Article
Niagara Region Industrial Market Is Building Back Better
April 6, 2022 5 Minute Read
The once-thriving industrial market in Niagara Region, which had benefitted from the presence of GM, fell far behind after the automaker downsized its operations there in the 90s, leaving behind a depressed economy.
CBRE’s Steven Davidson, who grew up in the area, notes that the Niagara Region industrial real estate market fell into decline and for decades missed out on opportunities to modernize.
“We have lots of buildings that don’t even have 16’-high ceilings — versus 40’ and higher in the GTA —they barely have loading docks, and minimal power supply,” he says. “We have 100,000 sq. ft. users trying to enter the market and we can’t accommodate them. That means saying no to good paying jobs.”
Losing Out
Scarcity of modern industrial product has seen Niagara lose business to regional rivals, namely Hamilton. Those that do locate in Niagara Region have had to make do with subpar buildings.
Davidson and his father Jeff, long-time local brokers, have gone to considerable lengths over the years to persuade regional leaders to create conditions to attract industrial developers and investors by making more land available for projects.
The Niagara Region’s industrial investment prospects are certainly appealing compared to other regions in the Golden Horseshoe. For starters, industrial land costs in Niagara are a fraction of those in Hamilton and certainly lower than the GTA. “Land is selling for over $1 million an acre in Hamilton,” says Davidson. “Down here you can still find it for $300,000 to $500,000 an acre.”
And despite the outdated industrial supply dotting Niagara Region, lack of quality product has meant that industrial rents for the good spaces have managed to keep pace with regional averages. “We were seeing base rents over $10 per square foot pre-pandemic, now we’re pushing up to as high as $15 psf for the more modern product, like in most parts of the GTA.”
Perfectly Placed
Niagara Region is ideally situated, with three U.S. border crossings on its doorstep and Hamilton and the GTA a “hop, skip and a jump” down the QEW, as Davidson puts it. “There’s a big push for industrial land in the Greater Golden Horseshoe right now, and if people venture a bit outside the GTA they’ll notice it’s here and recognize that it’s quite a steal.”
The Davidsons’ efforts to spur the Niagara Region industrial market have begun to bear fruit. “Now we’re seeing new industrial developments here for the first time in decades,” Steven says. “We’re slowly starting to build back.”
And with CBRE recruiting the duo to helm its Niagara Region operation last year—adding the power of its global platform and brand—the industrial demand has been building steadily. “This market is under-developed and starving for opportunity,” says Steven. "But we’re creating the conditions for modern industrial facilities to be built—finally fulfilling the promise we’ve been missing out on for decades. I don’t begrudge other competing regions, but their success doesn’t have to come at the expense of the Niagara Region’s.”
6934 Kinsman Court
New Developments
There’s been a fair bit of industrial development taking place in Niagara Region over the past two years, with the Davidsons helping to guide much of the process.
There’s 6934 Kinsman Court, a new-build industrial facility located along the QEW with 24-29’ clear height and loading docks with grade-level doors. The building is completed and ready to lease, with 31,798 sq. ft. available.
Another new build, 3430 Schmon Parkway, is slated for completion in June. This 33,089 sq. ft. warehouse in Thorold has exposure to Highway 406, a great location for distributing throughout the Niagara Region and beyond. The building has a 24 ft. clear height and optional office space to add to the mix, or it could be converted to additional production space.
And 7901 Blackburn Parkway will be completed by year end, supply chain gods willing. This build-to-suit project, with up to 58,281 sq. ft. of space, will boast a 30 ft. clear height and four loading docks.
As far as raw industrial land goes, 180-184 Buchner Road has 28 acres of developable dirt on offer that’s already zoned for light industrial use. Located next to the Innio development, the site has direct access to Highway 406, the Welland Canal, three border crossings, rail, and airports on both sides of the border.
Additional industrial builds are planned for St. Catharines, Thorold, Welland, Port Colborne and Niagara Falls, but Davidson says it could be at least a year before those break ground.
All this new product is helping to attract larger tenants from outside the Niagara Region. And institutional developers are looking to do big projects there, too. “We need to find the right pieces to make these deals work,” says Davidson. “And we need to keep at it or risk falling further behind.”
Window of Opportunity
The new projects are a big step in the right direction. And Davidson says Niagara Region must do all it can to seize this moment and capitalize on what he calls the biggest industrial expansion in decades. “Tenants need space now, not two years from now. There is great demand out there and we have the chance to accommodate it.”
Niagara needs to think bigger—a modern economy requires modern spaces. Davidson points to the recent announcement that Stellantis plans to build a 4.5 million sq. ft. EV battery manufacturing facility on a 220-acre site outside Windsor, which he considers a sister city to the Niagara Region. “It was inspiring to see that. It’s what I envision for Niagara Region.
“We have industrial buildings from the past for businesses of the past. It’s time to build modern facilities for today’s economy,” he adds. “An industrial revitalization is within our grasp to boost our economy and help Niagara Region to rise again.”
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