Crestpoint Real Estate Investments Ltd. continues to load up on industrial properties, announcing today that it acquired the newly built Coastal Heights Distribution Centre in Surrey, B.C., for an undisclosed price.
The 427,969-square-foot facility is on a 19-acre site at 2325 190 St. in Surrey’s Campbell Heights industrial area, near several highways and with easy access to the Canada-United States border.
“We like the market,” Crestpoint executive vice-president and chief operating officer Colin MacKellar told RENX. “We have another asset just down the street: South Surrey Business Park.
“We like the fundamentals of the Vancouver market overall. This gave us another opportunity to be in that market at scale with new-generation product that’s fully leased to a quality covenant. That checks a lot of boxes in terms of the risk-adjusted returns we’re looking for within our portfolio.”
Coastal Heights Distribution Centre attributes
Coastal Heights Distribution Centre was developed by Blackstone and Ivanhoé Cambridge-owned Pure Industrial and Vancouver-based real estate development and investment firm Cedar Coast. It was built by Langley, B.C.-based Orion Construction.
The distribution centre features a 36-foot clear height, 49 dock doors accessed through a secured loading courtyard, four access points and ample parking.
The building is 100 per cent leased for 10 years to multinational shoe company Skechers, which shipped 266.8 million pairs and had record sales of $7.4 billion in 2022.
Skechers has moved in and MacKellar said it's paying rent valued in the high teens per square foot, an under-market dollar figure that was negotiated before the sale of the property.
Toronto-based Crestpoint acquired a 100 per cent interest in the property on behalf of Crestpoint Core Plus Real Estate Strategy, its open-ended fund, along with two institutional clients. The deal was brokered by Avison Young.
The closing of the acquisition brings Crestpoint's total assets under management to more than $9.7 billion and 36 million square feet.
Crestpoint is in acquisition mode
The Coastal Heights Distribution Centre acquisition is the latest for Crestpoint, which has been very active in the industrial real estate sector for a number of years.
The asset class comprises about 45 per cent of the Crestpoint Core Plus Real Estate Strategy, according to MacKellar.
While the unprecedented growth in property values and rental rates for industrial real estate in the past few years is starting to slow, MacKellar believes there’s still upside to be found in it.
In addition to industrial, Crestpoint is also seeking acquisition opportunities in multiresidential and retail — but not office.
“We don't feel like we have to stretch for anything at this point in the cycle,” said MacKellar. “We’re thinking there may be some opportunities here as interest rates settle in it at a higher level than they've been at for some time.
“We think of ourselves as being opportunistic and nimble and in a position to take advantage of opportunities as they present themselves — but probably being a little more conservative, given the economic headwinds that are out there and the uncertainty in the market in general.”
Recent Crestpoint acquisitions
Crestpoint acquired almost 500,000 square feet of industrial properties in the Greater Toronto Area and Burnaby, B.C., for more than $180 million in December.
It first acquired a 50 per cent stake — along with a local investor/developer — in 7307 Meadow Ave. in Burnaby on Dec. 15. The 100 per cent leased, multi-tenant portfolio is comprised of six buildings totalling more than 190,000 square feet.
Crestpoint then acquired 190 Summerlea Rd., a fully leased 305,000-square-foot asset in Brampton, Ont., on Dec. 19. It sits on a 24.8-acre site in Bramalea Business Park and includes 10 acres of excess land.
Those deals capped off a year in which Crestpoint completed approximately $1.9 billion of acquisitions involving industrial, office, retail and multiresidential assets.
This included the creation of a joint venture with PROREIT in June involving $455 million worth of industrial properties, including the acquisition of a $228-million portfolio in the Halifax Burnside Industrial Park.
Crestpoint’s largest single deal of 2022 was the $494-million acquisition of a 90 per cent stake in a 2.8-million-square foot, multi-level Amazon distribution centre in Ottawa from Montreal-based developer Broccolini, which retained the other 10 per cent interest.
Crestpoint also acquired a 540,000-square-foot, class-A office tower at 121 King St. W. in Toronto’s downtown financial district last June.
Crestpoint is a commercial real estate investment manager that’s part of Connor, Clark & Lunn Financial Group, an asset management company that provides investment management products and services to institutional and high net-worth clients.
Connor, Clark & Lunn has offices across Canada as well as in Chicago, London and Gurugram, India.
The company and its affiliates are collectively responsible for the management of approximately $104 billion in assets.