METRO VANCOUVER INDUSTRIAL REVIEW JANUARY 19, 2017

Transcription

1 METRO VANCOUVER INDUSTRIAL REVIEW JANUARY 19, 2017 PANELISTS: BETH BERRY, BEEDIE DEVELOPMENT GROUP LEE HESTER, JLL JEFF MILLER, OXFORD PROPERTIES MODERATORS: CHRIS MACCAULEY, CBRE JASON KISELBACH, CBRE

2 FORMAT

3 TOPICS OF DISCUSSION 1 2 THE LEASING MARKET IS STILL 3 WHERE IS ALL THE F#@%& LAND?! WHAT IS DRIVING IT AND WHERE COULD IT GO? SALES - A TALE OF TWO MARKETS TOTALS AND USER SALES VS. INVESTMENT SALES CURRENT LAND MARKET AND THE FUTURE OF INDUSTRIAL DEVELOPMENT

4 THE LEASING MARKET IS STILL HOT

5 LEASING MARKET 2016 KEY LEASING STATISTICS 2.4 % 4.0 MSF 3.6 MSF $9.00 PSF VACANCY RATE ABSORPTION NEW SUPPLY AVG ASKING RATE

6 LEASING MARKET MULTI-MARKET COMPARISON - HOW DO WE STACK UP? VACANCY 2.4% 7.7% 1.8% ABSORPTION (% OF MARKET) 4.0 MSF (2.15%) -1.1 MSF (-0.85%) 9.3 MSF (1.22%) NEW SUPPLY (% OF MARKET) 3.6 MSF (1.94%) 1.2 MSF (0.92%) 4.7 MSF (0.62%) UNDER CONSTRUCTION (% OF MARKET) 4.2 MSF (2.27%) 240 KSF (0.18%) 5.1 MSF (1.02%) # OF OPTIONS 100 KSF

7 LEASING MARKET % OF METRO VANCOUVER TOTALS SURREY DELTA TOTAL ABSORPTION 39% 25% 64% SPOTLIGHT NEW SUPPLY 29% 18% 47% ON SURREY UNDER CONSTRUCTION 19% 30% 49% & DELTA VACANCY SOUTH OF FRASER RIVER 2.6% NORTH OF FRASER RIVER 3.2%

8 LEASING MARKET MARKETS IN A CRITICAL STATE? % OF METRO VANCOUVER ABSORPTION VANCOUVER BURNABY RICHMOND 1% 12% -5% TOTAL 8% Q VACANCY 1.7% 2.1% 1.6% % OF THE TOTAL MARKET UNDER CONSTRUCTION 1.55% 1.88% 0.99%

9 LEASING MARKET SIGNIFICANT TRANSACTIONS 2016 DEALS 2015 DEALS 1 Stemcell Technologies 236,685 Burnaby High Tech 2 Adjacent Production Services 222,879 Langley Film 3 Legion Can TV Productions 208,000 Burnaby Film 4 Skydance Media 195,000 Surrey Film 5 Urban Barn 160,000 Delta Distribution 6 CJ Express 112,066 Delta Distribution 7 Kintetsu 104,190 Delta Distribution 8 Pico Production 97,430 Surrey Film 9 The Crossing Studios 82,110 Burnaby Film 10 Leon s Furniture 79,174 Delta Distribution Amazon 548,000 New West Ecommerce TJX Canada 430,000 Delta Ecommerce Arc Teryx 243,610 New West Distribution Ironwood Studios 177,033 Vancouver Film Lululemon 155,562 Delta Distribution Fed-Ex 153,081 Delta Distribution A52 152,084 Surrey Distribution Orbit Distribution 147,378 Richmond Distribution Jysk 135,115 Pitt Meadows Distribution Kuehne & Nagel 129,782 Richmond Distribution TOTAL 1,497,534 TOTAL 2,271,645 FILM = 60% FILM = 8%

