Industrial demand, annexation bid reveal explosive growth in Northern Alberta
DAVID HUSDAL
Western Investor
Norma Barber considers her job a bit of a chess game.
That's because Barber, a long-time commercial real estate broker and owner of CommVest Realty Ltd. and Quality Property Management in Grande Prairie, spends a lot of time trying to figure out how to move pieces.
Those pieces are the growing small and medium-sized businesses of the Grande Prairie industrial sector, which generally keep moving and aren't too fond of longer five- and 10-year leases.
Why? It's not because they aren't confident in their market, according to Barber.
On the contrary, they expect to grow.
It speaks volumes about the market and the mindset of the people who drive it.
"Everything changes so quick, and they grow so fast," Barber said, reflecting on how she can remember putting together deals for 1,800-square-foot bays for businesses that are now in 20,000- and 30,000-square-foot shops.
Grande Prairie caters to the oil and gas, forestry and agricultural sectors - arguably in that order - but it's also a growing hub for retail outlets. Its urban population tops more than 55,000, not to mention another 21,000 folks in the surrounding County of Grande Prairie. Here, the work ethic prevails.
The city is ranked fifth in Canada and first in Alberta for its number of successful small businesses by the Canadian Federation of Independent Business.
Industrial
Grande Prairie industrial lease rates typically range from $8 to $18 per square foot. Retail opportunities can start as low as $10 annually per square foot, and run to $30.
New industrial land can still be found for $250,000 an acre, if you don't mind a gravel access road, but pavement and immediate highway access may double that figure.
Industrial growth has been largely in the county, where there's more space for businesses, and it's been happening south, west and particularly north of the city.
Still, Barber said, city landlords who lose tenants to bigger spaces in new shops in the county can usually snag smaller startups quickly to backfill existing space.
Is there a preference, one way or the other, for where to locate when it comes to the city or county choice?
Barber's clients are aware of the boundary line and its potential tax implications. The county is generally considered a less-expensive location to operate, she said.
Annexation
That goes to one of the reasons the two municipalities haven't been able to come to full agreement on the terms of a 15,600-acre annexation request the city is filing with the provincial government.
Among issues the county still wants to see addressed: the tax treatment for any county properties swallowed up by the city.
The county has requested a longer-term assessment and tax-transition period for residents and businesses affected by the city's annexation application, one that covers a significant swath of land around the city.
"Being the second-largest annexation in Alberta's recent history makes this a special and unique application," said Leanne Beaupre, county reeve. "We need to ensure that the special conditions of this annexation effectively work for the affected landowners, considering the large amount of land and expected longer time period of the proposed annexation."
While the city and county don't see eye-to-eye perfectly on annexation, they certainly have experienced prosperity together - and 2013 seems to be no exception.
Permits surge
As of the end of June the city had recorded almost $188 million in new building permits, up about $57.6 million (44 per cent) from the first half of 2012. County permits were over $82 million for the same period.
The region has even embraced tourism more thoroughly in 2013, with a groundbreaking and construction start on the new Philip J. Currie Dinosaur Museum, located in the Town of Wembley, 20 kilometres west of Grande Prairie.
The project is backed with a $5 million loan from the county, which wants to see more tourism in its communities.
Plenty of jobs
A key issue for businesses in the Grande Prairie market remains finding staff, even with the community's relatively affordable housing costs.
Rent for a two-bedroom apartment in the city went up to $1,031 this April, according to CMHC, but that's still below Calgary and Edmonton's average rents. Vacancy, however, dipped under 1 per cent, which may push rents higher, sooner.
Noted Barber: "Everybody is going as fast as they can. It's all about the people. We can't get enough people."u
Grande Prairie, AB quick facts
- Population 55,000
- Average detached house price $300,000
- Rental vacancy rate 1 per cent
- Acre industrial land $250,000 - $500,000
From the Western Investor, August 2013
