Border Town Success
The fluctuating dollar brings Canadian investors to the U.S.
In the past year, in the U.S./Canadian border city of Blaine, Wash., commercial real estate sales have been almost exclusively Canadian transactions. The Canadian dollar, or Loonies, has risen in value, making buying U.S. property a bargain. For example, Surrey, British Columbia industrial property averages $1 million Canadian dollars per acre for finished lots while Blaine averages $350,000 U.S. dollars per acre. Western Canada’s property values are expected to remain firm as the economic forecast for the next two to three years is strong.
The currency exchange provides a profit margin when the U.S. dollar is high but with its decline, Canadian companies are finding they can no longer compete in the U.S. market. This fact leaves Canadian companies little choice but to establish a U.S. presence. Many Canadian companies already have located further south than Blaine to cities such as Ferndale and Bellingham, Wash.
The city decided to redevelop the Blaine Municipal Airport to capitalize on the cross border demand. The location of the airport to the major border crossing and truck route make this the most desirable property available to British Columbia businesses looking to the U.S. Wages in the Vancouver/Surrey area are considerably higher than the Blaine area, adding motivation for companies to make the move.
The redevelopment of the Blaine Airport will create 33 acres of useable land serviced by a regional storm water facility and city utilities. The city rezoned the airport property to allow for commercial mixed use, light industrial, and manufacturing and has accepted an offer from Blaine Gateway LLC to purchase and redevelop the property at 4.5 million.
Finished lots are currently being marketed to Canadian businesses at $8 U.S. dollars per square foot for industrial and $16 to $20 psf for commercial. Bolstering the viability of the redevelopment project was Viva Pharmaceutical’s ground breaking this past September on a $10 million, 200,000-square foot manufacturing and research facility one block from the airport property. The airport’s redevelopment has the potential to provide five more Canadian companies an opportunity to have a U.S. presence while at the same time adding a large boost to the local economy.