CanFirst and Colonnade BridgePort buy industrial land in Ottawa • RENX • Real Estate News Exchange

A rendering of a proposed industrial building in the 50 acre South West Ottawa development property acquired by CanFirst Capital Mgmt. and BridgePort Colonnade. (Courtesy of CanFirst)

Ottawa’s growth as a mid-to-high bay industrial market will continue, with the acquisition by CanFirst Capital Management and Colonnade BridgePort of a 50-acre site in the southwest of the city. They plan to build up to 900,000 square feet of new space on the land starting in 2024.

Although Colonnade BridgePort is a local developer and commercial real estate company, the project marks a return to market for Toronto’s CanFirst. Executive Vice President Mark Braun told RENX that CanFirst is looking to reinvest in the region’s growing industrial base.

“Honestly, it’s not for lack of trying,” Braun said. “We’ve been looking for opportunities for a few years, industrial opportunities, and we just haven’t been able to take them for a variety of reasons, mainly because we weren’t the highest bidder.

“We have been actively trying to re-enter the Ottawa market for some time.

The industrial project brings CanFirst back to the market with a different strategy from its previous investments in the region.

This site was acquired on behalf of its CanFirst Industrial Development Fund, a recently launched investment vehicle that targets industrial development sites.

“Obviously this is land development, we are developing new products where we have previously invested in Ottawa as types of revenue-generating or value-added opportunities.

The 50-acre property and development plan

The partners paid approximately $44 million for the property, on Strandherd Drive and Citygate, near a new 2.9 million square foot Amazon fulfillment center and the freeway. 416 in the Barrhaven area.

Colonnade Bridgeport will be the development partner and bring local knowledge to leasing and then property management.

“They’re a great partner,” Braun said, “very knowledgeable and very well known in the Ottawa market. So it gives us a lot of comfort and confidence to move forward with this project to have a partner like that with us.

Braun said about 43 to 44 acres would be developable, and the partners are working on zoning and site plan requirements to begin construction in 2024.

It had been listed by Colliers. The acquisition was finalized on September 22.

“We’re aiming to develop 850,000 to 900,000 square feet in two to four buildings,” Braun said. “Specifications are still a bit evolving.

“Depending on the type of tenants we see, it could be more logistics, types of fulfillment uses, so larger format buildings with exterior trailer storage.

“But I also think there will be an allowance in the project for some mid-sized rentals, say in the 50,000 to 100,000 square foot size range, so those would be more rentals that are traditional in the market for ‘Ottawa, non-small tenants requiring roughly the same level of shipping and logistics.

Buildings will also likely have clear heights of 40 feet.

Ottawa’s growing industrial sector

After many languid years, the city’s industrial market has picked up steam in the past three or four years. Vacancy in the 46 million square foot market (according to Colliers data) has been steadily declining, Amazon has opened two huge warehouses comprising approximately 3.9 million square feet of total space, and other new tenants distribution and warehousing have arrived.

Local businesses are also growing, as the city’s population has officially passed one million people and continues to grow. Braun sees the demand for new spaces continuing and noted that any competing projects currently underway will be delivered well before that space goes live in about three years.

“The size of the industrial market in Ottawa relative to the population is quite small. Depending on who you ask, there are 35 to 45 million industrial feet for every million people in the city.

“While Ottawa is not a manufacturing type economy, there is always a demand for industrial space and we see continued demand, primarily to meet current logistics and e-commerce needs. The product that is in place, for the most part, is an older product and not built to the latest standards.

Future demand for industrial space

He expects demand to come from various sectors.

“I see continued growth in e-commerce. Amazon has obviously taken a huge position, but there are a lot of other retailers nationally and how they look to meet the demands of other big markets like Ottawa, there’s still a lot of potential space that they need for service,” Braun noted. “

But also existing tenants in the Ottawa market looking to expand, or if not expanding, looking to move to better and more efficient spaces to improve their operations. So we think there’s a lot of demand there as well.

The city is also one of Canada’s hottest high-tech hubs, a sector that has seen significant expansion in recent years.

That premise was backed up this week with the announcement that international telecommunications giant Nokia will invest $340 million in a major expansion of its Canadian headquarters in Ottawa’s western Kanata district. It will expand all facets of its operations in Ottawa, from offices to research and development, as well as planning the commercial and residential components of the 26-acre campus.

“What also underpins everything, what we love about Ottawa, is that there’s a technology element to this market,” Braun said. “There are technology-related users, warehousing uses or maybe, if it’s not direct warehousing, there could be certain types of manufacturing or other types of light industrial uses related to technology users.

“Our main objective is to build new, quality industrial warehouses that meet existing and, we believe, future demand in the market.”

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