INDUSTRIAL MARKET SURVEY RED DEER 2015 - … · TREVOR HANSON, AACI, P.App. INDUSTRIAL MARKET SURVEY | RED DEER 2015 ... Readers of this report are welcome to use and reproduce the

SODERQUIST APPRAISALS LTD | 405, 4901 - 48 Street

Red Deer, AB T4N 6M4

Ph.: 403 346 5533

Fax: 403 347 7730

soderquist.ca [email protected]

Prepared by:

MIKE GARCELON, AACI, P.App., MRICS, Q.Arb

TREVOR HANSON, AACI, P.App.

INDUSTRIAL MARKET SURVEY | RED DEER 2015

WE VALUE WHAT YOU VALUE COMMERCIAL • INDUSTRIAL • AGRICULTURAL • MULTI-FAMILY • RESIDENTIAL

Soderquist Appraisals Ltd. 2015 Red Deer Industrial Market Survey


About The Study

The industrial sector is a significant portion of the Red Deer economy and therefore the

economic dynamics and trends in the industrial sector are reflective of the overall state and

condition of Red Deer’s economy.

In developing this report we identified and studied sixteen industrial districts in and adjacent to

the City of Red Deer. We did not include any government owned industrial properties because

these are typically owner occupied and therefore do not compete in the open market.

The occupancy status of each industrial property was determined by visual drive-by inspections

conducted in September 2015, as well as additional data gathered from building owners,

tenants, brokers, and municipalities. Buildings currently under construction have been excluded,

but will be included in next year’s study.

About Us

Soderquist Appraisals Ltd. is a full service real estate appraisal and consulting firm providing

valuation and consulting services on virtually every real estate property type. Established in

1977 and located in Red Deer, Alberta we provide our services throughout central Alberta, as

well as all of western and northern Canada. For more information about Soderquist Appraisals

Ltd. please visit our web site at www.soderquist.ca.

http://www.soderquist.ca/



Qualification

Readers of this report are welcome to use and reproduce the information contained herein,

either in whole or in part, provided that Soderquist Appraisals Ltd. is quoted as the reference

source.

This report is based on data obtained from sources believed to be reliable, however its accuracy

cannot be guaranteed. Soderquist Appraisals Ltd. makes no representations or warranties,

express or implied, in this regard. All information contained in this report is provided as of the

date of this report and is provided in good faith but without any legal responsibility of Soderquist

Appraisals Ltd. in any way. Nothing in this report constitutes investment or other advice.

Readers of this report are advised to conduct their own due diligence in this regard before

making any investment decision. Soderquist Appraisals Ltd. and its affiliates shall not be

responsible for any liability whatsoever for any loss arising from any use of this report or the

information contained herein.

Recognition

Soderquist Appraisals Ltd. acknowledges and is grateful for the assistance of Red Deer County,

the City of Red Deer, Century 21 Advantage Commercial Real Estate, and Salomons Commercial

in developing this study.



Red Deer Industrial Market

The Red Deer Industrial Market includes fifteen (15) distinct industrial districts, plus one

additional category for those stand-alone industrial properties outside of established industrial

neighborhoods.

The total inventory of industrial space increased by 327,326 sq.ft. (2.55%) during the 12 months ending September 2015.

The overall industrial vacancy rate is 7.51% as of September 2015 which is an increase of 387 basis points from 3.65% in 2014.

In September 2015 there was 988,557 sq. ft. of vacant industrial space, which is 111% more than 2014 when there was 468,678 sq. ft. of vacant industrial space.

Net Absorption for the 12 months ending September 2015 is -409,472 sq. ft.

2011 2012 2013 2014 2015

Total Inventory (sq. ft.) 11,778,672 12,157,947 12,544,269 12,840,692 13,168,018 327,326 ↑

Vacant (sq. ft.) 435,650 418,747 389,174 468,678 988,557 519,879 ↑

Vacancy Rate 3.70% 3.44% 3.10% 3.65% 7.51% 387bps ↑

*Net Absorption (sq. ft.) n/a 396,178 415,895 216,919 -192,553 -409,472 ↓

Trend (y/y)

*Net Absorption: Is the increase or decrease in the quantity of occupied space.

