Blair Sinclair, senior development manager for the Calgary/Edmonton office of Chicago-based First Industrial Realty Trust Inc., tells GlobeSt.com that infrastructure work will begin in the spring, with ready-to-go lots for vertical construction coming online in the fall. He says the JV is weighing the prospect of jumpstarting First Park Nisku with some spec product. The development land is less than one mile east of the airport and fronts Queen Elizabeth II Highway, a thoroughfare traveled by 60,000 vehicles per day as people shuttle between Calgary and Edmonton.
The CalSTRS-funded JV bought the marketed land from residential builder Beaverbrook Developments of Edmonton. The purchase price is off limits, but to put the build-out value into perspective, Sinclair says construction costs in the region can range from $60 per sf for "a simple warehouse" to $100 per sf for a showcase building.
Sinclair says the FirstCal fund is focused on western Canada due to dynamics like Edmonton, which has a 90-million-sf industrial inventory and 1% vacancy. On average, rents for 10,000-sf to 20,000-sf small-bay spaces are running $10 per sf to $11 per sf and 100,000-sf bulk spaces are fetching $7 per sf to $9 per sf. Sinclair admits tight markets can be nice, but says "in a tight market like this, everything is expensive."
Sinclair and Dana Schmidt, senior development manager, led the First Industrial team for the acquisition. CB Richard Ellis Investors is CalSTRS' adviser for the fund. Thomas Ashcroft, a partner in the Edmonton office of Avison Young Commercial Real Estate Services, brokered the land deal.
"This will be First Industrial's first opportunity in the Edmonton market to showcase its expertise," Sinclair says, confiding that its 22-acre buy in early January in southeast Calgary might be flipped. He says a group is pursuing the deed or joint venturing on the development of the prized acreage, which was bought for a 425,000-sf project from Edmonton-based Ronmor Holdings Inc. The land is a prime infill location at the intersection of 94th Avenue and 52nd Street.
"We are continuing to look at strategic land opportunities, both short term and long term," Sinclair says. "We're all pleased that we've got two strategic locations in the first seven months of operating in western Canada."
Toronto is the fourth-largest industrial market in North America, so it too is on FirstCal's radar screen, particularly since it's a primary distribution hub for Ontario, Northwestern Quebec and Northeast US. Calgary is a major western distribution hub for Canada, while Edmonton holds a key positioning as a distribution and service center for the natural resource industries.
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