- What KingSett is selling two warehouse assets it bought in 2022
- Why The properties were acquired as part of a 21-asset portfolio deal
- What next Market pros expect the properties to trade below their value two years ago
KingSett Capital is selling two mid-bay industrial buildings in the Greater Toronto Area that it purchased just two years ago, Green Street News can reveal.
Market pros estimate the Toronto-based investment shop will fetch around $39m, or $227/sq ft, for the properties, which total 171,000 sq ft. RBC Capital Markets’ real estate group and the real estate arm of Scotiabank Global Markets are co-representing KingSett on the deal.
KingSett bought the properties, at 5300 Tomken Road in Mississauga and 346 Orenda Road in Brampton, as part of a $461m purchase of 21 industrial buildings from Sagitta Development and Management, a now-defunct real estate division of Park Property Management. The $253/sq ft portfolio valuation translated to a purchase price of $43.2m for the two offered assets.
Some GTA market watchers doubt that KingSett will be able to exceed that price today. Even with interest rates edging lower, pros point to an inability to drive higher rents and a cooler market as weighing on demand.
“Market conditions are weaker now [than 2022], rents have adjusted down slightly. Expectations for growth aren’t there,” a market analyst with a major commercial brokerage told Green Street News.
The property at 5300 Tomken totals 86,000 sq ft of warehouse and distribution space. It has clear heights of 24 feet and 12 doors: 11 at truck-level and one with drive through access. Envelope manufacturer SupremeX occupies the entire property under an agreement with a weighted average lease term of 4.9 years and contractual rent bumps.
Meanwhile, 346 Orenda is an 85,000 sq ft warehouse and manufacturing facility. It has clear heights of 14 to 19 feet and has three drive-in doors plus another six at truck level. The building’s lone tenant is Dasco Storage Solutions, which manufactures weapons lockers for military and law enforcement clients.
That lease has a weighted average remaining term of 2.9 years. With rents at about 22% below market rates, the property offers a buyer value-added potential.