2011 2012 2013 2014

District Vacancy Rate Vacancy Rate Vacancy Rate Vacancy Rate Inventory (sq. ft. ) Vacant (sq. ft. ) Vacancy Rate

52nd Avenue 3.01% 1.97% 1.52% 2.73% 293,138 12,170 4.15%

Belich Industrial 1.39% 1.44% 1.44% 1.44% 433,138 82,544 19.06%

Blindman Industrial 3.76% 1.75% 0.00% 0.00% 544,866 15,358 2.82%

Burnt Lake Industrial 3.30% 4.54% 4.54% 4.04% 1,330,992 145,068 10.90%

Chiles Industrial 8.22% 12.94% 3.29% 3.29% 291,905 9,608 3.29%

Clearview Industrial 2.59% 1.16% 0.44% 5.27% 692,053 23,422 3.38%

Edgar Industrial 4.35% 1.70% 0.66% 1.37% 2,566,573 228,655 8.91%

Golden West/Johnstone 3.95% 3.53% 4.42% 6.23% 1,547,208 72,497 4.69%

McKenzie N/A N/A 19.86% 19.86% 325,502 61,670 18.95%

Northlands Industrial 5.50% 8.95% 4.79% 2.54% 1,476,199 97,615 6.61%

Petrolia Business 0.00% 3.23% 12.18% 7.75% 316,198 8,663 2.74%

Piper Creek Business n/a 46.84% 30.07% 53.71% 57,612 35,610 61.81%

Riverside Light Ind. 4.09% 4.35% 6.53% 2.63% 917,145 38,668 4.22%

Riverside Heavy Ind. 0.00% 0.14% 0.00% 0.00% 1,225,152 25,138 2.05%

Queens Business N/A N/A N/A 16.84% 385,075 37,717 9.79%

"Other" Industrial 5.02% 0.00% 0.00% 0.00% 765,264 94,154 12.30%

TOTAL 3.70% 3.44% 3.10% 3.64% 13,168,018 988,557 7.51%

2015



District Analysis

52nd Avenue Industrial District

The 52nd Avenue Industrial district is situated northwest of the Gaetz (50th) Avenue / 67th Street

intersection. It is bounded on the west by the Glendale residential neighborhood, on the south

by 67th Street, on the east by the Gaetz (50th) Avenue commercial strip, and on the north by the

Normandeau residential neighborhood. Some landmark developments include Quinn Pumps

and Automotive Universe.

Belich Business Park

The Belich Business Park is adjacent to the west boundary of the City of Red Deer, and is at the

south west corner of the Highway 2 / Highway 11 interchange. It is bounded on the west and

south by Red Deer County agricultural and country residential lands, on the east by Highway 2,

and on the north by Highway 11. Some landmark developments include Gentex Oilfield

Manufacturing and Line-X Coatings.

2011 2012 2013 2014 2015

Total Inventory (sq. ft.) 290,950 290,950 294,472 293,138 293,138 0 →

Vacant (sq. ft.) 8,770 5,738 4,490 8,006 12,170 4,164 ↑

Vacancy Rate 3.01% 1.97% 1.52% 2.73% 4.15% 142bps ↑

Trend (y/y)

2011 2012 2013 2014 2015


Vacant (sq. ft.) 4,330 4,480 4,480 4,480 82,544 78,064 ↑

Vacancy Rate 1.00% 1.03% 1.03% 1.03% 19.06% 1762bps ↑

Trend (y/y)



Blindman Industrial Park

The Blindman Industrial Park is in Red Deer County and is situated adjacent to the north

boundary of the City of Red Deer. It is bounded on the west by Highway 2A, on the south by the

Chiles Industrial Park, and on the east and north by Red Deer County agricultural and country

residential lands. Some landmark developments include Universal Handling Equipment and

Leyen Enterprises Corp.

Burnt Lake Business Park

The Burnt Lake Business Park straddles the City of Red Deer and Red Deer County boundary, and

is situated along the west side of Highway 2 near the north west corner of the City of Red Deer.

It is bounded on the west by Red Deer County agricultural and country residential lands, on the

south by Highway 11, on the east by Highway 2, and on the north by the Queens Business Park.

Some landmark developments include Strongco and UFA.

