Photo: Contributed
Caban development by Cressey Development Corp. in Kelowna
Vancouver’s Cressey Development Corp. expects a quick pre-sale sale of a luxury, 127-unit mixed-use water project in downtown Kelowna, and developers are offering serviceland in the city at overrated prices, but the real estate action cools off when zoning and risk come into play, local agents say.
As hot as Kelowna properties are this year, previous downturns continue to hit them.
Cressy’s project, known as Caban, consists of upscale residential and retail properties on the lakefront of Kelowna’s popular Gyro Beach, resurrecting a plan for a similar project on the same two-acre site that was suspended during the 2008 recession.
The environment is different today, according to caban seller Taylor Musseau, who said a few invitations-only previews in Vancouver and Kelowna were enough to enroll 200 potential condo buyers for the Caban project.
Musseau expects most of the buyers to be owner-occupiers, but Cressey appears to be hedging his bets. The $ 850-per-square-meter residential units, which include seven townhouses, will also be available for short-term rentals, Musseau confirmed.
Another green field lot of a stalled development, 1.41 acre lot on Pacific Avenue and Pasnak Streets in Kelowna that resulted from a six lot build, was sold by court order in June. The website had reached third reading for a 110-unit condominium before the developer got out of a bind two years ago.
It was valued at $ 7.02 million and sold for $ 8.31 million on June 16 following multiple bids.
An unnamed Vancouver investor is involved in a pending transaction that has offered $ 3.27 million for a 0.58-acre property in Kelowna with potential for 45 residential units listed by Macdonald Realty, Kelowna.
That adds up to $ 5.45 million per acre, or $ 128 per square foot, which is close to what is seen on the lower mainland.
The City of Kelowna is offering two shovel-ready mixed-use commercial properties totaling 2.4 acres at the west entrance of the city along Harvey Avenue / Highway 97A. The price is $ 5.9 million; Bids will be accepted until October 31st.
“It’s just mind blowing what happened to Kelowna prices,” said Jeff Hudson, director and co-founder of HM Commercial Group in Kelowna, whose most recent report on land sales since May was more than $ 24 million in deals.
According to Hudson, out-of-town buyers include groups from Ontario, Saskatchewan, Alberta, and BC, the latter mostly from the Lower Mainland and Vancouver Island.
Seymour Pacific Developments, a large multi-family rental developer based in Campbell River, BC, is a “major player” in Kelowna, according to Hudson, while Vancouver-based PC Urban has bought industrial sites in the area.
Cressey is looking for more land in BC’s second largest city outside of the Lower Mainland, said Hani Lammam, executive vice president of the Cressey Development Group. Vancouver mega-housing companies Adera and Polygon already own land in the city.
“Kelowna has come of age,” said Lammam, “it’s become a real contender.”
But the hyper-action stands for land outside of Kelowna, said Scott Marshall of Re / Max Kelowna, a rural area specialist in Okanagan, whose offerings include 142 acres of rural land on Huckleberry Road, Kelowna, less than Requires $ 30,000 per acre.
His customers, he said, are locals, including patient developers, who are realizing it can take months, maybe even years, to zone and permit higher densities.
Marshall estimated that rural land scores in Okanagan have increased perhaps 15% over the past five years, well below the 50% increase seen in Kelowna over the same period.
“Despite all the hype, it seems like a normal year here,” said Marshall.
