Anthem buys 3-property Edmonton industrial portfolio, more to come • RENX

December 18, 2023
3 mins read
2023121830 edmonton crossroadsab600

The Crossroads A and B buildings in Edmonton, which have been acquired by Anthem as part of a larger portfolio transaction. (Courtesy Anthem Properties)

Vancouver-based real estate company Anthem Properties continues to solidify its presence in the Alberta market with the recent acquisition of its first industrial properties in Edmonton.

Sean Day, vice-president, industrial, told RENX Anthem has purchased a three-building industrial portfolio in northwest Edmonton from Morguard and the Canada Post Pension Plan

The portfolio is actually larger than the three buildings that have been announced – more news is to follow in a few months. This is the first portion of the transaction, Day explained.

He did not disclose the transaction value.

“It’s a bit of an eclectic mix of properties that aren’t all clumped together. It’s not like a bunch of buildings in one business park. It was several buildings that are scattered throughout northwest and southeast Edmonton.”

The three buildings acquired by Anthem

The confirmed three buildings which have been sold comprise 282,000 square feet. They include:

  • a 66,000-square-foot cross-load, last-mile distribution facility, occupied by Loomis;
  • a 160,000-square-foot light industrial warehouse facility in the Crossroads complex; and
  • a 56,000-square-foot, small-format warehouse facility adjacent to the larger building in the Crossroads district.

Day said the three buildings are 100 per cent leased.

In the Crossroads complex, there are three tenants with the largest being Crossroads C & I Distributors, occupying the larger building as a single tenant. The smaller building is occupied by Old Dutch and Petro Comm Industries Ltd.

“The fuse is much shorter in the Loomis building. We know that those folks are vacating in the spring of 2025, so we’re going to have to install our program in Edmonton and get that building on the market for lease and we’ve got about a year to go in the new year to backfill that space,” Day said.

“So part of the plan, the kind of value-add proposition that we bring to the table, is to install our platform and get a leasing program going and add some value and release that facility so by the time 2025 rolls around that it’s actually occupied by a different long-term tenant.”

Day said the offering by Morguard and the Canada Post Pension Plan included five buildings in total.

“This is part of a larger transaction that actually involves more buildings that we don’t have the liberty to discuss just yet,” said Day.

“But overall we’re talking about over half-a-million square feet total in the transaction and we’re getting really good value for it.”

Expand from Calgary into Edmonton

 A large portion of Anthem’s holdings in Alberta, from industrial to residential, remain in Calgary. The firm has offices in that city as well as Vancouver, Toronto, California and now Edmonton.

“We’ve done a lot of stuff in Calgary to date,” Day said. “We’ve got a few holdings in the Greater Vancouver market, but Alberta by far is where the concentration of our industrial assets are.”

Day said Edmonton has been on Anthem’s list of places it wanted to expand.

“Edmonton has always been on the radar in terms of a natural progression or expansion into the Alberta market. We were just waiting for the right opportunity. It took a couple of years but the right opportunity came up and so that’s why we jumped on this,” he said.

“It’s a way to diversify our holdings in the Alberta market.”

Day said the Edmonton industrial real estate market is not dissimilar to Calgary in its underlying metrics.

He said a large portion of the Edmonton market exists to service the energy industry while the Calgary market exists more predominantly as a distribution centre to service Western Canada. 

Anthem continues to be bullish on Alberta

Overall, Alberta remains an attractive market for several reasons, he said, noting it has: one of the highest median incomes in the country; the country’s youngest working population; Canada’s highest inter-provincial migration; a low cost of living and high quality of life; as well as a pro-business environment.

“Where do you want me to stop? There’s just so many things that we like about this province. . . . There’s just a lot of opportunity here and we like it for all of those reasons and more,” he said.

“As long as there’s opportunity and the returns keep making sense we’ve got a lot of confidence in the Alberta market. We think on the industrial side of our business . . . there’s a lot of room to run here and there’s going to be continued growth and that’s both from a land development perspective, the development sites that we’ve purchased and we’re going to be building on.

“We’re going to grow organically through that type of development and we’re going to continue to buy existing income-producing properties and grow the portfolio in that respect as well.

“It’s certainly easier and less risky than buying land and developing on a speculative basis and trying to lease the tenants. There’s a certain level of risk . . . associated with that type of growth, but when you can grow organically like that you can build the exact type of product that you and some of your financial partners want to own long-term.

“The combination of those two approaches is definitely what we’re going to keep pursuing going forward in both Calgary and hopefully we’ll do more in Edmonton, too.”

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