METRO VANCOUVER REGIONAL DISTRICT INDUSTRIAL LANDS STRATEGY TASK FORCE

Transcription

1 METRO VANCOUVER REGIONAL DISTRICT INDUSTRIAL LANDS STRATEGY TASK FORCE REGULAR MEETING Wednesday, September 26, :00 a.m. th 28 Floor Committee Room, 4730 Kingsway, Burnaby, British Columbia A G E N D A1 1. ADOPTION OF THE AGENDA September 26, 2018 Regular Meeting Agenda That the adopt the agenda for its regular meeting scheduled for September 26, 2018 as circulated. ADOPTION OF THE MINUTES 2.1 June 21, 2018 Regular Meeting Minutes That the adopt the minutes of its regular meeting held June 21, 2018 as circulated. 3. DELEGATIONS 4. INVITED PRESENTATIONS Roy Pat, Associate Vice President, Industrial, Colliers Geoffrey Charters, Associate, Industrial Sales & Leasing, Colliers Subject: Methods for Quantifying Demand for Industrial Lands 4.2 Eric Aderneck, Planning Consultant Subject: Stratification of Industrial Land in Metro Vancouver 4.3 Kevin King, Bokeh Urban Design Subject: Industrial Edges: Compatibility and Interface Issues in Metro Vancouver Note: Recommendation is shown under each item, where applicable. September 19, 2018

2 Regular Agenda September 26, 2018 Agenda Page 2 of REPORTS FROM COMMITTEE OR STAFF 5.1 Project Status Update for the Regional Industrial Lands Strategy Designated Speaker: Gord Tycho, Senior Regional Planner, Regional Planning Heather McNell, Director, Regional Planning and Electoral Area Services Parks, Planning and Environment That the MVRD Board receive for information the report dated September 18, 2018, titled, Project Status Update for the Regional Industrial Lands Strategy. 5.2 Defining Industrial for the Regional Industrial Lands Strategy Designated Speakers: Gord Tycho, Senior Regional Planner, Regional Planning Parks, Planning, and Environment That the MVRD Board endorse the working definition of Industrial for the purpose of developing the Regional Industrial Lands Strategy as laid out in the report dated September 6, 2018, titled, Defining Industrial for the Regional Industrial Lands Strategy. 5.3 Stratification of Industrial Land in Metro Vancouver Designated Speaker: James Stiver, Division Manager of Growth Management and Transportation Parks, Planning and Environment That the MVRD Board receive for information the report dated September 6, 2018, titled, Stratification of Industrial Land in Metro Vancouver. 5.4 Industrial Edges: Compatibility and Interface Issues in Metro Vancouver Designated Speaker: James Stiver, Division Manager of Growth Management and Transportation Parks, Planning and Environment That the receive for information the report dated September 18, 2018, titled, Industrial Edges: Compatibility and Interface Issues in Metro Vancouver. INFORMATION ITEMS 6.1 Article re Companies Crave Larger Industrial Spaces, from Property Biz Canada, dated August 28, Article re Food Companies Gobbling Up Industrial Space, from Business in Vancouver, dated May 28, Article re Fostering Economic Diversity and Innovation through Industrial Lands, from Bay Area Council Economic Institute, date March 2018

3 Regular Agenda September 26, 2018 Agenda Page 3 of 3 7. OTHER BUSINESS 8. BUSINESS ARISING FROM DELEGATIONS 9. RESOLUTION TO CLOSE MEETING Note: The Committee must state by resolution the basis under section 90 of the Community Charter on which the meeting is being closed. If a member wishes to add an item, the basis must be included below. 10. ADJOURNMENT/CONCLUSION That the adjourn/conclude its regular meeting of September 26, Membership: Stewart, Richard (C) Coquitlam Brodie, Malcolm Richmond Dhaliwal, Sav Burnaby Gill, Tom Surrey Louie, Raymond Vancouver Penner, Darrell Port Coquitlam Williams, Bryce Tsawwassen First Nation Non-Voting Members: Desmond, Kevin TransLink Grout, Kim Agricultural Land Commission Litwin, Val BC Chamber of Commerce McMullin, Anne Urban Development Inst Mingay, Rob Ministry of Jobs, Tourism and Skills Training Silber, Arnold Value Property Group Silvester, Robin Port of Vancouver

4 2.1 METRO VANCOUVER REGIONAL DISTRICT INDUSTRIAL LANDS STRATEGY TASK FORCE Minutes of the Regular Meeting of the Metro Vancouver Regional District (MVRD) Industrial Lands Strategy Task Force held at 1:30 p.m. on Thursday, June 21, 2018 in the 28th Floor Committee Room, 4730 Kingsway, Burnaby, British Columbia. MEMBERS PRESENT: Mayor Malcolm Brodie, Richmond (departed at 3:21 p.m.) Councillor Sav Dhaliwal, Burnaby (arrived at 1:31 p.m.) Councillor Tom Gill, Surrey Councillor Raymond Louie, Vancouver Councillor Darrell Penner, Port Coquitlam MEMBERS ABSENT: Chair, Mayor Richard Stewart, Coquitlam Chief Bryce Williams, Tsawwassen First Nation NON-VOTING MEMBERS PRESENT: Greg Kolesniak for Kevin Desmond, TransLink Kim Grout, Agricultural Land Commission Val Litwin, BC Chamber of Commerce Assistant Deputy Minister Rob Mingay, Ministry of Jobs, Trade and Technology Robin Silvester, Port of Vancouver NON-VOTING MEMBERS ABSENT: Ryan Beedie, Beedie Development Group Anne McMullin, Urban Development Institute Arnold Silber, Value Property Group ALSO PRESENT: Ex-Officio, Director, Mayor Greg Moore, MVRD Board Chair STAFF PRESENT: Heather McNell, Regional Planning and Electoral Area Services Director, Parks, Planning and Environment Carol Mason, Chief Administrative Officer Genevieve Lanz, Legislative Services Coordinator, Board and Information Services In the absence of the Chair, members were requested to appoint an acting Chair to preside over the June 21, 2018 regular meeting of the. It was MOVED and SECONDED That the appoint Councillor Raymond Louie to preside as acting Chair for its regular meeting scheduled June 21, CARRIED Minutes of the Regular Meeting of the MVRD held on Thursday, June 21, 2018 Page 1 of 6

5 1. ADOPTION OF THE AGENDA 1.1 June 21, 2018 Regular Meeting Agenda It was MOVED and SECONDED That the adopt the agenda for its regular meeting scheduled for June 21, 2018 as circulated. CARRIED 2. ADOPTION OF THE MINUTES 2.1 May 10, 2018 Regular Meeting Minutes It was MOVED and SECONDED That the adopt the minutes of its regular meeting held May 10, 2018 as circulated. CARRIED 1:31 p.m. Councillor Dhaliwal arrived at the meeting. 3. DELEGATIONS No items presented. Further to requests made at the May 10, 2018 meeting of the Industrial Lands Strategy Task Force, Chair Moore introduced Kim Grout as the representative for the Agricultural Land Commission and addressed members regarding the requested amendment to the Terms of Reference. Members discussed including the phrase reinforcing need for maximizing industrial land while respecting agricultural land. 4. INVITED PRESENTATIONS 4.1 Pietra Basilij, Sustainable Community Development, Vancouver Economic Commission (VEC) Pietra Basilij, Sustainable Community Development, Vancouver Economic Commission (VEC) provided members with a presentation on the issues regarding industrial land in the City of Vancouver, highlighting the city-wide survey of businesses, varying levels of industrial land use, and challenges associated with housing affordability and labour supply. Presentation material titled Industrial Opportunity is retained with the June 21, 2018 agenda. Minutes of the Regular Meeting of the MVRD held on Thursday, June 21, 2018 Page 2 of 6

6 4.2 Tom Hutton and Trevor Barnes, School of Community and Regional Planning, UBC Tom Hutton and Trevor Barnes, School of Community and Regional Planning, UBC, spoke to members regarding the innovation economy, highlighting classes of industrial land use, development of urban centres and localized networks, and the balance between local production and opportunities to outsource existing production. In response to questions, members were informed of current and developing policy related to the coordination of cities across the region and the innovation economy. Request of Staff Staff was requested to provide members with policies related to industrial land in the region inventoried by the UBC School of Community and Regional Planning. 5. REPORTS FROM COMMITTEE OR STAFF 5.1 Putting Metro Vancouver Industrial Lands in Context James Stiver, Division Manager, Growth Management and Transportation, Parks, Planning and Environment, provided members with a presentation on Metro Vancouver industrial lands highlighting regional industrial land availability, evolution of industrial lands and traditional uses, and a comparison with other metropolitan areas in North America. Presentation material titled Metro Vancouver Industrial Lands in Context is retained with the June 21, 2018 agenda. It was MOVED and SECONDED That the receive for information the June 21, 2018 verbal report from James Stiver titled Putting Metro Vancouver Industrial Lands in Context. CARRIED Councillor Penner absent at the vote. 5.2 Defining Industrial for the Regional Industrial Lands Strategy Report dated June 1, 2018 from Gord Tycho, Senior Regional Planner, and Sean Tynan, Regional Planner, Parks, Planning and Environment, providing the with information on the spectrum of activities on industrial lands including traditional and non-traditional uses. Members were provided a presentation on the variety of industrial land uses occurring across the region, highlighting traditional and non-traditional uses of industrial land, and municipal OCP designations and zoning. Minutes of the Regular Meeting of the MVRD held on Thursday, June 21, 2018 Page 3 of 6