2011 2012 2013 2014 2015

Total Inventory (sq. ft.) 528,584 528,584 534,466 534,466 544,866 10,400 ↑

Vacant (sq. ft.) 19,874 9,230 0 0 15,358 15,358 ↑

Vacancy Rate 3.76% 1.75% 0.00% 0.00% 2.82% 282bps ↑

Trend (y/y)

2011 2012 2013 2014 2015

Total Inventory (sq. ft.) 1,144,343 1,257,913 1,257,913 1,295,992 1,330,992 35,000 ↑

Vacant (sq. ft.) 37,735 57,165 57,165 52,318 145,068 92,750 ↑

Vacancy Rate 3.30% 4.54% 4.54% 4.04% 10.90% 686bps ↑

Trend (y/y)



Chiles Industrial Park

The Chiles Industrial Park is situated on the north side of the City of Red Deer. It is bounded on

the west by Highway 2A, on the south by the allowance for the future extension of Highway 11A,

on the east by the Red Deer River, and on the north by the Blindman Industrial Park. Some

landmark developments include Chiles Sandblasting and Stor-Mor Mini Warehousing.

Clearview Industrial Park

The Clearview Industrial Park is situated adjacent to the south boundary of the City of Red Deer.

It is bounded on the west by 40th Avenue, on the south by the McKenzie Industrial Park, on the

east by Red Deer County agricultural and country residential lands, and on the north by the City

of Red Deer Waste Management Facility. Some landmark developments include In-Land

Concrete and Peak Energy Services.

2011 2012 2013 2014 2015


Vacant (sq. ft.) 23,994 37,760 9,608 9,608 9,608 0 →

Vacancy Rate 8.22% 12.94% 3.29% 3.29% 3.29% 0 →

Trend (y/y)

2011 2012 2013 2014 2015


Vacant (sq. ft.) 14,850 6,847 2,577 33,171 23,422 -9,749 ↓

Vacancy Rate 2.59% 1.16% 0.44% 5.27% 3.38% -189bps ↓

Trend (y/y)



Edgar Industrial Park

The Edgar Industrial Park is situated toward the north west corner of the City of Red Deer. It is

bounded on the west by Highway 2, on the south by 67th Street, on the east by Johnstone Drive,

and on the north by Highway 11A. Some landmark developments include Finning and Permolex.

Golden West / Johnstone Industrial Park

The Golden West / Johnstone Industrial Park is situated in the north west area of the City of Red

Deer and straddles 67th Street. It is bounded on the west by Johnstone Drive, on the south by

the Oriole Park residential neighborhood, on the east by the Glendale residential neighborhood,

and on the north by the Johnstone residential neighborhood. Some landmark developments

include Great West Kenworth Ltd., and Bruins Plumbing.

2011 2012 2013 2014 2015

Total Inventory (sq. ft.) 2,539,829 2,539,829 2,519,530 2,566,573 2,566,573 0 →

Vacant (sq. ft.) 110,526 43,243 17,580 35,289 228,655 193,366 ↑

Vacancy Rate 4.35% 1.70% 0.70% 1.37% 8.91% 753bps ↑

Trend (y/y)

2011 2012 2013 2014 2015


Vacant (sq. ft.) 58,447 56,936 71,264 96,387 72,497 -23,890 ↓

Vacancy Rate 3.95% 3.68% 4.61% 6.23% 4.69% -154bps ↓

Trend (y/y)



McKenzie Industrial Business Park

The McKenzie Industrial Business Park is situated in Red Deer County just south of the City of Red

Deer and east of Gasoline Alley. It is bounded on the west by 40th Avenue, on the south by

McKenzie Road, and on the north by Clearview Industrial Park. Some landmark developments

include Schlumberger and the Red Deer Shooting Club.

Northlands Industrial Park

The Northlands Industrial Park is situated towards the north side of the City of Red Deer. It is

bounded on the west by the Gaetz (50th) Avenue commercial strip, on the south by the Pines

residential neighborhood, on the east by Riverside Heavy industrial area, and on the north by the

allowance for the future Highway 11A extension. Some landmark developments include the

Home Hardware Building Centre and Habitat For Humanity.

2011 2012 2013 2014 2015

Total Inventory (sq. ft.) n/a n/a 235,631 235,631 325,502 89,871 ↑

Vacant (sq. ft.) n/a n/a 46,800 46,800 61,670 14,870 ↑

Vacancy Rate n/a n/a 19.86% 19.86% 18.95% -92bps ↓

Trend (y/y)

2011 2012 2013 2014 2015


Vacant (sq. ft.) 79,738 132,126 70,734 37,435 97,615 60,180 ↑

Vacancy Rate 5.50% 8.95% 4.79% 2.54% 6.61% 408bps ↑

Trend (y/y)



Petrolia Business Park

The Petrolia Business Park is situated on the east side of the Gasoline Alley district, which is just

south of the City of Red Deer. It is bounded on the west by the Highway 2 commercial corridor,

on the south by Red Deer County agricultural and country residential lands, on the east by the

Piper Creek Business Park, and on the north by Spruce Street. Some landmark developments

include BWS Fabrication Inc., and Fortis Alberta Inc.

