This tract of industrial development land at 12713-12519 Humber Station Rd., in the Town of Caledon has been sold by Solmar Development Corp. to Prologis. At rear are the Canadian Tire (upper left) and Amazon distribution centre properties. (Google Maps)

A 198-acre tract of industrial development land in a prime logistics node in the Greater Toronto Area Town of Caledon has been sold in a near-$500-million transaction by Solmar Development Corp. to Prologis.

The property consists of two parcels, each almost 100 acres, at 12713 and 12519 Humber Station Rd., between Healy and Mayfield streets. It’s located at the edge of an area designated for industrial and commercial development, where a number of large facilities including Canadian Tire and Amazon warehouses have recently been developed.

The transaction closed today (June 9).

Benny Marotta, the founder and CEO of Solmar, told RENX in an exclusive interview the land is not far from a previous business park his firm developed in Bolton. When he considered the value of this tract of land, Marotta said he felt it was a better option to sell rather than develop it himself.

“We actually did an industrial development called Equity Industrial Park in Bolton,” Marotta explained. “We developed it, we built the buildings also. We do that. too, but this time the cost of the land is so high it is more beneficial to sell it rather than building on it.”

The Humber Station Road property

He said the economics of this property are more suited to a large-scale pension fund or investor such as Prologis, which would develop the site for longer-term stable income.

At one time, Marotta’s family-owned-and-operated company held about 500 acres in the area, but this was the last remaining tract. Previous tracts were also sold for development.

The property offers easy access to Hwy. 50, and the northern terminus of Hwy. 427. Hwy. 400 is a few kilometres to the east and the route for Ontario’s planned Hwy. 413 is right beside the site.

“There’s going to be a new Hwy. 413 coming out right adjacent to where the property is, with an exit, so those lands are perfect for employment,” Marotta said. “Caledon was smart enough to make an industrial hub in the area. Then there will be residential close to it, so that way the live-and-work (dynamic) comes into effect.”

Broker sold land to Solmar

James Doucette, the president and broker of record at Toronto-based JCD Commercial Realty, brokered the transaction and has had a long relationship with Solmar. He was also the broker when Solmar acquired the land about 16 years ago.

“I sold him all that land initially and now we’ve got the deal with Prologis,” Doucette told RENX. However, even in his wildest dreams, Doucette never thought that almost two decades later he’d broker another deal for the site at nearly $2.5 million per acre.

“No,” he said with a chuckle. However, conditions have changed radically, especially during the past few years. “Let me put it this way, there is pretty well zero vacancy . . .

“The other (industrial) buildings around here, and in the GTA from what I’ve seen and heard, there is no space available. It is just crazy,” he said, “and I know because I’ve looked for it before, and there is just nothing out there.”

According to CBRE’s Q1 2022 industrial report, vacancy in the Toronto area is at a record low of 0.5 per cent and asking rents increased for a 20th consecutive quarter to $13.59 per square foot. Rates for new or fully modernized properties can be considerably higher.

In addition to its location in an established industrial region, with good highway access, the Humber Station Road property is greenfield and virtually all of it is developable. Doucette said only a small portion of the site would be withheld from development.

Prologis and Solmar

He estimated this property could offer Prologis the potential to build up to, or slightly over, three million square feet of space. It acquired the site via a bid process.

San Francisco-based Prologis is the world’s largest owner and operator of industrial real estate.

The firm is currently involved in a takeover bid for another large, U.S.-based commercial real estate owner/operator, Duke Realty Corp. The bid values Duke at about $24 billion US but has been rejected by Duke management as “insufficient.”

Marotta formed Solmar in the mid-1980s and for many years was focused mainly on residential development and land.

That has expanded into multiresidential development in recent years, with projects in Vaughan (most recently, the sold-out Park Avenue Place), Brampton and Mississauga.

He is also developing a mainly single-family community of about 1,500 homes in the community of Erin, where site preparation has begun.

Solmar also maintains a land bank for future projects.

“The company has been doing what we are doing for the last 30 years,” Marotta said. “We always look ahead, so we have plenty of inventory.”