The document discusses increasing ceiling heights in industrial warehouses in the Lower Mainland region over time. It summarizes that average new warehouse ceiling heights have increased from 20 feet in the 1970s-80s to 24-32 feet currently, depending on building size. Higher ceilings allow more efficient storage by increasing usable cubic capacity. While development costs rise slightly with increased heights, the benefits to tenants and landlords can outweigh the costs. The trend of higher ceiling heights is expected to continue.

1. Accelerating success.
Maximizing industrial warehouse space
Cubic Efficiency

2. 15
20
25
30
1970s 1980s 1990s 2000s 2010s
Feet
SPARK | CUBIC EFFICIENCY
Cubic Efficiency
As companies are increasingly opting to
open distribution centres in competing cities
such as Calgary, Metro Vancouver policy-
makers are investigating ways to promote
industry in the region including brownfield
redevelopment, intensifying land usage, and
parcel assembly.
Developing warehouses with higher ceiling
heights is another proposed solution.
Generally considered to be more efficient,
higher ceiling heights offer more vertical
space for pallet storage, generating more
revenue over a fixed amount of floor
space. It is often worthwhile for a tenant
to compensate a landlord for the excess
construction costs associated with higher
ceilings instead of leasing more floor space.
Average New Industrial Building Clearance Heights
NAIOP Clearance Height Definition: Distance from the floor to the lowest hanging ceiling member or hanging objects, beams, joists or
truss work descending down into a substantial portion of the industrial work area.
The typical newly-built distribution centre
in the Lower Mainland is significantly taller
today than it was a decade ago. In the 1970s
and 1980s, new industrial developments
in the region had an average clearance
height of 20 feet. As the Lower Mainland’s
population increased and densified and as
industrial lease rates increased, tenants
shifted their preferences to higher ceiling
heights in order to take advantage of the
associated increases in efficiency.
Since 2010, the most common newly-built
building clearance heights in the Lower
Mainland have been 24 feet for small units
ranging from 2,000 to 10,000 square feet,
26 feet for mid-sized units ranging from
10,000 to 20,000 square feet, and 30 or 32
feet for buildings or units larger than 20,000
square feet.
What is cubic efficiency? In this report, we define it as maximizing
both floor space and height usage in a warehouse or distribution
centre. Maximizing available space and intensifying the use
of industrial land is becoming increasingly important in land-
starved regions such as the Lower Mainland. Ceiling heights have
continuously increased in the region overthe past several decades,
but will they go higher? We will attempt to predict the trajectory
of this trend by examining the opportunities and costs associated
with developing and operating in warehouses with higher ceilings.

3. collierscanada.com/research
Clearance height is the most
important measure of the interior
height of an industrial building
because it defines the minimum
height of usable space within the
structure.
Colliers spoke with two experts in the construction
and racking industries to gather further insight into
the opportunities and costs associated with building
higher. According to Alan Petrie of Redi-Rack, the
typical height from the floor of a pallet to the floor
of the next pallet in a rack is five feet, allowing for
a 48-inch load, six inches of room for lifting, and a
six-inch-thick beam.
This corresponds to five stacked pallet loads in a
26-foot-clear building, and six stacks in a 30-foot-
clear building. Similarly, moving up from a 30-foot-
clear building to a 36-foot-clear building will allow
another additional pallet load to be stacked.
Opportunities for
Increased Efficiency
2,500 LBS.
MAX
2,500 LBS.
MAX
2,500 LBS.
MAX
2,500 LBS.
MAX
2,500 LBS.
MAX
2,500 LBS.
MAX
5’
5’
5’
5’
3’
12” TYP
TYP. 30” - 42”
TRUSS
25’ CLEAR
HEIGHT
MIN. 36” CLEAR FROM TOP OF PALLET TO SPRINKLER
SPRINKLER TYP.
12” BELOW CEILING
2,500 LBS.
MAX
2,500 LBS.
MAX
2,500 LBS.
MAX
2,500 LBS.
MAX
Gains to Cubic Capacity
Clear Height
Increase
Net Change in #
of Pallet Loads
Cubic Storage
Increase
26’ - 30’ +1 20%
30’ - 36’ +1 17%
Typical Racking for 25’ Clearance
The additional vertical space created by building
higher translates to gains in operational efficiency.
An increase in ceiling height of four feet, from a
26-foot-clear to a 30-foot-clear, translates to a 20
percent increase in cubic storage space.
In the same manner, an increase in ceiling height
of six feet, from a 30-foot-clear to a 36-foot-
clear, results in a 17 percent increase to total cubic
storage space.

