Stymied by years of rejection by the District of North Vancouver, Wesbild Holdings Ltd. has sold 1371 McKeen Avenue to an institutional investor.
The 27-acre parcel sold Jan. 31, with industry sources identifying the buyer as Dream Summit Industrial LP of Toronto.
A purchase price was not disclosed, but Wesbild president and CEO Kevin Layden said it came in below the $6.6 million an acre HTEC paid last year for 100 Forester Street, also in North Vancouver. That deal ranked as the largest industrial land deal last year for both North Vancouver and the region.
“They did better than we did,” Layden said.
The value of the McKeen Avenue property was pegged at $115 million in 2019, and industry sources indicate that its current value lags the current assessed value of $175.3 million by a significant amount.
Wesbild had owned the property since 2017, spending money improving the existing 860,000-square-foot self-storage facility and marine centre on the site, which it will continue to operate under a lease-back arrangement, but Layden was frustrated with the district’s panning of its comprehensive vision for the site.
“We fixed up the warehouses, brought them to code, and really turned it into an outdoor storage facility,” he said. “That’s really the best we could do.”
Wesbild’s last proposal to the municipality in 2019 called for subdividing the property into an 11.6-acre parcel on the south side that could continue functioning as a port. The northern portion, totalling 15 acres, would have six lots ranging from 0.67 to four acres accommodating various uses including film production, a food commissary, e-commerce, craft brewing and child care.
The plans reflected objectives on the district’s official community plan calling for “more intense use of employment lands” to create jobs and opportunities for business.
Wesbild said its vision would create between 500 and 1,000 jobs on the northern portion versus the eight positions in place at the time.
“We were initially trying to redevelop the site with industrial flex, much needed on the North Shore,” Layden told Western Investor. “We had plans to build out industrial space that would have enabled more people to stay on the North Shore. … But if the district’s not interested, they’re not interested. You can only go at it so many times.”
Wesbild had “multiple meetings” with the district following the rejection of its 2019 application with no success.
“We just weren’t able to meet the hurdles that were being put in place,” he said. “It’s unfortunate with the shortage of industrial space on the North Shore we couldn’t do what we originally planned, but Plan B worked out fine.”
A key concern of the district was the lack of road capacity to deal with increased traffic to and from the site.
Layden said the buyer has acquired the property as an income-producing asset and will bide its time with respect to any future development.
Dream did not respond to a request for comment on the deal.
Tony Quattrin, vice-chair with the CBRE Ltd.’s National Investment Team in Vancouver said the sale of 1371 McKeen indicates the establishment of industrial outdoor storage (IOS) as an asset class in its own right.
“There’s a number of large institutional investors around the globe showing interest in IOS, which offers land with future development potential, as well as current income,” he said in a statement. “With the limited amount of industrial land in Metro Vancouver, the investor here took a long-term view that it was a good investment for reasonably priced land supported by a strong holding income.”
