Case Study: Net-Zero Fulfillment Centre in GTA

The Lakeridge Logistics Centre in Ajax, Ontario, sets a new benchmark as Canada's largest industrial facility to achieve Zero Carbon Building (ZCB) Design certification. This 1.2-million-square-foot centre eliminates on-site greenhouse gas emissions through electrification, advanced insulation, and solar-ready infrastructure. Built under stringent climate policies, it offers up to 19% cost savings over 10 years compared to conventional builds. Here's how it tackles challenges like heating massive spaces, reducing energy loss, and aligning with future carbon regulations:

• Location Advantage: Positioned in the GTA, a logistics hub with high carbon demands, the facility benefits from its proximity to Highway 401.
• Energy Efficiency: Features include insulated concrete panels (R-20), upgraded roofing (R-40), and automated dock systems to minimize heat loss.
• Electrification: Fully electric heating via air source heat pumps and energy recovery ventilators reduce emissions and shield tenants from rising carbon taxes.
• Solar-Ready Design: The roof is prepped for a photovoltaic array to eventually meet all electricity needs.
• Stakeholder Collaboration: Developers, leasing agents, and experts worked together to align design with tenant needs and sustainability goals.

This project highlights the financial and environmental benefits of zero-carbon industrial spaces while addressing design, construction, and operational challenges.

Project Details and Stakeholders

Facility Overview

The Lakeridge Logistics Centre, located at 537 Kingston Road East in Ajax, Ontario, boasts a prime spot with direct visibility from Highway 401 - one of the busiest freight routes in Canada. Covering an area of approximately 111,500 m², this facility holds the distinction of being Ontario's first industrial building designed to be fully net-zero carbon. It’s tailored for modern industrial needs, featuring enhanced electrical capacity, a solar-ready roof, and an integrated building automation system (BAS) to manage energy efficiently. Thanks to its net-zero design, the facility is expected to achieve up to 19% cumulative cost savings over 10 years when compared to a traditional build. These advanced features create a strong foundation for the collaborative efforts described below.

Key Stakeholders

This ambitious project relied on the coordinated efforts of experts in development, design, and leasing. Pure Industrial, with a portfolio exceeding 42 million square feet of industrial real estate across Canada, brought the vision and scale necessary to make this facility a reality.

"We built Lakeridge Logistics Centre with our customers' needs top of mind. With its strategic location and state-of-the-art features including ZCB-design certification and related efficiencies for our customers, this facility offers significant advantages for businesses seeking a competitive edge in the GTA." - David Owen, President, Pure Industrial

Avison Young managed leasing representation, with Principal Ben Sykes leading efforts to position the facility within the Greater Toronto Area's industrial market. For businesses making similar decisions, working with an advisor like Michael Law of Lennard Commercial - an expert in industrial leasing and acquisitions across Toronto and the GTA - can make a significant difference. Early evaluation of factors such as site selection, electrical servicing capacity, and roof load tolerances for solar installations is essential for success.

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Net-Zero Design Strategies

Building Envelope and Air Tightness

One of the standout energy-saving features at the Lakeridge Logistics Centre is its advanced building envelope. The facility uses insulated concrete sandwich panels in its walls, providing continuous R-20 insulation. Meanwhile, the roofing system is upgraded to R-40, dramatically cutting down on thermal transfer compared to standard industrial buildings.

The loading dock design also received a major upgrade. Vertical dock levelers with automated controls were installed, ensuring heating systems shut off when doors are open. This significantly reduces air infiltration and heat loss, making the space far more efficient.

These upgrades form the foundation for integrating high-performance mechanical systems.

Mechanical Systems and Electrification

The facility's heating system is fully electrified, replacing traditional gas-fired equipment. This shift not only reduces carbon emissions but also protects tenants from the financial impact of future carbon taxes. For a massive 1.2-million-square-foot warehouse, cold climate air source heat pumps (ASHPs) ensure reliable heating, even during Ontario's harsh winters.

