218 Industrial METRO MARKET REPORT
METRO MARKET OVERVIEW Healthy demand pushed the Metro Vancouver industrial markets vacancy rate down seven basis points from, the largest quarterly drop in a year. In 218 the Metro Vancouver vacancy rate dropped to 1.4% from the 1.47% reported in 218, making it the largest drop in vacancy since. Absorption on the other hand has decreased by 1, square feet since last quarter but totaled 62,532 square feet for this quarter. Demand for space is not showing any sign of slowing down and is forcing rental rates to climb, reaching an average asking rental rate of $11.81 per square foot for 218 over $1. increase since. Despite an expected two million square feet of new supply coming to market over the next six months we still expect these trends of decreasing vacancy rate, and decreasing rental rates to continue. While commercial real estate sales are down this quarter, industrial sales are still going strong, surpassing $33 per square foot for sales transactions this quarter. With over 9 transactions and over $377,, in sales volume, it is expected that this will surpass the 218 sales volume and transaction totals. MUNICIPAL LEASING STATISTICS LEASING STATISTICS MUNICIPALITY TOTAL INVENTORY (SF) TOTAL VACANCY (SF) VACANCY RATE AVERAGE ASKING LEASE RATE PSF (NNN) Abbotsford 8,181,924 51,318.63% $8.68 Burnaby 29,29,892 437,24 $12.36 Coquitlam 8,771,511 67,59.76% $1.87 Delta 26,211,482 51,51 1.91% $9.3 Langley 2,61,682 274,48 1.33% $1.69 Maple Ridge 2,38,553 2,454.11% $9.99 New Westminster 4,89,861.% North Vancouver 5,17,177 44,118.86% $16.44 Port Coquitlam 8,918,339 132,367 1.48% $12.61 Richmond 36,548,63 721,59 1.97% $1.97 Surrey 33,644,248 388,883 1.16% $1.53 Vancouver 24,59,176 311,317 1.27% $17.7 Total 28,83,98 2,932,219 1.4% $11.81 2,5, 2,, 1,5, 1,, 5, -5, 218 218 5.%.5% PERCENTAGE OF TOTAL AVAILABLE SPACE FOR LEASE BY SIZE 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % Abbotsford Burnaby Coquitlam Delta Langley Maple Ridge North Vancouver -5, SF 5,-3, SF 3,-1, SF Over 1, SF Pitt Meadows Port Coquitlam Richmond Surrey Vancouver PER SF VACANCY AND NEW SUPPLY MUNICIPAL VACANCY RATES $1,6,, $1,4,, $1,2,, $1,,, $8,, $6,, $4,, $2,, 218 218 $45 $4 $35 $3 $25 $2 $15 $1 $5 7,, 6,, 5,, 4,, 3,, 2,, 1,,.5% 1.4%.76% 1.91% 1.33%.11%.%.86% 1.48% 1.97% 1.16% 1.27% Standard - Total Sales Volume Strata - Total Sales Volume Standard - Average Price per SF Strata - Average Price per SF New Supply (SF) Vacancy Rates (%) Increase in Vacancy Decrease in Vacancy 2 Lee & Associates Vancouver leevancouver.com 218 Metro Vancouver Industrial Market Report 3
KEY MARKET SNAPSHOTS Vancouver North Vancouver Burnaby Tri-Cities Ridge Meadows (Port Moody, Port Coquitlam, Coquitlam, Pitt Meadows, Maple Ridge) INDICATOR TREND 218 218 INDICATOR TREND 218 218 Vacancy Rate q 1.35% 2.1% Absorption (SF) p 53,99-53,642 Average Asking Rent (PSF) p $15.5 $15.39 Average Additional Rent (PSF) p $6.32 $5.95 Sales Volume p $116,842,119 $112,38,19 1,, 8, 6, 4, 2, -2, -4, -6,.5% Vacancy Rate q 1.1% 1.19% Absorption (SF) p 36,358 2,328 Average Asking Rent (PSF) p $11.16 $1.62 Average Additional Rent (PSF) p $4.48 $4.1 Sales Volume p $63,333, $26,429,2 5, 4, 3, 2, 1, -1, -2, -3, -4, 6.% 5.% The Vancouver, North Vancouver and Burnaby market took a large drop this quarter, dropping to 1.35%, down from 2.1% in 218, this is the largest decrease across the major markets for 218. This change is mostly due to several large properties (75,+ square feet) coming off the market. Asking rental rates increased again this quarter reaching an average of $15.5 per square foot this quarter, the highest across metro Vancouver, while additional rents increased by.37 averaging $6.32 per square foot for 218. This high activity didn t just effect the leasing market, reported sales totaled $116,842,119 surpassing 218 reported sales of $112,38,19. 218 had a record high $515 average price per square foot due to many sales being above $1, per square foot, so it is no surprise when there was a small dip and the average price per square foot corrected to $438 for 218, despite the decrease, this is still a general increase compared to last year. 218 218 $8,, $7,, $6,, $5,, $4,, $3,, $2,, $1,, 218 218 $7 $6 $5 $4 $3 $2 $1 The Tri-Cities and Ridge Meadows market continues to experience the pricing challenges associated with its proximity to Vancouver, and therefore, its highly sought after industrial land. Vacancy rates saw a drop of 18 basis points to finish off the second quarter of 218 at 1.1%. This drop was due to an absorption increase of 36,358 square feet, compared to the 2,328 square feet experienced in. With no new supply coming to market in, the shortage of supply has consequently been highlighted, provoking a notable increase in rental rates. Average net asking rates breached the $11. per square foot mark with an increase from $1.62 to $11.16, while average additional rates increased from $4.1 square foot to $4.48. These increases of.54 and.47 respectively total a quarterly increase of $1.1. Tenants looking to enter this market have felt the effects as a result, and those looking to escape this rate hike have been forced to look elsewhere or explore their option to purchase. Thus, when looking at the sales market, owner-users are driving demand and have pushed prices upward towards near record levels. Overall sales volumes have also increased quarterly from $26,429,2 to $63,333,, however, approximately 8% of this volume was due to the purchase of 175 Golden Drive in Coquitlam for $51,,. $14,, $12,, $1,, $8,, $6,, $4,, $2,, 218 218 218 218 $45 $4 $35 $3 $25 $2 $15 $1 $5 884 8828 Osler Street Vancouver $14,25, 11,14 Kunyuan International 255 Boundary Road Vancouver $12,1, 15,8 Cado Bancorp Ltd. 851 855 Terminal Avenue Vancouver $11,5, 13,5 Sunshine Coast Education Group Ltd. 175 Golden Drive Coquitlam $51,, 164,577 MVP (Golden) Properties Inc. 93 North Bend Street Coquitlam $9,9, 24,24 A. & H. Abatte Ltd. #1174/1168-585 Seaborne Avenue Port Coquitlam $1,1, 4,39 912878 BC Ltd. 2751 Production Way Burnaby 52, GPS Logistics and Warehousing Services Ltd. 4185 Dawson Street Burnaby 23,675 Dorigo Systems Ltd 1586 Rand Avenue* Vancouver 11,25 Can-West Display Services Ltd. 162 Kingsway Avenue* Port Coquitlam 23,35 Western Checker Plate Inc. *Leased by Lee & Associates 255 BOUNDARY ROAD, *Leased by Lee & Associates 175 GOLDEN DRIVE, COQUITLAM 4 Lee & Associates Vancouver leevancouver.com 218 Metro Vancouver Industrial Market Report 5
