BALZAC IS BUZZING AS ONE OF ALBERTA’S BUSIEST INDUSTRIAL CORRIDORS
Thanks to plentiful plots of land for the big box users who need them and the associated savings they get on operating costs, the industrial corridor of Balzac, Alberta is buzzing with action. “With regards to property tax, depending on whom you talk to, there could be a much as a dollar per sq. ft. in savings,” says Marshall Toner, who leads JLL Canada’s Industrial Group. “So if you've got a 500,000 sq. ft. warehouse, and you're saving a dollar a sq. ft. on taxes, that adds up very quickly.”
Marshall Toner Managing Director & National Lead, Industrial JLL Canada
Currently the Balzac corridor is the busiest node outside Calgary’s city limits, eclipsing the industrial markets of Airdrie and Okotoks. “Lowes Canada just signed a deal for a 1.25 million sq. ft. warehouse that's being constructed right now for a delivery of Q4 in 2021,” says Toner. “Walmart has two warehouses in that area at 500,000 sq. ft. each, Amazon has a 600,000 sq. ft. center out there, and you’ve also got Gordon Food Service with 250,000 sq. ft., among others.”
“If you had told me on March 13th, ‘Hey, Marshall, don't worry about it because this is how busy you’re going to be in July, August, and September’, I'd be very happy with that answer.” In the past 25 years, Calgary’s industrial market has doubled to 150 million sq. ft., says Toner, who also lists current statistics including a vacancy of 7.8, an average rent rate of 9.98 and average land cost ranging from $650,000 to $950,000 an acre. These figures are similar to those of the Edmonton market as well, he says, noting that continued growth in e-commerce is good news everywhere from an industrial perspective, since bricks and mortar are needed to house products. When it comes to requirements for the next generation of warehousing, Toner says larger e-commerce players such as Amazon will be looking to fulfil last-mile delivery directly from the distribution centre to the consumer. However, several issues could arise related to the larger employee count at fulfillment centres, he points out. “Employee parking has become a bigger issue for people working in e-commerce. The power supply to the building has also become an issue because they're driving a lot of the robotics and material handling on the premises,” says Toner. While March and April were very slow in all facets of commercial real estate, including industrial, as people waited to see what would happen, they’ve been on a steady climb upwards since May, he says. “If you had told me on March 13th, ‘Hey, Marshall, don't worry about it because this is how busy you’re going to be in July, August, and September, I'd be very happy with that answer.” ■ Barbara Balfour
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Canadian Real Estate Forums / FALL 2020