7 Discussion ensued on the definition of industrial as it pertains to the development of the regional industrial lands strategy, the economic valuation of industrial land, and the differentiation between employment and industrial land uses. Presentation material titled Defining Industrial for the Regional Industrial Lands Strategy is retained with the June 21, 2018 agenda. It was MOVED and SECONDED That the receive for information the report titled Defining Industrial for the Regional Industrial Lands Strategy, dated June 1, CARRIED 3:21 p.m. Mayor Brodie departed the meeting. 5.3 Regional Industrial Lands Strategy: Issues and Initiatives Summary Report dated June 13, 2018 from Gord Tycho, Senior Regional Planner, Parks, Planning and Environment, providing the with a summary of challenges and initiatives on regional industrial lands. Members were provided a presentation on four main issues challenging regional industrial lands, highlighting a constrained land base, pressures site issues, and need for regional coordination. On-table additional material titled Industrial and Employment Land - Challenges and Initiatives and presentation material titled Regional Industrial Lands Strategy (RILS) are retained with the June 21, 2018 Industrial Lands Strategy Task Force agenda. It was MOVED and SECONDED That the receive for information the report titled Regional Industrial Lands Strategy: Issues and Initiatives Summary dated June 13, CARRIED 5.4 Industrial Lands and the Innovation Economy Report dated June 7, 2018 from Gord Tycho, Senior Regional Planner, Parks, Planning and Environment, providing the with a research paper examining the rise of the innovation economy and generalized employment lands. Minutes of the Regular Meeting of the MVRD held on Thursday, June 21, 2018 Page 4 of 6

8 It was MOVED and SECONDED That the receive for information the report titled Industrial Lands and the Innovation Economy dated June 7, CARRIED 5.5 Regional Industrial Lands Strategy Defining the Output James Stiver, Division Manager, Growth Management and Transportation, Parks, Planning and Environment, provided members with a presentation on the outputs or deliverables of the Regional Industrial Lands Strategy, highlighting potential report format and scope. Members commented that the Regional Industrial Lands Strategy should include stakeholder viewpoints, a Board recommendation, and be presented in a userfriendly format. 5.6 Manager s Report Report dated June 7, 2018, from Heather McNell, Director, Regional Planning and Electoral Area Services, Parks, Planning and Environment, updating the Industrial Lands Strategy Task Force on the status of Phase I research. 6. INFORMATION ITEMS No items presented. 7. OTHER BUSINESS No items presented. It was MOVED and SECONDED That the receive for information the report dated June 7, 2018, titled Manager s Report. CARRIED 8. BUSINESS ARISING FROM DELEGATIONS No items presented. 9. RESOLUTION TO CLOSE MEETING No items presented. Minutes of the Regular Meeting of the MVRD held on Thursday, June 21, 2018 Page 5 of 6

9 10. ADJOURNMENT/CONCLUSION It was MOVED and SECONDED That the conclude its regular meeting of June 21, CARRIED (Time: 3:43 p.m.) Genevieve Lanz, Legislative Services Coordinator Raymond Louie, Acting Chair FINAL Minutes of the Regular Meeting of the MVRD held on Thursday, June 21, 2018 Page 6 of 6

10 5.1 To: From: Gord Tycho, Senior Regional Planner, Regional Planning Parks, Planning & Environment Department Date: September 18, 2018 Subject: Project Status Update for the Regional Industrial Lands Strategy Meeting Date: September 26, 2018 RECOMMENDATION That the MVRD Board receive for information the report dated September 18, 2018, titled, Project Status Update for the Regional Industrial Lands Strategy. PURPOSE To provide the and MVRD Board with an update on the Regional Industrial Lands Strategy (the Strategy). BACKGROUND Since Metro 2040: Shaping our Future (Metro 2040), was adopted in 2011, many stakeholders, including municipalities, the Vancouver Fraser Port Authority, industry associations, and others have expressed concerns about the limited and diminishing supply of land for industrial activities in the region. In response, the (Task Force) was struck by the MVRD Board Chair in spring The received its terms of reference and approved the Regional Industrial Lands Strategy scope of work at its meeting on May 10, 2018 (Attachments 1 and 2). The scope of work identifies issue areas, for the Strategy to address and a vision to ensure sufficient industrial lands to meet the needs of a growing and changing regional economy to For this third Task Force meeting, and the final meeting of the year, staff are providing an update on progress to both the Task Force and Board. REGIONAL INDUSTRIAL LANDS STRATEGY SCOPE OF WORK The Strategy scope of work identifies a number of issues to be addressed in order to develop a forward looking and meaningful strategy for the region s industrial lands. These issues include: developing a clear definition of what constitutes an industrial activity and exploring the distinction between employment and industrial activities to help establish a clearer understanding of demand for industrial land, understanding the changing nature of industry and implications on land demand, and exploring best practices

11 Project Status Update for the Regional Industrial Lands Strategy Regular Meeting Date: September 26, 2018 Page 2 of 4 Through a review identifying industrial land issues and challenges facing stakeholders in the region, four categories of issues were identified: A constrained land base; Pressures on Industrial Lands; Site issues on Industrial lands; and Need for regional coordination. The update below is framed around the above scoping issues as well as the four categories and work underway or planned for each. STATUS UPDATE ON THE REGIONAL INDUSTRIAL LANDS STRATEGY With an aim to helping set the scope of the Strategy, the first phase of work is intended to build a common understanding of the current state of industrial lands in the region. Invited Speakers At the May 10, 2018 meeting, the Task Force received presentations from Chris McAuley from CBRE on an overview of the region s industrial market, from Geoffrey Charters from Colliers on industrial user needs and trends, and from Dr. Peter Hall setting industrial land use in a regional context. At the June 21, 2018 meeting, the Task Force received presentations from Dr. Tom Hutton and Trevor Barnes on the relationship between industrial lands and the innovation economy, and from Pietra Basilij from the Vancouver Economic Commission presenting the results of their Industrial Insights survey. Defining Industrial for the Regional Industrial Lands Strategy Staff presented to the Task Force on June 21, 2018 a report titled, Defining Industrial for the Regional Industrial Lands Strategy, that highlighted the range of activities occurring on lands designated and/or zoned for industrial uses, and the complexities associated with understanding what activities belong on industrial lands. The Task Force requested staff undertake additional exploration of the issue and report back with recommendations on land uses appropriate on industrial lands, and therefore on activities within the scope of the Regional Industrial Lands Strategy. Staff held a working session with the Strategy s Advisory Group on July 13, 2018 to further explore the range of activities occurring on lands designated and/ or zoned for industrial uses. A staff report summarizing the session s outcomes and proposing a definition is under separate cover in this agenda package. Inventorying work underway across the region about industrial lands Staff completed a working session with the Strategy Advisory Group on May 11, 2018 exploring issues and initiatives relating to industrial lands from their jurisdictional perspectives. Staff presented a report to the task Force on June 21, 2018, titled, Regional Industrial Lands Strategy: Issues and Initiative Summary (June 13, 2018) that described the issues facing stakeholders relating to industrial lands in the region, and providing a summary of initiatives underway around the region to address these issues. The issues and challenges identified are aligned with those identified in the Regional Industrial Lands Strategy Scope of Work.

12 Project Status Update for the Regional Industrial Lands Strategy Regular Meeting Date: September 26, 2018 Page 3 of 4 A Constrained Land Base and Pressure on Industrial Lands Quantifying Demand Significant work is underway to assist in better understanding the contribution of industrial lands to the regional economy as well as understanding the impacts of trends on industrial lands. This work is situated within the context of better understanding the implications on demand for industrial land. As a result, the following is underway: Metro Vancouver has retained Intervistas to model and identify the economic value of tradeenabling and non-trade-enabling industrial sectors and determine the associated jobs. Delivery of the final economic report is anticipated before December 31, 2018, with a reporting out to the Metro Vancouver Board in early Metro Vancouver is developing an industrial user survey to explore the needs of, and challenges facing, industrial land users, leveraging work undertaken by the Vancouver Economic Commission and extrapolating that to a regional scale. The deliverable will include user profiles, and work will be completed by January 31, Metro Vancouver has commissioned a white paper, as part of a series, on the stratification of industrial lands with an aim to understanding the prevalence, trends and implications of the stratification of industrial land. This work is under separate cover in this agenda package. Work is underway to scope a white paper on the interplay between agri-industrial uses and location, whether that be on land within the Agricultural Land Reserve or on land designated for Industrial activities. The intent is to complete this work prior to year-end. Site Issues Industrial site issues were identified as a key challenge by member jurisdictions. This includes servicing, environmental, transportation / access and interface issues. As a result, the following work is underway: Metro Vancouver has commissioned a white paper, as part of a series, on managing industrial interface issues, with an aim to understanding the practices and policy tools utilized around the region and elsewhere. This work is under separate cover in this agenda package. The Changing Nature of Industry and Land Demand It is essential that the Strategy be set within a future oriented context that considers the changing nature of work and industry (e.g. automation) and the anticipated impacts on employment and land demand to The strategy will seek to explore other regional approaches and associated innovative governance, financial, and policy tools. Metro Vancouver is developing a framework connected to Metro Vancouver s Long Range Growth Scenarios project to better understand the changing nature of industry, drivers of change, adaptations, and regional industrial sector trends, operational trends, and associated overall predictions for sector employment and land requirements. This work will be completed by April 30, Developing the Regional Industrial Lands Strategy The Regional Industrial Lands Strategy will be developed in 2019 (to be confirmed through the 2019 budget process). Staff anticipate a fulsome engagement process as the Strategy is developed. In

