The recent pandemic has brought many challenges to people and businesses alike. Of significant impact to the logistics industry and manufacturers who rely on the efficiency of movement of goods through the supply chain, is the tightening of available warehouse space. Experts share that in the first quarter of 2022, the regional average asking rent in Southern California reached a new high, climbing 25% on an annual basis. The median sales price soared by 31.9%. The significant shortage of industrial space and developable land is creating intense competition and rates. Developers are looking more than ever before at obsolete buildings with an eye to demolish and replace them with modern facilities.
North of the border, available warehouse space in Canada is at a historic low – heavily fueled by the increase in e-commerce. Vacancy rates in Toronto, Vancouver, and Montreal are at historic lows, while costs skyrocket. In both Toronto and Vancouver, lease costs have risen 40% in three years. Developers are struggling to keep up and are busily converting existing buildings to help meet demand. Across the nation, the availability rate for industrial real estate in major markets has shrunk to 2.2%, from almost 3% a year ago. Toronto and Vancouver, it’s around 1%.
At NRI we believe strongly in planning ahead and saw this constriction coming. We have secured new space in both the Vancouver and Toronto markets over the past year in order to manage customer demand. “Core to our expertise is planning in conjunction with our clients to be able to satisfy their growth”, notes Ryan Dale-Johnson, NRI VP of Sales. “Managing our clients’ scaling-up is a cornerstone of our business. The last couple of years have certainly put all of us to the test more than ever before”.
NRI recently expanded to both Easton, Pennsylvania, and Toronto, Ontario. We have experienced significant growth from our clients, in part due to the pandemic. With the acquisition of our newest warehouse facilities, we have strengthened our “Four Corners” strategy. This positions our warehouse facilities in key geographies in both eastern and western Canada and the US. With our multiple facilities across the 2 countries, we are able to service our clients’ customers in shortened time frames, thus keeping up with consumer delivery-time expectations and reducing transportation costs.
What this all translates to is that proactiveness, and patience, are key. The supply chain is not what it once was. Congestion, staffing challenges, and rising rates are the norm now. A successful, long-term partnership begins with a solid foundation and advanced planning so that both parties can implement necessary resources and execute an effective transition plan.
Start your discovery process early and you will be well-positioned for success.