Dream Industrial has expanded its Calgary portfolio with the acquisition of a 618,000-square-foot multi-tenant complex in the Foothills Industrial Park, underscoring the company’s continued investment in one of Canada’s strongest-performing markets. 

The four-building property is nearly fully occupied by 10 tenants and offers rail-served capability, a feature available in only a small portion of Calgary’s industrial inventory. It also has direct access to major transportation corridors including Deerfoot Trail, Glenmore Trail and Stoney Trail, said Alexandra Screpnechuk, director, investments, Dream Industrial.

With the acquisition of Foothills North, Dream’s Calgary portfolio is now 8 million square feet and 88 assets, Screpnechuk told RENX.

Dream Industrial manages approximately $16 billion in industrial assets, including roughly 48 million square feet in Canada and a combined 74 million square feet across Canada, Europe and the United States, she said. 

Bruce Traversy, Dream Industrial's chief investment officer, said Calgary remains attractive because of strong demand for urban mid-bay industrial space, slowing deliveries of new supply, and growing interest from logistics and distribution tenants.

“I think the industrial market is actually in a pretty good balance right now. Different sub-markets and different geographies are facing different drivers and, in some cases, some challenges, but I would say in general the market’s in balance,” he said.

“I would say Alberta, and in particular Calgary, is certainly one of the stronger markets. I think what we see is that our focus is really largely on more mid-bay product, so mid- and small-bay product. We do have some larger-bay product as well, but our real focus is urban mid-bay assets, and that segment of the market is performing quite well.”

Slate fund is Foothills North vendor

According to Casey Stuart, executive vice-president, JLL Capital Markets in Calgary, the vendor of the Foothills property was SCREO II, a fund managed by Slate Asset Management. Stuart, who represented Slate and listed the property, said the purchase price was $81.3 million.

“As buyer demand for Calgary industrial real estate remains elevated, we have seen cap rate compression and upward movement in pricing. Capital is actively pursuing opportunities ranging from core institutional assets, to value-add and private-client acquisitions,” he said. 

“Alberta continues to attract both domestic and international capital due to its resource-driven economy, entrepreneurial environment, strategic geographic positioning, and relative value. The buyer of this portfolio has deep and ongoing ownership experience in the Calgary market and sees continued investable value. 

“Calgary’s industrial leasing fundamentals remain healthy and attractive. Most inventory under construction is already leased, which is setting the market up for a vacancy decline and upward pressure on rental rates. Even with increased industrial rents, Calgary would still be the lowest of the major Canadian markets.”

Traversy said both the Calgary and Edmonton industrial real estate markets are doing very well and Vancouver seems to be strengthening. In the Greater Toronto Area and in Ontario, there’s more exposure to the current challenges, in particular for the manufacturing and automotive sectors. 

“In our portfolio, we don’t have very much direct automotive exposure. I think what we’re seeing is the demand, particularly from 3PLs, third-party logistics tenants, is growing,” he explained.

“We’re seeing supply in most markets has really slowed down from where it was at the peak of the market. A lot of observers feel we’re coming to a point where there’s not going to be enough supply to meet the demand, just because of the volume of starts. It certainly takes some time even for industrial to go from vacant land to completed, leased product.”

Traversy added there is not much new supply on the books for 2027.

The attraction of Foothills North

Screpnechuk said major tenants at Foothills include CGC, Goldray and Anipet. Traversy described it as a good-quality product with 28-foot clear heights, which is attractive. It’s a mid-bay product, which appeals to a wide range of tenants. 

“It’s got rail access, which for some tenants is something they need and require, and it’s not easy to find. Obviously every building doesn’t have rail access right up to it, so if you need rail access, then you have a much narrower range of potential buildings to choose from, and this is one of them,” he said, noting the site ticks a lot of boxes for Dream Industrial.

“Obviously, just more of the macro and micro locational appeal of the Calgary market and the Foothills market being, I think, the largest sub-market in Calgary: lots of tenants, a diverse pool, a lot of demand, good-quality product, growing rents, and that’s what we’re looking for.”

Traversy said Dream has been very active in Calgary with the acquisitions of a handful of properties within the past year. 

“I think we’ve been, probably, one of the more active buyers in Calgary because we really like the story, and we have a very large portfolio in Calgary already,” he said. 

Screpnechuk said Dream Industrial invests and manages assets on behalf of several key clients, including TSX-listed Dream Industrial REIT (DIR-UN-T), the Dream Summit JV between Dream Industrial REIT and Singapore's sovereign wealth manager GIC, and a recently launched value-add industrial JV between Dream Industrial REIT and CPP Investments.