{"id":1361,"date":"2021-12-14T01:25:48","date_gmt":"2021-12-14T01:25:48","guid":{"rendered":"https:\/\/pelion.co\/?p=1361"},"modified":"2021-12-14T09:00:26","modified_gmt":"2021-12-14T09:00:26","slug":"how-pure-industrial-is-winning-logistics-real-estate","status":"publish","type":"post","link":"http:\/\/pelion.co\/how-pure-industrial-is-winning-logistics-real-estate","title":{"rendered":"How Pure Industrial is Winning Logistics Real Estate"},"content":{"rendered":"\n

Competition for industrial assets today is fiercer than ever. Evolving retail strategies and the increasing adoption of e-commerce in virtually every sector are forcing investors to think harder about how they should align their portfolios so as to best maximize returns on investments while delivering value to tenants. Balancing these efforts can be difficult so we look to one of the largest industrial landlords in Canada, Pure Industrial (\u201cPure\u201d), to better understand the company\u2019s asset positioning and management strategies, using a combination of corporate earnings reports and Pelion\u2019s mapping feature.<\/p>\n\n\n\n

Who is Pure Industrial?<\/h3>\n\n\n\n

Pure Industrial is a pure-play industrial real estate investment and development company founded in Vancouver, BC. By Pelion’s estimates, the company currently owns 189 properties (24 million square feet) located predominantly in Toronto, Vancouver, and Montreal.  Pure\u2019s assets are primarily flex warehouses and distribution centers that are 120,000 square feet on average.<\/p>\n\n\n\n

Pure was established and went public on the TSX Venture Exchange with 10 properties as a REIT in August 2007. The company was formed to fill the gap in Canada\u2019s industrial REIT universe after Summit REIT was taken private by ING Real Estate in late 2006.<\/p>\n\n\n\n

In 2018, Pure was acquired and taken private by Blackstone Property Partners and Ivanhoe Cambridge for $3.8 billion<\/a>.<\/p>\n\n\n\n

Superior Location<\/h3>\n\n\n\n

Looking at Pure\u2019s asset map in markets like Toronto and Montreal, it is apparent that the company prioritizes locations near transportation nodes like airports and highways. In Ontario, for instance, most of the properties are located around Toronto\u2019s Pearson International Airport and along Highway 401. While these assets likely came with a hefty price tag, the company is unlikely to have trouble finding tenants in such prime locations.<\/p>\n\n\n\n

More importantly, positioning assets this way helps tenants minimize drayage costs and streamline the supply chain. As tenant demand evolves and becomes more complex, the ability for a landlord to go beyond providing mere warehouse space can help him differentiate himself from the competition tremendously. This in turn helps the landlord maintain his pricing power and occupancy level. While we do not know what Pure’s lease rates and occupancy look like today, we do know that the company has been able to consistently post 95%+ occupancy and maintained market rents when it was public. <\/p>\n\n\n\n

\"\"
Pure’s portfolio in the Greater Toronto Area<\/figcaption><\/figure>\n\n\n\n
\"\"
Pure’s portfolio surrounding Toronto Pearson International Airport<\/figcaption><\/figure>\n\n\n\n

Prioritizing Efficiency & Stability<\/h3>\n\n\n\n

Since its inception, Pure has had a focus on prioritizing efficiency and stability. This is manifested through the company’s preference for single-tenant properties with long lease terms.<\/p>\n\n\n\n

Single-tenant industrial properties are typically larger properties that are sought after by large, credit-worthy corporations, who tend to enter into long-term triple\/quadruple net leases. While this may increase tenant concentration risks and limit cash flow growth (through lease-up and market rent increases), it does allow for a more efficient property management platform and greater predictability of cash flow, as well as more comprehensive underwriting of tenant\u2019s covenants.<\/p>\n\n\n\n

In addition, Pure’s focus on flex warehouses and e-commerce\/logistics assets provides greater leasing flexibility and transaction liquidity compared to light\/heavy manufacturing industrial properties that are more likely to be custom-built for a specific company’s manufacturing process. This reduces re-leasing risks and further adds to the stability of the portfolio.<\/p>\n\n\n\n

Building Economies of Scale<\/h3>\n\n\n\n

Another key takeaway we got from analyzing Pure\u2019s portfolio is that the company tends to buy properties in clusters to increase regional economies of scale<\/a>, another indication of the company’s focus on efficiency.<\/p>\n\n\n\n

The most recent example of this is Pure\u2019s acquisition of Artis REIT\u2019s 28-property GTA portfolio for $750 million<\/a> in August. Artis\u2019 portfolio is located primarily in Brampton and Mississauga, Pure\u2019s existing core markets in the GTA. The transaction earned Pure another 2.6 million square feet in the province, a 21% increase.<\/p>\n\n\n\n

\"\"
Pure’s property cluster in Vaughan, ON<\/figcaption><\/figure>\n\n\n\n
\"\"
Pure’s property cluster in Brampton, ON<\/figcaption><\/figure>\n\n\n\n

<\/p>\n\n\n\n

The exponential demand for industrial assets is attracting unprecedented levels of capital and competition in the sector. Pure Industrial’s growth through its focus on location, stability, and efficiency provides a valuable reference for all landlords looking to sharpen their edge.<\/p>\n","protected":false},"excerpt":{"rendered":"