13 Project Status Update for the Regional Industrial Lands Strategy Regular Meeting Date: September 26, 2018 Page 4 of 4 preparation for this work, Metro Vancouver is producing a series of White Papers to investigate approaches, tools, initiatives and best practices in the region and in other regions with similar geographies and major industries. As noted above, papers on stratification, buffers, and agriindustrial business locations are under way or completed, and additional papers will be completed on: quantifying demand; the complete community implications of industrial uses; the future of industry and impacts on the demand for land; land protection measures; governance structures; and densification and intensification measures. The papers are intended to inform policy options for consideration in the Regional Industrial Lands Strategy. Advisory Group Staff continue to work with an Advisory Group to provide analysis and technical support for the development of the Strategy. The Advisory Group comprises the members and associate members of the Regional Planning Advisory Committee (RPAC), as well as representatives from other agencies and organizations that are represented on the Task Force. ALTERNATIVES This is an information report. No alternatives are presented. FINANCIAL IMPLICATIONS There are no financial implications resulting from this report. SUMMARY / CONCLUSION Since Metro 2040: Shaping our Future (Metro 2040), was adopted in 2011, many stakeholders, including municipalities, the Vancouver Fraser Port Authority, industry associations, and others have expressed concerns about the limited and diminishing supply of land for industrial activities in the region. In response, the Industrial Lands Task Force (Task Force) was struck by the MVRD Board Chair in spring The approved the scope of work for the Regional Industrial Lands Strategy at its meeting on May 10, Metro Vancouver staff continue to work with an Advisory Group and, to date, have presented information, and received feedback, at two Industrial Lands Strategy Task Force meetings on May 10, 2018 and June 21, Results have been delivered on various topics, including issues and initiatives throughout the region, and the exploration of the range of uses occurring on lands designated as industrial. Progress continues to be made on various other deliverables, including the economic benefits of industrial lands to the region, survey of industrial users, and white papers on various issue areas such as stratification, industrial-residential interface issues, and locating agri-industrial activities. Final deliverable of the Strategy is anticipated for Q Attachments 1. Terms of Reference 2. Report dated April 24, 2018 titled Regional Industrial Lands Strategy Scope of Work 3. Status of Research to Address Identified Issue Areas

14 ATTACHMENT 1 Regional Terms of Reference The Regional is the standing committee of the Metro Vancouver Regional District (MVRD) Board responsible for developing the Regional Industrial Lands Strategy and for providing associated advice and recommendations. Scope of Regional Industrial Lands Strategy The Regional Industrial Lands Strategy will provide a vision for the future of industrial lands across Metro Vancouver to the year 2050, and actions for achieving that vision. The development of the Regional Industrial Lands Strategy will be a collaborative process involving a range of stakeholders with an interest in the present and future role that industrial lands should play in the region. A research and engagement program will support the development of the Regional Industrial Lands Strategy by exploring key issues that include: Understanding current industry sectors in Metro Vancouver (and associated operational requirements); Understanding variations in job types and job densities within industry; Understanding the changing nature of industry and implications for projected industrial land demand in the region; Identifying pressures to convert industrial land uses to other land uses; Understanding the effectiveness of current Regional Growth Strategy policies in protecting existing industrial lands; Managing the interface between industrial lands and other land uses, and exploring other industrial best practices. Reinforcing need for maximizing industrial land while respecting agricultural land. Task Force Responsibilities The Task Force will provide advice and recommendations to the MVRD Board on issues related to the development of the Regional Industrial Lands Strategy. Key responsibilities for the Task Force include: 1. Confirming the work plan and resource requirements needed to develop the Regional Industrial Lands Strategy; 2. Engaging additional stakeholders in dialogue on the future of industrial lands in the region; 3. Identifying information needs and guiding the development of research to support the development of the Regional Industrial Lands Strategy; and 4. Reporting back to the MVRD Board with the recommended Regional Industrial Lands Strategy.

15 Regional Terms of Reference Page 2 of 2 Task Force Membership and Meetings The Task Force includes both voting and non-voting members. Voting members are MVRD Board Directors who have been appointed. Non-voting members will include representatives from other agencies and organizations with an interest in and knowledge of the issues surrounding industrial lands. Committee members are appointed annually by the Chair of the MVRD Board. The Task Force will meet every two months or at the call of the Chair. A quorum of 50% plus one of the Task Force s voting members is required to conduct Task Force business. To complement regular Task Force meetings, members may be expected to attend additional events such as site tours in industrial areas or broader meetings that include additional stakeholders. Task Force Management and Support The Task Force Chair will be the chief spokesperson on matters of public interest within the Task Force s purview. For high profile issues the role of spokesperson rests with the MVRD Board Chair or Vice Chair. On technical matters, or in cases where an initiative is still at the staff proposal level, the Chief Administrative Officer or designated senior staff member is the appropriate spokesperson. Where necessary and practical, the MVRD Board Chair, Task Force Chair, and Chief Administrative Officer will confer to determine the most appropriate representative to speak. The senior staff person responsible for the Regional Planning function at Metro Vancouver will serve as Committee Manager for the Task Force. The Task Force Committee Manager is responsible for coordinating agendas and is the principal point of contact for Task Force members. Funding for the Task Force is provided under Metro Vancouver's General Government function to cover incidental costs and meeting expenses. Voting members of the Task Force will be remunerated in accordance with the Remuneration Bylaw. Non-voting members will not be remunerated for their participation in the Task Force. Consultation and Engagement with Other Stakeholders The Task Force will seek out and consider input from additional stakeholders with an interest in industrial lands. The Task Force may request staff to: Identify and invite speakers to Task Force meetings; and, Coordinate and host meetings, conduct surveys, or interview individual stakeholders to gather input from additional stakeholders and report back to the Task Force. The Task Force may also seek advice and input from other existing Metro Vancouver committees, such as the Regional Administrators Advisory Committee or Regional Planning Advisory Committee June 21, 2018

16 ATTACHMENT 2 To: Industrial Lands Task Force From: Gord Tycho, Senior Regional Planner, Parks, Planning and Environment Department Date: April 24, 2018 Subject: Regional Industrial Lands Strategy Scope of Work Meeting Date: May 10, 2018 RECOMMENDATION That the Industrial Lands Task Force endorse the scope of work set out in the report titled Regional Industrial Lands Strategy Scope of Work, dated April 24, PURPOSE To seek the Industrial Lands Task Force s approval of a scope of work for the development of the Regional Industrial Lands Strategy. BACKGROUND Since Metro Vancouver 2040: Shaping Our Future (Metro 2040), the regional growth strategy, was adopted in 2011, many stakeholders, including municipalities, the Port of Vancouver, industry associations, and others have expressed concerns about the limited and diminishing supply of land for industrial activities in the region, ongoing and increasing pressures to convert industrial lands to other uses, and the need to explore policy, financial, and other tools to address these challenges. In response, the Industrial Lands Task Force (Task Force) was struck by the MVRD Board Chair with an aim to guiding the development of a Regional Industrial Lands Strategy intended to ensure sufficient industrial land to meet the needs of a growing and changing regional economy. A draft scope of work has been prepared for the Task Force s consideration and is outlined in this report. PROJECT CONTEXT Industrial lands are crucial to supporting a prosperous, sustainable regional economy and to providing space to accommodate the industrial services needed in a growing region. Presently, about 23% (275,000) of the region s jobs are accommodated on industrial lands. Metro Vancouver s industrial lands are used mainly for transportation/warehousing, wholesale trade, retail trade, manufacturing and professional/technical services. Many of the activities on the region s industrial lands provide for the local day-to-day needs of the region s population, providing locations for services like regional utilities, vehicle repair, hotel laundry services, catering companies, couriers, breweries, small scale manufacturing, and craft/artisan design space. In our port-based region, a significant amount of land is also needed for container storage, warehousing, freight forwarding, and other distribution functions that keep the region connected to Canada and the rest of the world

17 Regional Industrial Lands Strategy Scope of Work Regular Meeting Date: May 10, 2018 Page 2 of 5 Due to a constrained land base and strong demand for all types of land uses, the regional supply of industrial land is under significant pressure for conversion to residential, retail and commercial uses, all of which currently command higher market land values. Demand for industrial land is also increasing and under current levels of densification, the region is facing a shortage of industrial lands, particularly for trade enabling purposes, and this shortage is expected to worsen over the next 10 to 15 years. New technologies and economic forces will also impact the region s existing industrial activities in ways that will likely have implications for the viability of a number of industry sectors, employment densities, site requirements, and associated overall land requirements in the coming years. In addition, given the unique services offered by industrial activities, combined with anticipated changes to employment for some industrial sectors, it is important to better define and differentiate between employment lands and industrial lands. Looking to the future, there is an increasing concern over whether the continual increases in industrial demand and pressures from other uses can be accommodated within Metro Vancouver. The lack of available lands and associated high land costs could slow job growth, discourage businesses from locating or expanding in the region, result in some firms leaving the region, and potentially result in some industries advocating for the industrial utilization of other lands. Conversely, it is recognized that negative regional impacts associated with industrial activities, such as noise, odour, transportation congestion, and GHG production may be alleviated by slower industrial growth in the Metro Vancouver region and/or encouraging some industrial growth to focus in areas outside of the Metro Vancouver region. Project Description The Regional Industrial Lands Strategy (the Strategy) is intended to establish a shared vision for the future of industrial lands across Metro Vancouver (and the larger region) to the year 2050, and to provide a set of recommendations to guide a broad range of stakeholder actions to achieve that vision. The development of the Strategy will be a collaborative process involving a range of stakeholders with an interest in industrial lands and economic development, and will complement other initiatives underway across the region including Metro Vancouver s Regional Prosperity Initiative, the work of the Greater Vancouver Urban Freight Council, TransLink s Regional Goods Movement Strategy, the work of the Greater Vancouver Gateway Council, and the Gateway Transportation Collaborative Forum. The Strategy s engagement process will include a wide range of stakeholders including: elected officials, senior levels of government, regional agencies (e.g. TransLink), municipal planning and economic staff, Vancouver Fraser Port Authority, Vancouver Airport Authority, industry associations (e.g. NAIOP, UDI, Chambers of Commerce, etc.), brokerage firms, developers, academics, and others. Identified Issue Areas The issues facing industrial and employment lands in the region continue to garner significant interest and attention, and over the past number of months, Metro Vancouver staff have received several requests from member jurisdictions (some of whom are undertaking related work) regarding a variety

