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The Myth of Hamilton’s Industrial Vacancy

The Myth of Hamilton’s Industrial Vacancy

There is a common mis­conception about the in­dustrial land and building availability in Hamilton’s lower city. Within this first installment of commercial property information we aim to shed some light on the availability, or lack thereof, of industrial build­ing space in the lower city Hamilton market.

With over 65 years of combined experience of selling and leasing com­mercial/industrial real estate in Hamilton, the specialized team of Sydney Hamber, Paul Mariutti and John MacNamara of Colliers International have a real-time understanding of what is available in the city of Hamilton, delving more specifically into the lower city area. Since 2010 the team has leased and/or sold over 3,342,000 square feet of industrial space.

The team works with the City of Hamilton’s Eco­nomic Development De­partment, MPAC records and pairs with that their combined market intelli­gence to determine that there is over 38,600,000 square feet of industrial buildings greater than 15,000 square feet in the Hamilton market, (exclud­ing US Steel and Arcelor Mittal Dofasco). The following represents the approximate percentages of various sizes of space by square feet (15,000 to 30,000 = 50%), (30,000 to 50,000 = 20%), (50,000 and up = 30%). As far as vacan­cy statistics go, the Q4 sta­tistics were 6.1% in 2010, 3.4% in 2011, 2.2% in 2012 and 2.8% in 2013. 80% of this vacancy is represent­ed by only six buildings, the smallest being 50,000 square feet. It’s easy to see the current trend is towards a lack of availa­ble product rather than a surplus. As we move closer towards a more stable economy the gap between supply and demand will become a greater problem for businesses that wish to expand within the city.

Part of the availability problem lies in the lack of any new building con­struction for sale or lease over the last five years and part lies in the fact that a large number of buildings have been demolished. It is easy to argue the ma­jority of the buildings that came down needed to, but it has resulted in a sub­stantial drop in the overall industrial base regardless. The Rheem building, the old Firestone plant, and most notably the Stude­baker building at 600,000 square feet sq.ft. have been demolished. In spite of the new construction with Navistar (250,000 square feet), Maple Leaf Foods (400,000 square feet) and Canada Bread (385,000 square feet) there has been a zero sum gain in indus­trial space.

Generalizations have been made that there are hundreds of buildings that aren’t generating any tax revenue while the owners are holding out for larger revenue. These misconceptions are false and misleading. The six vacant buildings that make up the majority of the current vacancy indicated above are generating over $1,206,000 in taxes on an annual basis. It is hard to make the case that owners could reap any benefit by leaving their buildings va­cant while they pay taxes, maintenance and higher insurance rates that accrue because the property is vacant.

In closing, Hamilton’s vacancy is at or below the average of other GTA cities and unless new buildings are built to service the cur­rent demand the city may miss out on current and future opportunities.

Stay tuned for the next edition where will discuss vacant land opportunities within Hamilton.

Sydney Hamber is Senior Vice President and Broker, Colliers International 1122 Interna­tional Boulevard Suite 102 Burlington, ON. 289 266 1020

About Bay Observer Staff

Providing a Fresh Perspective for Burlington and Hamilton.

One comment

  1. You know it is the same in any other field.
    You would think experience teaches us anything, but alas.
    Hate all you want but the world changes, and we have no control whatsoever over it.
    For instance, imagine Barack had any balls to put Russian bear to his place, but it seems like it’s not happening, welcome WW3.
    Awesome post, thanks!

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