4. SPARK | CUBIC EFFICIENCY
THE COST TO LEASE
Using an example of a current 33,000-square-foot, 30-foot-clear, build-to-suit opportunity in the Lower
Mainland, we calculated the cost effectiveness of leasing a 30-foot-clear building instead of a 26-foot-
clear building. Although the analysis below is based on certain leasing assumptions and final results may
vary by property, it illustrates the savings that could be achieved by switching to higher ceiling heights.
The Tenant
Advantage
Cost Savings - Pallet Storage
Clear Height
(Feet)
Max # of
pallets based
on 33,000 SF
Annual NNN
Rent
NNN Rent per
pallet
Cost savings
per pallet per
annum
% cost savings
per pallet
26 1,265 $247,500 $195.65 - -
30 1,518 $264,000 $173.91 $21.74 11.1%
DECREASED FLOOR AREA
Operations achieving steady growth may take advantage of high ceiling heights to decrease their total
square footage of leaseable floor area. With higher clearances, the total floor area required to stack the
same number of pallets decreases, translating to lower annual rents for tenants.
INCREASED INVENTORY
By building higher, a greater number of pallet loads can be stacked within a fixed amount of floor space.
For businesses that are expanding and require additional space for inventory, higher ceiling clearances
enable tenants to generate more revenue while achieving cost savings on a per-pallet basis.
Cost Savings - Annual NNN Rent
# of Pallets
Required by
Business
Clear Height
Options (Feet)
Total floor area
required (SF)
% decrease in
floor area to
achieve desired
pallets
Annual NNN
Rent
Total cost
savings per
annum
1,518 26 39,600 - $297,000 -
30 33,000 16.7% $264,000 $33,000
Assumptions:
$8.00 psf/year 30’ clear building and $7.50 psf/year comparable 26’ clear building
Assumptions:
$8.00 psf/year 30’ clear building and $7.50 psf/year comparable 26’ clear building
1,518 maximum pallet load for 33,000-square-foot, 30’ clear building and 1,265 for comparable 26’clear building

5. collierscanada.com/research
THE COST TO DEVELOP
The costs of developing buildings with higher ceilings
include, in addition to the higher tilt-up panels, heavy-flow
Early Suppression Fast Response (ESFR) sprinkler heads,
increased floor thickness, and increased column spacing to
allow for larger lift trucks. According to Joshua Gaglardi of
Integrated Construction, increasing the clearance height of a
building from 26 feet to 30 feet will add an extra $60 per
linear foot of wall. Increasing heights from 30 feet to 36 feet
will add an additional $96 per linear foot.
The current concrete floor slab thickness standard of six
inches is enough to support the added weight from extra
storage resulting from an increase from 26 feet to 30 feet
clear. However, fully racking the increase from 30 feet to 36
feet will require an extra two inches of slab thickness and
a decrease in spacing in the rebar grid. The resulting cost
increase is approximately $1 per square foot.
Using the 12920 Mitchell Road example, we calculated the
extra cost of building to 36-foot-clear to be an extra $3 per
square foot.
The Landlord
Opportunity
Marginal Cost to Build
26’ to 30’ 30’ to 36’
Wall construction (per linear foot) $60 $96
33,000 SF building (per square foot) $1.30 $2.00
Floor thickness (per square foot) $0.00 $1.00
Total marginal cost: $1.30 $3.00
With typical warehouse construction costs of approximately
$90 per square foot, servicing the growing demand for higher
clearances requires only a three percent increase in costs for
developers.
As distribution centres with higher ceilings require smaller pieces
of land to achieve the same cubic storage capacity, industrial land
developers have the potential to benefit from lower land acquisition
and construction costs when initiating speculative development
projects. With industrial land supply dwindling, higher clearances
present an attractive means of leveraging existing sites in a cost-
effective manner.
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RAMP ON
57'-8" 57'-8" 57'-8"
57'-0" 57'-0" 57'-0"
8"
8"
41'-33/16"
12920 Mitchell Road, Richmond

