Managing Property Risk in the Industrial Sector – Verified Electronic Security

Property related crime in the commercial/industrial sector is on the rise. This trend is correlated to a number of factors including, a recessionary economic climate, obsolete/inadequate security measures, non-police response to conventional alarms, the price of scrap steel, copper, other metals, and other regional specific factors. As a result, businesses with, or without, a history of security related events are increasingly becoming targets and experiencing losses. Professional thieves take advantage of delayed Police responses, and employ tactics to defeat conventional security methods – ultimately, increasing the probability of catastrophic loss for businesses in an unavoidable risk category.

Businesses victimized by these types of crimes need to be aware of a new piece of legislation which could soon impact the City of Calgary – Verified Response (VR) Policy. To date, over one hundred and twenty municipalities in Canada (including Vancouver and Winnipeg) and the United States have implemented VR policies to existing law enforcement services.  This policy removes these services from responding to unverified alarm calls, thus ensuring officers are only responding to real break-ins. The rationale supporting this legislation is simple – false alarms are a huge problem for Police services as 98% of all conventional based alarm activations are false. Police Services do not have the resources to handle this volume and mitigate the problem by citing culprits with a minimum $75 fine per violation.

Conventional based alarm systems (motion and glass break sensors) and their 98% false rate have become such a burden that Law Enforcement Services are forced to give these calls the lowest possible priority. Only alarm calls which have been verified as a real break-in will receive a priority Police dispatch. Business owners may use a guard service, or send an employee to the premises to verify conventional based alarm activations. However, the additional time required for a person to get on site, and the resulting delayed Police response, essentially makes an immediate response impossible. The 30-60 minutes (at least) it could take for a person to get on premise to verify a real event from a false one, could also translate to catastrophic loss for a business. Sending an employee on premise to verify an alarm activation also exposes an individual to a potentially harmful environment from an Occupational Health and Safety perspective.

Regardless of any legislation, all businesses need an immediate Police Response in the event of a real break-in or security situation – they simply cannot afford a delayed response from the Police. Verified Electronic Security technologies give these businesses the best possible response from Law Enforcement because of their ability to remotely determine whether a real break-in has taken place, in real time, without sending people into a potentially harmful environment.

Sonitrol Verified Electronic Security is the leader in the Verified category of the Security Industry. Sonitrol employs state of the art Audio Intrusion Technology and Remotely Monitored Video Surveillance to ensure that you receive a prompt Police response. Sonitrol’s average response rate, from the time an intrusion has been detected to the time it takes for Law Enforcement to reach your front door, is 3.5 minutes. Sonitrol also leads the entire security industry in terms of police captures – nabbing over 170,000 crooks red handed since 1977.

If you are looking for more information surrounding the implications of Verified Response (VR) Legislation in Calgary, want to watch or listen to real Police captures, or want more information about Sonitrol Verified Electronic Security, please check out www.sonitrol-canada.com.

Article Printed with Permission from Sonitrol Verified Electronic Security.  Check out some of the captures on video including a response that led to the arrest of various individuals who were targetting Calgary tire distribution warehouses.

We knew that Calgary Industrial Real Estate had experienced a good year but much to our surprise the Calgary Industrial market has performed at or close to the top of all its peers in North America.  A recent article by Cushman & Wakefield in the Calgary Herald indicated that vacancy had dropped below 5.0 percent to finish the 2011 year at 4.7%. 

Much of the activity and absorption that occurred in the market continued to be driven by the manufacturing sector and particularly those manufacturers supplying equipment and materials to the oil & gas industry.  A recent article in the Vancouver Sun reported on a recent report by the Brookings Institution that Calgary was ranked the top Canadian manufacturing city (51st overall in world metropolitan economies) with gross domestic product per capita of $54,080 U.S..  Edmonton was second among Canadian cities with GDP per capita of $43,934 U.S.  Clearly an indicator that oil & gas manufacturing and refining drove both economies.

Locally there were indicators that the oil & gas industry continued to drive the economy.  A speculation on our part (see previous article) that Surefire Industries had purchased the former Enerflex facility at 4700 47th Street SE turned out to be true.  They paid $38,000,000 for the 328,000 square foot facility or $115.85 per square foot.   Surefire Industries and their related companies have experienced phenomenal growth and now occupies in excess of 410,000 square feet of high end fabrication shops in the Calgary marketplace.

Other active companies were Enerflow Industries with their acquisition of 6016 90th Avenue SE and Sanjel with their rumoured purchases of buildings at the former Monarch Siding facility at 4390 106th Avenue SE which is currently listed by Colliers  and the final piece of the entire city block that Sanjel now owns at 4326 110th Avenue SE.  

