Peter Mitham, Western Investor – The past year saw a welcome round of interest rate cuts, the first since 2020, with the Bank of Canada’s policy rate falling five times since April to end the year at 3.25 per cent, 175 basis points below where it stood a year ago. A corner had been turned, setting the stage for a return of investor confidence.

And the resurgence could have industrial strength, says Cory Wright, managing director, B.C., with William Wright Commercial in Vancouver.

“When the economy shifts in our direction with regards to interest rates and such, that’s when buyers will come back to the table,” he said. “The mom-and-pop owners can’t afford to buy it at seven per cent interest rates at $700 a square foot.”

And without buyers, developers weren’t building – not just industrial, but residential and other investor-oriented product. That kept supplies in check, which is set to fuel a run-up in prices as interest rates fall.

“The existing inventory will get absorbed at a faster pace than we’ve seen over the past two years,” Wright said. “When the existing inventory gets absorbed, we won’t have enough inventory coming in to fill the ongoing demand we anticipate will happen. It’s going to apply to industrial more than anything.”

Small-bay units with loading at grade, such as those at 5108 North Fraser Way, Burnaby, will be absorbed first as the mom-and-pop owner-occupiers return to the market after three years. The development is across the street from Amazon’s logistics facility in the Big Bend area, the kind of development that has carried industrial through the past two years.

“Some of the biggest warehouse deals done in the past couple of years have been done by companies like Amazon, which is backfilling so much of the larger-scale stuff,” Wright said.

But as the economy improves, the breadth of activity is increasing.

“There’s so many industries that can feed that industrial market right now heading into 2025,” he said.

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Read the full article published by Western Investor.