Non-Residential

Epic, Woodbourne join forces to buy $155M Ottawa industrial portfolio from Skyline REIT

January 26, 2022

Ottawa’s red-hot industrial real estate market continues to be a magnet for investors, with a pair of industry heavyweights teaming up to acquire 18 properties across the city for $154.5 million in the latest big-ticket deal.

Epic Investment Services and Woodbourne Capital Management announced this week they purchased the 693,000-square-foot portfolio of small-bay facilities from Guelph-based Skyline Commercial REIT.

The transaction, one of the biggest in recent Ottawa history, comes hot on the heels of Toronto-based Crestpoint Real Estate Investments’ half-billion-dollar acquisition of Amazon’s Barrhaven fulfilment centre.

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The deals punctuated a recent flurry of transactions in Ottawa as investors rush to expand their holdings in a market where vacant industrial space is virtually non-existent and net rents have soared to record highs in recent months.

“It really is the preferred asset class right now. Everybody seems to be formulating an industrial strategy.”

Nico Zentil – senior vice-president of CBRE Ottawa

“It really is the preferred asset class right now,” said CBRE Ottawa senior vice-president Nico Zentil, whose firm brokered the Skyline deal.

“Everybody seems to be formulating an industrial strategy. At this point, the demand outstrips the supply, which is why we’re seeing premium portfolios being heavily pursued by a number of different capital sources, including both private as well as institutional capital.”

The deal also marks the first foray into the Ottawa commercial market for Colorado-based Woodbourne, which will hold the majority stake in the properties. Epic Investment Services, which is headquartered in Toronto, will act as the portfolio’s asset and property manager.

Brian Roberts, Epic’s vice-president of real estate management for the National Capital Region, said the city is an attractive market for investors due to its mix of asset types and diverse tenant base.

“Ottawa has a growing reputation as an e-commerce hub while providing a stable inventory of small-bay industrial product,” he said in a statement. “This portfolio is one of the largest industrial offerings in Ottawa and offers an enormous opportunity for both Woodbourne and Epic to grow its presence in this market with scale.”

Zentil said an industrial sale of this magnitude is rare in the Ottawa market.

“In terms of the ability to get this type of scale, this amount of tenants, this management platform in small-bay (properties), 600,000 (square) feet is almost unheard of in the city,” he said.

“A lot of groups that have industrial (space) right now are holding it close to the chest. If there’s not a strategic reason for them to sell, they’re likely going to hold because it is such a coveted asset class.”

Zentil said other sought-after properties could change hands if investors feel they need to divest some industrial holdings in favour of other asset classes in order to better balance their portfolios.

“If you are overweighted (in industrial), then we could see some sales transpire as a result of that,” he said.

The 18 properties Epic and Woodbourne acquired in the deal are: