Legacy Pacific Industrial Park contains 300,000 sq. ft. of buildings, capacity for additional 160,000 sq. ft.
The Legacy Pacific Industrial Park in Chilliwack, B.C. (Courtesy Avison Young)
Bosa Properties has acquired the Legacy Pacific Industrial Park in Chilliwack, B.C., which contains 300,000 square feet of existing space plus excess land for expansion, in the city’s largest-ever industrial transaction.
Bosa Properties Inc. bought the property, at 44500 and 44688 South Sumas Rd. and 6333 Unsworth Rd., from
Legacy Pacific Land Corporation. The 37-acre site includes space for up to 160,000 square feet of additional development density.
The milestone sale was led by the Avison Young team of Michael Farrell, Ryan Kerr, Garth White, Joe Lehman and Bob Levine.
“This is Chilliwack’s largest industrial sale ever and it comes at a significant time when many investors have been in a holding pattern, waiting for the right opportunity,” Michael Farrell, principal of the Avison Young office in Vancouver, told RENX.
“This was indeed the perfect opportunity – and signals to the market that there is confidence in the Fraser Valley and in the ability to continue to attract quality tenants at market rates.”
Supply constraints continue in B.C. industrial
Farrell said the industrial real estate market in the Vancouver area remains strong.
“We’ve got a relatively small, supply-constrained market here and we’re also a port city with strong population growth,” he said.
“Even though rising interest rates and (the) potential for us to have a recession has softened the market elsewhere, the market here remains stronger than others.”
Farrell said what made the Chilliwack property attractive was the fact it had an existing footprint of 300,000 square feet over three buildings with great tenants – a good mix of government, local, private and international private companies.
There are about 15 tenants on the property and Farrell said all the leases are rolling over in the near to medium terms, with an upside for rate increases.
He said there’s an ability for the new owner to expand some of the existing buildings and build a new freestanding building for an additional 160,000 square feet of new space.
“So, an opportunity for someone to come in and add value by managing the existing leases as well as through construction,” Farrell said. “It is basically 100 per cent tenanted.”
Legacy Pacific a Chilliwack developer, owner
Since its establishment in 1996, Chilliwack-based Legacy Pacific has been a leading industrial developer in the city, revitalizing nearly 300,000 square feet of formerly vacant buildings and developing 525,000 square feet of new structures in the city.
In a statement, Collin Rogers, CEO of Legacy Pacific said: “While our company passes the torch to a new leader, my family and I look forward to remaining active participants in Chilliwack.”
In recognition of the transaction and their shared commitment to supporting communities, Legacy Pacific, BPI (through the Robert Bosa Foundation) and Avison Young will jointly donate $250,000 to the Chilliwack Hospital Foundation.
“Legacy Pacific is a family-owned business that’s been involved in commercial real estate development in Chilliwack for several years,” Farrell said.
“The patriarch Mr. Rogers passed away a few years ago and his son has taken over subsequently. Last year they approached us about selling out the balance of their holdings here because they had bought and sold several buildings and developed them over time.
“But essentially the family decided now is the time for them to exit the business entirely and they tapped us for that. . . . This is the balance of their ownership.”
Chilliwack is just over 100 kilometres from Vancouver. Farrell said the city was a smaller tertiary market in the past compared to places like Delta or Richmond which were the primary core markets.
“But as our market has grown and vacancy has remained chronically low for an extended period – it’s been below two per cent since around 2016 – groups, tenants as well as developers, have looked farther afield for development opportunities,” Farrell explained.
“It is right on the TransCanada Highway and it does have a thriving local business community, as opposed to some opportunities that are more in isolated business parks. This is actually part of a small community.
“So you have restaurants and lawyers and accountants and a labour pool immediately adjacent to this part and I think that’s one of the things that made it attractive.”
Employment growth in Chilliwack
Farrell said Chilliwack has seen significant employment growth in recent years, landing the Molson Coors brewery when it moved from Vancouver.
The city has also received a major investment from Red Bull for construction of the first facility outside of Europe to produce the syrup which is the base of the drinks.
“So they do have a reputation of maybe hitting above their weight in some circumstances,” he said. “As far as transactions of this size happening across the country, there aren’t many right now. . . . So we’re pretty proud to have gotten this one across the line.”
No one from Bosa was immediately available for an interview about the transaction.
“It is challenging to acquire industrial properties of this scale and quality, and we appreciate Avison Young and Legacy Pacific’s collaborative approach to making our entry into the Chilliwack industrial market a reality,” Bosa’s Marc Ricou, executive vice-president, commercial, said in a statement.
“We have a strong belief in the attractiveness of doing business in Chilliwack and the vital role of the industrial market for job creation and economic growth in the Fraser Valley.”
A media release said BPI’s decision to acquire the property and its plans to develop adjacent lands reflect the growth and ongoing evolution of the company in the province and its commitment to long-term investment in industrial real estate.
In its market report for the first six months of 2023, Avison Young said industrial investment in the province remained resilient, with industrial representing 72 per cent of all investment transactions in British Columbia.
Bosa’s growing residential portfolio includes 20,000 homes built or under development. Its commercial portfolio includes approximately 5.5 million square feet of retail, industrial and office space under management.
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