Photo: The contribution
Cressey Development Corp.’s Caban development in Kelowna
Vancouver’s Cressey Development Corp. expects a quick advance sale of a luxury 127-unit mixed port project in downtown Kelowna, and developers are offering serviced land in the city at overpriced prices, but land action cools when re-regulation and risk come into play, local agents say.
Hot as Kelowna real estate is this year, it continues to be haunted by past downturns.
Cressy’s project, known as Caban and consisting of exclusive homes and retail on the shores of Kelowna’s popular Gyro Beach, is reviving a plan for a similar project on the same two-acre site that was paused during the recession in 2008.
The environment is different today, according to Caban sales agent Taylor Musseau, who said a few invitations-only previews in Vancouver and Kelowna were enough to register potential 200 apartment buyers for the Caban development.
Musseau expects most buyers to be owner-residents, but Cressey seems to be hedging his bets. The housing units at $ 850 per. Square meters, which include seven townhouses, will also be available for short-term rent, Musseau confirmed.
Another greenfield site with a stall, a 1.41-acre parcel on Pacific Avenue and Pasnak Street in Kelowna that was the result of a six-party land collection, was sold in June under court order. The site had reached third reading for a 110-unit condominium development before the developer rescued two years ago.
Estimated at $ 7.02 million, it sold for $ 8.31 million on June 16 after several bids.
A pending deal involves a named Vancouver investor who offered $ 3.27 million for a 0.58-acre Kelowna site with potential for 45 homes built on Macdonald Realty, Kelowna.
The pencils for $ 5.45 million an acre or $ 128 per square foot, which comes close to values in the lower mainland.
The town of Kelowna offers two shovel-ready commercial plots for mixed use totaling 2.4 acres at the town’s west entrance along Harvey Avenue / Highway 97A. Asking price is $ 5.9 million; bids are received until 31 October.
“It’s just blowing up what’s happened to Kelowna prices,” said Jeff Hudson, principal and co-founder of HM Commercial Group in Kelowna, whose latest land sales report had a value of over $ 24 million in trades since May.
Hudson said buyers outside the city include groups from Ontario, Saskatchewan, Alberta and BC, the latter primarily from the lower mainland and Vancouver Island.
Seymour Pacific Developments, a large multi-family rental developer based in Campbell River, BC, is a “big player” in Kelowna, Hudson said, while Vancouver-based PC Urban has bought industrial sites in the area.
Cressey is scouting for more land in BC’s second-largest city outside the lower mainland, said Hani Lammam, executive director of the Cressey Development Group. Vancouver mega-housing developers Adera and Polygon already own land in the city.
“Kelowna has grown up,” Lammam said, “it’s become a real challenger.”
But the hyperactivity stalls land outside Kelowna, said Okanagan Land Specialist Scott Marshall of Re / Max Kelowna, whose list includes a 142-acre piece of land on Huckleberry Road, Kelowna, that begs for less than $ 30,000 acres.
His clients, he said, are locals, including patient developers, who realize it can take months, maybe years, to get zoning and permits in place for greater density.
Marshall estimated that the value of rural Okanagan land has risen perhaps 15% over the last five years, well below the 50% increase in Kelowna over the same period.
“Despite all the hype, it seems like a normal year here,” Marshall said.