BCBusiness

60 BCBUSINESS NOVEMBER 2017 doesn't fall under o'ce space, farmland or housing. Since the high-tech explosion, the deŽnition has broadened to include software engineering spaces and computer animation stu- dios, which are conducive to urban settings. Municipalities like this gentler deŽnition of industrial because it plays better with residential and mixed-use developments. But there's not much high-quality industrial real estate, Jones Lang LaSalle's Fiorvento warns: "The amount of quality stu™ that's actually developable, that you can build on, is extremely negligible." The commercial real estate industry is predicting disaster. In a May report, CBRE Group Inc. showed that at just 2.6 per cent, Metro Vancouver has the lowest industrial land availabil- ity of any metropolitan area in North America. The city of Van- couver will reach a crisis point by the early 2020s, commercial real estate services Žrm CBRE projects—at least a decade ear- lier than Metro Vancouver forecast last year. In 2017, demand for industrial property will be 2.5 times greater than the total new space being added, according to CBRE. In a 2015 study, Vancouver-based real estate consulting Žrm Site Economics Ltd. also predicted a crisis within 10 years as the region runs out of logistics-oriented land, or property used to move goods. Parcels of 20 acres or more are in especially short sup- ply. The CBRE report cites Molson Coors's inability to secure 400,000 square feet west of Chilliwack for its new brewery location. An international transportation company could only Žnd 200,000 square feet in South Surrey, not a prime location for such businesses, due to its distance from major highways. CBRE also touches on the surge in the region's average lease price for industrial buildings—now $10 a square foot, an 11 per cent gain over 2016. Since Metro Vancouver declared a potential crisis more than a decade ago, the industrial land base has kept shrinking. In 2016, the Metro Vancouver board announced that over a Žve- year period the region had lost 352 hectares of industrial-zoned land, mostly to residential and commercial redevelopment. "People are sounding alarm bells, people like myself, in the real estate community, and the developers, and most importantly, the tenants," says Chris MacCauley, senior vice- president with CBRE in Vancouver. "But until there is some eco- nomic pain felt by municipalities, or by the province, with com- panies shutting down or moving out of province, I don't think anything will be done. We are just telling government, 'This is going to end. We have no more inventory to support economic growth, and job requirements for the increases year over year in population. We have challenges ahead.'" MacCauley's point is that we should care about losing good, central industrial land because a healthy economy relies on long- term employment. When Amazon opened its so-called fulŽll- ment centre in New Westminster, it posted hundreds of openings for software developers and warehouse workers. In Vancouver, the upcoming Ironworks building, on Victoria Drive near East Hastings Street, will house 500 full-time jobs. These might not all be traditional industrial jobs, but they're on industrial sites. But at the civic level, governments tend to focus on residen- tial development. "Look at the GDP," MacCauley says. "It's all residential real estate. They say, 'Look at all the jobs created by construction,' and that's great, but you have people building all those homes that can't a™ord to be in those homes." So far, the new provincial government is taking a wait-and- see approach, shifting responsibility to municipalities. "The Province is aware that the issue of industrial land supply is particularly acute within the Lower Mainland, where there is strong competition with other uses, including agriculture and housing," Bruce Ralston, minister of jobs, trade and technoloy, said in an emailed statement. "B.C.'s land-use planning frame- work gives local governments the authority and responsibility for local land-use planning and zoning decisions, including for industrial land. That said, the Province will continue to monitor the situation and consider options for working with partners to address this complex issue." So it falls to Metro Vancouver to protect this dwindling jobs land. Chair Greg Moore, who is also the mayor of Port Coquitlam, says an industrial land stratey is underway to address the issue of quantity and type of property most needed. It will take into account the fact that manufacturing is now more broadly deŽned to include animation and software develop- ment, Moore explains. STRATA SPHERE Conwest COO Ben Taddei, at his company's Ironworks site in East Vancouver, says the future is mixed-use industrial buildings

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