KEY MARKET SNAPSHOTS Surrey Langley Abbotsford Richmond Delta INDICATOR TREND 218 218 INDICATOR TREND 218 218 Vacancy Rate p 1.14%.99% Absorption (SF) q -35,455 564,456 Average Asking Rent (PSF) p $9.96 $9.84 Average Additional Rent (PSF) q $3.64 $3.65 Sales Volume q $39,857,57 $129,164,514 1,4, 1,2, 1,, 8, 6, 4, 2, -2, -4, -6, -8,.5% Vacancy Rate p 1.95% 1.63% Absorption (SF) q 98,53 26,757 Average Asking Rent (PSF) p $1. $9.98 Average Additional Rent (PSF) p $3.77 $3.74 Sales Volume p $151,75,514 $12,617,94 1,4, 1,2, 1,, 8, 6, 4, 2, -2, -4, -6, 7.% 6.% 5.% 218 218 218 218 The Surrey, Langley and Abbotsford market has increased its vacancy by 15 basis points. This brings vacancy back into the one percentile to 1.14% which it has not experienced since. This increase in vacancy is largely due to the significant amount of industrial development being completed within the City of Surrey. A common trend among all markets within Metro Vancouver is displayed in terms of the average asking rental rate which has increased by.12 per square foot bringing the current average rate to $9.96 per square foot. On the other hand, the average additional rental rate has experienced a slight drop of.1 from to resulting in an average additional rental rate of $3.64 square foot. The Surrey, Langley and Abbotsford market is the only one to experience a decrease in its additional rates. Sales volume has demonstrated another substantial drop of $89,36,944 bringing the sales volume in to $39,857,57 for 218. $7,, $6,, $5,, $4,, $3,, $2,, $1,, 218 218 $35 $3 $25 $2 $15 $1 $5 The Richmond and Delta market experience an increase in vacancy this quarter jumping to 1.95% a modest increase from the 1.63% recorded in 218, this large increase is mostly due to over 34, square feet of new supply coming to market in 218. With over 1.4 million square feet of new supply coming to market since and over one million expected in the next 12 months the Richmond and Delta market has been the most active market for industrial construction projects in Metro Vancouver. Despite this large amount of new supply, this has not negatively affected rental rates as it is still a landlord s market; rental rates increased to $1. per square foot up from a reported $9.23 in. The Richmond and Delta sales market has continued its increased activity into 218, with over $15,, in reported sales this quarter, up from $12,, in 218. This has continued to push the Price per square foot for sales properties past the $3 mark, settling at $31 per square foot for 218. $35,, $3,, $25,, $2,, $15,, $1,, $5,, 218 218 $4 $35 $3 $25 $2 $15 $1 $5 8238 129th Street Surrey $9,5, 77,729 Value Property Group 5367 271st Street Langley $8,23, 39,64 271st Street Holdings Ltd. 27222 58 Crescent Langley $7,3, 32,42 Langley 27222 Holdings Ltd. 1771 Savage Road Richmond $57,38, N/A Nexus Richmond GP Inc. 9311 River Drive Richmond $27,8, 26,61 15133 BC Ltd. 1251 Riverside Way Richmond $16,1, 51,958 1251 Riverside Way Nominee Inc. 8238 129TH STREET, SURREY #214 217-18822 24th Avenue Surrey 47,53 Iron Mountain 9726 186th Street Surrey 36,563 Allmar Inc. #11 13-19255 21st Avenue Surrey 31,312 Boss Wholesale Ltd #13-7979 Vantage Way Delta 79117 Inteplast Bags & Films Corp. 396 Jacombs Road Richmond 48,8 related use 1372 Mayfield Place Richmond 36,86 Herbaland Naturals Inc. 9311 RIVER DRIVE, RICHMOND 6 Lee & Associates Vancouver leevancouver.com 218 Metro Vancouver Industrial Market Report 7