"Electrified heating systems... play a key role in enabling LLC to be zero-carbon and are built to protect against future carbon tax and regulatory requirements." - Pure Industrial

Additional efficiency is achieved through energy recovery ventilators (ERVs), which capture heat from exhaust air before it exits the building. This reduces the workload on heating systems while maintaining excellent indoor air quality. A fully integrated Building Automation System (BAS) brings everything together, monitoring and optimizing mechanical systems in real time. To support the demands of an all-electric setup, the facility's electrical capacity was increased during construction, a more cost-effective approach than retrofitting later.

These upgrades work hand-in-hand with the facility’s renewable energy plans.

On-Site Renewable Energy

The roof was specifically designed to accommodate a solar PV array capable of eventually supplying all the facility's electricity needs as the system grows. By planning for this from the outset, the design avoids expensive structural retrofits and offers tenants a clear path toward energy independence. The solar array is part of a broader strategy, working seamlessly with the efficient envelope and mechanical systems. By reducing overall energy demand, the building ensures the solar system doesn't have to compensate for inefficiencies, reinforcing its net-zero goals.

"This remarkable building sets the sustainability standard of the future for industrial properties in the Greater Toronto Area and across Canada." - Ben Sykes, Principal, Avison Young

The site also includes EV charging infrastructure, further supporting its commitment to low-carbon operations.

Wilkinson Avenue Net-Zero - Heating Energy Warehouse

Challenges and Solutions

Planning and Policy Alignment

Building a net-zero industrial facility in the GTA comes with its fair share of regulatory hurdles. Developers must work within the framework of the Ontario Building Code while aiming for Zero Carbon Building (ZCB) standards, which go beyond the code to anticipate future regulations and carbon pricing changes.

One major obstacle is the uncertainty of speculative builds. Without a tenant in place before construction, it's hard to predict energy demands or operational requirements. To tackle this, the team behind BGO's Fifth Line Business Park in Milton adopted a flexible approach. They completed one building as a fully all-electric, net-zero facility, while three others were designed as "Net Zero Carbon Ready." These buildings featured reinforced roofs for future solar installations and upgraded electrical systems to support HVAC electrification down the line. This strategy allowed for adaptability while keeping sustainability goals intact.

Grid limitations added another layer of complexity. Local utility restrictions on feeding solar energy back into the grid forced developers to carefully plan on-site generation systems. This included integrating storage solutions or load-management strategies to work within these constraints.

These planning challenges naturally lead to financial and execution-related considerations.

Cost and Business Case

Achieving net-zero standards comes with higher upfront costs. Typically, developers face a 10% to 15% premium compared to standard industrial construction. For a massive facility like the 1.2-million-square-foot Lakeridge Logistics Centre, this premium represents a significant investment.

However, the long-term financial benefits are clear. The table below highlights key metrics from Canadian projects that justify the added costs:

Project	Location	Size	Key Financial Metric
BGO Fifth Line (Building 2)	Milton, ON	234,061 sq. ft.	59% reduction in annual operating costs
Lakeridge Logistics Centre	Ajax, ON	1,200,000 sq. ft.	19% cumulative cost savings over 10 years
355 Wilkinson Ave Warehouse	Dartmouth, NS	65,000 sq. ft.	10–15% capital premium; $0 central heating bill

All-electric systems, combined with on-site solar, can slash heating costs to nearly zero. This is a strong incentive for tenants:

"Higher net rents are achieved because tenants have a significantly lower heating energy bill and more comfortable workspace at the same time." - Judy Wall, President, East Port Properties

Beyond cost savings, ZCB certification enhances asset value and attracts institutional investors focused on ESG mandates. This was a key factor in Pure Industrial's decision to pursue certification for the Lakeridge Logistics Centre.

Construction and Day-to-Day Challenges

Even with a strong design, on-site challenges can arise. Trades unfamiliar with advanced techniques may struggle with proper installations, and tenant behaviours can unintentionally impact energy performance.

For instance, leaving overhead bay doors open for extended periods can significantly undermine energy efficiency. At the 355 Wilkinson Ave project, developers addressed this issue with automated controls that shut off in-floor heating circulators when a door opens. Additionally, overhead unit heaters were separately metered, holding tenants accountable for heat loss. When tenants see the cost reflected on their bills, they quickly adapt their habits.

