Industrial real estate star of 2018, says commercial realty company
Executive with HM Commercial Realty in Kelowna tells of disruption to retail, financial sectors
Bricks and mortar is not dead. Neither is retail, office nor industrial real estate. Urban infill is in. Highrises are going higher. More people need to live downtown. Density is key. And the Kelowna Effect is alive and well.
A crowd of developers, property owners and investors heard all this Thursday as Kelowna-based HM Commercial Realty released its commercial real estate report in the theatre of the Okanagan Centre for Innovation downtown.
“There’s an incredible amount of statistics in this report,” admitted HM vice-president of sales and leasing Meghan O’Mara. “But the bottom line is Kelowna is an amazing place to live, work, play and invest.”
However, the landscape for commercial real estate is shifting.
“Retail is not dead,” said O’Mara, “but it is being disrupted beyond the traditional shopping centre. Vacancies are up at Orchard Park (mall) and Capri (Centre Mall), and the financial industry is changing and Royal Bank, TD and BMO have all closed branches in Kelowna.”
The opportunities to fill those spaces are specialty stores that offer shoppers an experience and the so-called “green rush” of legal cannabis retail.
O’Mara called industrial real estate “the rock star of 2018,” with space being snapped up
The bottom line is Kelowna is an amazing place to live, work, play and invest. Meghan O’Mara
along the Kelowna-Winfield border, and at the Airport Business Park and McCurdy Business Park.
“Despite e-commerce driving a lot of innovation and land use, there’s still need for bricks and mortar real estate in Kelowna,” said HM co-founder and principal Marshall McAnerney.
“Kelowna needs more highrise condos, offices and the right shopping.”
HM’s other co-founder and principal, Jeff Hudson, stressed that density is key to Kelowna’s progress.
“That’s happening with low-, mid- and high-rise condominium building, so much rental apartment building construction, and strong office and industrial building and leasing,” Hudson said.
He admitted activity has slowed from 2017’s record pace, but said activity and prices remain well ahead of the five-year average.
HM invited Mission Group president Randy Shier and Mayor Colin Basran to speak at the presentation and share their views and visions for the city.
“There is a Kelowna Effect,” said Shier.
“We’re a vibrant city with good infrastructure and a downtown where people want to live so they can walk to shopping, the office, the lake, restaurants and the (Rockets) hockey game.”
That’s why Mission Group is heavily investing in downtown, building low-rise condos at Central Green, the 20-storey Ella condo at the corner of Ellis Street and Lawrence Avenue, and three retail-office-condo towers along Bernard Avenue where the Bargain Shop was.
Shier mentioned the softening real estate market but said it seemed to have no effect on sales for its first Bernard Block tower, the 25-storey Brooklyn.
“We’re 70 per cent sold after just three weeks,” he said.
Construction on Brooklyn starts early next year for mid2021 completion.
Shier also referenced homelessness, drug addiction and mental illness as issues that have to be addressed downtown.
However, he hopes the three levels of government and nonprofit agencies can solve those problems, while Mission Group remains bullish on downtown and continues building.
Mayor Colin Basran outlined “the great evolution of our community” continuing with 50,000 new residents expected to move to Kelowna over the next 20 years, adding to a current population of almost 200,000.
“The city is open to investment and directing growth to the existing urban core and town centres” of downtown, Capri-Landmark, South Pandosy, Orchard Park and Rutland, said the mayor.
“Downtown is experiencing unprecedented growth and investment. We need urban infill to be sustainable to protect the environment and keep the economy strong.”
Basran sees technology reshaping the future of the city as an industry that already has 700 companies, 12,500 workers and an annual economic impact of $1.7 billion continues to grow.
“Let’s keep it going,” said the mayor.