10 LEASING MARKET DISCUSSION

11 SALES: A TALE OF TWO MARKETS

12 SALES INDUSTRIAL SALES STATISTICS $1.2B TOTAL SALES 518 TOTAL # OF DEALS $195 AVG PRICE PSF

13 SALES 1 5 YEAR BANK OF CANADA BOND RATE VS. AVG SALE PRICE $ % Sale Price per SF 4.50% Bond Rate $ % 3.00% $ % $ % $ % 1.50% 1.00% $ % $0 0.00% Bond Rate Sale Price $ per Sq.Ft $ %

14 SALES 1 USER PURCHASE CASE STUDY, THEN & NOW ASSUMPTIONS 20,000 SF 5 YEAR 30% 25 YEAR BUILDING MORTGAGE DOWN PAYMENT AMORTIZATION AVG $ PSF $142 $195 Purchase Price $2,840,000 $3,900,000 5 Year Bond Rate 3.98% 1.16% Spread 150 bps 200 bps Interest Rate 5.48% 3.16%

15 SALES 1 USER PURCHASE CASE STUDY, THEN & NOW % CHANGE Purchase Price $2,840,000 $3,900, Interest Rate 5.48% 3.16% -42 Monthly Payment $12,184 $13,184

16 SALES 1 STRATA CONTINUES TO OUTPERFORM SOUTH VANCOUVER SOUTH BURNABY DELTA CAMPBELL HEIGHTS

17 SALES 2 ANOTHER BANNER YEAR FOR INDUSTRIAL INVESTMENT YEAR # OF DEALS TOTAL PRICE $388M $231M $381M INDUSTRIAL TRANSACTIONS $15M $456M BUT...

18 SALES 2...NOT REALLY Burrard Street Vancouver $185,000,000 Molson Brewery nd Street Delta $60,216, & 8500 River Road Delta $49,500, Lougheed Highway Pitt Meadows $45,750,000 Loblaws to Choice REIT Great Northern Way Vancouver $34,600, Grace Road Surrey $26,455, Bridgeview Drive Surrey $21,500,000 City of Surrey to CCB Glenlyon Parkway Burnaby $17,700, West 3rd Avenue Vancouver $16,400,000 NOT A TRUE INVESTMENT DEAL "FIRM DEAL PRIOR TO 2016" WE ARE LEFT WITH 4 DEALS TOTALING $95M

19 SALE MARKET DISCUSSION

20 WHERE IS ALL THE LAND?!

21 LAND/DEVELOPMENT METRO VANCOUVER INDUSTRIAL LAND SALES - 10 ACRES Total Acres Total Acres 2015 # of Deals 2016 # of Deals

22 REMEMBER THE MARKETS IN A CRITICAL STATE? LAND SALES 3 ACRES TO 2016 VANCOUVER BURNABY RICHMOND # OF DEALS Sold Out Strata 2 Government 5 to Developers (all planned or completed Strata or BTS Sale) All Users or Government AVG # OF DEALS PER YEAR

23 REMEMBER THE MARKETS IN A CRITICAL STATE? REMAINING YEARS LAND SUPPLY VANCOUVER BURNABY RICHMOND SITES OVER 1 ACRE & PRIVATELY OWNED BUILDABLE SQ.FT. 45% SITE COVER REMAINING YEARS BASED ON 5 YEAR AV. ANNUAL ABSORPTION 21 acres 116 acres 276 acres 420,000 2,300,000 5,420,

24 LAND/DEVELOPMENT THE NEW FACE OF INDUSTRIAL IN THE CITY OF VANCOUVER 2.07 FSR 0.83 FSR

25 LAND/DEVELOPMENT THE WALL STREET JOURNAL Prologis to build first multistory warehouse in the US SEATTLE VANCOUVER Developers are having a harder time finding space for new warehouses in increasingly crowded and expensive cities. Their answer: build upward SUB 2.5% VACANCY LAND PRICES 25% GEOGRAPHIC CONTRAINTS WHY NOT HERE?

26 LAND/DEVELOPMENT DISCUSSION

27 KEY TAKEAWAYS LEASING The market will tighten in the short term SALES LAND/DEVELOPMENT Small user sales are still the majority We have not yet hit price levels to free up trophy assets Multi-Story warehouses, we are not there yet

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