Kelowna’s home market made headlines, but the city’s commercial real estate market hasn’t been lazy either, as office vacancy rates have steadily declined from last year.
“I’ve been in this business since 2009 and I’ve never seen it so busy,” said Steve Laursen of Royal LePage Realty.
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Kelowna has become a hotspot for investors, said Laursen, who specializes in commercial real estate.
“Right now we’re seeing a lot of investors coming from Vancouver because Vancouver cap rates are so low, prices are so high and a lot of these people vacation here in the summer and have watched Kelowna’s growth over the past three years” said Laursen.
With commercial sales rising, those on the front lines attribute mixed-use developments to driving the market.
“It makes sense to have commercial property on the first floor, it attracts people, it looks good when a building looks like this,” said Steve Harvey, owner of Commercial Finders Group.
A second quarter office market report from Colliers International showed that the Thompson-Okanagan region has seen an increase in mixed-use development projects with upper-tier office space.
In Kelowna, growth has been driven by a number of new tech companies that have increased demand for office space, the report said.
The city’s office vacancy fell from 9.08 percent in the fourth quarter of last year to 8.78 percent in the second quarter of 2017, it said.
READ MORE: Vancouver buyers continue to fuel the Kelowna real estate market
Colliers noted that Kelowna has grown to 130,000 sq. ft. has added new office space and it is planned to add 13,500 sq. ft. to add more.
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The One Water Street project is just one of the mixed-use developments coming on board.
The project includes Kelowna’s two tallest buildings with 36 and 29 stories.
It will be on the corner of Ellis Street and Water Street and will include commercial space on the ground floor.
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The Ella project, a 20-story condominium project on the corner of Ellis Street and Lawrence Avenue, will also include commercial space.
Meanwhile, the old Bargain store on Bernard Avenue is also to be expanded after having been empty for seven years.
Although few details were disclosed about this project, the developer told Global News that the new building will be a mix of residential and commercial space.
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No slowing down
Experts believe that the commercial real estate market will remain strong for some time.
“For all economic factors, I think the trade index continues to rise, we are not seeing any slowdown,” said Harvey.
© 2017 Global News, a division of Corus Entertainment Inc.
