“Where to next?” – a common question in most industries of which the world of industrial real estate is no exception. Given the age-old saying in the real estate industry of – “They ain’t making any more land!” – developers of warehouse and manufacturing space along with their clients, the end users, always have their sights set on the best next place to develop and or operate from. There are numerous factors that help to mould the eventual answers to this question and they are constantly changing. Among them are transportation routes, access to appropriate labour, applicable tax bases, availability and cost of land, services available for new development lands, individual municipalities eagerness for employment expansion, local economic sustainability, available and/or planned amenities, lifestyle options, etc.
Prior to 2001, the development that occurred outside of the immediate geographical area known as the Greater Toronto Area (GTA), generally bordered by Oakville, Mississauga, Brampton, Vaughan, Markham, Richmond Hill, Pickering and Ajax, was limited for the most part to one-off operations owned by a mixture of local and multi-national interests while large-scale development was focused within the GTA. Although land prices fluctuated, hitting high points at times due to particular demand in a given cycle, the availability to acquire it was generous enough that one needed not to look far in order to secure appropriate opportunities for new development.
That story has changed significantly due in large part to what I call, “ The Compression Factor”. Geographically speaking, The compression happens as follows, Lake Ontario provides pressure from the South and the Oak Ridges Morraine, a government protected 160 km swath of land that was formed 12,000 years ago and runs from the Niagara Escarpment to Rice Lake, delivers the pressure from the North. As the population, grows and industry in general expands, the immediate growth opportunities are East or West. The East end of the GTA holds limited promise for rapid industrial development expansion when compared to the West. Part of the reason for this is the West’s generous access to Pearson International Airport (PIA) as well as direct, unobstructed access via multiple high-volume arterial highways to 2 major US borders points, namely Buffalo, New York and Detroit, Michigan.
The results of this evolution have provided windfalls for towns that have in the past been identified more by their bedroom community charm than their critical involvement in industry. Some of the benefactors are:
Bolton & Caledon – located North-West of the GTA, this area is experiencing a tremendous amount of growth and interest from the development community and end users due to its labour force which come from local residents as well as the City’s of Brampton, Mississauga and Vaughan, availability of farm land considered to be less expensive than tradition development opportunities to the South East and the proximity to CP Rail Intermodal Terminal located at Hwy 50 and Rutherford Road.
Milton – located immediately West of Mississauga along Hwy 401, this Niagara Escarpment bordered community has seen rapid development from AMB, HOOPP and Verus. Mitlon has tremendous access to PIA, is served by major rail providers and has access to multiple major highways within minutes.
Guelph & Kitchener-Waterloo (GKW) – located West of Milton, along Highway 401 and now included as part of the Greater Golden Horseshoe (GGH), this area has long been an alternative place to live vs. being in the actual GTA. Although much of GKW’s growth has been organic, the last 4 years have provided increased optimism and attention from traditional GTA based developers and end users.
Brantford – located South West of Milton, GKW and the GTA, Brantford is home to 32,000 people and is experiencing one of the most aggressive industrial development growth propositions within the Southern Ontario region. Hindsight suggests that this growth makes complete sense given it’s access to major arterial highways that lead equally as easy to Toronto, Buffalo and Detroit coupled with a work force that draws from within as well as the neighboring communities of Hamilton, Stoney Creek and Cambridge. Brantford is an up and comer that has attracted attention from many major developers.
Woodstock – located West of the communities named earlier, this 34,000 person community and self-proclaimed dairy capital of Canafa sits at the cross roads of Highways 403 and 401. The auto industry has been particularly generous to Woodstock in part due to less expensive land, proximity to transportation routes and willingness by local government to work with industry. The future looks bright for these alternative development communities, and sustainability appears to be good.