Lakeridge Logistics Centre in Ajax, Ont., Canada’s largest speculative-build industrial property, is seeking tenants.

Pure Industrial developed the 1.2-million-square-foot facility at 537 Kingston Rd. E. in the city east of Toronto. Avison Young’s Ben Sykes, Eva Destunis and Ryan Hood are working on Pure's behalf to lease it.

Construction started a year ago and the building is a month away from substantial completion. Pre-marketing didn’t commence until construction started and interest has been picking up as completion nears.

“We would have been open to pre-leasing it,” Pure president and chief operating officer David Owen told RENX in an interview that also included Sykes, a principal at Avison Young. “But the majority of the activity when we started was on the smaller side of things.

"The larger-scale interest has picked up more when the building started showing shape and completion was on the horizon.”

What Lakeridge Logistics Centre offers

Lakeridge Logistics Centre provides:

• a 40-foot clear height;
• 5,000 amps of power;
• LED lighting;
• 207 truck-level doors and four drive-in doors; and
• parking stalls for 619 cars, 308 trailers and 38 electric vehicles.

Office areas can be built to suit.

“We built this to suit everyone for the long term and didn't build it so we could maximize site coverage, which we've seen because of how much land prices have risen over the past two years,” Owen said. “We see this as a forever destination for somebody looking to set up shop in this neck of the woods.”

The facility is easily visible from Highway 401 and close to a large variety of stores, food and beverage outlets, and bank branches. 

Sustainability is a separator

Lakeridge Logistics Centre’s design is dedicated to long-term zero-carbon performance, yielding potential savings of as much as 19 per cent in cumulative costs over 10 years. 

“We've got 30 locally manufactured, custom-made, roof-mounted electrified heat pumps on the roof that condition in the summer if needed and can heat the building,” Sykes explained.

“We've effectively de-carbonized any type of heat source in and out of this building. For a building of this scale, nothing like that in Canada has ever been built before.”


The class-A building’s other sustainability measures include:

• a high-performance envelope and ultra-efficient mechanical systems;
• solar power generated on-site to meet a portion of the building’s energy load;
• future-proofed infrastructure allowing for the building to have 100 per cent of its anticipated electricity needs met with solar power; and
• superior indoor air quality and filtration.

“I think this is going to be the new gold standard for what big spec development is going to be, not just in Toronto, but Canada and potentially North America,” Sykes said.

Hoping for single tenant, but can demise

Lakeridge Logistics Centre can be leased to one tenant or demised for multiple users to take as little as 250,000 square feet. Owen said the preference is for one tenant to lease it all, but the design can accommodate three or four if that doesn’t happen.

“We're not going to chase the groups who need 100,000 square feet,” Sykes noted. “We chase the groups who need 1.2 million.”

There are 30 industrial buildings in the Greater Toronto Area with more than 900,000 square feet of space, according to Avison Young.

Toronto-headquartered Pure is owned by Blackstone and Ivanhoe Cambridge. It has a portfolio of 41 million square feet of industrial real estate at more than 400 properties across Canada.

Its development pipeline includes another significant project just north of Toronto.

Pure and Hopewell Development, along with leasing partner CBRE, started marketing Bram10 at 10 and 20 Whybank Dr. in Brampton, Ont. early last month. Its two buildings are both demisable.

One is 458,496 square feet with a 40-foot clear height, 58 dock-level doors, four drive-in doors and 48 trailer parking spaces. The other is 167,909 square feet with a 36-foot clear height, 27 dock-level doors and two drive-in doors.

The state of the industrial real estate market

While the industrial construction and leasing markets were hyper-active earlier this decade as online shopping spiked and concerns with supply chains rose, huge rent increases have moderated and vacancy rates have crept up more recently.

“What we're seeing is a normalization on the demand side,” Sykes explained. “What groups are doing is, they're looking really strategically at their real estate.

“This is about functionality. This is about bottom-line results. This is about employee welfare. This is about, in a lot of cases, the ESG (environmental, social and governance) commitments that they've made.”

Sykes said there was positive absorption for industrial space in Q3, tenant demand seems to be picking up, and he expects continued stabilization of rents, so he’s optimistic about the market picking up in 2025.

Owen said consumer confidence may have bottomed out, and interest rates have started to decline, which should also boost business confidence and drive capital investment within the supply chain.

Pure is coming off of two successful months

“We did our two highest months ever in terms of volume of square footage and number of deals in October and November,” Owen said. “That leads me to believe that it's not just a consolidation play. 

“You're not just seeing people look for space to make things more cost-effective, but you're seeing expansion back. You're seeing people taking a longer-term view of where they need to be.”

Sublet activity has dropped “drastically” over the past two months, according to Owen, who expects that to continue.

Owen added that new industrial building starts are down 90 per cent from the high period in Q3 2023 and a lot of industrial land is being held.

“Risk is a little bit off on the development side and I think it's project-specific,” Owen observed. “There are a lot more micro details going into whether you go up today or not, and it depends on the sub-market you’re in.”