Recently had opportunity to tour the former National Oilwell Facility at 1616 Meridian Road NE which is presently occupied by Surefire Industries.  Our counterparts at CB Richard Ellis have the property listed for sublease and we recently had several fabrication companies look at the property. I haven’t’ seen a brochure yet from CBRE so I have attached our base building report for the building.   The new portion of the building is exceptional for any metal fabrication users.  Particularly those that require 10 and 20 ton crane capacities.   The two draw backs for a number of the compressor manufacturers that we have shown the building to is the lack of large (20 to 24′ wide) doors and the heavy and high load corridor capabilities to and from the building.  The older building is somewhat cut up but appears to provide reasonable ancillary services to the main assembly shop like heavy welding fabrication, a paint booth and parts storage.   Surefire appears to be having a huge amount of success as they are rumored to be buying a 300,000 square foot facility in the Foothills Industrial Park.  The logical building is the the former Enerflex facility at 4700 47th Street SE which has been listed for at least a year now by our friends at Colliers.  The information has been very scarce on this one as well so again not having seen a brochure from Colliers I have attached our base building profile.

I  may be mistaken but I believe this will be Surefire’s third major expansion in 5 years. I haven’t represented them in any of their relocations so don’t know their business intimately but understand that they manufacture oilfield related service equipment including nitrogen pumpers, coiled tubing units, frac equipment, cementers and pumpers.

This relocation has created a flurry of interest in the 1616  Meridian Road NE building from various metal fabrication related industries.  We have had several compressor fabrication companies through the building and have introduced it to numerous drilling rig manufacturing companies, skid manufacturers and others.  I am told by the listing agent that it is still available at this time but there are several offers that have either been submitted or are threatening to be submitted.

If you would like more information on this building and other fabrication related opportunities please feel free to contact us by email or call me directly at 403-680-1767.

Have been going through a bit of a dilema recently on a building we are involved in as it relates to changing the internal warehouse lighting system.  Our current tenant will be leaving us in the fall and we are currently marketing the property for lease or sale.  Unfortunatetly the lease that we inherited when we bought the building had a tenant that was less than motivated to maintain the building and a lease that had very little in the way of teeth to enforce a requirement.  What we are being left with is a building that has less than 20 foot candles of lighting at eye level.   As a leasing guy we always want bright.  But how bright? Over the years I have seen many buildings change dramatically when new lighting is intalled.  I know we have to do something but wasn’t sure where to start.  So I started to do some research.  I came across this article which started to help understand the required lighting levels in a warehouse area.  I started to see foot candles and lumens being mentioned and needed to understand the difference as most users talk about foot candles while the federal occupational health guidline references lumens or lx.  Attached is the link to Section 6.5 of the Canada Occupation Health and Safety Regulations (SOR/86-304) along with the relevant Schedule that outlines minimum required lighting levels.  Here is the unit conversion calculator.       According to what I see in the regulations for a standard warehouse use we need between 150 lumens (13.935456 foot candles) for applications not requiring alot of reading labels or detailed work to 500 lumens (46.45152 foot candles) in applications that require reading of fine print labels and other similar uses.  Then we started to enquire about what product to use.  Historically the standard was metal halide and before that it was sodium vapor and before that flourescent.  Today it is a version of flourescent which is called “T5″ or “T8″.  Here is a good article that summarizes the difference between metal halide and T5.  On the horizon is LED.  Where do we start?

So far here is where I am at on the process that we are taking to review this question.

1. Understand the application.  How many foot candles or lumens do you want?  Brighter is always better.
2. Determine your budget.
3. Determine how important long term energy savings are.
4. Get two or three quotes from reputable electrical contractors on refixturing your facility.  Make sure you specify which two or 3 options you want priced, (T5, Metal Halide and T8) and to what lumens or foot candles at what level (eye level or work bench level).

I will keep you posted on our outcome.  Please email me if you have any questions or comments or need the name of a few good electricians that service the Calgary industrial real estate market.

I had the opportunity to tour a unique facility occupied by Caltrax Inc.this past week and was duly impressed what the company has done with the 125,000 square foot facility located on 13 acres of rail serviced land.  They can house 150 railcars on the site and it is currently used for refurbishing rail cars for various bulk product transportation companies.

Caltrax is taking advantage of the massive sand blasting and paint booth that can accommodate rail car sized items to expand their business to include painting and sandblasting work for other fabrication related companies in the Calgary Industrial area.

