Colonnade BridgePort and CanFirst Capital Management are wasting no time getting their newly acquired Gateway Industrial Park up and running in Ottawa. The partners announced this morning they are pre-leasing up to 900,000 square feet at the 50-acre, south-end site.
“Gateway Industrial Park is providing much-needed distribution and warehouse space in the Ottawa region – an emerging gateway to several major markets,” said Colonnade BridgePort’s director of industrial leasing, Scott Craven, in the announcement. “There has been a lot of buzz about this development and we are looking forward to getting the design finalized, leases signed and shovels in the ground in the fall of 2023.”
Colonnade BridgePort is overseeing leasing, construction and management of the park on behalf of CanFirst. The property is owned by the CanFirst Industrial Development Fund, which targets industrial development sites.
It was acquired for about $44 million and its owners expect about 90 per cent of the site to be developable.
First phase to be 224,000-sq.-ft. building
In an email exchange with RENX, Craven said the initial construction phase is for one 224,000-square-foot building which is being constructed on spec while “other buildings will follow based on leasing activity.”
The project will launch into a market where space remains at a premium.
In Colliers’ Q4 2022 industrial report, it cited an availability rate of about 1.7 per cent and 382,000 square feet of absorption during the year. It also noted leasing activity had slowed in the second half of 2022 due to a lack of available new space.
Ottawa’s industrial market totals roughly 46 million square feet, having added about 10 per cent of that in the past couple of years. E-commerce giant Amazon alone contributed 3.9 million square feet of absorption since 2019.
“Our investment in this land and this development shows our confidence in Ottawa and in the growth of Ottawa’s industrial market,” said CanFirst executive vice-president Mark Braun in the announcement.
“With Colonnade BridgePort’s expertise, we have no doubt that Gateway Industrial Park will provide tenants with the space they need to meet and even exceed their business objectives.”
The Gateway property was acquired in October, and at the time Braun told RENX the partners were planning to get development underway by 2024.
The current plan includes four buildings ranging from 150,000 to 224,000 square feet, although that could be changed to accommodate larger users.
Craven told RENX at this point he expects all buildings to host multiple tenants.
“Gateway Industrial Park is ideal for distribution and we anticipate a mix of local, national and international tenants,” he wrote.
Competition in Ottawa for tenants
One factor which is different from the past several years in Ottawa is competition.
Several major developers are now active in the market, from local firm Avenue 31 with several buildings under construction along the Hwy. 417 corridor in the southeast section of the city, to Rosefellow with a newly acquired property in Kanata, and a number of other sites.
Craven doesn’t believe this will oversaturate the market, however.
“We’re very bullish on the market and don’t see it slowing down anytime soon,” he explained. “We believe the amount of product being built will be rapidly absorbed to fulfill ongoing demand.”
The property is adjacent to the amenity-rich South Ottawa community of Barrhaven and neighbours Amazon’s new 2.8 million-square-foot fulfillment centre, just off Hwy. 416 at Strandherd Drive and Citigate Road.
With frontage on Highway 416, Gateway Industrial Park will provide access to Hwys. 417, and 401. Several U.S. border crossings are within an hour or two of travel time and Montreal is less than two hours of driving time.
About Colonnade BridgePort and CanFirst
Colonnade BridgePort is a full-service real estate company, offering property management and leasing services, acquisition, development, investment management and asset management for commercial and residential properties.
Headquartered in Ottawa, it also has offices in Mississauga and Toronto.
CanFirst was founded in 2002 and is an industry leader in commercial real estate.
CanFirst employs a disciplined investment strategy and co-invests with both institutional and private high-net-worth partners.
The firm has raised over $1 billion in equity and manages over $1 billion in assets.