Vancouver Commercial Real Estate Podcast

Providing real-time insight into today's commercial real estate industry.

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May 17, 2023
VCREP #97: Where You Can Buy an Acre of Industrial for ONLY $550,000 with Bronwyn Scrivens

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Joining Cory and Melisa this week is Bronwyn Scrivens, Associate on the Industrial Team at Omada Commercial, back on the show to give us an update on the Alberta market.

Bronwyn unpacks market lease rates, the differences between Calgary and Edmonton when it comes to being an industrial landlord, how prices have changed, and where she would invest if she were to walk into the market today.

We even shook up the 6-pack for a little extra excitement. We ask the questions and Bronwyn does not hold back. Another episode jam-packed with information and insight—let's go!

Omada Commercial’s Bronwyn Scrivens is our guide to the Edmonton industrial real estate market. She’s sharing current lease rates, the best investment in Edmonton and where you can buy an acre of industrial land for only $550,000!

Who is Bronwyn Scrivens?

I’m an industrial real estate agent in Edmonton at Omada Commercial. We specialize in the owner-user asset class but our market is very different from Vancouver. We’re not over-brokered.

Edmonton has finally come out of the long dip it was in from 2015-2020. It’s been a lot of fun the last couple of years. It’s a healthy market with great options for buyers and sellers.

Are buyers who are getting priced out of Vancouver industrial real estate coming to Edmonton?

Yes. The trend has only continued over the last 12 months since we spoke. The pricing is so high in Vancouver that tenants who want space have to look elsewhere.

Some tenants are looking for 500,000 or even one million square feet which just isn’t feasible in the Lower Mainland. But we have lots of land in Edmonton. The challenge is getting the land ready but our counties and land developers are proactive.

Yes, Edmonton has land and it is cheaper. But construction costs aren’t too different between markets. The big difference is permits. It takes about six months for permits in Edmonton and Calgary, 15-20 months in Burnaby and Vancouver, and 32 months in Toronto. The faster process is another reason to come to Alberta.

You’re able to buy land in the $550,000-$750,000 per acre range just outside of Edmonton. The same land would cost you millions of dollars in the Greater Vancouver area and that’s if you’re able to find it.

What are industrial lease rates like in Edmonton?

Our market average is around $10.50 in Edmonton; it’s about $10.80 in Calgary. We have product that was developed pre-covid and then the product that is being developed now. It costs way more money to build now with inflation, higher interest rates, higher labour costs, etc.

If you’re looking for a newer Class A building, you won’t be able to find it for less than $11 per square foot. But product built 5-10 years ago would be in the high single digits.

Five years ago, prices were definitely lower for Edmonton industrial real estate. We were an oil and gas province and are now one of the leaders in diversifying energy. But because of our reliance on oil and gas, we ebb and flow based on oil prices.

When the price of oil tanked in 2015, our lease rates dropped across Alberta. You could have gotten Class A or B buildings in the $7.50-8.50/square foot range. Nowadays, that would be in the double digits. But it’s not a huge increase like you’ve seen in Vancouver because of all of the land we have.

Who is driving the industrial market in Edmonton?

We are getting distribution and fulfillment centres. We had two deals over 500,000 square feet last year, one with a logistics company and one with a furniture company.

The majority of the growth has been in warehousing and distribution but we do have a good base of manufacturing centres in the energy sector. They do tend to be smaller footprint buildings compared to the distribution centres.

What is the difference between an Edmonton industrial tenant VS a Calgary industrial tenant?

Calgary has been a stronger market over time. It’s closer to Vancouver and the US with more draw for people to live there. We see more distribution users in Calgary who are looking for transportation and warehouse options. It’s a day’s drive from Calgary to Vancouver or Salt Lake City.

Edmonton sees more manufacturing users who traditionally catered to the energy centres up north. That’s more of what our buildings were designed for. You see a lot of heavy power cranes and large yards. We used to say Edmonton was more blue collar, working class while Calgary was more white collar, professional class.
But things are changing and there are fewer differences between Edmonton and Calgary these days. More people are trying to advocate for Alberta as a whole and a place for people to bring business, rather than having our cities compete against each other on a smaller scale.

