Halifax Gate is a 475-acre land and water lot property zoned for industrial development. (Courtesy CBRE)

The words “unique” and “rare” appear in a lot of commercial real estate sales pitches. Seldom have they been more appropriate, however, than for Halifax Gate.

The 475-acre site includes a huge parcel of zoned industrial land which could accommodate about 6.5-million square feet of development, an ocean water lot, is near both the TransCanada Highway and a major CN railyard.

It is for sale in a market with a record-low industrial vacancy rate (1.9 per cent) and no large industrial buildings available for rent.

“It’s the first one I’ve seen in my career,” 30-year commercial real estate veteran Robert Mussett, an executive-vice-president with CBRE Atlantic Canada, told RENX. “We’ve never seen anything like this, so it’s unique in a lot of ways, and not only for Halifax.

“Having an industrial parcel of this scale, 475 acres that has a 33-acre water lot attached, that gives you access to one of the best harbours on the eastern seaboard, you have a railhead immediately adjacent to the property, you have TransCanada highway access – it really does check a lot of boxes.”

Former Valero Energy refinery property

Mike Częstochowski is a founding member of CBRE’s land services group, and has 38 years in the industry. He echoed Mussett’s comments.

“I’ve never seen a contiguous piece of industrial (like this),” he said. “Forget about the port access, rail, highway, even to find a situation like this where you have a contiguous site that allows for large-scale logistics building, or any other type of employment uses, is really unique.”

Halifax Gate is the former site of a Valero Energy Inc. refinery and petroleum product distribution facility. It sits adjacent to the Canadian Armed Forces air base in Halifax, and a rail port which can facilitate transportation of goods to many major Canadian and U.S. markets in two or three days.

With companies scaling up distribution and logistics networks across North America, CBRE land services group executive vice-president Lauren White said Valero’s decision to divest the property comes at an opportune moment.

“I think the timing couldn’t be better to be on the market,” she noted. “We’ve seen the industrial market trajectory over the last couple of years. Not only is it unique, but the timing couldn’t be better.”

For Montreal-based Valero, the property is redundant. The refinery and distribution centres closed years ago, and the site is now in remediation in preparation for the sale. It is drawing international interest, as word is spread to the global logistics community.

“This has really reached global basis, where we are getting calls from overseas, from companies in Asia, Europe, the States,” Czestochowski said. “We are getting those global players looking at it.”

Halifax Gate includes land, water lot

The property has several components.

“The water lot is what we call, here in Halifax, a pre-Confederation water lot, which means you actually own the bottom of the harbour,” Mussett explained. “There’s a wide range of opportunities as to how that could be developed.”

The ice-free port contains an existing docking facility designed for tanker ships, with water depths of 33 to 47 feet.

The 442 acres of land includes about 100 acres classed as wetlands. A small portion of the site near the oceanfront also still contains a tank farm.

The nearby Port of Halifax is rated as one of the most efficient in the world, No. 25 overall in a 2021 World Bank / IHS report and No. 1 in North America. Its rail connection offers access to markets such as distant as Chicago or Detroit in about three days.

“That’s pretty interesting because what drives the users to come to a port, the shipping lines, is how quickly can we bring a vessel in, how quickly can you guys do what you’ve gotta do, because we’ve gotta get going to the next port of call,” Mussett said.

“Efficiency in that world is huge.

“Then you add CN Rail and their connectivity to the midwest. We can bring product from Antwerp (a major international port in Belgium) or other ports in Europe, land it here and have it in the market in Chicago before the boat lands in New York.”

The Halifax industrial, logistics sector

The land-based development potential would be significant in any Canadian market. But in Halifax, with an industrial inventory of about 12.5 million square feet (and much of that in the city-controlled Burnside Industrial Park), it represents a potential increase of 50 per cent of leasable space. Privately owned leasable space.

“We’ve seen users trying to find the right solution in the existing Burnside inventory and it simply doesn’t exist because it’s not big enough,” Mussett explained. “And, we’ve gone from thinking about square feet to thinking about cubic feet, that’s really important to these types of users.

“When they say they need something 500,000 square feet, it’s also got to be 32- or 36-feet clear height because it’s more about cubes than squares.”

The scale of operations has also rapidly escalated. A decade ago, large users wanted perhaps 250,000 square feet in the market.

“The users that have come forward (now) are talking 700,000, 800,000, a million square feet for distribution out of there because they are going to be shipping across Canada and into the United States.” Czestochowski said. “Six-and-a-half million square feet is a lot of density, but when people start taking down chunks of 500,000 or 700,000, or a million square feet, it gets sucked up really quickly.

“I have no doubt we’ll see the absorption here because (the market) is very bouyant. To have the access to water, rail, highway and the infrastructure that is built into Halifax, and the labour pool, it is so important to these large logistics users.

“We have everything.”

While the property is currently being actively marketed, there is no timeline set for accepting bids.

“I remember standing with somebody looking at this site and he said ‘well, why do you think this is going to trade, and why do you think there is going to be so much interest?’ ” Mussett recalled. “I said ‘well, because of all the attributes of the site and also because there is only one of them’.

“As a broker, I love it when there is only one of something.”