Developer to sell strata office space in Kelowna
Land is scarce for small business owners in the city, broker says
Vancouver developer PC Urban has announced plans to build the first strata industrial building in Kelowna in more than five years.
PC Urban is working to finalize a deal to purchase an industrial site at 1655 Dilworth Dr. in Kelowna, once home to the now-defunct Enterprise Steel Fabricators. Upon completion of the sale, PC Urban plans to redevelop the eightacre site into a commercial strata business complex zoned for light industry.
The units would range from 2,700 to 4,200 square feet and would be built to suit industrial businesses with office and retail components with bay doors, windows and mezzanines.
PC Urban is already in talks with the City of Kelowna ahead of the completion of the sale, said Garry Fawley, a principal with PC Urban.
“We would start construction in approximately eight months, and then we would hopefully complete … construction a year after that, so it could take up to 20 months to complete,” he said in an interview.
He said they are doing market research to determine how many units the market could handle at the site.
The property is located at the corner of Enterprise Way and Dilworth Drive, one block from Highway 97 — the main link between the North, Central and South Okanagan.
According to B.C. Assessment, 1655 Dilworth is valued at $7.125 million.
For about 30 years, Enterprise Steel Fabricators produced equip- ment for the oil and gas industry at the site.
They shut their doors last year, laying off about 38 employees, the Kelowna news site Castanet reported.
“We’ve studied the strata market there, and Kelowna took a real hit in industrial development in 2008 and 2009,” Fawley said.
“Most places did. But with our experience here in Vancouver with the small bay strata, the response was overwhelming. We feel that Kelowna is a market that is ideal to deliver our kind of product.”
The project will be similar to a strata industrial park PC Urban is now building on a five-acre plot in Vancouver at 8811 Laurel St. near SW Marine and Oak Street.
“I think both Kelowna and Victoria are benefiting from what’s happening in Vancouver, and we’re seeing, I think, strong growth,” Fawley said.
He said the price of the small-bay units would likely start in the high $200s per square foot, meaning a 3,000-sq.-ft unit priced at $280 per sq. ft, for instance, would sell for about $840,000.
The property is being co-marketed by Royal LePage Commercial in Kelowna and CBRE.
Any similar industrial product that has been developed in recent years has all been for lease, not for sale, said Steve Laursen, a broker with Royal LePage in Kelowna.
“The majority of the city is owned by a few families and they typically just lease out their space, they don’t sell it,” he said.
“The last big strata development to be completed was done in the early 2000s and it was done in the far north end of the city. That had a lot of great demand,” he added. “Kelowna is typically a city of lots of small businesses, lots of great entrepreneurs and these entrepreneurs love to own their own real estate, but it just hasn’t been available.”
Laursen said the supply of strata industrial space is very limited in Kelowna.
“We did a pre-registration campaign during our due-diligence process on this property, and we sent an email brochure out to 15 people and we had 90 per cent registration out of those 15 people,” he said.
Since putting sign notices on the property a week before Christmas, another 27,000 sq. ft of “interest” has been received on the project, Laursen said.
He said the feedback so far suggests about 95 per cent of registrants are business owners who want to own their own space, and about five per cent are investors.
“These are people who have been leasing their space in either West Kelowna or the North Kelowna area that are distributing through- out the South, Central and North Okanagan,” he said.
Kelowna Mayor Colin Basran held off supporting the project in a call with The Sun, noting the property purchase has yet to close.
“Council has yet to see an application,” he said. “What I can tell you is that I am very supportive of PC Urban being under contract to purchase the site.”
Basran said demand for industrial sites has been high in the city.
“We know there is demand because the minute they come on the market they’re usually snapped up,” he said.
“The city would be very excited to see something take place on this site, and we’re happy to hear that a prospective purchaser has a deal on the property, and we would look forward to seeing their plans.”
The majority of the city is owned by a few families and they typically just lease out their space, they don’t sell it.