Michael Molyneux*

Bolton, ON

• Leased 225,000 SF (e-commerce) distribution centre

Challenge
Due to the success of its e-commerce business, Gap Inc, initiated a growth strategy focused on international markets. Unfortunately, due to market deterioration caused by the economic recession, timing for expansion into Canada was not ideal. As there was no new development planned and absorption of existing product was ongoing, Gap’s biggest challenge was sourcing and securing the ideal Class A distribution facility in a market with less than 2% vacancy. Coupled with tight geographical parameters, a size range with limited supply, labour constraints and a tight launch deadline, CBRE had to devise a strategy and execute a plan that met all of Gap's needs.

Solutions
CBRE created a plan focused on providing Gap with the leverage required to complete this assignment in a timely manner while meeting all of their criteria. By preparing a detailed outline specification and initiating a tender call, CBRE was able to create a competitive environment whereby the few Landlords with product available were given the opportunity to bid aggressively for GAP's tenancy. Keeping in mind that available options were minimal, demand for this type of product was also very slow. With this knowledge of market conditions, CBRE was confident that our strategy would be effective and would provide GAP with the greatest chance for success.

Results
Gap secured a new Class A distribution facility of 225,000 sq. ft. in Bolton, Ontario. Due to the recent construction of this facility, Gap was able to achieve additional free rent (as it had been included in the Landlords’ development proforma). In addition, a reduced lease rate and extensive leasehold allowance was provided as a result of the competitive bid process. Estimated savings to Gap were 20-25% below market on comparable transactions.

Client Testimonial
"Thank you for your efforts John. You found us an excellent facility and a very good landlord. We were able to meet our start-up date as a result of your team’s hard work and diligence."
Chris Black, Vice President Operations, Gap Direct

Pickering, ON

• 725,000 SF purchase/lease arbitrage assignment
• Size: 715,000 SF
• Quick Facts
  • Lease with purchase option
  • High cube and heavily engineered to support load and conveyor system.
  • Room for expansion
  • Lease arbitrage
  • Limited sites available for purchase
  • Floor engineered to accommodate cantilevered racking system

Challenge
In an effort to identify a suitable site for the proposed retail support function of a large national grocery chain, CBRE’s Global Supply Chain Practice was mandated to identify locations and to solicit proposals for the development of a 700,000 - 750,000 SF facility in the GTA. This undertaking lead to hundreds of man-hours of labour as it entailed a statistical approach to transportation and labour.

Solutions
CBRE’s Global Supply Chain Practice initiated an extensive site selection process aimed across the entire GTA. As part of this process, we examined key transportation and labour nodes. The information generated was overlaid on a list of available land alternatives and a final site was chosen based on the results of a detailed cost matrix. It is important to note that this assignment was completed by securing a property that was a) not on the market b) in an area identified as having strong labour component c) in a part of the GTA that was away from where every other developer was focusing (giving it a strong price advantage) and d) utilizing the services of a U.S. based developer that had a strong desire to enter the Canadian marketplace.

Results
CBRE’s Global Supply Chain Practice was able to identify and secure an “off market” transaction of a 57 acre site that was ultimately acquired from a local GTA development firm. In addition, we brought a large U.S. developer into negotiations and were able to complete a lease that was extremely favourable for our client’s customer, resulting in an option to purchase the facility, which was ultimately exercised. The benefit for our client included the implementation of our wide range of development expertise which resulted in significant financial savings.

Brampton, ON

• Sold 50 acres – development site under Power of Sale
• Size: 55 acres

Challenge
The Bank of Montreal was the primary lender for a development site located at the corner of Airport Rd & Steeles Ave in Brampton. After construction of the first phase of development, the economy turned sour and the developer went bankrupt leaving BMO with a site that had a road network and plan of subdivision in place. Unfortunately, the plan of subdivision was poorly designed and allowed very little room for modification. In addition, the tenant occupying the 100,000 sq. ft.+ facility on the first phase of development had poor credit. BMO directed CBRE to dispose of this property and placed a very high target price/goal.

Solutions
CBRE implemented a program designed to maximize value and exposure to the marketplace. The property had been on the market previously with one of our competitors and had received minimal interest. Our strategy involved the creation of a development proforma that was prepared by our in-house engineering team. This allowed us to approach the development community with a quantifiable exit strategy already in place.

Results
Due to a concentrated effort, BMO was able to leverage the experience of CBRE’s team in order to maximize the value of the property by severing the site and selling it to two separate purchasers. The leased building was sold to an investor and the residual land to a developer. In addition, the target price set by BMO was exceeded and the purchasers were still able to derive positive cash flow in a short time period.

