They are on different ends of the city but two projects clearly show the direction of new industrial construction in the city of Vancouver, where the industrial vacancy rate is the lowest in Canada and leasing and land prices are the highest.
The development direction is to build higher, the spaces are sold rather than leased and the projects are packed with the level of amenities normally seen in residential condo towers.
In the False Creek Flats, Alliance Partners is redeveloping an old warehouse on a 1.5-acre site into a five-storey industrial-office project of 173,000 square feet at the corner of East 1st Avenue and Clark Drive.
Called Frameworks, it will have 85 strata commercial units priced from $725 per square foot. Strata units start at 1,300 square feet for industrial space and 1,000 square feet for offices on the top two floors. The project is the first in the Flats with loading ramps to the first two floors of industrial space, in addition to freight elevators.
Unlike your granddad’s industrial space, Frameworks will also feature outdoor patio space, courtyard amenities, a bike room, showers and an onsite coffee shop. Industrial owners can also have a retail showroom component.
With construction starting early next year, Frameworks is expected to be completed in 2024.
Meanwhile in southwest Vancouver, developer Wesbild, with Kingsett Capital, is turning an old sawmill site into Canada’s largest stacked, mixed-use industrial-office complex in twin buildings. Its Marine Landing development will offer strata workspaces ranging from 600 up to 34,000 square feet.
“We start demolition in January,” said development manager Brennan Finley of the project at 8188 Manitoba Street, which is expected to cost from $110 million to $120 million to build and be completed by 2024.
The Marine Landing project, close to the Canada Line’s Marine Drive Station, totals 340,000 square feet. Both of the six-storey buildings will be completed at the same time. Each will have two large freight elevators and wide loading bays for the three floors of industrial space.
Unlike a lot of the industrial strata projects underway in Metro Vancouver, Wesbild is not building on speculation. According to Finley, 90% of the industrial space in the first tower is already sold, as well as a 20% of the office space. The industrial units are selling for $750 to $800 per square foot, while the office space on the top three floors sells for $950 to $1,000 per square foot.
It is not only the prices that resemble residential condo values. Marine Landing’s industrial is anchored by a large bakery that will have a café as part of the amenity package.
Finley said an extensive survey of potential buyers also resulted in the project being designed with a ”really good bike facility,” end-of-trip amenities, a fitness centre, a top-floor social lounge with a kitchen and a landscaped rooftop patio.
Buying workspace has become a major trend in Metro Vancouver for small-to-mid-size businesses, due to a record low vacancy rates for leased industrial space and Canada’s highest leasing costs.
”With less than 0.4% industrial vacancy now in Metro Vancouver, we have seen skyrocketing lease rates,” said Avison Young principal Ryan Kerr, who is selling space at Frameworks. “Ownership allows businesses to control their operational costs while building equity.” •