HOW WE HELPED DRIVE DEVILBISS HEALTHCARE SECURE A BRAND-NEW DISTRIBUTION FACILITY
June 17, 2021
Leveraging Virtual Technology to Complete a Cross-Border Deal
There were many concerns throughout the pandemic about the lasting effects it would have on commercial real estate and the broader business landscape. Some asset classes have suffered, however, demand for warehousing and distribution space – specifically in the Greater Toronto Area – has reached levels the likes of which we have never seen before. E-commerce, online grocery sales, film and TV production, and transportation are driving an insatiable appetite for industrial space.
This intense competition within the context of sub-1% availabilities means that looking to relocate and time a new headlease with an existing lease expiry may be challenging. Frankly, simply finding space to occupy or completing a renewal while managing rental rate increases can be difficult enough.
We were tasked with not only securing space in a timely manner but doing so with our Client’s Executive Committee unable to meet or view any potential facilities in person. These restrictions were applied across the market, however our team viewed this as an opportunity to adopt new technologies, better habits, and more efficient communication, with our Clients and internally.
With that said, let’s examine how Lee Toronto’s Corporate Solutions Group was able to help Drive DeVilbiss Healthcare secure a long-term lease for a newly constructed warehousing and distribution facility.
Challenge:
Before engaging our Corporate Services Group, our Client had been in a substantial growth mode and had considered a move a few years prior. Then the pandemic hit.
As a result, their leadership team spent time analyzing their metrics and trying to understand and forecast what their current and long-term needs would be. This planning would be critical not only in navigating the unknown as we all emerge into the post-pandemic world, but, taken in context with the GTA industrial market, it could help contribute to their bottom-line. Finally, with limited vacancies and construction delays, lining up a new headlease with their existing lease expiry added an additional layer of complexity.
Overview:
- 375 New Huntington Road, Woodbridge, Ontario
- 128,806 SF of Brand-New Construction
- Prestigious Industrial Zoning
- 36’ Clear Height
- 15 Truck-Level Doors
Transaction:
We ran our tailored process of analyzing the market and reaching out to our network to identify a preliminary list of qualified opportunities. Given how tight the market vacancy was at the time, we leaned on our relationships and the intel procured by our agents to uncover any ‘hidden gems’ that would normally not be found on traditional listing services. Having more options to present our Client would not only help them gain leverage at the negotiating table but also add more control with respect to their time constraint.
However, being based in the United States, most of our Client’s team was unable to travel north of the border to look at the potential options in person. This meant we had to rely on technologies such as virtual tours, hi-resolution videography/photography, conducting virtual meetings, and constant-communication to provide comfort before committing to a final decision. While always an important feature in managing a transaction, this dynamic was essential given the challenges faced.
Results:
Ultimately, we were able to achieve a financially attractive solution in securing 128,806 SF of brand-new warehousing and distribution space, which would also contain a 2-floor office buildout to separate their client showrooms and employee offices. Long-term planning led by our team allowed the Client to outpace the market’s rising rental rates by finding the right solution and leveraging time. The further in advance you can commit, the more positive impact it can have on your bottom line.
Overall: In the competitive and tight Greater Toronto Area market, starting early is your best insurance policy in regards to successfully completing a lease renewal, relocation, or new head lease.
Summary
In conclusion, companies with specific requirements and time considerations may experience that making real estate decisions in the GTA market can be challenging due to the limited inventories and strong competition.
Whether your business is going through a growth mode or looking to consolidate space, you want to ensure that you end up with the right space for your needs, wherever you land. Starting the process early and engaging with a market specialist can provide you with the most options and greatest chance of success.
