The Vancouver portfolio is lagging the market rents, around $14 a foot.
As for prices, clearly the internal valuations remain conservative.
Of all the commercial asset classes, industrial has a particular need for innovation in Vancouver given current supply and demand conditions.
Generally, that means finding ways to build taller structures in urban areas that are still attractive and useful to occupants.
Average lease rates for industrial in Metro Vancouver climbed from $11.60 per square foot (PSF) in 2019 to $22.90 in 2023, according to information provided during a panel on the industrial market.
Average prices to buy industrial space in the region climbed from $298 per square foot in 2019 to $584 per square foot in 2022.
While stakeholders suggest multi-level industrial facilities would be part of the solution to increasing prices, there remain constraints on stacked projects.
Inflation is one of them and another is a lack of design-build expertise, said Josh Gaglardi, principal with Orion Construction.
The construction of stacked industrial doesn’t yet include many efficiencies and actually leads to disproportionate construction costs, he said.
"When we look at these types of multi-storey projects, depending on the constraints of the site, we see anywhere from 1.5 to 2.5 times the (construction) price over a traditional warehouse,” Gaglardi told the forum.