Competition for industrial assets today is fiercer than ever. Evolving retail strategies and the increasing adoption of e-commerce in virtually every sector are forcing investors to think harder about how…<\/p>\n","protected":false},"author":1,"featured_media":1362,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","footnotes":""},"categories":[9,33,34],"tags":[],"class_list":["post-1361","post","type-post","status-publish","format-standard","has-post-thumbnail","category-analysis","category-logistics","category-strategy"],"uagb_featured_image_src":{"full":["https:\/\/pelion.co\/wp-content\/uploads\/2021\/12\/image-21.png",1986,901,false],"thumbnail":["https:\/\/pelion.co\/wp-content\/uploads\/2021\/12\/image-21-150x150.png",150,150,true],"medium":["https:\/\/pelion.co\/wp-content\/uploads\/2021\/12\/image-21-300x136.png",300,136,true],"medium_large":["https:\/\/pelion.co\/wp-content\/uploads\/2021\/12\/image-21-768x348.png",768,348,true],"large":["https:\/\/pelion.co\/wp-content\/uploads\/2021\/12\/image-21-1024x465.png",1024,465,true],"1536x1536":["https:\/\/pelion.co\/wp-content\/uploads\/2021\/12\/image-21-1536x697.png",1536,697,true],"2048x2048":["https:\/\/pelion.co\/wp-content\/uploads\/2021\/12\/image-21.png",1986,901,false],"portfolio-thumb_large":["https:\/\/pelion.co\/wp-content\/uploads\/2021\/12\/image-21-900x604.png",900,604,true],"portfolio-thumb":["https:\/\/pelion.co\/wp-content\/uploads\/2021\/12\/image-21-600x403.png",600,403,true],"portfolio-thumb_small":["https:\/\/pelion.co\/wp-content\/uploads\/2021\/12\/image-21-400x269.png",400,269,true],"portfolio-widget":["https:\/\/pelion.co\/wp-content\/uploads\/2021\/12\/image-21-100x100.png",100,100,true],"nectar_small_square":["https:\/\/pelion.co\/wp-content\/uploads\/2021\/12\/image-21-140x140.png",140,140,true],"wide":["https:\/\/pelion.co\/wp-content\/uploads\/2021\/12\/image-21-1000x500.png",1000,500,true],"wide_small":["https:\/\/pelion.co\/wp-content\/uploads\/2021\/12\/image-21-670x335.png",670,335,true],"regular":["https:\/\/pelion.co\/wp-content\/uploads\/2021\/12\/image-21-500x500.png",500,500,true],"regular_small":["https:\/\/pelion.co\/wp-content\/uploads\/2021\/12\/image-21-350x350.png",350,350,true],"tall":["https:\/\/pelion.co\/wp-content\/uploads\/2021\/12\/image-21-500x901.png",500,901,true],"wide_tall":["https:\/\/pelion.co\/wp-content\/uploads\/2021\/12\/image-21-1000x901.png",1000,901,true],"wide_photography":["https:\/\/pelion.co\/wp-content\/uploads\/2021\/12\/image-21-900x600.png",900,600,true],"large_featured":["https:\/\/pelion.co\/wp-content\/uploads\/2021\/12\/image-21-1870x770.png",1870,770,true],"medium_featured":["https:\/\/pelion.co\/wp-content\/uploads\/2021\/12\/image-21-800x800.png",800,800,true]},"uagb_author_info":{"display_name":"Pelion","author_link":"https:\/\/pelion.co\/?author=1"},"uagb_comment_info":31,"uagb_excerpt":"Competition for industrial assets today is fiercer than ever. Evolving retail strategies and the increasing adoption of e-commerce in virtually every sector are forcing investors to think harder about how...","yoast_head":"\nHow Pure Industrial is Winning Logistics Real Estate - Pelion<\/title>\n<meta name=\"description\" content=\"We analyze Pure Industrial portfolio to identify the factors that led to its growth into one of Canada's largest industrial landlord\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"http:\/\/pelion.co\/how-pure-industrial-is-winning-logistics-real-estate\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How Pure Industrial is Winning Logistics Real Estate - Pelion\" \/>\n<meta property=\"og:description\" content=\"We analyze Pure Industrial portfolio to identify the factors that led to its growth into one of Canada's largest industrial landlord\" \/>\n<meta property=\"og:url\" content=\"http:\/\/pelion.co\/how-pure-industrial-is-winning-logistics-real-estate\" \/>\n<meta property=\"og:site_name\" content=\"Pelion\" \/>\n<meta property=\"article:published_time\" content=\"2021-12-14T01:25:48+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2021-12-14T09:00:26+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/pelion.co\/wp-content\/uploads\/2021\/12\/image-21.png\" \/>\n\t<meta property=\"og:image:width\" content=\"1986\" \/>\n\t<meta property=\"og:image:height\" content=\"901\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\">\n\t<meta name=\"twitter:data1\" content=\"Pelion\">\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\">\n\t<meta name=\"twitter:data2\" content=\"3 minutes\">\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebSite\",\"@id\":\"https:\/\/pelion.co\/#website\",\"url\":\"https:\/\/pelion.co\/\",\"name\":\"Pelion\",\"description\":\"CRE Competitive Intelligence\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":\"https:\/\/pelion.co\/?s={search_term_string}\",\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"ImageObject\",\"@id\":\"http:\/\/pelion.co\/how-pure-industrial-is-winning-logistics-real-estate#primaryimage\",\"inLanguage\":\"en-US\",\"url\":\"https:\/\/pelion.co\/wp-content\/uploads\/2021\/12\/image-21.png\",\"width\":1986,\"height\":901},{\"@type\":\"WebPage\",\"@id\":\"http:\/\/pelion.co\/how-pure-industrial-is-winning-logistics-real-estate#webpage\",\"url\":\"http:\/\/pelion.co\/how-pure-industrial-is-winning-logistics-real-estate\",\"name\":\"How Pure Industrial is Winning Logistics Real Estate - 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