The Beedie Group is preparing for the construction of the largest single-level warehouse ever to be built in the Lower Mainland in one phase.
The 504,000-square-foot facility for tissue-maker Kruger Inc. is another sign that corporate confidence in the region has returned to pre-recession highs.
However, the buzz over the Beedie project, which would be the largest structure in the company's 57-year history, has overshadowed several underlying Metro Vancouver industrial real estate trends that brokers say include:
• mid-sized companies increasingly wanting to occupy larger warehouses of up to 150,000 square feet;
• more companies that import products via Port Metro Vancouver (PMV) wanting large warehouse space; and
• renewed interest in building warehouses larger than 400,000 square feet.
Beedie is in final negotiations with the City of New Westminster and PMV to build the Kruger warehouse.
Kruger considered a range of options to consolidate two Annacis Island warehouses: one 194,000 square feet, the other 110,000 square feet.
The paper products manufacturer has been so pressed for space that it has used some at its New Westminster paper mill for storage and has had to store some products in third-party warehouses, said its broker, Cushman Wakefield senior vice-president of industrial properties Bob Stokes.
Kruger considered building its new warehouse on PMV land that's more than a kilometre east of the Beedie site and therefore closer to Kruger's mill. However, executives decided that hiring Beedie to build the structure on 20 acres of Beedie-owned land was the best option.
"Beedie is the best," Stokes said. "They can build a building better, faster and less expensively than anyone."
Kruger's future warehouse won't be Metro Vancouver's largest. That title belongs to the 685,000-square-foot warehouse near the Braid Street SkyTrain station that Woodward's built in the 1980s and is now used in part by Best Buy Canada. It has 95,000 square feet of available space.
Avison Young principal Rob Gritten believes the recent boom in warehouse construction marks the end to a lull that started during the 1990s when the New Democratic Party was in power and many companies chose to locate in Alberta.
"In the last few years there have been several million square feet built in the 400,000-square-foot size range alone," Gritten said. "That's really unusual for our market. We haven't seen that before."
– Glen Korstrom/BIV
from Western Investor June 2011