18 Regional Industrial Lands Strategy Scope of Work Regular Meeting Date: May 10, 2018 Page 3 of 5 of issues they are facing related to industrial and employment lands. It is expected that the Strategy will explore those interests and more, including: defining industry, exploring the distinction between employment and industrial lands, and examining the growing interest in employment rather than industrial lands; understanding current industry sectors in Metro Vancouver (and associated operational requirements); understanding variations in job types and job densities within industry; understanding the changing nature of industry, changing definition of industrial activities, and implications for projected industrial land demand in the region; understanding the effectiveness of current policies in the region for protecting existing industrial lands; exploring best practices, including governance structures, land protection, land densification/intensification (with examples), land interfaces (industrial-residential), mixeduse opportunities, and land conversion assessment criteria. investigating interest in, and challenges with, retaining job density and job type (e.g. industrial and other employment activities) if industrial / employment sites are redeveloped; and exploring the implications of adding residential uses to employment lands in certain locations (e.g. near rapid transit stations), and exploring whether specific conditions should be required, such as retention of industrial/employment job density and job type, or meeting other regional objectives (e.g. affordable housing). Project Objectives Much work has already been undertaken to: quantify the economic value of trade enabling lands; understand the quantity and quality of industrial lands in the region; explore intensification best practices; and to identify which lands are available for development, the types of industrial activities in the region, and other land characteristics. The Regional Industrial Lands Strategy will: 1. build a collective understanding of the challenges and issues facing industrial lands; 2. establish a vision to ensure that there are sufficient industrial lands in the region to meet the needs of a growing and evolving regional economy; and 3. recommend actions for a wide range of stakeholders to achieve that vision. Project Phases There are three planned phases of work for this project:

19 Regional Industrial Lands Strategy Scope of Work Regular Meeting Date: May 10, 2018 Page 4 of 5 PHASE 1. The Present: Identify Trends, Inventory and Demand (May to September 2018) This first phase of work is intended to understand and depict the current state of play for industrial lands in the region. Research in Phase 1 will be required to: 1. define Industrial for the purposes of the Strategy; 2. confirm work completed and underway about industrial lands across the region, and explore collaboration / integration opportunities; 3. develop an understanding of the economic value of non-trade enabling industry sectors, and determine the jobs associated with these sectors; 4. describe the qualitative value of industrial lands from a complete communities perspective to include both qualitative benefits/detriments and regional service/ infrastructure maintenance aspects; 5. better understand the activities on General Industrial lands in Metro Vancouver s Industrial Lands Inventory, and consider defining different sector categories within General Industrial ; and 6. explore the needs of, and challenges facing, industrial land users, and develop corresponding profiles. It is anticipated that this work will be undertaken between May and September 2018, and presented to the Task Force for consideration at its September meeting. For the May Task Force meeting, staff have arranged to have guest speakers attend from industrial associations and academia to provide context to the issues facing industrial lands in the region. PHASE 2. Explore Opportunities (September 2018 to February 2019) The second phase of the project is intended to consider the changing nature (i.e. future) of industry and the anticipated qualitative impacts on employment and land demand in both the next 10 years and to Phase 2 will also explore other regional approaches and associated innovative governance, financial, and policy tools to address the challenges identified in Phase 1. Research in Phase 2 will be required to: 1. understand the changing nature of industry, drivers of change, adaptations, and higher level regional industrial sector trends, operational trends, and associated overall predictions for sector employment outlooks and land requirements; and, 2. survey / research other approaches in regions with similar geographies and major industries, and investigate their initiatives and associated best practices and tools, including examples of governance structures, partnerships, land protection, land densification/intensification, land interfaces, mixed-use opportunities, and land conversion assessment criteria. It is anticipated that this work will be undertaken between September 2018 and January / February 2019 and will be presented to the Task Force for consideration at meetings early in PHASE 3. Strategy Development: Considering Solutions (February to Fall 2019) The final phase of the project is intended to consolidate the information learned in Phases 1 and 2, and to develop the Regional Industrial Lands Strategy. The Strategy will comprise a set of

20 Regional Industrial Lands Strategy Scope of Work Regular Meeting Date: May 10, 2018 Page 5 of 5 recommendations applicable to the Metro Vancouver region, geared toward all the key stakeholders with an interest in industrial lands. Phase 3 will also involve significant stakeholder engagement, including a large roundtable event to get feedback on the Strategy before it is finalized. It is anticipated that the Phase 3 work will be undertaken between February 2019 and June 2019 and will be presented to the Task Force for consideration at meetings, dates yet to be determined, in ALTERNATIVES 1. That the Industrial Lands Task Force endorse the scope of work set out in the report titled Regional Industrial Lands Strategy Scope of Work dated April 12, That the Industrial Lands Task Force amend and then endorse the scope of work set out in the report titled Regional Industrial Lands Strategy Scope of Work dated April 12, FINANCIAL IMPLICATIONS Funding for the Task Force is provided in the 2018 Board approved Regional Planning budget, which contains $30,000 to advance the Regional Industrial Lands Strategy and $50,000 for the Metro 2040 Industrial and Mixed Employment Policy Review. Staff will seek additional funding as necessary through the 2019 budget process. SUMMARY The regional supply of industrial land is under significant pressure for conversion to residential, retail, commercial and other uses, and the non-industrial use of industrial lands continues to be a significant challenge. The completion of a Regional Industrial Lands Strategy will build a collective understanding of the challenges and issues facing industrial lands, provide a vision of how to ensure sufficient industrial lands meet the needs of a growing and evolving regional economy, and recommend actions for a broad range of stakeholders to achieve that vision. Through three phases of work, it is anticipated that the strategy will be completed by mid The Strategy will be developed with guidance from the Industrial Lands Task Force and input from the Regional Planning Advisory Committee and various stakeholders. Recommendations from the Task Force will be reported back to the MVRD Board. The Regional Industrial Lands Strategy engagement process will include a wide range of stakeholders including: elected officials, senior levels of government, regional agencies (e.g. TransLink), municipal planning and economic staff, Port of Vancouver, Vancouver Airport Authority, industry associations (e.g. NAIOP, the Urban Development Institute, Chambers of Commerce, etc.), brokerage firms, developers, academics, and others

21 ATTACHMENT 3 Status of Research to Address Issue Areas Issue Area Defining industry, exploring the distinction between employment and industrial lands, and examining the growing interest in employment rather than industrial lands Understanding current industry sectors in Metro Vancouver (and associated operational requirements) Understanding variations in job types and job densities within industry Understanding the changing nature of industry, changing definition of industrial activities, and implications for projected industrial land demand in the region Understanding the effectiveness of current policies in the region for protecting existing industrial lands Status Report Completed: Defining Industrial for the Regional Industrial Lands Strategy Issue of Concern identified by stakeholders: stratification, buffers, agri-industrial business locations; quantifying demand; complete community implications of industrial uses; future of industry and impacts on the demand for land; land protection measures; governance structures; and densification and intensification measures Retaining job density and job type (e.g. industrial and other employment activities) if industrial/ employment sites are redeveloped Exploring implications of adding residential uses to employment lands Underway: White Paper Series 3 underway or completed; 6 pending Underway: Survey of industrial users Underway: Economic value of industrial land study Pending: Intended for Q Underway: Municipal and Regional Policy Review; Managing the Industrial / Residential Interface White Paper Pending: White Paper Series Intensification Measures Advisory Committee consideration completed.

22 5.2 To: From: Gord Tycho, Senior Regional Planner, Regional Planning Parks, Planning & Environment Department Date: September 6, 2018 Subject: Defining Industrial for the Regional Industrial Lands Strategy Meeting Date: September 26, 2018 RECOMMENDATION That the MVRD Board endorse the working definition of Industrial for the purpose of developing the Regional Industrial Lands Strategy as laid out in the report dated September 6, 2018, titled, Defining Industrial for the Regional Industrial Lands Strategy. PURPOSE To provide the (Task Force) and MVRD Board with a recommendation for defining Industrial for the purposes of the Regional Industrial Lands Strategy. BACKGROUND There is not a singular definition for what constitutes industrial use in the region. Stakeholders often enter discussions about industrial land supply and demand needs with their particular filter at the forefront. The wide range of permitted uses on industrially designated and zoned lands in the region, and the changing nature of industry also affect the ability to achieve a consistent definition. Given the importance of the definition of industrial in framing the Regional Industrial Lands Strategy, staff provided a report to the Task Force on June 21, 2018, describing the complexity of defining what constitutes an industrial activity. Discussion ensued, and the Task Force requested staff undertake additional exploration of the issue and report back with a proposed definition of industrial for the purposes of the Regional Industrial Lands Strategy. EXPLORING WHAT CONSTITUTES AN INDUSTRIAL USE As part of the report provided at the June 21, 2018 meeting, the Task Force received a draft Spectrum of Industrial Uses to help guide the discussion. The report categorized uses occurring on lands either designated or zoned Industrial into three conceptual categories, Traditional, Non-Traditional and Non-Industrial. Discussion focused primarily on the Non-Traditional uses, providing feedback on how to address retail, wholesale, high tech, media production and studios, and other similar uses in terms of the Strategy. Subsequent to the June 21 Industrial Land Strategy Task Force meeting, staff convened a workshop on July 13, 2018 with the Advisory Group providing analysis and technical support to the development of the Strategy to further explore the definition of industrial (Attachment). The Advisory Group comprises the members and associate members of the Regional Planning Advisory Committee

