Orlando Corporation has made one of the largest land acquisitions of the new year, buying a 350.4-acre tract just outside Brantford, Ont.
While Orlando president Blair Wolk wouldn’t confirm a purchase price for the property acquired at 982-986 and 1036 Powerline Rd. on Feb. 7, data obtained by Hamilton-based investment management firm Forge & Foster — which tracks transactions across Southwestern Ontario — listed the price at $190 million.
The site sits just outside the community of Paris in an area bounded by Hwy. 403, Powerline Road, Rest Acres Road and Cleaver Road.
It’s the largest commercial real estate transaction reported in the region so far in 2023. Panattoni made a major land purchase in the area a year earlier, snapping up 423 acres for $290 million (about $684,000 per acre). Orlando’s purchase represents a per-acre price of $542,237.
“We have met with the mayor and the local councillors there, as well as staff, and they're pretty excited to have us there to kick off this business park and to get Orlando in that community and making a contribution,” Wolk told RENX in an interview.
“When you show up and people are there with open arms to have you doing business with them, it's a great start.”
Wolk said Orlando made an unsolicited approach to owner Vicano Construction Ltd., which is active in the Brantford area, about acquiring the property. Colliers executive vice-president and sales representative Stewart Metcalfe was involved in the off-market deal.
Plans for the site
The current agricultural land is divided into two areas, with the initial focus being on approximately 80 acres on Rest Acres Road.
“Those are already in the Official Plan and they've just gone through draft plan approval, so that will be zoned for employment uses and industrial commercial uses,” Wolk said.
“And then the balance of the lands in behind, what we call Phase 2 lands, are still to be brought into the Official Plan. They are in the County of Brant Official Plan, but they’ve got to be adopted by the province. We anticipate that will happen this year.”
Orlando would like to start site servicing this year and begin construction early next year, with the first building to be delivered in late 2024 or early 2025. The plan is to have two spec-built industrial buildings of approximately 400,000 square feet each in Phase 1.
“We'll do one building first and see how the market goes with that,” Wolk said. “Unless we have the first one leased up, we probably won't build them both at the same time, but they’ll be in quick succession of each other.”
A public road will be built through the property to make access to the rest of the site easier for future development. Wolk anticipates it could take 15 to 20 years until all phases are completed.
Orlando is going through brokers to talk to potential tenants and Wolk said there’s been plenty of early interest, although it’s not yet in a position to sign a deal.
Orlando’s first Brantford acquisition
Orlando’s primary activity has been in the Greater Toronto Area (GTA), but Wolk said it presents challenges in terms of being able to get land approved and shovel-ready in a timely manner.
That’s making it difficult to keep up with the increasing demand for industrial product, which he doesn’t see drying up anytime soon.
Brant County presented an opportunity that fit what Orlando was looking for. Wolk said it’s a growing community not far from the busy Hwy. 401 corridor, via Hwy. 403, which makes it convenient for shipping goods.
“We believe that it's well-positioned to pick up more of the industrial market going forward. It won't be what we have within the GTA proper, if you will, but there's certainly an opportunity to build some great industrial buildings there.”
This doesn’t mean Orlando is looking to acquire more land outside of the GTA, however.
“At 350 acres, this site is about as much as we want to take on outside of our traditional market for the time being,” Wolk said.
“We’ll see how the success goes with this site to see if it makes sense to buy outside of our typical area, but we’re certainly not eager to purchase more land at this point in time.”
Orlando has purchased GTA sites during the past year and will continue to acquire strategically located properties, but Wolk said the focus is currently on developing land it already owns.
Orlando’s current industrial development activity
Orlando bills itself as Canada’s largest privately owned industrial real estate owner and developer. The Mississauga-based company owns, leases and manages approximately 48 million square feet of industrial, office and retail property.
The vertically integrated company is involved in all facets of the industry, from land acquisition and development through planning, servicing, leasing, design, construction and property management.
It has two major industrial developments in its pipeline.
Halton Business Community is a 300-acre site near James Snow Parkway and Hwy. 401 in Milton that’s being serviced in anticipation of building facilities in excess of a million square feet.
Wolk said interest is high and construction of a new building should begin this year, with a 2025 delivery anticipated.
Coleraine Business Park, located just west of Hwy. 50, is within a 15-minute drive of two of the busiest intermodal facilities in Canada: the CP Yard in Vaughan and the CN Yard in Brampton.
Earthworks has begun on the Phase 1 lands fronting Hwy. 50, which will comprise approximately 55 acres and accommodate approximately one million square feet of industrial buildings. Initial delivery is expected in 2025.
Brantford rents lower than in the GTA
There has been significant interest in the Brantford area in recent years, but one longtime local broker said the Orlando transaction is an attention-grabber.
“It was, to a degree, a little surprising for Orlando to come at that kind of scale to Brantford, but it also in our minds gives the market a lot of credence,” JLL executive vice-president and practice lead Mitchell Blaine told RENX.
“When Orlando takes a 300-acre position in a secondary market, as they did once upon a time in Mississauga — when Mississauga wasn’t what it is today — it gives a lot of credit to what the long-term vision of a Brantford really is.”
Whereas asking rental rates for new industrial product in areas such as Mississauga are approaching $20 per square foot, Blaine said, Brantford offers rates of $12 to $14 per square foot.
The proximity to the GTA and access to major highways, however, add to its attraction for potential tenants increasingly being forced to look outside the GTA.
“If tenants aren’t going to come, Orlando isn’t coming either,” Blaine said.
New industrial activity in the Brantford area
While Granite REIT is constructing a 730,000-square-foot building in Brantford, it’s the only major industrial project in the ground at the moment, Blaine said.
Blaine expects projects proposed by both Panattoni and Orlando to be spaced out, based on market demand, to avoid over-saturation. While demand is continuing from distribution and logistics firms, he’s also seeing the manufacturing sector become increasingly active.
“I’d say that’s a newer dynamic,” said Blaine. “What’s interesting is, from a number of the 3PL groups that are active, their contracts are driven by the manufacturing sector.
“When I look at the tenants that we are working for, a number of them are tied to food production. That’s a big thing right now. And obviously automotive tied to electric vehicles.
"Manufacturing has really picked up in the tenant and market mix and it appears to largely be tied to this idea of near-shoring.”