What is the market like for industrial strata units in Edmonton?

The industrial strata market isn’t very big in Edmonton. It’s stronger in Calgary because there is more demand, mostly due to people coming from Vancouver, but it’s still not huge.

Generally speaking, the strata market doesn’t work as well in Alberta because we have more available land. If you’re a user who can afford a house, why would you buy a condo?

For a brand new, small bay strata unit, you’re probably looking at $225-235 per square foot. But the demand isn’t that high. However, the market for leasing on that small bay product is stronger. So it can be a good investment but the lease rates may not justify the cost.

Edmonton has such a strong owner-user market which goes back to the city’s entrepreneurial spirit. They’re usually looking for a free standing building with a yard. And they can find that and be able to purchase it, even with how the interest rates have gone up. There are options here.

What is the best investment in the Edmonton commercial market? 

Like every market, industrial real estate is reigning supreme. Multi-family is also a big asset class in Edmonton and even more so in Calgary. With the increase in population to Alberta, multi-family and industrial just keep growing.

If you can find a multi-tenant, four bay shop – which are harder to find these days – that could be a good investment. But a lot of groups are looking in Alberta, which has impacted pricing.

If you’re buying a portfolio with multiple properties under an institution or REIT, you can probably get Class B and C product in the $130-150 range. But if you’re just buying a one-off property, the price will be around $200 per square foot.

As the interest rate increased, it increased the cap rate people were expecting. But Edmonton has been able to match that with our ability to increase rental rates and backfill vacancies. Our vacancy rate is down to 3% from around 5% last year. So the hardest part is trying to find something right now.

Where does the Edmonton industrial market go from here?

I don’t see any slopping or slowing down in Edmonton or Alberta. The average house price is $550,000 in Calgary and $400,000 in Edmonton; $730,000 for detached in Calgary and $500,000 for detached in Edmonton. As more people move into our market, the prices go up and we get a stronger labour force.

If you’re a business owner, you want to move to where people are moving and where you can easily operate. A lot of people are looking at Calgary and Edmonton as a beacon for that opportunity.

Vancouver and Toronto are going to continue to do well because of the lack of supply. But in Alberta, we are investing in our industries and trying to be leaders in diversifying energy. We’re pushing the limits for what our province can do.

Alberta is open for business. Come work with us and we’ll get it done!

The 6 Pack: Getting to Know Omada Commercial Associate Broker Bronwyn Scrivens

Favourite bar or restaurant in Edmonton?

We love to frequent this amazing little Italian restaurant in our building called Bianco.

Who’s winning the Stanley Cup this year?

Obviously the Oilers but it’s a roller coaster out there. I love that Florida is coming from behind. I think a Toronto vs Edmonton final would be epic.

My brother, Ben Scrivens, is actually an ex-NHL goalie. Ben was in the NHL for about 10 years and played for Toronto, LA, Edmonton and Montreal. After he finished, he got his Masters in Social Work and is now doing some mental health programming for the NHL. He also coaches a junior hockey team and high school program, and is involved in an alumni program.

Share a book recommendation with us.

As a broker, I’ve been reading Fanatical Prospecting By Jeb Blount, but I think it would be good for anyone in sales. It’s all about how you can provide value no matter what industry you’re in.

What is the work attire post-covid: business-casual, business-professional or Lululemon?

I’m between business-casual and business-professional. I am definitely not wearing Lululemon to the office! But if I roll up to a site visit in a three piece suit, I do get some looks. It’s better to wear a pair of jeans to a site.

What’s your last meal on death row?

Probably a nice Alberta beef filet mignon with blue cheese crust and mashed potatoes. I want a good, hearty meal!

What is one useless fact you know that you can share with us?

I was doing some research on the labour market and found out that Alberta has more engineers per capita than any other province.

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Vancouver Commercial Real Estate Podcast

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This communication is not intended to cause or induce breach of an existing agency agreement. E&OE: All information contained herein is from sources deemed reliable, and have no reason to doubt its accuracy; however, no guarantee or responsibility is assumed thereof, and it shall not form any part of future contracts. Properties are submitted subject to errors and omissions and all information should be carefully verified. All measurements quoted herein are approximate.