23 Defining Industrial for the Regional Industrial Lands Strategy Regular Meeting Date: September 26, 2018 Page 2 of 5 (RPAC), as well as representatives from other agencies and organizations that are represented on the Task Force. Attendees participated in small group conversations to: consider how their community/agency defines industrial, develop criteria to help define industrial uses, and then categorize the same uses considered by the Task Force into Industrial lands, Employment lands, or Other lands. Participants applied the criteria they had identified when categorizing uses. Defining Industrial In general, participants defined industrial as consistent with the allowable uses for industrial lands within their respective policy or regulatory framework (e.g. OCP designation, zoning bylaw, or Land Use Plan). And, there was recognition that some bylaws sought to limit permitted uses to more traditional activities, while others provided substantially more flexibility to accommodate other uses, such as commercial. Many participants expressed that there should be clearer and more consistent definitions for appropriate uses in industrial versus employment areas. Some participants recommended guidelines that are sufficiently narrow to protect the needs of region-serving and trade-enabling activities, yet sufficiently flexible to accommodate the changing nature of industry and the industrial-office hybrid spaces associated with the needs of the innovation economy. Criteria to Assist in Defining Industrial At the June 21, 2018 Task Force meeting, members identified some possible criteria for assisting in categorizing more Non-Traditional Industrial Uses as either Industrial or Other. In particular, members discussed retail uses and whether they were intended to serve other industrial businesses in the area or whether they were a draw for the public, as well as access and space requirements. Staff leveraged this initial discussion in designing the Advisory Group workshop and asked participants to identify criteria to assist in confirming the Traditional and Non-Industrial Uses as well as helping to better categorize the Non-Traditional Industrial Uses. There was substantial consistency on the criteria identified. Table 1 provides a summary of the criteria identified and definitions. Table 1. Criteria to Assist in Defining Industrial Compatibility with adjacent Whether the business is an emitter of noise, vibration, odour, or uses visual nuisances that make occupying areas proximate to other land uses (e.g. residential, commercial, or institutional) challenging Access (to site and goods movement network) Whether the business requires access to particular infrastructure or modes of transportation such as water, rail, airport, and highway Space requirements and scale of business Whether the business requires large / unique site or building characteristics Product Produced Whether the business manufactures, distributes or repairs a physical product Trip Generation Whether the business generates or handles relatively large amounts of truck or client traffic Client Type Whether the business is geared toward other businesses or the public Ancillary / Hybrid Use percentage of the business that is office if a hybrid use (e.g. biotech)

24 Defining Industrial for the Regional Industrial Lands Strategy Regular Meeting Date: September 26, 2018 Page 3 of 5 Applying Criteria and Categorizing Uses Workshop participants then applied the criteria they identified to the Spectrum of Industrial Uses considered by the Task Force at its June 21, 2018 meeting. They were asked to categorize the full list of uses as Industrial, Employment or Other. Traditional Industrial Uses are commonly understood to include the general categories of production, distribution and repair, including uses that serve the region and activities that serve the tradeenabling function of the region. The following uses were confirmed as traditional industrial activities appropriate on lands designated or zoned as Industrial: light and heavy industrial production (e.g. cement manufacturing, food and beverage manufacturing, furniture manufacturing, metalwork and fabrication, sawmills); distribution (e.g. warehousing, industrial storage, and freight trucking, intermodal couriers); repair (e.g. autobody shops, truck and trailer repair, consumer goods repair) construction materials and equipment (e.g. building supplies and specialty trade contractors, heavy equipment rental and leasing); infrastructure (e.g. public utilities such as wastewater treatment facilities and pumping stations, works yards, rail / port terminals; storage activities (e.g. outdoor and container storage); and wholesale (e.g. merchant and logistic wholesalers). The following uses were confirmed as Non-Industrial uses, that should not be permitted on lands zoned as Industrial: residential and supportive housing; artist studios and live/work space; agriculture (soil based growing); places of congregation; and institutional uses (e.g. schools, day cares, hospitals). The following uses were identified as uses more appropriate on Employment lands rather than Industrial lands, but are currently permitted in several Industrial zones in the region: storage activities (such as self-storage); stand-alone office (such as law, financial); stand-alone recreation (e.g. karate studios, theatres, crossfit and climbing gyms, badminton/tennis facilities); retail / wholesale big box; retail /wholesale car dealership; retail / wholesale furniture; retail / wholesale automotive parts; high tech - software development; and consulting services (e.g. engineering, architecture, environment).

25 Defining Industrial for the Regional Industrial Lands Strategy Regular Meeting Date: September 26, 2018 Page 4 of 5 Finally, participants noted a number of uses that are more context specific, and that could be appropriate on either Industrial or Employment lands depending on the applicability of the criteria noted above. For example, micro-breweries were seen as context specific a good fit on industrial land if most of the space is dedicated to production, but more appropriate on employment lands if the tasting room / retail element is the main space component. In addition, if a small micro-brewery grows its manufacturing component, the scale of production, space requirements, client type, and access needs would be different enough to warrant utilization of industrial space. Other such uses include: restaurants (e.g. serving adjacent industrial uses versus being a draw for the public) retail microbreweries; services (e.g. commercial laundry, bakery, catering); research and development (high tech, Bio-tech); high tech distribution centres; and media production studios (such as movies, recording, television, and radio). Although workshop participant responses varied, there was a general sense that activities that are a less obvious fit for one category should be considered in light of the criteria listed in Table 1. The June 21, 2018 staff report to the Task Force highlighted the growing interest and use of more flexible mixed employment zones that permit a wide range of industrial and commercial uses and how these zones may displace more traditional industrial uses necessary for the functioning of the region. A theme that emerged from the workshop is that there should be some further exploration of the potential of a larger format commercial designation / zone to better capture and direct the activities identified as appropriate for Employment rather than Industrial lands. A WORKING DEFINITION FOR INDUSTRIAL The Task Force s input as well as the feedback received by workshop participants has been helpful in gleaning a clearer understanding of the uses occurring on land either designated or zoned Industrial as well as in helping to shape a working definition for the purposes of the Srategy. The upcoming evaluation of the economic contribution of industry in the region will be influenced by the categorization of activities in this report, as will other Strategy consultant studies undertaken. In addition, this categorization will be feedstock for possible recommendations that emerge as the Strategy is developed. In terms of a working definition, and in service of the vision to ensure sufficient industrial land to meet the needs of a growing and changing regional economy to 2050, Industrial, for the purposes of the Strategy, will be defined as businesses and infrastructure services that meet one or more of the following: 1. are generally not compatible with residential or commercial uses, due to generating heavy vehicle traffic, odour or noise; 2. have unique location, site or space needs that are generally not well served by commercial areas, such as access to the goods movement network or requiring large-area buildings; or 3. are typically serving other businesses, not the general public.

26 Defining Industrial for the Regional Industrial Lands Strategy Regular Meeting Date: September 26, 2018 Page 5 of 5 These criteria would typically be met by businesses that produce, repair or distribute goods. In addition, some existing and new (or emerging) uses are context specific, but will be included in the definition of Industrial for the purposes of the Strategy. Businesses that are part of the Non-industrial or Employment categories above are considered outside the scope of the Regional Industrial Lands Strategy and as such would not be targeted for outreach efforts or policy recommendations. These other business types could be considered through other initiatives such as the Metro 2040 Industrial and Mixed Employment Policy Review. The proposed definition is a working definition as work completed over Fall 2018 may result in minor adjustments. Staff will report back in early 2019 if any changes are proposed. ALTERNATIVES 1. That the MVRD Board endorse the working definition of Industrial for the purpose of developing the Regional Industrial Lands Strategy as laid out in the report dated September 6, 2018, titled, Defining Industrial for the Regional Industrial Lands Strategy. 2. That the MVRD Board receive for information the report titled, Defining Industrial for the Regional Industrial Lands Strategy, dated September 6, 2018 and provide alternative direction to staff. FINANCIAL IMPLICATIONS There are no financial implications resulting from this report. SUMMARY / CONCLUSION Staff provided information to the on June 21, 2018 regarding the definition of industrial, and the range of uses and activities that are occurring on the region s industrial lands, for the purposes of developing the Regional Industrial Lands Strategy. In response to direction received at the same meeting from the to further explore the issue, a dedicated Advisory Group session was held on July 13, This report provides both a summary of results from the Advisory Group session and a recommendation for a working definition for Industrial to guide work on the Regional Industrial Lands Strategy over Fall Attachment: Attendees at the July 2018 Regional Industrial Lands Strategy Working Session

27 ATTACHMENT ATTENDEES AT THE JULY 13, 2018 REGIONAL INDUSTRIAL LANDS STRATEGY ADVISORY GROUP WORKING SESSION Caitlin Dorward, Land Use Planner, Agricultural Land Commission Lee-Ann Garnet, Assistant Director-Long Range Planning, City of Burnaby Andrew Merrill, Manager, Community Planning, City of Coquitlam Marcy Sangret, Director of Community Planning and Development, City of Delta Christine Carter, Director of Planning, City of Maple Ridge Lisa Grant, Manager of Community Development, City of Pitt Meadows Andre Boel, General Manager, Planning and Development, City of Port Moody Tina Atva, Senior Planning Coordinator, City of Richmond Katie Ferland, Business Development Liaison, City of Richmond Markus Kischnick, Community Planner, City of Surrey Preet Heer, Manager Community Planning, City of Surrey Ingrid Hwang, Planner, City of Vancouver Angele Clark, Community Planner I, District of North Vancouver Johannes Bendle, Planner I, Fraser Valley Regional District Barclay Pitkethly, Director of Regional Programs, Fraser Valley Regional District Bob Denboer, Senior Analysist, Metro Vancouver (observer) Eric Nicholls, Manager, Planning and Land Use, Ministry of Municipal Affairs and Housing Joanna Brownell, Manager, Partner Planning, TransLink Greg Kolesniak, TransLink Peta Wolmarans, Manager, Engineering Planning, Vancouver Airport Authority Randy Ash, Vancouver Coastal Health Marc Ballard, Manager, Real Estate, Vancouver Fraser Port Authority Theresa Rawle, Manager, Development, Vancouver Fraser Port Authority

