5 Years of Data on Edmonton’s Industrial Real Estate Market

With support from The Network, we compiled and analyzed sales data for Edmonton’s industrial real estate market from 2014 to 2018.  The beginning of that five year stretch represented a period of $100 / barrel oil prices and the Great Recession firmly in the rear view mirror.  In short, Edmonton’s economy at that time was at a historical high.  In the fall of 2014, however, oil prices began falling at a frenetic pace, eventually bottoming out near $30 / barrel in 2016.  While prices have since increased, oil prices are still roughly 50% of 2014 values.  As expected, the data on industrial sales over that time have been impacted by oil prices, although not as much as one might think.

We broke down sales over the past five years to show the transaction values, amount of square footage sold, and the corresponding average sale price per square foot for both industrial condominiums and free-standing buildings.

Industrial Condominiums:

Year Total Value Total Sq. Ft.Average Price / Sq. Ft.
2014 $      48,102,210        241,081 $                   199.53
2015 $      40,798,386        189,537 $                   215.25
2016 $      34,302,998        172,680 $                   198.65
2017 $      32,112,771        163,583 $                   196.31
2018 $      32,003,114        156,589 $                   204.38

Industrial Free-Standing Buildings:

YearTotal Value Total Sq. Ft.Average Price / Sq. Ft.
2014 $   407,933,780           2,978,292 $            136.97
2015 $   338,560,663           2,429,539 $            139.35
2016 $   434,980,305           3,209,339 $            135.54
2017 $   325,909,808           2,371,135 $            137.45
2018 $   513,611,214           4,008,894 $            128.12

Industrial Sales Total:

YearTotal Value Total Sq. Ft.Average Price / Sq. Ft.
2014 $        456,035,990             3,219,373 $   141.65
2015 $        379,359,049             2,619,076 $   144.84
2016 $        469,283,303             3,382,019 $   138.76
2017 $        358,022,579             2,534,718 $   141.25
2018 $        545,614,328             4,165,483 $   130.98

 

There are a few interesting observations in this data:

1. Industrial condominium transaction value has dropped over 30% from 2014, but the average price per square foot haven’t changed a whole lot.

2. The total value of industrial real estate sale transactions hit a 5 year high in 2018, rising roughly 20% from 2014’s values.  However, the average price per square foot dropped over 7.5% in that same time frame.

Curious about the most expensive industrial real estate transaction in the past five years?

Sunwapta Business Centre (104 ave and 184 Street), a 415k square foot facility sold for $63M in April 2018.  It was part of a 4-building portfolio purchased by Fiera Properties.

 

Notes:

What is Industrial Real Estate?

Generally speaking, industrial real estate refers to a building designed for one of the following:

1. Manufacturing, fabrication, or assembly of raw materials into finished products or goods

2. Warehousing, storage or distribution of materials or goods.

While each municipality will differ, the City of Edmonton classifies industrial real estate into one of four areas:

1. Industrial Business

2. Light Industrial

3. Medium Industrial

4. Heavy Industrial

References:

Land Use Zones Summary. (n.d.). Retrieved from https://www.edmonton.ca/city_government/urban_planning_and_design/land-use-zones-summary.aspx#Industrial_Zones

Peiser, R. B., & Hamilton, D. (2012). Professional real estate development: The ULI guide to the business. Washington, D.C.: Urban Land Institute.

Disclaimer:

While best efforts have been made, there may have been sales in late 2018 that have not yet been accounted for.  This could potentially change the data above.  Information has been obtained from sources deemed reliable but is not warranted to be so.  Information has been provided for illustration purposes only and should not be construed as real estate advice.

Our Team

Chad Griffiths

Chad Griffiths

Partner, SIOR, CCIM

Chad is a partner with NAI Commercial Real Estate and focuses on the Greater Edmonton area. Chad entered the industry in 2004 and has completed over 400 commercial transactions with clients ranging from small, local companies to large institutional owners. Chad has been a top 15 producer with NAI Canada-wide since 2013.

Ryan Brown

Ryan Brown

Partner, BCom, SIOR

Ryan is a partner with NAI Commercial Real Estate in Edmonton and is currently ranked nationally as one of NAI's top advisors. Having executed in excess of $100 Million worth of sales transactions and over 2 Million square feet of lease transactions, Ryan has developed a firm understanding of asset evaluation and an aptitude for building design, functionality, and long-term practicality.

Darcie Bouteiller

Darcie Bouteiller

Associate

Darcie is a licensed Commercial Real Estate Agent in the Province of Alberta with a focus on the Edmonton market and its surrounding areas. Darcie accomplishes custom solutions for her clients through her personable nature and results driven attitude. Darcie can help if you are looking to invest in commercial real estate or are looking for representation for a sale or lease transactions.

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