CBRE Vancouver just closed its largest industrial deal to date.

Financial terms of the deal were not disclosed, but the 22-acre site in Delta, BC, had 14 offers—unsurprising considering Metro Vancouver’s industrial vacancy rate is 0.6%, and because the Lower Mainland is landlocked, there’s a scarcity of new supply.

In fact, according to CBRE Vancouver, there are no new proposed projects that will bring supply to market in the short term. The COVID-19 pandemic has accelerated demand for properties that can accommodate third-party logistics, distribution and food warehousing capabilities, but with a dearth of facilities larger than 100,000 square feet, demand is at an all-time high.

Steve Brooke, Senior Vice President at CBRE, says the 14 bids totalled over a billion dollars, and added that competition is especially stiff with pension funds and REITs in the mix.

“Metro Vancouver remains an incredibly challenging market to navigate when you have owner/occupiers, developers and investors all competing for the same space,” he said. “We’re seeing purchasers become much more aggressive with the terms they propose from unconditional offers to larger security deposits. We’re definitely experiencing more purchasers perform added due diligence up front to remain more competitive by making unconditional offers. What was perhaps most interesting is that this is happening despite the magnitude of these transactions.”

Brooke, who brokered the deal with Joel Barnett, also a CBRE Senior Vice President, noted that the Delco site is being repurposed into a large format industrial development that should create local jobs.

Vancouver’s industrial market is red-hot as lease rates and sales values change by the week, which Brooke anticipates will continue for the foreseeable future. Since Q1-2020, lease rates have grown by 20% across Metro Vancouver, with vacancy falling to an historic low of 0.6%, and 0.3% in Delta.

Read: Frustrated Investors Set Sights on Vancouver's White Hot Industrial Sector

“While we have a record high of 9.4 million square feet of industrial space currently under construction, nearly 80% of that is already spoken for, which continues to present challenges to local occupiers,” Brooke said. “We can expect continued vacancy rate compression as occupiers look 18-24 months from occupancy to secure a home for their business and lease rate escalations of nearly 10% can be expected for the upcoming calendar year.”