28 5.3 To: From: James Stiver, Division Manager of Growth Management and Transportation Parks, Planning and Environment Department Date: September 6, 2018 Subject: Stratification of Industrial Land in Metro Vancouver Meeting Date: September 26, 2018 RECOMMENDATION That the MVRD Board receive for information the report dated September 6, 2018, titled, Stratification of Industrial Land in Metro Vancouver. PURPOSE The purpose of this report is to provide the (Task Force) with a white paper on the extent, trends and implications of the stratification of industrial land in Metro Vancouver. BACKGROUND As part of the development of the Regional Industrial Lands Strategy (the Strategy), Metro Vancouver is producing a series of white papers to investigate approaches, tools, initiatives and best practices in the region and in other regions with similar geographies and major industries. White papers will be completed on stratification, buffers, agri-industry, quantifying demand for land, complete community implications of industrial uses, the future of industry and impacts on the demand for land, land protection measures, and densification /intensification measures. The papers are intended to provide policy options for consideration in the Strategy. The Metro Vancouver region is experiencing a severe constraint of land dedicated for industrial uses, which has resulted in many impacts to the real estate markets, both positive and negative. One trend that has been seen is the appearance of denser forms of industrial development, in an increasing number of cases, this has included an increasing prevalence of strata tenured buildings. To determine the scope and impacts of this issue, a white paper was commissioned to provide background material for the preparation of the Strategy (Attachment). The white paper explores the extent, trends, drivers, benefits, challenges, and implications of increased industrial land stratification in the Metro Vancouver region. THE EXTENT OF INDUSTRIAL STRATIFICATION As with residential buildings, industrial strata units represent a form of tenure (or occupancy) and is distinct from fee simple ownership and rental or lease, with a tenant-landlord relationship. Based on available information and interviews with a number of stakeholders, the white paper documents the extent of stratification by geography and type of industrial business, noting financial values, the increasing appeal of strata units, and the potential implications of these trends by sector and the industrial economy of the region

29 Stratification of Industrial Land in Metro Vancouver Regular Meeting Date: September 26, 2018 Page 2 of 4 According to figures from 2016, the region s non-residential strata market recorded nearly $700 million in total sales volume through approximately 600 transactions. The industrial market represented 40% of this sales volume, followed by retail at 38%, and office at 22%. The total floor area of strata space traded in 2016 reached 2.3 million sq. ft. and the industrial market represented 62% of the area sold, followed by retail at 23%, and office at 15%. There continues to be an increasing trend in industrial stratification, which is also occurring in the office and retail real estate markets. Types of Uses Drawn to Stratified Units Industrial strata development is not conducive to all forms and types of industrial users. The benefits and limitations of strata development impact certain tenant types more than others. Ultimately, industrial strata owners, as with those in residential strata (condo) buildings, share space in a multitenant building/complex. For certain industrial tenant types, the smaller, owned spaces are desired, such as small production businesses that serve the local population on high value lands. These may include light-industrial flexspace units that have a loading bay and mezzanine at the front that can allow an accessory office and retail/wholesale component. Larger industrial tenants such as warehousing and distribution typically do not operate in smaller spaces and strata tenure. They tend to prefer a standalone building on a larger property, which provides them a dedicated facility for their operations, without potential conflicts with other tenants. These types of larger users also seek out large sites that are accessible to the regional highway network, rather than in the more urban, inner-city areas. Drivers of Industrial Stratification There are a number of identified reasons for the increasing interest in industrial strata development, along with the other business considerations when selecting a space. In many cases, given the very low vacancy rates in the region, there are fewer options, both in terms of availability and price, to find industrial space. Reflecting a strong demand, pricing for industrial space, for both lease and ownership, continues to rise as investors and owner/operators compete for the limited supply. Ownership can be financially advantageous to a business thanks to low interest rates and property appreciation, and it provides control over a business s space and costs and security of accommodation. Given the limited lease options and high rents (along with low interest rates), strata ownership becomes more attractive relative to leasing. However, the financial benefits to a business of leasing are a reduced long-term commitment to the property and a reduced capital obligation. Leasing provides a greater flexibility for evolving business needs over ownership. Larger tenants, especially logistics related, tend to prefer investing their capital in business operations rather than real estate, such that leasing rather than ownership is desired. THE IMPLICATIONS OF INDUSTRIAL STRATIFICATION The consultant report notes that there are both short and long term implications to industrial stratification on industrial land, businesses, real estate, land use planning, and government policies. Although strata industrial provides needed accommodations for new and growing businesses, redevelopment of industrial land can, in some cases, displace existing businesses, often more

30 Stratification of Industrial Land in Metro Vancouver Regular Meeting Date: September 26, 2018 Page 3 of 4 traditional forms of industry. At the same time, strata industrial units are often a more intensive use of the land, although in some cases with a larger proportion of accessory and non-industrial uses. Short term implications include: Significant capital commitment for businesses (commitment and security yet ties up capital that could be used for operations); Limited pool of tenants because more suited to smaller businesses / tenants; reduced site / space flexibility; Higher proportion of accessory or non-industrial uses; Not all businesses can afford ownership as stratification increases, leasing opportunities decrease; Displacement of businesses requiring larger spaces; Stratification is a form of intensification / densification; Can support clustering; Speculation associated with rising land values; and Increased off-site impacts (such as truck traffic). Ownership, rather than renting/leasing, results in a strong form of commitment to a property. Some businesses prefer this greater control, however it does reduce flexibility, in that businesses must sell or rent if they wish to relocate, rather than simply terminating a lease agreement. This ownership also comes with an associated capital obligation to real estate for the owner/business. These monies are invested in real estate, rather than in the operation of the business, focusing more resources on being a real estate investor rather than on operating and expanding the business, and result in a business being more vulnerable to changes in the real estate market and mortgage interest rates. Industrial strata units tend to be smaller than other types of units. For businesses needing larger spaces, there may be fewer options. The stratification of an industrial building has long term implications and reduces the flexibility and scalability of the unit sizes in that building for future possible alternative or changing uses. While a business can purchase and combine together multiple units, it will much more difficult for a larger firm to assemble/acquire to redevelop in the future, compared to a rental or single owner building. Furthermore, in many cases the strata units will be a higher cost because of their individual small sizes (i.e. the price per sq. ft. tends to be higher for smaller units than larger ones). While purchasing a strata unit may be appropriate for established businesses, not all can afford it. New businesses tend not to be well capitalized and generally do not have a strong financial track record, thus tend to have challenges in securing financing to purchase a unit. A lease, which requires no capital and a lesser financial commitment, may be more appropriate for them. Industrial land speculation is occurring in many areas of the region, often associated with rising land values. Increased interest in industrial land for re-development purposes to strata buildings also pushes the market values higher. These higher values are reflected in increased property assessments and property taxes.

31 Stratification of Industrial Land in Metro Vancouver Regular Meeting Date: September 26, 2018 Page 4 of 4 Long term implications include: Limited redevelopment potential; Not enough land for large, logistics or trade enabling uses, and stratification worsens the situation; and Unclear long term implications given changing nature of work/industry and future demand. In the longer term, increasing stratification of industrial land may limit or challenge the future redevelopment potential of the lands when the functional lives of the buildings are at their end, and diminish the amount of industrial land available for larger format industrial and logistics users. Consideration about the wider economic impacts of stratification should take into account the need to respond to a changing industrial economy, as well as concerns about limiting the availability of industrial space which compromises the growth potential of businesses in the region, and trade and transportation needs of the region. ALTERNATIVES This is an information report. No alternatives are presented. FINANCIAL IMPLICATIONS There are no financial implications associated with this report. SUMMARY / CONCLUSION Metro Vancouver is experiencing a severe constraint of land dedicated for industrial uses, which has resulted in many impacts on the real estate markets, both positive and negative. One trend that has emerged is the appearance of denser forms of industrial development and, in an increasing number of cases, this has included a prevalence of strata tenured buildings. Industrial strata units represent a form of tenure (or occupancy) and is distinct from fee simple ownership and rental or lease. There are many reasons driving the interest in industrial strata development and the market is changing as a result. Ownership of units can be financially advantageous to many industrial firms thanks to low interest rates and property appreciation, it can provide control of over a firm s space and provide a valuable capital asset. However, decision makers should also be aware that the creation of a strata plan on a property locks in unit sizes for the long-term, limiting the flexibility and ability to redevelop or renovate buildings in the future as markets and business needs change. Furthermore, increased land speculation, the limited supply of rental spaces, and the higher proportion of business funds going into financing rather than business investment may be negative implications of the pronounced shift to strata units being seen in the region. Attachment: White Paper: Stratification of Industrial Land in Metro Vancouver, prepared by Eric Aderneck, Planning Consultant, dated August

32 ATTACHMENT White Paper: Stratification of Industrial Land in Metro Vancouver Prepared for: Metro Vancouver, Regional Planning Parks, Planning and Environment Department Prepared by: Eric Aderneck, Planning Consultant / August 2018

