Tesla's Battery Manufacturing Facility Hits the Market in Markham

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Tesla's fully leased facility in Markham, Ontario, has been listed for sale, providing a significant opportunity in the industrial real estate market.

In a notable development for the industrial real estate market in the Greater Toronto Area (GTA), a facility fully leased to Tesla has been listed for sale just weeks after another property leased to TELUS was made available. This Tesla facility, located at 95 Clegg Road in Markham, boasts strategic access to major highways including Highway 7 to the north, Highway 404 to the west, and Highway 407 to the south, facilitating connectivity throughout the GTA. The site is also surrounded by key amenities such as Downtown Markham, the Unionville GO Station, and the CF Markville shopping centre.
The property is owned by Pure Industrial, a real estate investment trust (REIT) that was privatized in 2018 through the acquisition by American investment firm Blackstone and Quebec's Caisse de dépôt et placement du Québec, now known as La Caisse. Built in 1998, the facility features durable precast concrete walls and sits on a 5.33-acre parcel of land, encompassing a gross leasable area of 110,236 square feet. It is equipped with six dock-level loading doors and includes 112 parking spaces. The building is currently 100% leased to Tesla, the electric vehicle manufacturer led by Elon Musk, which utilizes the site as a battery manufacturing facility.
According to the listing team from Colliers, Tesla's lease is structured as a net lease with annual escalations, indicating a strong likelihood of renewal. This optimism is bolstered by Tesla's substantial investment in the facility, which includes significant enhancements to electrical and mechanical infrastructure, such as a power upgrade to 3000 Amps, as well as warehouse racking systems, security upgrades, and employee amenities. These improvements have not only increased the functionality of the property but also its overall appeal for potential future tenants.
The facility was listed for sale earlier this month on an unpriced basis by Colliers, represented by Max Brenzel, Victor Cotic, Gord Cook, and Farabe Wahab. The listing highlights the investment opportunity in acquiring this premier institutional-quality industrial asset, which is expected to generate stable cash flow while offering compelling long-term renewal prospects.
Colliers describes the area surrounding 95 Clegg Road as one of Markham’s most established and sought-after industrial corridors, known for its exceptional connectivity, strong labor pool, and proximity to essential amenities. Markham is recognized as one of the top-performing industrial submarkets in the GTA, characterized by robust tenant demand, premium rental rates, and limited availability. This combination of strong market fundamentals and desirable location enhances the attractiveness of the property as an industrial site within the GTA’s competitive landscape.

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