Buildable land has always come at a premium in Vancouver, home to Canada’s busiest port. And with the e-commerce revolution pushing warehouse demand to new heights, the city could soon run out of industrial land entirely, according to CBRE.
“There is a critical shortage of industrial land in Vancouver,” CBRE Canada vice president Paul Morassutti told Bloomberg. “It was our estimation that they could potentially, literally run out of industrial land by the early 2020s.”
According to a recent report from the brokerage, industrial rents in the land-strapped city jumped 16 percent in 2018, reaching a record in the Canadian market of $11.86 per square foot. At the same time, the industrial availability rate hit a historic low of 2.3 percent with nearly two-thirds of new supply already pre-leased or sold.
As a result, developers have been looking beyond Vancouver city limits for more space to build. One upcoming project highlighted in the CBRE report is a 1.1 million-square foot industrial park in the town of Abbotsford, about 40 miles southeast of Vancouver near the U.S.-Canada border.
American cities’ response to land scarcity has led to the advent of the “vertical warehouse,” the first of which was completed last year in Seattle. Several similar projects are now in the works in New York City, such as Innovo Property Group and Square Mile Capital Management’s two-story warehouse in the Bronx. RXR Realty and partners are also bringing a four-story facility to Queens, while Dov Hertz and Bridge Development Partners have plans for a massive four-story, 1.3 million-square-foot distribution center in Brooklyn. [Bloomberg] — Kevin Sun