33 White Paper: Stratification of Industrial Land in Metro Vancouver Contents Introduction Purpose of Paper Industrial Lands Description Stratification and Intensification Metro Vancouver Industrial Lands Context Industrial Land Inventory Supply Industrial Market Conditions and Values Industrial Demand by Sector Unique Lands - Port and Airport Extent of Industrial Stratification Tenures of Industrial Development Industry Comments About Industrial Stratification Notable Strata Industrial Projects Growth of Industrial Strata Development Industrial Strata by Geography Industrial Strata by Sector Characteristics of Strata Industrial Development Strata Industrial Occupant Considerations Drivers of Industrial Stratification Immediate Implications of Industrial Stratification Long-Term Implications of Industrial Stratification Future Redevelopment Potential of Land Wider Economic Impacts Other Concerns Conclusion Appendix A: Interviewees... B Appendix B: References... C Appendix C: Example New Strata Industrial Projects...D August 2018 Page 1

34 White Paper: Stratification of Industrial Land in Metro Vancouver Introduction 1.1 Purpose of Paper Metro Vancouver is coordinating the development of a Regional Industrial Lands Strategy. The Strategy will provide a vision for the future of industrial lands in Metro Vancouver and actions for achieving the vision. As an informational component, this paper has been prepared to explore the extent, trends, drivers, benefits, challenges, and implications of increased stratification of industrial lands in the Metro Vancouver region. This paper documents the extent of industrial stratification by geography and sector, drivers of stratification, and potential implications (immediate and long-term) of these trends on industry sectors and the industrial economy of the region. The results can be used to inform regional and municipal plans and policies related to industrial lands. This paper is based on review of publically available information, research, and 25 interviews with stakeholders, specifically industrial developers, brokers, business associations, agencies, and other experts. These interviewees were targeted for structured informational interviews to receive their diverse and informed insights, opinions, and comments about industrial stratification issues. The interviews and paper were largely completed during August Industrial Lands Description Metro Vancouver defines industrial in the Regional Growth Strategy1: "Industrial areas are primarily intended for heavy and light industrial activities, and appropriate accessory uses. Limited commercial uses that support industrial activities are appropriate. Residential uses are not intended." However, it is important to also acknowledge that there is a wide range of different types of industrial and quasi-industrial uses, and accordingly they have different locational and space needs. Metro Vancouver regional planning recognizes this through the below description of industrial uses2: "Metro Vancouver s industrial lands are used mainly for transportation/warehousing, wholesale trade, retail trade, manufacturing and professional/technical services. Many of the activities on the region s industrial lands provide for the local day-to-day needs of the region s population, providing locations for services like regional utilities, vehicle repair, hotel laundry services, catering companies, couriers, breweries, small scale manufacturing, and craft/artisan design space. In our port-based region, a significant amount of land is also needed for container storage, warehousing, freight forwarding, and other distribution functions that keep the region connected to Canada and the rest of the world." 1.3 Stratification and Intensification The Metro Vancouver region is experiencing a severe shortage of industrial land supply, which is manifesting itself in various forms: increasing land prices, very low vacancy rates, and higher lease 1 2 Metro Vancouver - Regional Growth Strategy: Shaping our Future, 2011 Metro Vancouver - August 2018 Page 2

35 White Paper: Stratification of Industrial Land in Metro Vancouver rates. These factors also impact the industrial real estate market, spurring more development of industrial projects (within the limitations of land supply) and more intense / dense forms of industrial development. In some cases, that means new higher density industrial developments that may also include increased accessory or offices uses, and in some cases these new developments are in the form of strata (condo) tenure -- often these two trends are associated with each other. 2 Metro Vancouver Industrial Lands Context This section of the paper provides a contextual overview of the industrial real estate market in Metro Vancouver, based on published market reports. These factors influence and spur industrial development, both in the form of strata and non-strata. 2.1 Industrial Land Inventory Supply The Metro Vancouver 2015 Industrial Lands Inventory3 quantified the amount of industrial lands in the region as 28,000 acres, of which 80% was 'developed' and only 20% or 5,586 acres was 'vacant'. Furthermore, the inventory noted that not all vacant lands are ideal for industrial uses, and that a notable amount of developed industrial lands have non-industrial uses on them. 2.2 Industrial Market Conditions and Values Metro Vancouver s industrial market continued the trend of growth after five years of consistently positive quarterly space absorption, with new supply still struggling to meet demand. With over 200 million sq ft of industrial building floor space, over the past five years the average annual new supply was 2.9 million sq ft, but the average absorption was 3.5 million sq ft, indicating demand has been outstripping supply.4 The chart and table shows the downward trend in vacancy rates since 2014, and summary of the current market. Demand for industrial space continues to set new records as both owner-operator and investor interest in industrial assets strengthen amid low vacancy, constrained land supply, and rising rental rates throughout Metro Vancouver.5 Regional industrial space demand has more than doubled in the last three years, a result of growth in GDP, population, and consumer spending.6 Source: Colliers: Metro Vancouver Industrial Market, Q Metro Vancouver - Metro Vancouver 2015 Industrial Lands Inventory, 2016 Colliers - National Dashboard Report, Industrial Metro Areas Population > 1 Million, Q Avison Young - Metro Vancouver, Industrial Overview, Spring Vancouver Sun, Evan Duggan - Industrial lease rate surge in Metro tops global study, August August 2018 Page 3

36 White Paper: Stratification of Industrial Land in Metro Vancouver Currently there is the greatest amount of industrial space under construction in the history of Metro Vancouver, but so far new supply has provided limited relief to the lack of vacant space, leading to significant increases in lease rates. 7 Many new developments are already preleased -- while the substantial amount of new strata product is likely to stabilize strata prices, the lack of new lease product will not address vacancy in a meaningful way. 8 Metro Vancouver s industrial vacancy rate stands at 1.4%, well below the five-year average of 2.8% 9, and among the lowest in North America. The year-over-year increase in the prime taking or achievable rent in the region increased by 29%, more than in any other market in the world during the past year. 10 Rental-rate appreciation is expected to continue (albeit at a slower rate), which will support higher land valuations. 11 Metro Vancouver s average industrial asking net rental rate hit a record $10.91 per sq ft in early 2018, up 15% from $9.50 psf just 12 months earlier. Vancouver ($17.94 psf) and North Vancouver ($15.30 psf) were the most expensive, while Delta ($9.01 psf) and Surrey ($9.11 psf) were the lowest rates in the region. 12 Capitalization rates for industrial properties in the Metro Vancouver market range from % for single tenant A buildings, to % for multi tenant B buildings. These rates are the lowest in Canada of major markets, with the next being Toronto, at 100 to 150 basis points higher. 13 This indicates strong demand; investors are willing to pay a premium, and thus accept a lower rate of return, for industrial investments in Metro Vancouver compared to other city-regions in Canada. 2.3 Industrial Demand by Sector Metro Vancouver is still showing a strong industrial forecast across all asset types and market areas. Warehouse/Distribution and Tech space appears to have the greatest likelihood of rent and tenant demand appreciation. 14 Last-mile delivery has also been a key focus, requiring well-located urban logistics space. 15 According to market reports: The majority of demand continues to be driven by distribution of consumer goods, food/beverage, building supplies, technology users and film production. In core locations, increasing prices force a transition to more specialized light manufacturing, tech, office and showroom-type uses. The change in Metro Vancouver s competitive and constrained industrial market is ahead of other Canadian markets and generating innovative building forms. 16 Notably, a number of these uses are not conventional industrial, reflecting the changing nature of the economy and more non-industrial uses on industrial lands. Also mentioned by broker interviewees were: small scale, artisanal businesses, such as custom manufacturing, small batch production, and food processing, some relating to the sharing economy, 7 Colliers - Metro Vancouver Industrial Market, Q Avison Young - Metro Vancouver, Industrial Overview, Spring Colliers - Metro Vancouver Industrial Market, Q CBRE Global Industrial & Logistics Prime Rents, Avison Young - Metro Vancouver, Industrial Overview, Spring Avison Young - Metro Vancouver, Industrial Overview, Spring Colliers - Canada Cap Rate Report, Q Colliers - Advisor Sentiment Survey, Vancouver, Q CBRE Global Industrial & Logistics Prime Rents, Western Investor, Russ Bougie - Industrial real estate: Changes afoot, May August 2018 Page 4

37 White Paper: Stratification of Industrial Land in Metro Vancouver such as facilities with common kitchens. Much of these businesses require small space, and are local serving, benefiting from close proximity to the consumer population. Growth also in tech companies in urban light industrial areas, noting the diverse types: high tech, bio tech, software, and digital. These businesses often need high ceiling, studios, labs, storage, and power, with various activities including, R&D, packaging, and distribution on site -- industrial space meets their needs. Furthermore, different types of tech companies have different abilities to pay, in terms of both wages and accommodations; most small and young companies cannot afford high rents and to purchase space. For logistics related activities, distribution models are shifting throughout North America. Instead of a retailer having a large regional distribution centre to serve several stores, the forecast for many retailers includes fewer and smaller stores but additional warehouse facilities for return centres and smaller pick-up facilities close to downtown centres, supported by a local distribution network Unique Lands - Port and Airport Lands located within Port of Vancouver (Port) and Vancouver International Airport (YVR) jurisdictions are unique and not under municipal regulation, with market forces to some extent tempered by the respective roles and objectives of the agencies. With the duel functions of regulator and landlord, and in accordance with their respective federal mandates, these agencies consider more than financial factors for leasing. Both authorities have Land Use Plans that facilitate various commercial and industrial activities, and these portfolios are part of the regional real estate inventory. The Port and Airport facilitate a multiplicity of synergistic entities and activities, which reciprocate with the associated supply chains and terminals. The facilities on Port and Airport lands may be associated with off-site distribution facilities located within municipal jurisdictions on industrial lands, linked by truck drayage. In the case of YVR, the federal government is the landowner, with the Airport administering tenant leases. Airport lands thus cannot be stratified in a conventional sense. However, within 'Cargo Village' headquarters with over one million sq ft of cargo and warehouse space, smaller units are leased to multiple tenants, including air carriers, freight forwarders, customs brokers, trucking and courier companies. Given lease rates, use restrictions, investment levels to support air cargo, and the scarcity of available sites, tenants tend to be limited to those that need to be located close to the terminal for specific operational purposes. This includes integrators (such as UPS and FedEx) who require access for aircraft as well as Cargo Village tenants. For several cargo and logistics operators on Sea Island, there are economies of scale in co-locating activities, such that more than half of the cargo tonnage transiting on Sea Island is truck-to-truck (i.e.: it is processed there by an operator that handles air cargo, but is not transported by air). YVR and the Port encourage investments in infrastructure and intensification that support more efficient use of lands and facilities to advance growth in capacity, some of which require significant capital and long-term planning. However, at YVR some airside sites are height restricted owing to 17 Western Investor, Russ Bougie - Industrial real estate: Changes afoot, May August 2018 Page 5

