Inland port rises on the Prairies

By Robert Frank

“Calgary has become a bit of an inland port,” according to Jon Mook. 

“It’s strictly driven by West Coast ports being at capacity,” explained the Barclay Street vice president. “CN and CP yards will continue to expand. Seacans are being dropped off at a growing number of non-railway intermodal yards that have sprung up during the past 3-5 years.”

“It’s positive,” he said, “though, with only a limited number of players are engaged in that presence, it will likely proceed at a controlled pace.” Airport development is also poised to grow, with new runway to be built.

“It will be driven by groups that need to be there,” Mook observed. “Companies like FedEx and Purolator have to be next to the air side.”

“Since they will be paying at the upper end of the market, they have to have a reason to be there,” he continued. “If you don’t need to be right next to the runway, though, it’s less expensive to be a couple of blocks to a mile from the airport.”Mook shared the optimism that pervades the Calgary commercial real estate market. 

“There’s a considerable amount of product built during the past 12-18 months coming on board, which will make the distribution space market competitive, and the demand is there,” he affirmed.

“Many prospective players want to see how this 3 million sq. ft. will be absorbed,” Mook said. “That will dictate how many of them will come to the market next summer. If leasing activity, especially for large-bay distribution facilities greater than 50,000 sq. ft. isn’t as great as the market hopes, you won’t see as much development for these larger facilities.”

Note: This report appeared on page 32 of the Fall 2013 issue of Canadian Real Estate Magazine.

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