Distribution Stox is a Canadian company specializing in the distribution of tires and accessories for cars and pickup trucks. Operating in five separate facilities across Québec and Ontario, the company looked to consolidate all its locations.
A large requirement with minimal options
Patrick Soucy and his team, including Maxime Paquet, won the mandate to find Stox a facility that would fit its specific requirements and operation paraments. Together, the Colliers and Stox teams determined that Stox’s new home would need to be approximately 250,000 square feet, with the potential to expand to approximately 350,000 square feet.
The team carried out a thorough due diligence and concluded that the best option for Stox would be a land site allowing the construction of a build-to-suit facility. This in itself would be quite a challenging endeavor as there are practically no sites available for construction in Québec City for such a large building.
Nevertheless, following extensive market research, Patrick’s team was able to identify three potential land sites that met the clients’ needs, one belonging to Groupe Dallaire, one of the largest property developers in Québec.
Lengthy, complex negotiations with two separate owners
Negotiations with Groupe Dallaire for a build-to-suit facility lasted for several months without coming to fruition. In the middle of negotiations, a sale/lease listing came on the market, for a warehouse belonging to a major Canadian fashion retailer. Even though it measured 350,000 square feet – 100,000 square feet more than required – the Colliers team and the client concluded that a long-term lease for a 250,000-square-foot space, with the lessee having the option to expand into the remaining area, would be an interesting option to consider.
The negotiations with the retailer for a long-term lease lasted approximately five months. The client was almost ready to sign the offer when, at the last minute, the lessor decided to increase the rent – for such a large space, the difference was quite significant.
The Colliers team decided not to proceed with this space and called back Groupe Dallaire to renegotiate their initial offer. Finally, the team managed to negotiate an agreement that enabled the client to proceed with a built-to-suit on a land site strategically located east of Henri-IV Highway in the Espace d'innovation Chauveau, a new industrial park in Québec City.
Furthermore, not only did Groupe Dallaire significantly reduce their rates, they also offered the client a few advantages the Colliers team had requested, one of which, and quite important, was the option to build the centre in phases: The first phase (150,000 square feet) is currently under construction and will be delivered on May 1, 2021. The second phase (100,000 square feet) is expected to be delivered in 2022.
New facility and increased business efficiency add up to record transaction
The client was extremely satisfied with the transaction, as not only will this new property improve their operational efficiency, but for the first time, they will be able to enjoy an entirely new building. (This type of company usually runs its operations in C-type buildings.)
This deal represented the largest industrial lease transaction for a private company in Québec City . What’s more, with a clear height of 27’ and an ESFR sprinkler system, this is one of the first buildings in Québec City offering such features.