38 White Paper: Stratification of Industrial Land in Metro Vancouver runway transitional surfaces, radar, and instrument landing systems, which limit densification of cargo and logistics buildings. In the case of the Port, lands are leased for the best value and user from the Port's perspective, rather than necessarily the highest financial value. Ground lease lengths can vary up to 60 years depending on the scale of infrastructure and investment by the tenant. Off dock lands typically must be occupied by users preliminary engaged in the movement of goods through the Port. The head / master lease may be 'owned' by an investor, such as a pension fund, who wants stability and regular revenue, with subtenant leases for shorter periods, and potential partitioning of buildings into smaller units, all subject to approval by the Port. The Port Land Use Plan includes eight use designations across the Port s 3,600 acre jurisdiction. Specifically, the industrial lands are in the form of two major categories: Port Terminals and Industrial (including off dock uses such as logistics warehousing). The Port is active in land acquisitions, reviewing opportunities to purchase strategically important industrial lands, with the Land Use Plan updated accordingly. For YVR, the six Land Use Plan designations correspond to a hierarchy with airfield taking precedence, followed by terminal and airside, then ground access, groundside, etc (there is no industrial designation, per se). Over time, as passenger numbers and aircraft movements grow, priority uses such as runway and terminal will consume land (including future new runways) currently dedicated to other purposes (including cargo, logistics, and ground transportation) requiring these to relocate. Thus, while there may appear to be vacant land at YVR, much of it will be absorbed by the relocation of uses in the future. 3 Extent of Industrial Stratification According to available figures for 2016, the Metro Vancouver commercial strata market recorded nearly $700 million in total sales volume through approximately 600 transactions. The industrial market represented 40% of the sales volume, followed by retail at 38%, and office at 22%. 18 The total square footage of strata space traded in 2016 reached 2.3 million sq ft. The industrial market represented 62% of the area sold, followed by retail at 23%, and office at 15%. 19 There continues to be an increase in industrial stratification in Metro Vancouver, which is also occurring in the office and retail real estate markets. Whereas in other city-regions in Canada, based on limited anecdotal input, strata industrial development and pre-sales does not seem to be as widespread. 18 Colliers - Metro Vancouver Commercial Strata Market Overview, Q Colliers - Metro Vancouver Commercial Strata Market Overview, Q August 2018 Page 6

39 White Paper: Stratification of Industrial Land in Metro Vancouver 3.1 Tenures of Industrial Development Like residential housing, strata is a form of tenure, and is distinct from fee simple ownership and rental / lease with a tenant-landlord relationship that may be in the form of a multi-tenant building. As stated by the Province of British Columbia20: "A strata development can be buildings or land, divided into separate units, called strata lots. This allows for individual ownership of a strata lot. All the strata lot owners together own the common property as a strata corporation. The strata corporation is, in law, an artificial person that can do everything of a legal nature that a real person can do." The corporation operates the property on behalf of the strata unit owners. Just like residential, as industrial uses become more intense, a larger proportion of new developments are attached units, to use the land more efficiently. There need not necessarily be a significant physical difference between strata and non-strata buildings. Attached units could either be all one property owned by a single landlord with individual units rented to multiple tenants, or stratified and owned by individual buyers/businesses. From the onset, it is important to remember this distinction about tenure and form, while noting that they are often related. For example, many of the new developments are high density and strata. In theory, these same developments could be high density and lease; however strata are generally higher values than lease and thus could better support higher building construction costs associated with higher density forms of developments. 3.2 Industry Comments About Industrial Stratification Generally speaking, the industrial real estate is made up of two types of markets: those that are strata owned and those that are not. There are differing opinions about strata within the industry21: The strata market is alive and well, but I m personally not a fan because it limits tenants, said Jeff Miller, Vice President of Industrial in Oxford Properties Group. Strata is uniquely Vancouver. It s not as ingrained or important anywhere else. For Lee Hester, Senior Vice President of Industrial Sales and Leasing at JLL and Beth Berry, Director of Industrial Development at Beedie Development Group, strata ownership allows small and medium sized business to grow, and creates a more stable market. Strata is good thing for the industrial market, said Hester. We are an owner based city, we all want to own. It s a Vancouver phenomenon. According to Hester, 90% of industrial buyers are businesses with less than 10 employees who prefer to live within 20 minutes of their property. I love strata, said Berry. Strata buyers are typically private and family owned companies with a succession plan, not big distribution companies who need flexibility to grow. These types of buyers make the market steady and strong. These comments recognize the different perspectives on the needs and solutions for industrial tenants, and that different industrial developers have different investment objectives BC Government - www2.gov.bc.ca/gov/content/housing-tenancy/strata-housing/understanding-stratas/kinds-of-stratas NAIOP Vancouver Chapter - Regional Industrial Cost Survey, Fall 2017 August 2018 Page 7

40 White Paper: Stratification of Industrial Land in Metro Vancouver 3.3 Notable Strata Industrial Projects There are a number of notable new higher density strata industrial development projects in the region. These profiles (Appendix C) are intended to provide a flavour of the new and increasingly common forms of industrial and quasi-industrial strata development occurring in the Metro Vancouver region. The first few are conventional smaller-format and flex-space industrial buildings, with accessory office / mezzanine. The latter ones include significant or nearly entirely office and commercial uses, with limited industrial uses. These profiles reflect the growing demand for both strata units, but also smaller industrial units and with increasing amounts of accessory or non-industrial uses, and in many cases higher densities, especially in the more urban locations. It is notable how some of these projects are marketed, with many references to the features of the work space and area amenities, which are desirable for workers. According to brokers, making buildings comfortable for employees has taken on increased significance in the current labour market. Tenants want amenities, including break rooms with games, televisions and other leisure equipment, etc, to help attract and retain employees.22 A number of these projects are by PC Urban, using the 'IntraUrban' brand for their projects, and describing them as such:23 It s the perfect combination of location and design. At these prime locations, best-in-class architects and designers create brand new space specifically designed for the needs of business. With flexible unit sizes and attractive pricing, property ownership is now accessible to more businesses. Efficient interior space and contemporary storefront for increased warehouse and office potential. Almost too good to be industrial. 3.4 Growth of Industrial Strata Development Based on published market reports, most of which cover the industrial market in general, and a few by JLL and Colliers on the strata market in particular, below are relevant excerpts over the past two years. Statements from these publications provide a clear and consistent trend of both increasing supply and increasing demand for strata industrial developments As one of the more stable of the commercial strata assets, the industrial strata market is largely owner-occupied and has seen significant increases in demand over the last 24 months. 22 National Real Estate Investor, Patrick Kirk - What Industrial Tenants Want, July PC Urban Colliers - Metro Vancouver Commercial Strata Market Overview, Q August 2018 Page 8

41 White Paper: Stratification of Industrial Land in Metro Vancouver Through 2016, the industrial strata market experienced $278 million in sales volume across 343 transactions and 1.4 million sq ft. The majority of the volume occurred in Surrey (24%), Richmond (21%), and Burnaby (20%). Spring A low interest rate environment, rising lease rates, and a lack of industrial land are among the factors pushing strata units to be sold at record prices. The weighted average price per sq ft has increased 69% over the past five quarters. Developers are actively building strata units to capitalize on high sales prices. Fall Comparing the weighted average price per sq ft of strata sales in the first half of 2016 to the first half of 2017 for the region, prices increased 16%. The increase was even larger in some submarkets. Pre-sales illustrate demand - developers typically arrange contracts before construction is completed. And increasingly, more units might be pre-sold when the developer launches pre-sales. Spring This clear level of demand has led to an increase in the amount of strata developments in Metro Vancouver, both planned and under construction. In Q2 2017, there were 9 developments under construction and 8 planned. In Q4 2017, there were 11 developments under construction and 12 planned. Year-over-year increases in average weighted price in Metro Vancouver from 2015 to 2017 were 39%. Summary This sentence summarizes the situations well: "With every strata development being sold out before completion, it seems that developers really can t build strata fast enough."28 Source: JLL - Strata Market Report Metro Vancouver, Spring 2018 The chart shows the latest available summary data for strata values in the region, as of the second half of Average industrial strata sales prices per sq ft were at $265, and much higher in Vancouver and North Vancouver. Since then, prices have further increased to the $400+ range in some markets. 25 JLL - Strata Market Report Metro Vancouver, Spring 2017 JLL - Strata Market Report Metro Vancouver, Fall JLL - Strata Market Report Metro Vancouver, Spring JLL - Strata Market Report Metro Vancouver, Spring JLL - Strata Market Report Metro Vancouver, Spring August 2018 Page 9