6. SPARK | CUBIC EFFICIENCY
Average New Industrial Building Clearance Height Forecast
NAIOP Clearance Height Definition: Distance from the floor to the lowest hanging ceiling member or hanging objects, beams, joists
or truss work descending down into a substantial portion of the industrial work area.
WILL THE MARKET SUPPORT FURTHER INCREASES IN CEILING HEIGHTS?
Higher ceiling clearances provide an attractive solution to tenants whose operations are in various
phases of growth. The additional pallet storage created by more vertical space allows expanding
tenants to increase their inventory and generate additional revenue, while established tenants can take
advantage of building higher to decrease the total leaseable floor area of their facilities and save on
annual rental payments.
Tenants are not the only ones to benefit from this growing trend. As landlords are looking to stay ahead
of the market and retain high-quality, long-term tenancies, they are continuing to scrutinize building
features such as optimal clearance heights. We expect that as the gap in achievable lease rates for low-
ceiling versus high-ceiling facilities increases, eventually landlords will deem their low-ceiling facilities
to be functionally obsolete, and the cost of a retrofit or redevelopment will become a necessary expense.
However, the increased costs of servicing this demand are minimal, representing approximately three
percent in our estimation.
So, which height will draw the most user interest? Our discussion indicates that 30- to 32-foot-clear,
depending on standard racking dimensions, is currently optimal for the Lower Mainland distribution
centre tenant. With a scarcity of land for development across the region, maximizing available industrial
space by building higher on smaller parcels of land is becoming an increasingly necessary, financially
viable alternative for developers.
1970s 1980s 1990s 2000s 2010s 2020s
35
30
25
20
15
Feet

