Industrial Panel Industrial Lease Vacancy Vacant space in the city - - PowerPoint PPT Presentation

Edmonton Real Estate Forum 2018 Industrial Panel

2018 Real Estate Panel Discussion | Cushman & Wakefield Edmonton

Industrial Lease Vacancy

Vacant space in the city is constricting

• Lease vacancy began 2018 at 5.0%, a year over year decrease of 1.5%.
• Strong leasing has occurred over the last four quarters, driving down overall

vacancy in the market and in almost all submarkets.

• Sublease vacancy dropped below 1 million square feet at the end of 2017, a

level unseen since 2015, and now sits at 868,712 square feet.

• Sale vacancy has contracted as well to 1.0%.

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 2012 2013 2014 2015 2016 2017 Q1 2018 Historical Average = 4.0%

6.3% 6.5% 6.0% 5.0%

Key Indicators

Q1 2018 Q1 2017

6.5%

LEASE VACANCY RATE

(333,475)

NET ABSORPTION

(SF)

288,783

UNDER CONSTRUCTION

(SF)

$9.51

Q1 2018

5.0% 320,769 1,567,462 $9.30

12-MONTH FORECAST

AVERAGE ASKING RENT

Edmonton’s industrial market has seen significant growth in the past year as the market recovers from the downturn. Increased construction, lowered vacancy, and average asking rents that are rising for the first time in two years are positive signs for landlords and industrial real estate investors heading into 2017.

Real Estate Forum 2018 | Cushman & Wakefield Edmonton

$8 $10 $12

• 300,000
• 200,000
• 100,000

100,000 200,000 300,000 400,000 500,000 600,000 2016 2017 2018

Trailing Average Absorption, SF Asking Net Rents

Absorption

2015 Absorption

• 922,675

2016 Absorption

• 573,211

2017 Absorption 1,498,066 2018 Absorption YTD: 320,769

Trailing averages and deal velocity

Real Estate Forum 2018 | Cushman & Wakefield Edmonton

Sale History

Quarterly sale volume of industrial buildings, condos, and land

Real Estate Forum 2018 | Cushman & Wakefield Edmonton

Land Price

$0.00 $10,000,000.00 $20,000,000.00 $30,000,000.00 $40,000,000.00 $50,000,000.00 $60,000,000.00 $70,000,000.00 $80,000,000.00 Southeast Northeast Northwest Acheson Leduc/Nisku

Overall Sales

2015 2016 2017 $0.00 $200,000.00 $400,000.00 $600,000.00 $800,000.00 $1,000,000.00 $1,200,000.00 $1,400,000.00 $1,600,000.00 Southeast Northeast Northwest Acheson Leduc/Nisku

Price Per Acre

2015 2016 2017

Acheson forerunner in Edmonton’s economic recovery

2018 Real Estate Panel Discussion | Cushman & Wakefield Edmonton

Spec built space that is available makes up 27.0% of all directly vacant space in the Southeast market and 41.4% of all directly vacant space in the Northwest market.

Current Spec Availability

Northwest

962,645 Sq. Ft.

Southeast

655,053 Sq. Ft.

Current Available Spec

Northwest Southeast

Northwest Edmonton 962,645 Sq. Ft. Southeast Edmonton 655,053 Sq. Ft.

Real Estate Forum 2018 | Cushman & Wakefield Edmonton

Key Market Analysis

INDUSTRIAL INVESTMENT ACTION PLAN Plan Update

REGIONAL AND ECONOMIC DEVELOPMENT ECONOMIC INVESTMENT AND DEVELOPMENT 10

EDMONTON REAL ESTATE FORUM 2018

ACTION PLAN INDUSTRIAL DISTRICTS

11 REGIONAL AND ECONOMIC DEVELOPMENT ECONOMIC INVESTMENT AND DEVELOPMENT

REGIONAL AND ECONOMIC DEVELOPMENT ECONOMIC INVESTMENT AND DEVELOPMENT 12

ACTION PLAN TAXABLE ASSESSMENT BASE

REGIONAL AND ECONOMIC DEVELOPMENT ECONOMIC INVESTMENT AND DEVELOPMENT

INDUSTRIAL ACTION PLAN OVERVIEW

ACTION 1:

IMPROVE IMAGE & REPUTATION

ACTION 2:

IMPLEMENT FLEXIBLE STANDARDS

ACTION: 3

EXPLORE ALTERNATIVE INFRASTRUCTURE COST SHARING MODEL

ACTION: 4

INTRODUCE CAPITAL PROJECT PRIORITY FRAMEWORK

ACTION: 5

INCREASE SPEED TO MARKET

ACTION: 6

LEVERAGE BUSINESS FACILITATION RETENTION

ACTION: 7

INCREASE EETP READINESS

ACTION: 8

IMPLEMENT ECO- INDUSTRIAL PRINCIPLES

ACTION: 9

PRIORITIZE INDUSTRIAL INFRASTRUCTURE PROJECTS (WINTERBURN)

REGIONAL AND ECONOMIC DEVELOPMENT ECONOMIC INVESTMENT AND DEVELOPMENT

NEXT STEPS – 2018 ACTION PLAN DELIVERABLES

14

• Capital Prioritization

Criteria

• Speed to Market
• Eco-Industrial Principles

and Guidelines

• Infrastructure Cost Sharing

Model

• Context Sensitive Design

Standards

• EETP Area Structure Plan

Amendments

• Business Retention and

Expansion

• Capital Budget Profile

REGIONAL AND ECONOMIC DEVELOPMENT ECONOMIC INVESTMENT AND DEVELOPMENT

NEXT STEPS – 2018 ACTION PLAN DELIVERABLES

15

THANK YOU

QUESTIONS