I wanted to share with everyone a Hamilton Spectator news story that I had the opportunity to be a part of about the Hamilton Real Estate Market. Thank you to Lisa Marr for the interview. Hope you enjoy this read!
"Tight Industrial Market May Hamper Growth"
Miguel Lima had no idea there would be so many showings, so much activity tied up in an industrial sale.
Lima listed a food processing plant at 504 Kenora Ave. at $1.9 million about a year ago for a longtime local customer.
The plant housed GFS food service until last fall and the property has been on the market for nearly a year. An array of people potential company owners have toured the site, everything from wine makers to grocery store owners to steel company execs.
Lima said a sale is pending now to another local business owner who plans to use the space as a warehousing and distribution centre.
"It's been amazing. Hamilton has turned a corner," said Lima, who usually specializes in residential real estate. "It's really great to see this much interest in the city."
However, the lack of industrial/commercial space may create an obstacle to economic development.
The city's industrial vacancy rate is currently at about 3.8 per cent, but that will likely dip as low as 2 per cent this year, said John McNamara, a broker with Colliers International.
"Our prediction is that the inventory of industrial properties will be dangerously low in 2014," he said. "We are losing out on opportunities to attract new business."
McNamara is the broker for the former Ball Packaging plant at 3912 Victoria Ave., listed for $5.5 million. The property and the 330,000-square-foot building are currently partially occupied by the owner who runs a small manufacturing operation.
He said he has had high interest in the site since it was listed a few months ago and is hopeful to close a sale within a couple of months.
McNamara said it's likely a low industrial vacancy rate will force businesses to turn to buying land and build, although when that will happen is hard to forecast.
Sergio Manchia is in the midst of a project that is taking 26 acres in the city's downtown at the former Studebaker plant on Victoria Avenue, just down the road from the former Ball Packaging Plant, and redeveloping it into an industrial park.
The park would have about 20 separate lots that would then be sold with the option for custom builds, depending on the client.
He said there is a solid market demand for this kind of product, simply because there isn't much available, particularly in the city's core.
But after two years of jumping regulatory hurdles with at least another year ahead, Manchia said he understands why industrial spaces are rarely redeveloped. Just one of those hurdles is getting final council approval for a proposal to turn Victoria Avenue into a two-way street that would facilitate ingress and egress into the site.
"The problem with industrial (property development) is that it's harder because there are a lot of intensive costs and it's a big investment for a (prospective) business," he said.
But Drew Blair, an industrial/commercial broker, said there is very little on the market and what remains is fragmented. There are only a few properties worth more than $1 million and many already have tenants. He is currently looking for more properties to sell.
"You've got old stuff, new stuff and in-between. The market is very tight," he said.
While he agrees the leasing market is slow, there's been a slight surge this year so far. Still, he said prices have strengthened for industrial properties but there are no bidding wars yet.
"Buyers are educated and they are not just paying any price," he said.
905-526-3992 | @lisamatthespec
Courtesy of The Hamilton Spectator, as featured Saturday April 12, 2014. Written by Lisa Marr.