Bolton, ON

• Leased 800,000 SF to three quality tenants

Challenge
Panattoni Development Co., acquired a 40 acre parcel of industrial land in Bolton, ON in early 2007. Given strong leasing activity in the GTA, and a lack of big box alternatives, all indicators pointed towards proceeding with SPEC development. As a result, Panattoni broke ground on a 250,000 sq. ft. and 570,000 sq. ft. industrial facility that could provide occupancy by late 2008. The facilities were well under construction when the Economic Meltdown started in late 2008. The incumbent listing team was a competitive firm who were unable to generate any interest. CBRE was asked to provide a solution that would increase exposure and activity.

Solutions
Panattoni recognized the need to effectively implement an aggressive marketing campaign to meet the new market realities. After interviewing several firms, CBRE was hired to find tenants for 820,000 sq. ft. in a secondary node with low activity. We quickly put a strategy in place and executed a tactical plan aimed at:

1. all current and previous tenants in the market,
2. co-operating brokers,
3. national and international tenants and,
4. the local market.

Results
A comprehensive marketing strategy led to the successful completion of three major lease transactions in short order:

250,000 sq. ft. - Colgate-Palmolive
340,000 sq. ft. - Exel Canada
235,000 sq. ft. - Damco Distribution (Maersk)

CBRE exceeded the client’s expectations by leasing over 800,000 sq. ft. in a market that was in a downward spiral. The success of this project was made possible by a clearly defined and communicated plan and constant, aggressive follow-up.

Client Testimonial
“CBRE was able to implement an aggressive marketing campaign to meet the new market realities. And through the entire process CBRE always remained accountable and transparent”
Wade Dobbin, Panattoni

Mississauga, ON

• Leased 211,000 SF corporate headquarters facility
• Size: 211,000 SF
• Quick Facts
  • Long term lease
  • Highway exposure and high office component
  • Determining most efficient network size
  • Location to accommodate Customs Bond

Challenge
CBRE Global Supply Chain Practice was approached by Senior Management of DHL Global Forwarding in order to assist with the consolidation and integration of several facilities across North America under the new DHL brand. Up until the merger of Danzas, AEI and Loomis, Canadian real estate operations were extremely decentralized to the extent that reporting and approval was slow and haphazard. The ultimate goal was to achieve autonomy within the newly merged entity, create a smooth and seamless transition and most importantly, ensure that the newly branded entity was efficient, well located and capable of obtaining a 497 Canada Customs Bond.

Solutions
After a formal presentation outling the width and breadth of our capabilities, CBRE’s Global Supply Chain Practice was appointed the sole provider of real estate services for DHL Global Forwarding in North America. As part of this mandate, we completed a thorough cost benefit analysis comparing the cost of locating into one centralized facility against both two and three building scenarios. Using complex financial and analytical tools, we were able to show DHL that they would realize significant cost savings and increase efficiency by moving to a two building scenario. The result lead to leasehold interest in 211,000 sq. ft. at 6200 Edwards Blvd, Mississauga, which complimented their nearby 90,000 sq. ft. corporate headquarters at 100 World Drive.

Results
The benefits realized by DHL through the leasing of this new facility are extensive and include; immediate access and exposure to Hwy 401 at Hurontario Street, close proximity to their existing Canadian Headquarters facility, reduced occupancy costs due to limited leasehold work required, increased efficiency in a modern distribution facility and flexibility with lease term through a termination provision in their lease.

Across Canada

• 3 x 1.3M SF Canadian distribution network site selection assignment

Challenge
In late 2010, Target announced that it had acquired the retail leases for 220 Zellers locations across Canada. Their goal was to launch rebranded stores by March 2013 and since they had no presence at all in the Canadian market, there was a tremendous amount of work to do in a relatively short period of time. In order to support the retail function, Target had to establish both a corporate head office and national distribution presence. In order to meet the launch date, a team needed to be assembled and an effective strategy had to be prepared and implemented.

Solutions
Target understood that they needed an experienced national broker to help them navigate the Canadian market. They invited a number of qualified companies to their Minneapolis Headquarters in order to compare service platforms and quickly chose CBRE as our fully integrated offering aligned with their business objectives. CBRE was assigned to handle the search and co-ordinate parameters for Target’s Canadian head office facility as well as three central distribution centres across the country. The distribution assignment spanned four provinces and we examined over 150 options. The task we completed is unprecedented in Canadian commercial real estate. /p>

Results
Following an exhaustive search of the Canadian market place, Target chose a 180,000 SF head office location in Mississauga. In addition, they completed land acquisitions in Cornwall and Milton, Ontario as well as Balzac (Calgary), Alberta. Each site will accommodate a distribution centre of between 1.3 to 1.5 Million square feet and the acquisition was completed in a timely manner guaranteeing a construction schedule that would ensure Target met their goal of having completed DC’s by Q4, 2012, well in advance of store openings. /p>

Client Testimonial
“Please accept our appreciation for your team’s hard work. We made a lot of progress in a short period of time”
John Haller, Target

Our client base includes a wide range of institutional, corporate and developer entities. A small sample is as follows:

Corporate Clients

Developer Clients