Company: Farm Boy (TSE: EMP.A) is a Canadian food retailer that specializes in selling fresh produce and food products.
Challenge: A well-respected brand in Eastern Ontario, Farm Boy made the decision to expand into the Greater Toronto Area. The expansion would require a distribution center that could meet the following requirements:
- Proximity to the Ontario Food Terminal
- Flexible rent and square footage commitments to allow for growth
- A facility that aligned well with the prestige brand and image Farm Boy had worked hard to create
Response: LIDD began the assignment by completing an operational assessment of Farm Boy’s existing distribution centre in the Ottawa region. In tandem, LIDD’s Toronto based industrial real estate advisory team was introduced. A review of surrounding opportunities and competitors in the market place was completed, as well as an RFP to the Toronto West landlord community.
Solution: LIDD maximized leverage with the landlord community by running a competitive process. This created more than one viable opportunity for Farm Boy to consider.
Multiple rounds of negotiation were completed that resulted in Farm Boy securing a 92,000 SF facility. The facility was secured with significant rent abatement, flexibility for future growth and substantial landlord improvements.
Company: Global Plas Inc. is a tier two automotive manufacturer located in Southern Ontario. The organization supports many of Canada’s leading import automotive manufacturers through the production of interior and exterior plastic parts.
Challenge: Already occupying a 50,000 SF facility in Vaughan, Ontario, Global Plas had successfully been awarded a sizable multi-year contract that would require growth. Faced with few opportunities that lent themselves to a heavy manufacturing use, Global Plas engaged the services of LIDD Real Estate to evaluate consolidating their existing manufacturing plant into one larger building (150,000 SF+) or becoming a decentralized operation with the acquisition of a secondary manufacturing facility.
Response: LIDD Real Estate undertook a comprehensive evaluation of Global Plas’ needs and objectives over a ten-year time frame. On market and off market opportunities were uncovered that met the company’s physical infrastructure requirements.
Solution: LIDD Real Estate ran a competitive process with multiple landlords that included both consolidated and decentralized leasing arrangements. Ultimately, the decision was made to maintain lease term flexibility and thus, a decentralized approach was pursued.
A new manufacturing facility was secured in Vaughan, Ontario which allowed Global Plas to occupy 130,000 SF of manufacturing space. The facility was acquired with significant landlord improvements, as well as favourable tenant inducement.
Company: In August 2015, ReTrans Canada was acquired by Kuehne + Nagel (SWX: KNIN), one of the world’s largest logistics providers.
Challenge: Faced with an upcoming lease expiry at their Toronto distribution centre, ReTrans needed to make a strategic decision about whether they would extend the lease on their 86,000 SF building or consolidate into Kuehne + Nagel’s vast portfolio.
Response: LIDD Real Estate was engaged to begin a direct dialogue with ReTrans’ existing landlord and to evaluate other opportunities in the marketplace.
Part of this evaluation would require leasing terms that were flexible and well aligned with the mandate of a parent company that possesses over 1,000 locations.
Solution: LIDD ran a competitive process that considered various opportunities in the marketplace. Ultimately, a fact-based decision was made for ReTrans to remain at their existing 86,000 SF facility upon terms and conditions that were suitable for both ReTrans and their landlord.
Company: Shepherd Hardware Products LTD. (“Shepherd”) is a distributor of general duty and industrial casters, replacement wheels and floor protection products. The company is headquartered out of Three Oaks, Michigan, and has a global presence with distribution centres in Canada, Mexico, England, France, Australia, China and the United States.
Challenge: Faced with an upcoming lease expiry at their Markham facility, Shepherd wanted to evaluate how to better service their customers, while promoting long term growth and sustainability for the company.
Response: LIDD was hired to help develop a long-term network capacity plan that provided Shepherd with the necessary infrastructure to promote growth in North America and to most effectively reach their consumer market. Concurrently, LIDD’s real estate advisory team was engaged to begin a dialogue with Shepherd’s current landlord at their Markham facility to discuss their upcoming lease expiry.
Solution: LIDD’s integrated model was used to understand Shepherd’s operation on a deeper level and to help Shepherd make strategic decisions based on an exhaustive set of data gathered by LIDD’s supply chain engineers. A competitive negotiation strategy was created which aided in maximizing leverage with the current landlord. The end result was an extension of Shepherd’s 47,000 SF lease with basic rent below market ask, as well as a tenant improvement allowance to allow Shepherd to modernize the facility.
Company: The Supreme Cannabis Company (TSX:FIRE) provides premium cannabis products through operational excellence and product innovation. Their portfolio includes a wholly owned subsidiary branded as 7ACRES which is a cannabis growing operation that includes a 342,000 SF federally licensed facility in Kincardine, Ontario.
Challenge: On the cusp of cannabis legalization, Supreme was committed to growing their presence and product line throughout Canada. As apart of this growth, Supreme wanted to expand their operations and secure an additonal facility in the outlying GTA region that would be used for large scale warehousing, packaging, fulfillment, and light processing of cannabis related products.
Response: LIDD Toronto commenced a wide search for both on market and off market opportunities in the GTA and outlying GTA regions. Facilities that possess existing GMP buildout, as well as compliance with Health Canada were pursued aggressively in the search.
Concurrently, LIDD’s supply chain consulting team was introduced to ensure Supreme was selecting an optimal facility that would avoid operating penalties.
Solution: LIDD Real Estate created a competitive environment, maximizing Supreme’s ability to negotiate concessions with the landlord community.
After multiple rounds of negotiations, the result was Supreme securing tenancy at a 107,000 SF facility in Kitchener, Ontario. A significant amount of lease term flexibility and rent abatement was achieved in a facility that was already built out with clean rooms and lab space.
Company: CT Bakery Inc. is a private Canadian company headquartered in Toronto, Ontario. Specializing in manufacturing and distribution of frozen/ready-to-eat pastry products to Canada’s largest retailers and quick serve restaurants across North America.
Challenge: As the world plunged headfirst into a global pandemic, CT Bakery remained committed to growing their presence and brand throughout Canada. To facilitate this growth, CT Bakery wanted to expand their operations and secure an additional facility in the GTA West region that would be used for large scale warehousing, manufacturing, and distribution of ready-to-eat and frozen baked goods.
Response: LIDD Toronto commenced an extensive search for both off/on market opportunities in the neighboring GTA area (close to CT Bakeries headquarters). Facilities that possessed existing freezer/cooler infrastructure, floor drains, and food manufacturing equipment were pursued aggressively in the search.
Solution: After several buildings and aggressive negotiations, LIDD Real Estate found the perfect building (50,000 SF) for CT Bakery. While maximizing leverage with the landlord, CT Bakery also maintained negotiations with the previous tenant in the space to absorb their pre-existing temperature-controlled infrastructure and food-related manufacturing equipment. This allowed CT Bakery to seamlessly move into the space with little to no improvements, kick starting their operation.
A significant amount of rent abatement was achieved in a facility that was already built out with drains, food equipment and freezer/cooler space.
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