NOTABLE TRANSACTIONS BROKERED BY LEE & ASSOCIATES NORTH Buntzen Lake Coquitlam Lake Pit Lake Sale Transaction WEST Lynn Valley Deep Cove Indian Arm Belcarra Anmore Lease Transaction English Bay Stanley Park Downtown CITY OF NORTH 5 Burrard Inlet 1 Capitol Hill PORT MOODY COQUITLAM Coquitlam Centre Alouette Lake Stave Lake Chehal River West Point Grey PORT COQUITLAM Dunbar Kerrisdale Vancouver International Oakridge Marpole Mitchell Fraserview Collingwood Metrotown BURNABY 2 3 Edmonds Burquitlam Sapperton NEW WESTMINSTER Austin Heights Fraser River Maillardville Whalley Mary Hill Douglas Fraser Heights 9 PITT MEADOWS Pitt Meadows Haney Yennadon MAPLE RIDGE Stave Falls Steelhead Norrish Creek Lake Errock Sea Steveston RICHMOND 1 Tilbury Queensborough Annacis South Westminster Guildford Newton SURREY Anniedale Cloverdale Barnston 4 Port Kells Walnut Grove Forest Knolls Fort Langley Albion Whonnock Glen Valley Ruskin West Heights MISSION Mission City Hatzic Dewdney LOUGHEED HIGHWAY ght of rgia Westham Ladner 8 Boundary Bay DELTA Mud Bay Panorama Ridge Sullivan Surrey Centre 7 LANGLEY Brookswood Milner Langley Murrayville Aldergrove 6 Bradner Matsqui Clayburn ABBOTSFORD Yarrow Greendale CHILLIWACK Cultus Lake Beach Grove Boundary Bay WHITE ROCK Sunnyside LANGLEY Aberdeen Clearbrooke Abbotsford North Poplar SALE TRANSACTIONS METRO 218 ADDRESS CITY PRICE SIZE (SF) PURCHASER AGENTS 1 1955 East Hastings Street Vancouver $8,2, 8,63 Reliance Properties (Acquisitions) Ltd. Ryan Saunders*, Mitch Ellis 2 752 755 Conrad Street Burnaby $9,65, 27,2 CREC Commercial Fund LP Steve Caldwell* 3 757 759 Conrad Street Burnaby $6,75, 3,129 CREC Commercial Fund LP Steve Caldwell* 4 18533 97th Avenue Surrey $2,975, 14,94 A & J Barbour Holdings Ltd. Chris McIntyre*, Steve Caldwell* 5 239-241 East 1st Street North Vancouver $3,264, 9,7 971263 BC Ltd. Rand Thomson*, Arash Rezai* LEASE TRANSACTIONS METRO 218 ADDRESS CITY SIZE (SF) TENANT AGENTS 6 4916 275th Street Langley 123,5 Thomson Technology Power Systems Sebastian LP Espinosa* 7 2329 Logan Avenue Langley 32, Global Mining Products Inc Sebastian LP Espinosa* 8 4363 King Street Delta 3,344 Greenhouse Grown Foods Inc. Ryan Saunders*, Mitch Ellis 9 Unit C - 1765 Coast Meridian Road Port Coquitlam 28,7 Dynamic Structures Steve Caldwell* 1 7331 Vantage Way Delta 16,363 Superior Tray Systems Inc. Sebastian LP Espinosa* * 8 Lee & Associates Vancouver leevancouver.com 218 Metro Vancouver Industrial Market Report 9
LOCAL EXPERTISE. INTERNATIONAL REACH. WORLD CLASS. 5 Years of Local Market Experience The Lee Network The Lee & Associates Vancouver office has had a long history of providing exceptional commercial real estate services in Vancouver; our roots go back to 197 when we were originally established as Town Group Realty. Prior to joining Lee & Associates in, the office was most recently branded as DTZ Vancouver Real Estate Ltd. Throughout the past five decades, our professional realtors have represented buyers and sellers as well as landlords and tenants alike in the primary asset classes of industrial sales and leasing, retail sales and leasing, office leasing, land sales and investment sales. We are the first Canadian office in the Lee & Associates network, the largest broker-owned commercial real estate firm in North America. With more than 9 brokers (and growing) Lee & Associates provides a wide range of specialized services on a local and international level. 