A building in Red Deer's Burnt Lake Industrial Park that was once home to NTL Pipelines Inc. is going up for auction next month. Industrial and commercial real estate has been strong in Red Deer, and this auction could indicate how strong.
Photo by PAUL COWLEY/Advocate staff

Pipeline company building auction could show strength of Red Deer industrial market

Many closely watching upcoming auction of NTL Pipelines Inc.’s Red Deer property

The upcoming auction of a Red Deer County pipeline company’s former home will be watched closely, predicts a Red Deer commercial realtor.

NTL Pipelines Inc. shut down operations last month, and Ritchie Bros. Auctioneers is selling off hundreds of pieces of equipment, as well as large buildings in Grande Prairie and in the Burnt Lake Industrial Park, west of Highway 2.

The equipment will be sold in Grande Prairie over four days next week and an online auction for the real estate is set for Dec. 8 in Edmonton.

Brett Salomons, a partner with Salomons Commercial, said the nine-year-old, 8,800-square-foot offices and 13,400-square-foot shop located on 5.2 acres of prime industrial land has caught the eyes of many potential bidders.

“There’s quite a bit of interest, even just to see where the thing sells. It’s going to be a good litmus test for the industrial market here.”

While the long energy industry downturn has seen a number of very visible businesses, such as BJ Services and the Finning Canada Centre of Excellence shutter their Red Deer operations, the commercial and industrial real estate sector is hot.

“There’s a perception out there among the general public that things are way worse than is the reality,” said Solomons. “The last five or six quarters, we’ve seen positive absorption.

“We’re under 10 per cent vacancy with industrial right now. Vacancy for industrial is our strongest performing sector.”

That is not to say the commercial and industrial sectors are not feeling the impact of the lingering downturn. Lease rates and sale prices are down, which on the positive side, means there are some deals to be had.

“Oilfield services, specifically, is definitely down. There’s no secret there. But there are other industries taking advantage of lower lease rates and everything else.”

NTL’s site is an example. Salomons predicts it will likely be sold for a little over $3 million, which considering the offices and shop were built for $5.5 million in 2011, would be a pretty good deal.

Building new would likely cost in the $6 million range.

While that is likely not the price the owner would want, it would be a reasonable return, considering the pandemic and economic downturn, said Salomons.

Salomons expects that lease rates will begin to rise again soon. Construction costs have been climbing sharply because of the spiking price of lumber, which is up 70 per cent his year.

That means more businesses are looking at leasing existing space.



pcowley@reddeeradvocate.com

Like us on Facebook and follow us on Twitter

Just Posted

A rodeo south of Bowden drew a huge crowd on May 1 and 2, 2021. (Photo courtesy Mom’s Diner’s Facebook page)
Organizers of central Alberta anti-lockdown rodeo plead not guilty

Ty and Gail Northcott charged under the Public Health Act

(Black Press file photo.)
Road closures at both ends of Red Deer next week

Red Deer motorists should expect delays with road closures in the north… Continue reading

(File photo by Advocate staff)
37-year-old from Red Deer dies in highway crash

An individual from Red Deer has died after a collision on Highway… Continue reading

Grade one teacher Heidi Dimou arranges the desks in line with physical distancing policy in her class in preparation for the new school year at the Willingdon Elementary School in Montreal, on Wednesday, August 26, 2020. THE CANADIAN PRESS/Paul Chiasson
Alberta students expected to return to in-person learning next week

Kids can anticipate a return to the classroom next week in Alberta.… Continue reading

This grizzly bear had been hanging out near Aurum Lodge and the Cline River area and was later killed by Fish and Wildlife, says an area resident. (Contributed photo)
Grizzly sniffing for human food west of Nordegg killed

Lodge owner reminds campers to keep all food away from wildlife

Red Deer musician Curtis Phagoo is glad the Alberta government is investing $2 million to help the province’s live music industry, but he would have liked the criteria to be expanded, so the money could be used as relief to cover revenue shortfalls. (Contributed photo by Cory Michaud)
Red Deer musicians welcome $2M in grants to help live music, but would have preferred relief program

The money is for future projects and can’t be used for retroactive expenses

(CPAC)
Trudeau says he knew about investigation into general overseeing vaccines weeks ago

OTTAWA — Prime Minister Justin Trudeau says he learned weeks ago that… Continue reading

Canadian and American flags fly near the Ambassador Bridge at the Canada-USA border crossing in Windsor, Ont. on Saturday, March 21, 2020. Canadian residents are allowed to head to the United States for a COVID-19 vaccine and avoid quarantine on return if they meet some straightforward conditions, the Public Health Agency of Canada confirms.THE CANADIAN PRESS/Rob Gurdebeke
Canadians can drive to U.S. for COVID-19 vax and avoid quarantine, Ottawa confirms

TORONTO — Canadian residents are allowed to head to the United States… Continue reading

Prime Minister Justin Trudeau holds a press conference in Ottawa on Tuesday, May 18, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Quebec can modify part of the Canadian Constitution unilaterally: Trudeau

MONTREAL — Prime Minister Justin Trudeau says Quebec can unilaterally modify part… Continue reading

In this Thursday, April 29, 2021, file photo, giant bucket-wheel excavators extract coal at the controversial Garzweiler surface coal mine near Jackerath, West Germany. Canadian environmentalists are welcoming a report from the International Energy Agency that says new fossil fuel investment must end if the world is to meet its climate goals. THE CANADIAN PRESS/AP -Martin Meissner
Canadian environmentalists happy with International Energy Agency report

Environmentalists say a report from the International Energy Agency that concludes investment… Continue reading

Prime Minister Justin Trudeau holds a press conference in Ottawa on Tuesday, May 18, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Ceasefire needed in Israeli-Palestinian conflict to avoid loss of more civilians: PM

OTTAWA — Prime Minister Justin Trudeau says Canada is calling for a… Continue reading

A forest fire burns late into the evening northeast of Prince Albert, Sask., on Monday, May 17, 2021. THE CANADIAN PRESS/Kayle Neis
Saskatchewan wildfire grows, forcing evacuations in the area to expand

PRINCE ALBERT, Sask. — Dry conditions and strong winds caused a large… Continue reading

A man makes his way past signage to a mass COVID-19 vaccination centre at the University of Toronto's Mississauga campus during the COVID-19 pandemic in Mississauga, Ont., on Monday, May 17, 2021.  THE CANADIAN PRESS/Nathan Denette
Tam hopeful for summer even as Canada hits grim death milestone in COVID-19 pandemic

OTTAWA — Chief Public Health Officer Dr. Theresa Tam says she expects… Continue reading

Sheffield United’s Daniel Jebbison celebrates after scoring his side’s opening goal during the English Premier League soccer match between Everton and Sheffield United at Goodison Park in Liverpool, England, Sunday, May 16, 2021. THE CANADIAN PRESS/AP-Alex Pantling/Pool via AP
Canadian teenager Daniel Jebbison turns heads with Premier League goal

Jebbison, 17, is the youngest player in Premier League history to score on his first start in England’s top tier

Most Read