Strong demand for industrial condos
“Pent-up demand for high-quality industrial condo units largely led us in that direction,” Berkshire Axis vice-president and partner Craig Wagner told RENX.
“We’ve had a very strong year across the platform for condo sales, whether that’s some of our conversions on existing buildings or our pure new-build industrial condominiums.
“I think both lines have exceeded our sales forecasts throughout the first part of this year and we’re definitely excited for the remainder of this year and certainly heading into next year.”
Heart Lake Industrial Condominiums was launched by Fiera Real Estate and Axis Berkshire while interest rates were escalating rapidly last year.
It offers 26 industrial condo units in two buildings of 61,000 and 46,000 square feet with 28-foot clear heights and truck-level loading. All of the units sold ahead of schedule.
Fiera Real Estate and Berkshire Axis are partners on Addison Hall Business Park, which features three industrial condo buildings ranging in size from 37,661 to 50,339 square feet at 115-155 Addison Hall Circle in Aurora, just north of the GTA.
Sales launched a year ago and 32 of its 39 units, ranging in size from approximately 2,700 to 5,000 square feet, have been sold. Construction completion is slated for November.
“There’s a big need for continuing to support small- to mid-size businesses,” Fiera Real Estate senior VP of development, core and opportunistic strategies Kathy Black told RENX.
She noted it’s difficult to find smaller sites that are appropriately sized for building industrial condos.
Plans for new Brampton site could change
Plans for Fiera Real Estate and Berkshire Axis’ latest Brampton site to be broken down into small industrial condo units could change due to market conditions and tenant interest.
“If somebody came by and wanted to have a big design-build and wanted to buy everything, we’re not closed off to that,” Black explained.
“We’re so fresh in the development cycle with all of these conversations, but it’s zoned for all of those uses so the flexibility is there.”
Black said industrial rents in the GTA increased by 25 per cent from 2020 to 2021 and by almost 40 per cent from 2021 to 2022.
While rents have stabilized this year, they’ve done so at more than $20 per square foot to create a benchmark, she noted.
Fiera Real Estate and Berkshire Axis’ partnership
Toronto-headquartered Fiera Real Estate is wholly owned by Fiera Capital Corporation, a multi-product investment management firm that had approximately $164.2 billion of assets under management as of June 30.
Fiera Real Estate is an investment management company with offices in North America and Europe and more than 80 employees.
It globally managed more than $7 billion of commercial real estate through a range of investment funds and accounts as of June 30.
Fiera Real Estate purchased 156 acres of industrial land in Acheson, Alta., near Edmonton, and is also active in industrial condo projects (known as strata developments) in British Columbia.
Toronto-based Berkshire Axis has more than 25 years of experience in delivering industrial and residential projects across the GTA. It has completed more than 30 industrial developments over the past 10 years.
Four Fiera Real Estate funds have been used in the partnership with Berkshire Axis, which is now responsible for more than two million square feet of industrial space in the GTA.
Three of Heart Lake Business Park’s five for-lease industrial buildings have firm leases in place and Wagner said there are deep conversations happening regarding leasing of the fourth building.
Construction of the development will be winding down through the remainder of the year, according to Wagner.
There’s more apparently to come, according to Black and Wagner, but they can’t yet reveal any details.
While Black said she would like to see the partnership continue long-term, it depends on what opportunities arise.
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