Vancouver-based real estate developer Wesbild has thrown in the towel and sold a prime North Vancouver industrial property after eight years of attempting to get approval for redevelopment and intensification of the site.

The 27.5-acre waterfront property at 1371 McKeen Ave. was sold to an unidentified "Canadian institutional investor" the company states in the announcement. It cannot identify the buyer, nor the purchase price due to confidentiality restrictions, a spokesperson told RENX.

Wesbild acquired the site in the Norgate/Lower Capilano neighbourhood, which was valued at $115 million, in 2017 according to previously published reports.

This property represents one of the last remaining privately-held waterfront sites of magnitude in the area. It has 730 feet of water frontage, and dock access.

Under the sale agreement, Wesbild will lease-back a portion of the property and continue to operate two businesses remaining on the site, the Lion’s Gate Marine Centre and Lion’s Gate Mini Storage.

Wesbild could not get redevelopment approval

“After several development applications with the District of North Vancouver that did not proceed, we had to pivot and focus on renovating the existing warehouses that provide much needed industrial and storage space,” Kevin Layden, Wesbild’s president and CEO, said in the announcement. “With industrial vacancy at less than one per cent in North Vancouver, and with industrial rents in the range of $25 to $27 / square foot, businesses in North Vancouver are challenged by increased costs.”

He also expressed frustration with Wesbild’s inability to get municipal approvals for its proposed redevelopments. 

“Across Metro Vancouver, we need more industrial space,” he said. “But we need a reset in thinking about industrial land development in Metro Vancouver if we are to compete on the world stage.” 

Wesbild had submitted two plans to redevelop the site.

A plan in 2019 proposed subdividing the property into seven separate blocks ranging from 0.6 acres to 10.8 acres in size and including a trade-related area along the waterfront. Its rationale for the plan was to more easily facilitate new development on the property, which offers potential for up to 860,000 feet of development space but is largely utilized for outdoor industrial storage in its present configuration.

Wesbild contended at that time that full development of the block could lead to up to 1,200 jobs on a property that was only providing a handful of employment opportunities.

However, the city rejected that plan and a subsequent proposal to construct a new industrial building on a portion of the property. It cited a lack of transportation infrastructure and other concerns, though Wesbild said it had provided possible solutions to the transportation issues.

A series of meetings with municipal representatives did not lead to progress on any possible redevelopment at the site, so Wesbild made the decision to sell. A source with knowledge of the matter told RENX Wesbild spent close to $3.5 million on its redevelopment efforts.

A 'landmark transaction' in IOS

There is now hope that a new owner, with potentially a different goal for the site, might have more success. In the meantime, it will provide holding income via the operating businesses and the outdoor storage. Including the storage components, the property is almost fully utilized.

“We view this as a landmark transaction that represents a significant sale in an emerging asset class: industrial outdoor storage (IOS). There’s a number of large institutional investors around the globe showing interest in IOS, which offers land with future development potential, as well as current income,” Tony Quattrin, vice-chairman with CBRE’s National Investment Team in Vancouver, said. “We are delighted with the sale as it brought in a well-known Canadian institutional investor.

“With the limited amount of industrial land in Metro Vancouver, the investor here took a long-term view that it was a good investment for reasonably priced land supported by a strong holding income.”

EDITOR'S NOTE: This article was updated with additional details regarding Wesbild's efforts to redevelop the property, after the original version was published.