Piper Creek Business Park

The Piper Creek Business Park is situated on the east side of the Gasoline Alley district, which is

just south of the City of Red Deer. It is bounded on the west by the Petrolia Business Park and

the Highway 2 commercial corridor, on the east by Piper Creek, on the south by Red Deer County

agricultural and country residential lands, and on the north by Spruce Street.

2011 2012 2013 2014 2015


Vacant (sq. ft.) 0 7,957 34,576 22,000 8,663 -13,337 ↓

Vacancy Rate 0.00% 3.23% 12.18% 7.75% 2.74% -501bps ↓

Trend (y/y)

2011 2012 2013 2014 2015

Total Inventory (sq. ft.) n/a 33,390 33,390 57,612 57,612 0 →

Vacant (sq. ft.) n/a 5,600 10,040 30,942 35,610 4,668 ↑

Vacancy Rate n/a 16.77% 30.07% 53.71% 61.81% 810bps ↑

Trend (y/y)



Queens Business Park

The Queens Business Park is situated toward the north west corner of the City of Red Deer. It is

bounded on the west by rural farm land and acreages, on the south by the Burnt Lake Industrial

Park, on the east by Highway 2, and on the north by Highway 11A.

NOTE: At the time of our survey there were eight buildings under construction in Queens Business Park

and therefore have been excluded from this survey.

Riverside Heavy Industrial Park

The Riverside Heavy Industrial Park is situated toward the north west corner of the City of Red

Deer. It is bounded on the west by the Northlands Industrial Park, on the south by municipal

environmental reserves, on the east by the Red Deer River, and on the north by the allowance

for the future Highway 11A extension. Some landmark developments include Olymel and Quinn

Pumps.

2011 2012 2013 2014 2015

Total Inventory (sq. ft.) N/A N/A N/A 385,075 385,075 0 →

Vacant (sq. ft.) N/A N/A N/A 68,150 37,717 -30,433 ↓

Vacancy Rate N/A N/A N/A 17.70% 9.79% -791bps ↓

Trend (y/y)

2011 2012 2013 2014 2015


Vacant (sq. ft.) 0 1,696 0 0 25,138 25,138 ↑

Vacancy Rate 0.00% 0.14% 0.00% 0.00% 2.05% 205bps ↑

Trend (y/y)



Riverside Light Industrial Park

The Riverside Light Industrial Park is centrally located within the City of Red Deer. It is bounded

on the west and north by municipal environmental reserves, and on the south and east by the

Red Deer River. Some landmark developments include Waste Management of Canada and Red

Deer Co-op Home and Garden Centre.

“Other” Industrial Areas

This category includes those industrial developments and industrial zoned land which are outside

of the established industrial neighborhoods. Some examples include Crimtech Services Ltd. in

Gasoline Alley, and Key Agventures Inc. near the intersection of Highway 11 and Highway 2.

2011 2012 2013 2014 2015


Vacant (sq. ft.) 37,496 39,929 59,860 24,092 38,668 14,576 ↑

Vacancy Rate 4.09% 4.35% 6.53% 2.63% 4.22% 177bps ↑

Trend (y/y)

2011 2012 2013 2014 2015


Vacant (sq. ft.) 40,190 0 0 0 94,154 94,154 ↑

Vacancy Rate 5.43% 0.00% 0.00% 0.00% 12.30% 1230bps ↑

Trend (y/y)



52nd Avenue2%

Belich3%

Blindman4%

Burnt Lake10%

Chiles2%

Clearview5%

Edgar19%

Golden West / Johnstone

12%

McKenzie2%

Northlands11%

Petrolia2%

Piper Creek

0%

Riverside Light7%

Riverside Heavy9%

Queens3%

Other areas6%

Neighborhood Comparitive Size Based on Total Building Areas



Documents

INDUSTRIAL MARKET SURVEY RED DEER 2015 - … · TREVOR HANSON, AACI, P.App. INDUSTRIAL MARKET SURVEY | RED DEER 2015 ... Readers of this report are welcome to use and reproduce the