Perimeter Development Group and Skyline Group of Companies have broken ground on a $50-million, two-building industrial project called Waterloo North Business Park at 325 Northfield Dr. E. in Waterloo, Ont.

Kitchener, Ont.-headquartered Perimeter, which acquired the land from Spear Street Capital before bringing in Guelph, Ont.-based Skyline as a partner, will manage the day-to-day development and construction activities.

One building will be 125,535 square feet while the other will be 115,557 square feet. Both will have 28-foot clear heights and be demisable, with the smallest space starting at 23,211 square feet. They’ll have a combined 336 parking spaces. 

Both buildings will be net zero-ready, meaning the design allows them to produce as much energy as they consume. This will enable them to significantly reduce energy consumption and carbon emissions through efficient building envelopes, prepared electrical infrastructure, renewable energy compatibility and energy-efficient systems.

Waterloo North Business Park is in the southwestern Ontario city’s primary industrial node and in close proximity to Highway 85 as well as a number of restaurants, stores and services. There’s a stop in front of the site for a bus that also connects to the ION light rail transit line.

Waterloo Region’s industrial real estate market

Waterloo Region includes Kitchener, Waterloo and Cambridge. Its industrial real estate market is robust, with a vacancy rate of less than 2.5 per cent for smaller industrial units under 50,000 square feet.

Perimeter chief executive officer Craig Beattie told RENX there hasn’t been much new space built in the 25,000- to 50,000-square-foot range in recent years.

“Everything has just been the big monster distribution and warehousing facilities, for which there was very robust demand for quite some time,” he said. “That's tapered off a bit in the last 12 months, but this kind of smaller product has still stayed very, very strong.” 

This gave Perimeter and Skyline the confidence to start construction without first securing lease commitments.

“There's a lot of very sophisticated, long-standing advanced manufacturing companies that have been based in Waterloo because of the talent base for decades,” Beattie said. “But in many instances they’ve been forced into being in multiple different locations in the city because there just hasn't been new supply.”

Beattie expects interest from occupiers of older, less efficient buildings as well as companies looking to consolidate operations under one roof.

While there’s a scarcity of industrial development land in Waterloo Region, there’s another site available across the street from where Waterloo North Business Park will be built. The development’s second phase will provide another design/build opportunity in the future.

New Valley Blades headquarters

Perimeter owned another Waterloo site at 630 Weber St. N. that’s occupied by a 65,000-square-foot office building and has more than six acres of empty land behind it. About half the office building was vacant.

Valley Blades Limited designs, manufactures and distributes blades, cutting edges, ground engaging tools, wear parts and accessories for construction, mining and snow plow equipment. It’s occupied a site at 435 Phillip St. in Waterloo for decades and was looking for a new nearby location, so it purchased the Weber Street property from Perimeter. 

“It's been a good kind of entrepreneurial, creative solution that worked for us and worked for them,” Beattie observed.

Valley Blades will take up much of the vacant office space in the existing building while working collaboratively with Perimeter on developing a new 135,000-square-foot manufacturing facility on the empty land. Ground was broken a month ago and the new building is expected to be delivered late next year. 

“They'll have a bunch of further improvements to do, but they should be commencing operations in the new facility in early 2027,” Beattie said of Valley Blades, which is looking to move into the office space before then.

Opportunities are being sought

Perimeter led the recently completed construction oversight activities for the adaptive re-use of a Kitchener building owned by The Working Centre to create 44 units of deeply affordable housing and wraparound services, along with the construction of a new mass-timber addition to house a community kitchen which serves meals to those in need.

“In addition to our contribution to manage the project delivery, we kickstarted the private fundraising for the project with a one million-dollar donation, which ultimately led to $10 million raised privately," Beeattie said. "We helped secure another $12 million in various government funds to cover the $22 million project budget."

Perimeter is seeking new acquisition and development opportunities in Waterloo Region and, while Beattie anticipates deals being completed, nothing is firm at this point. 

While many land and building owners have been on pause for much of this year when it comes to transactions, that appears like it may be starting to change.

“Companies are coming to the realization that you can't sit around forever and you need to move on,” Beattie said. 

“We're optimistic despite some of the headwinds out there. In some of these more challenging times, those who can be creative in terms of deal-making will find some opportunities when they present themselves.”