Another challenge is the gap between energy modelling and real-world performance. Design-phase energy models often underestimate infiltration rates in operating warehouses, leading to discrepancies in energy performance. To address this, developers rely on Building Automation Systems (BAS) for post-occupancy monitoring. This allows teams to identify and correct issues early, ensuring the building performs as intended over time.

Performance Outcomes and Lessons Learned

Post-Occupancy Performance

In April 2025, the Lakeridge Logistics Centre in Ajax, Ontario, earned the distinction of being the largest industrial property in Canada to achieve ZCB Design certification. Spanning an impressive 1,200,000 square feet, this facility sets a new standard for low-carbon industrial developments in the Greater Toronto Area (GTA). Its design is expected to deliver up to 19% in cumulative operational cost savings over the next decade. However, since it has obtained the Design certification rather than full operational certification, a full year of post-occupancy data will be necessary to verify energy use and emissions through third-party validation. This gap between design projections and actual performance is being closely monitored by industry experts. The early results provide valuable insights into what works and can guide future projects.

What Works and What to Repeat

One of Lakeridge's standout achievements is the complete electrification of heating systems. The facility uses 30 custom-designed, roof-mounted electrified heat pumps, completely eliminating the need for gas-fired heating across its massive 1.2 million square feet.

"We've effectively de-carbonized any type of heat source in and out of this building. For a building of this scale, nothing like that in Canada has ever been built before." - Ben Sykes, Principal, Avison Young

Another forward-thinking feature is the solar-ready infrastructure. The roof and electrical systems were engineered to eventually meet 100% of the building's electricity needs, avoiding the expense and disruption of future retrofits. This scalable approach could serve as a blueprint for other industrial developments in the GTA.

Specialists like Michael Law from Lennard Commercial also play a crucial role in these projects, offering expertise in site selection and lease structuring tailored to net-zero objectives.

Key Takeaways

Lakeridge's design and early performance provide valuable lessons for advancing net-zero industrial developments. Even as a speculative build with no anchor tenant, it proves that net-zero design is achievable for large-scale industrial projects. Here are three critical insights for developers, tenants, and investors:

• Integrate sustainability from the start. Certification goals, building envelope designs, and electrification plans should be incorporated at the outset rather than being added later.
• Plan for future growth. Solar-ready roofs and expanded electrical capacity can help ensure long-term cost savings and operational efficiency.
• Leverage data to bridge the performance gap. A fully integrated Building Automation System (BAS) is essential for identifying and addressing discrepancies between projected and actual performance before they escalate into costly issues.

FAQs

What does ZCB Design certification mean versus operational certification?

ZCB Design certification ensures that a building's design aligns with energy efficiency and carbon reduction goals to achieve net-zero carbon emissions. This certification focuses on the planning and design phase, emphasizing strategies to reduce environmental impact before construction begins.

On the other hand, Operational certification assesses how the building performs once it's up and running. It evaluates whether the building is effectively reducing emissions during its day-to-day operations.

While both certifications aim to lower carbon footprints, they apply to distinct stages of a building's lifecycle - design and operation. Together, they provide a comprehensive approach to achieving net-zero carbon goals.

How do all-electric heat pumps heat a 1,200,000 sq. ft. warehouse in Ontario winters?

All-electric heat pumps are effectively heating a massive 1,200,000 sq. ft. warehouse during Ontario's harsh winters. They work by extracting heat from the outdoor air - even in freezing conditions - and transferring it indoors through a refrigeration cycle. This method ensures steady and efficient heating throughout the season.

What should tenants check in a net-zero warehouse lease (power, solar, BAS, EV charging)?

Tenants should make sure their lease includes essential features that support sustainability, such as a dependable power supply, onsite solar energy systems, building automation systems (BAS), and electric vehicle (EV) charging stations. It's important to verify that these components are installed correctly and in working order to meet net-zero goals.