The top 5 points for Landlords and Tenants to consider as the Niagara Industrial Real Estate market heats up
Now that the Industrial market is heating up it will have a significant impact on both the tenants and their landlords.The demand for quality industrial space is on the rise and in which case most spaces have already been filled. As this demand continues to increase supply will be limited. This is especially true in St.Catharines at the moment and is already spreading through the rest of Niagara.
The impact this demand will have on Landlords is as follows.
1) Landlords will be asking for a higher rental rate.
2) Landlords will be more picky about about which tenants they want.
3) Landlords will want clean tenants.
4) Landlords will be less willing to entertain short leases and low rental rates.
5) Landlords that are having a difficult time filling quality industrial space should contact a commercial real estate agent to see if there is opportunity to improve their exposure to quality tenants.
This will also have an effect on the tenants who are leasing out the industrial space.
1) Tenants should expect an increase in rent if their lease is coming up for renewal.
2) Tenants will have a difficult time finding space to relocate to.
3) Unless a tenant is patient and flexible with timing they may need to settle for lower quality spaces.
4) Tenants looking to locate or relocate should start looking as early as possible and when they find the right space they should act quickly.
5) Tenants should be actively working with a commercial real estate agent to ensure new properties are presented to them as soon as possible and to be in a position to submit speedy offers.
Where does this leave us?
As industrial space becomes more difficult to find, built to suit projects will increase. In the next 1-3 years tenants with flexible timing and willingness to commit to long term leases and higher lease rates will entertain build to suit projects hopefully adding a few hundred thousand square feet to the St. Catharines and Niagara market. Build to suit projects will be more successful if the municipalities and the region focus on reducing development charges and taxes for industrial businesses.