This is the thirteenth consecutive quarter where the GVA’s industrial vacancy rate has been below 2.0%. The availability rate (which includes listings that are physically occupied, as well as listings of buildings under construction) reached 5.1% of total inventory, a high not seen since Q4 2015 when the availability rate was 6.7%. However, the availability rate is still below the 10-year average of 5.5%.
- The 1.86 million square feet of new supply this quarter was the second largest amount of new supply in a quarter behind only Q2 2019’s 2.04 million square feet. A significant portion of this quarter’s new supply was from the 530,563 square foot build to suit development for Sobeys in Campbell Heights, one of the largest freestanding industrial buildings ever constructed in the GVA.
- Another large-scale project to complete construction this quarter was Delta iPort Building 2, a speculatively developed project offering space for lease totaling 484,920 square feet. Currently Delta iPort has 50% of the building remaining available and is the only move-in ready option for space above 200,000 square feet in the GVA.
- Although weighted average asking rent for the GVA actually increased quarter over quarter, anecdotally there is increasingly a divide between purchasers/tenants and sellers/landlords expectations with respect to sale price or lease rates. Tenants/purchasers are often looking for a discount given the existing economic/pandemic climate, but landlords/sellers are often unwilling to accept a rate below pre-COVID levels given vacancy is so low and some businesses have actually seen an increase in activity. The result has been a modest slowdown in deal velocity. Given a significant amount of the industrial inventory in the GVA is owned by well capitalized groups, there is relatively less urgency and more flexibility to wait for the right tenant/purchaser at the right rate for space owned by these types of landlords/sellers.