With the City of Calgary Bylaw enforcement inspectors out in full force along with the buidling code inspectors enforcing Alberta Safety Council guidelines  to ensure all the users doing painting and sandblasting live by the new design and safety guidelines, many companies who did their painting and blasting in house are finding it too expensive to adhere to the current regulations and are being forced to seek alternative painting  contractors. 

Enter Caltrax… with a 160′ long by 20′ wide by 18′ high fully approved paint booth and a 90′ long by 11′ wide by 18′ high fully automated sand blasting booth.   They have just started getting the word out to the fabrication community and as a result of the influx of work they may bring on another shift to accommodate the extra work.  The attached pictures show some of the work they have completed to date.

Feel free to contact us for further information on Caltrax and their services by emailing here.

Came across a great article on a clients web site recently.  It is an article about the cost of a pallet position.  It was written by the President of Cam Industrial Supply, Parker Foord.  As costs for warehousing are based on a price per square foot per year our clients often get caught up in the cost per square foot and don’t always take into consideration the cost per cubic foot.  This is particularly important to our third party logistics, distribution and warehousing clients.  We have developed a financial analysis tool that looks at the cost both on a per square foot basis and on a cubic foot basis.  Please contact us for an anlysis of your cost per cubic foot of warehouse space.

Colliers International Historical Vacancy Graph

Now that most of the reports are out from the major brokerage companies we wanted to summarize where the rates appear to be heading. From all indications both from an activity standpoint and a statistical point we are seeing declines in Calgary Industrial vacancy rates.  Where did we start the year?   During January 2011 many of the larger firms were reporting vacancy rates for year end 2010 in the 5.5 to 6% range.   With a shimmer of business confidence we started to see some dropping of these rates at the end of the first quarter of 2011 into the low 5% range (Colliers reporting its 1st Quarter Numbers showed Industrial Inventory of 122, 546, 375 square feet with a 5.23% vacancy rate.   Now here we are approaching the end of the 2nd quarter of 2011 we are seeing the business confidence continue, most likely due to a strengthing of commodity prices and announcements of major spending programs by major oil and gas producers.  As a result there are reports of vacanies approaching 3.6% (CBRE reporting its 2nd quarter review).  After some extensive reworking of our inventory database we at Advent Commercial are now in a position to report vacancy.  As of May 30th, 2011 we are reporting preliminary numbers of 4.10% vacant on 119,622,844 square feet of inventory.  Please contact me directly for a copy of our review.

In a recent Calgary Herald article there was an announcement that WAM Development Group is kicking off their next building in the Stoney Industrial Park.  Building number 4 is to be 436,000 square feet in size.  There are also plans for an additional 2 buildings on the site which could add up to an additional 750,000 square feet.

Another good article posted on monstercommercial.com regarding commercial mortgages.  In todays uncertain banking environment, seeking financing for your commercial real estate purchase can be a daunting task.  The attached article seems to clarify some of the perceivd challenges.  The article is written by an Ontario firm Domus Financial who we understand are very capable people.  If you would like to contact a similar company who has western Canada experience please contact us by clicking here.

Development begets more development as the saying goes.  Only a few years ago users considering the Balzac and East Balzac areas were considered ”trail blazers”.  Now they are being hailed as “visionaries”.  The area just north of Stoney Trail on the north edge of the City of Calgary limits is now becoming a popular location for both retailers and industrial users in the Calgary Industrial market.  The Cross Iron Mills mall has popularized the area with the general public and industrial users such as Wal-mart who built a 400,000 square foot freezer/cooler building in Wagon Wheel Industrial Park have put the area on the map for users of industrial space in Calgary.  Now there are rumours of another major retailer buying 160 acres of High Plains Industrial Park which is being developed by Highfield Stock Farm and CLT Contracting with the intention of developing a major warehouse and distribution centre to service its store expansion in western Canada.  Click here to contact us for a copy of the area structure plan and marketing information on High Plains Industrial Park.

There are various other opportunities in the area including land that was originally owned by United Horsemen as part of a grand plan to bring horse racing to the area which is now controlled by various entities including United Farmers and Ivanhoe Cambridge.  We are currently working with United Farmers of Alberta in marketing a 22.67 acre parcel which is zoned for a wide range of commercial and industrial uses.  A number of other developers have land ready for industrial development including Hopewell Development Corporation, Centron Construction, Bentall Kennedy and Prism Developments amongst others.  You can click here to contact us for a detailed report of the land options in the area.