Skyline Industrial REIT1 has completed its largest-ever transaction, entered the city of Edmonton, Alberta, and expanded its holdings in Calgary, Alberta.
On Thursday, September 8, 2022, the REIT purchased a portfolio of four business parks with a total of more than two million square feet of industrial space, from a major Canadian pension plan.
The portfolio, which is 97.7% occupied, comprises 16 buildings on 129.5 acres of land. Together, the properties accommodate 51 tenants.
The total purchase price of the portfolio was $309.25M.
All four business parks are ideally located in sought-after sub-markets of Calgary and Edmonton, providing tenants with immediate access to national transportation channels to promote business efficiency.
“The transaction is not only the largest ever for Skyline Industrial REIT, but also the largest closing across all of Skyline Group of Companies’ investment products,” said Jason Castellan, Co-Founder & Chief Executive Officer, Skyline Group of Companies.
“This milestone demonstrates the dedication and hard work of all our people across the group of companies, and our confidence in the markets across Canada where we invest.”
“This transaction was a momentous one for Skyline Industrial REIT, and we are thrilled to be entering the city of Edmonton, expanding our Calgary holdings, and enhancing our presence across Canada,” said Mike Bonneveld, President, Skyline Industrial REIT.
“Each of the properties provides exceptional logistics, distribution, and warehousing facilities to its tenants—which translates to excellent service to the tenants’ customers. This acquisition aligns with the REIT’s strategy and targeted asset format in terms of geography, clear height, tenant profile, and flexibility.”
The REIT recently completed a strategic disposition program and has significantly increased its weighting in new modern industrial assets and developments. Proceeds from the sale of these assets have continued to be redeployed into new acquisitions and toward the many development partnerships in the REIT’s pipeline.
“The redeployment of the capital generated from the disposition strategy over the past 15 months has given us the opportunity to acquire these assets and enhance our portfolio to the utmost,” said Bonneveld.
“We believe this transaction is a strategic move for the REIT and for Skyline Group of Companies. We thank CBRE Toronto, Calgary, and Edmonton for their assistance with this transaction.”
The REIT believes there is significant upside to this portfolio as both Calgary and Edmonton continue to experience significant Net rental growth similar to other major markets across Canada.
According to CBRE’s Q2 2022 Canada Industrial report, Calgary leasing activity has persisted into Q2 2022 with two million square feet of net positive absorption, and the market has experienced extraordinary rent acceleration, with rents rising 15.3% year-over-year to $9.49 per square foot.2
Post-acquisition, Skyline Industrial REIT now consists of 57 properties in 33 communities in five provinces across Canada, with a total of 8,753,999 square feet of industrial space.
Skyline Industrial REIT is currently open for investment—its first time opening in nearly one year.
“We are determined to continue our forward-thinking momentum and continue to position the REIT as an industry leader with more future transactions such as this,” said Bonneveld.
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Portfolio Summary
Gateway Business Park, Calgary, Alberta
Benefiting from its excellent exposure and connectivity via Peigan Trail Southeast, Gateway Business Park is currently 100% occupied by both regional and national manufacturing (50%) and distribution-related tenants.
- Site area: 15.30 acres
- Tenants: 16
- Dock doors: 60
| Property Address | SF |
| A-4550 25th Ave. SE, Calgary AB | 66,905 SF |
| B-2634 45th Ave. SE, Calgary, AB | 84,077 SF |
| C-2726 45th Ave. SE, Calgary, AB | 98,842 SF |
| D-2760 45th Ave. SE, Calgary AB | 99,026 SF |
| Total: 348,850 SF |
Foothills Industrial Park, Calgary, Alberta
This four-building portfolio is currently 94.5% occupied and is conveniently located on the high-traffic northwest corner of 52nd Street and 72nd Avenue Southeast. Foothills Industrial Park is occupied predominantly by warehousing storage and distribution-related tenants, including I-D Foods Corporation and WTS Distribution. Offering tenants the benefit of central and efficient access to major transportation thoroughfares, front-loading dock doors, and immediate access to the CP Rail spur line, Foothills Industrial Park is where businesses want to be.
- Site area: 34.96 acres
- Tenants: 12
- Dock doors: 97
| Property Address | SF |
| VI-B- 7139 44th Street, SE, Calgary, AB | 296,636 SF |
| VI-A- 7151 44th Street, SE, Calgary, AB | |
| VII-7115 48th Street SE, Calgary, AB | 111,664 SF |
| III- 4920-5280 72nd Ave. SE, Calgary, AB | 293,761 SF |
| Total: 702,061 SF |
Rampart Business Park, Edmonton, Alberta
Located in the heart of the Rampart Industrial neighborhood, Rampart Park is currently 96.3% occupied, with nearly 60% of the property’s net rentable area and 85% of its gross rental income represented by a mix of regional, national, and international distribution and third-party logistics tenants, including MTE Logistix and Wallace & Carey. Rampart’s strategic location and modern building amenities can accommodate tenants who seek best-in-class, high-ceiling industrial space, and easy access to major transportation routes to offer the fastest fulfillment times. This asset also incorporates two potential future development parcels, with the opportunity to bring brand new industrial product to this region.
- Site area: 50.04 acres
- Existing buildings: 20.4 acres
- Development Land: 29.5
- Tenants: 7
- Dock doors: 67
| Property Address | SF |
| I- – 14530 – 157 Avenue NW, Edmonton, Alberta | 178,397 SF |
| II- 15704 – 142 Street NW, Edmonton, Alberta | 58,270 SF |
| IV- 14444 – 157 Avenue NW, Edmonton, Alberta | 121,000 SF |
| Total 357,667 SF |
Westpoint Corporate Centre, Edmonton, Alberta
Situated along the high-traffic intersection of 178th Street and 111th Avenue, Westpoint Corporate Centre is 100% occupied by distribution-oriented tenants, including MTE Logistix, Wesco Distribution, and Sleep Country Canada, as well as a variety of other national name-brand tenants. Westpoint’s excellent proximity to major thoroughfares, including Anthony Henday Drive and Yellowhead Trail, ensures convenient travel times in and around the city of Edmonton. Ease of accessibility to national transportation routes to fulfill national distribution makes Westpoint an ideal location for distribution or warehousing-focused businesses.
- Site area: 34.96 acres
- Tenants: 16
- Dock doors: 92
| Property Address | SF |
| I-11010 – 178 Street NW, Edmonton, AB | 300,730 SF |
| II-17803 111th Avenue NW, Edmonton, Alberta | 80,750 SF |
| III-17803 111th Avenue NW, Edmonton, Alberta | 75,993 SF |
| IV-17803 111th Avenue NW, Edmonton, Alberta | 187,200 SF |
| V-17803 111th Avenue NW, Edmonton, Alberta | 94,419 SF |
| Total 739,092 SF |
1 Skyline Industrial REIT was previously Skyline Commercial REIT. As a result of the REIT’s increasing focus on modern warehousing and logistics assets, the REIT updated its name to better reflect its portfolio composition and target sector, effective June 14, 2022).
2 CBRE. (n.d.). Retrieved September 7, 2022, from https://www.cbre.com/insights/figures/canada-industrial-figures-q2-2022 (pg 12)