7. collierscanada.com/research
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BOUNDARY BAY
AIRPORT
LANGLEY
AIRPORT
PITT MEADOWS
AIRPORT
Albion Ferry
Burquitlam
Port Moody Centre
Lincoln
Lafarge Lake - Douglas
Coquitlam Central
Burquitlam
Port Moody Centre Inlet CentreInlet Centre
Lincoln
Coquitlam Central
Lafarge Lake - Douglas
Port Moody Centre
Pitt
Meadows
Maple
Meadows
Port
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Coquitlam
Central
Port
Coquitlam
Port Moody Centre
Pitt
Meadows
Maple
Meadows
Port
Haney
Coquitlam
Central
Port
Coquitlam
Commercial
RupertRenfrew
Gilmore
Brentwood
Town Centre
Holdom
Sperling/
Burnaby Lake
Lake City Way
Production Way/
University
Braid
Sapperton
Lougheed
Town Centre
Commercial
RupertRenfrew
Gilmore
Brentwood
Town Centre
Holdom
Sperling/
Burnaby Lake
Lake City Way
Production Way/
University
Braid
Sapperton
Lougheed
Town Centre
Nanaimo
29th Ave
Joyce
Patterson
Metrotown
Royal
Oak
Edmonds
22nd St
New
Westminster
Columbia
Scott Rd
Gateway
Surrey
Central
King George
Nanaimo
29th Ave
Joyce
Patterson
Metrotown
Royal
Oak
Edmonds
22nd St
New
Westminster
Columbia
Scott Rd
Gateway
Surrey
Central
King George
Delta
Surrey
Port Moody
Burnaby
North
Vancouver
White Rock
LangleyLangley
Port Coquitlam
Coquitlam
Pitt
Meadows
Maple
Ridge
Hammond Rd
Fraser Wy
Peardonvi
RossRd296thSt
48th Ave
WilsonSt
HaywardSt
Duke
Rd
280thSt
80th Ave
McTavish Rd
SatchellSt
Townshipline Rd
Downes Rd
BradnerRd288thSt
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0 Ave Boundary Rd
272ndSt
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232ndSt
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River Rd
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Glover Rd
Logan Ave
HWY 10
BYPASS
48th Ave
Old Yale Rd
40th Ave
Douglas Cr
208thSt
53rd Ave
203rdSt
Grade Cr
200thSt
208thSt
216thSt
32nd Ave
240thSt
24th Ave 24th Ave
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8th Ave
Buena Vista Ave
152ndSt
24th Ave
20th Ave
28th Ave
32nd Ave
184thSt
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20th Ave
Colebrook Rd
PacificHighway
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Harvie
Rd
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S Fraser Perimeter Rd
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BroadwaySt
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Panorama Dr
JohnsonSt
Landsd
owneDr
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Mary Hill Bypass
PittRiverRd
Dewdney Trunk Rd
HarrisRd
Richardson Rd
McNeil Rd
EastRd
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Ioco Rd
April
Rd
Heri
tageM
ountainBlvd
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Como Lake Ave
MarinerWy
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Austin Ave
Marine Dr
North Bluff Rd
128thSt
20th Ave
124thSt
Bayview
St
24th Ave
28th Ave
140thSt
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centR
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40th Ave
Colebrook Rd
56th Ave
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58th Ave
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ScottRd120thSt
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Kitson Pkwy
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AnnacisHighway
88th Ave
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132ndSt
100th Ave
Scott
Rd
100th Ave
104th Ave
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Grosvenor Rd
116th Ave
Hartley Ave
MtSeymo
ur Rd
DeepCoveRd
Mt Seymour Pkwy
Eton St
Parker St Curtis St
Gagl
ardi Wy
GeraldAve
SperlingSt
NorthRd
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6th
St
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Ave
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Ave
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Ave
Queens Ave
Deer Lake Pkwy
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RoyalOakAve
Imperial St
Rumble St
NelsonAve
Marine Dr
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Byrne Rd
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Rd
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Wy
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Ave
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EGrandBlvd
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d
St
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Dr
72ndSt
Huston Rd
76thSt
Kent Ave S
Grandview Hwy
Blundell Rd
64th Ave
Ladner Trunk Road
Blue
MountainSt
Bedwel
l Bay Rd
Rd
Trans Canada Highway
Lougheed Highway
Simon Fraser
University
Dollarton Hwy
Ol
dD
ollarton Rd
PortMannBridge
P
a
tull
o
Bridge
AlexFraserBridge
Queen
sbo
roughB
rid
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Clivede
n
Ave
IronWorkersMemo
rialB
ridge
Stewardson Wy
ColumbiaSt
Brunette Ave
Newton Rd
192ndSt
Shaughnessy
St
Fraser W
y
North
EarlesSt
110th Ave
112th Ave
Kingsway
E Hastings Street
E Broadway
KingGeorgeHighway
Fraser Highway
United Blvd
Barnet Highway
Haney Bypass
Fraser Highway
Trans Canada Highway
56th Ave
176thStPacificHighway
Lougheed Highway
264thStAldergrove-BellinghamHighway
Lougheed Highway
St. Johns St
ichmond Annacis Highway
WillingdonAve
Canada Wy
GilmoreAve
TILBURY
ISLAND
ANNACIS
ISLAND
DOUGLAS
ISLAND
BARNSTON
ISLAND
MCMILLAN
ISLAND
CRESCENT
ISLAND
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7
Metro Vancouver
Distribution Centre Space
Project Name Square Footage Completion Date Clearance Height
1. Boundary Bay Industrial Park Phase II 428,600 Q3 2015 36’
2. Tilbury Distribution Centre 289,000 Q3 2016 32’
3. Queensborough Logistics Centre Phase II 243,610 Q1 2015 32’
4. Delta Gateway Distribution Centre 220,000 Q3 2014 32’
5. Golden Ears Business Centre - Bldg. 300 219,330 Q2 2014 32’
6. South Surrey Business Park - Bldg. 1 213,400 Q3 2016 32’
7. Millennium VI - Annance Court Expansion 162,750 Q3 2014 32’
8. Hopewell Distribution Centre Phase I 151,200 Q3 2014 30’
9. Northview Business Centre 124,353 Q3 2015 26’
10. Tilbury West Corporate Centre II Phase II 98,553 Q1 2015 26’
11. Parkland Business Centre 86,510 Q2 2015 26’
12. Twin Creeks Business Centre Phase I 85,524 Q3 2015 26’
Clearance Height Comparison

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