.
This report by The Canadian Press was first published Oct. 24, 2024.
Housing affordability is a key issue in the provincial election campaign in British Columbia, particularly in major centres.
Here are some statistics about housing in B.C. from the Canada Mortgage and Housing Corporation’s 2024 Rental Market Report, issued in January, and the B.C. Real Estate Association’s August 2024 report.
Average residential home price in B.C.: $938,500
Average price in greater Vancouver (2024 year to date): $1,304,438
Average price in greater Victoria (2024 year to date): $979,103
Average price in the Okanagan (2024 year to date): $748,015
Average two-bedroom purpose-built rental in Vancouver: $2,181
Average two-bedroom purpose-built rental in Victoria: $1,839
Average two-bedroom purpose-built rental in Canada: $1,359
Rental vacancy rate in Vancouver: 0.9 per cent
How much more do new renters in Vancouver pay compared with renters who have occupied their home for at least a year: 27 per cent
This report by The Canadian Press was first published Oct. 17, 2024.