85% Increase in Transaction Volume Over 5 Years $13+ BILLION Transaction Volume () 1,+ PROFESSIONALS and Growing Nationwide 57+ OFFICES Nationwide Vancouver Industrial Team Ryan Barichello 64.63.3371 ryan.barichello@lee-associates.com Grant Basran 64.63.3376 grant.basran@lee-associates.com Steve Caldwell 64.895.2224 steve.caldwell@lee-associates.com Chris McIntyre 64.63.3392 chris.mcintyre@lee-associates.com Don Mussenden 64.63.3373 don.mussenden@lee-associates.com Arash Rezai 64.63.346 arash.rezai@lee-associates.com LOCAL EXPERTISE. INTERNATIONAL REACH. WORLD CLASS. At Lee & Associates our reach is international but our expertise is local market implementation. This translates into seamless, consistent execution and value driven market-tomarket services. Our agents understand real estate and accountability. They provide an integrated approach to leasing, operational efficiencies, capital markets, property management, valuation, disposition, development, research and consulting. We are creative strategists who provide value and custom solutions, enabling our clients to make profitable decisions. OFFICE INDUSTRIAL RETAIL INVESTMENT APPRAISAL MULTI-FAMILY LAND PROPERTY MANAGEMENT VALUATION & CONSULTING POWER OF THE LEE NETWORK Tony Capolongo 64.63.3378 tony.capolongo@lee-associates.com Mitch Ellis 64.63.3383 mitch.ellis@lee-associates.com Sebastian LP Espinosa 64.63.3396 sebastian.espinosa@lee-associates.com Ryan Saunders 64.63.3384 ryan.saunders@lee-associates.com Rand W. Thomson 64.63.3393 rand.thomson@lee-associates.com BC CANADA WEST SOUTH- WEST MIDWEST EAST SOUTH Vancouver, BC, Canada Irvine, CA Orange, CA Newport Beach, CA Ontario, CA Riverside, CA Los Angeles, CA Industry, CA Carlsbad, CA Stockton, CA Pleasanton, CA West LA, CA Sherman Oaks, CA Central LA, CA Temecula Valley, CA Victorville, CA Calabasas, CA Los Olivos, CA San Luis Obispo, CA Ventura, CA San Diego, CA Reno, NV Oakland, CA Antelope Valley, CA Santa Barbara, CA Palm Desert, CA ISG- LA, CA Boise, ID Long Beach, CA Denver, CO Pasadena, CA Walnut Creek, CA Seattle, WA Phoenix, AZ Dallas/Ft Worth, TX Houston, TX Chicago, IL, St. Louis, MO Southfield, MI Madison, WI Indianapolis, IN Greenwood, IN Cleveland, OH Columbus, OH Twin Cities, MN Atlanta, GA Greenville, SC Fort Myers, FL Orlando, FL Charleston, SC Valuation, Atlanta Elwood, NJ Manhattan, NY Edison, NJ Chesapeake Region LI/Queens, NY Eastern Pennsylvania 1 Lee & Associates Vancouver leevancouver.com 218 Metro Vancouver Industrial Market Report 11
218 Industrial METRO MARKET REPORT For inquiries please contact Ryan Walmsley VP Marketing and Research D 64.63.3399 ryan.walmsley@lee-associates.com Lee & Associates Vancouver 475 West Georgia Street, Suite 8 Vancouver, BC V6B 4M9 O 64.684.7117 F 64.684.117 This report should not be relied upon as a basis for entering into transactions without seeking specific, qualified, professional advice. Whilst facts have been rigorously checked, Lee & Associates can take no responsibility for any damage or loss suffered as a result of any inadvertent inaccuracy within this report. Information contained herein should not, in whole or part, be published, reproduced or referred to without prior approval. Any such reproduction should be credited to Lee & Associates. 218 Lee & Associates Commercial Real Estate (BC) Ltd.