Two record sales of multi-residential units in the booming Kelowna market | RENX
Two record sales involving the multi-residential market testify to the effervescence of the sector in Kelowna.
Cushman & Wakefield and Royal LePage Kelowna Commercial have partnered to facilitate the largest apartment sale within British Columbia. They also closed a second sale which represents a record for the dollar value per sequel.
Knox Village, which is currently under construction and includes 238 suites located next to Knox Mountain near downtown Kelowna, has been sold for $86.5 million ($363,500 per suite). Proxima Urban Homes, a 59-unit downtown apartment and townhouse complex just two blocks from Okanagan Lake, sold for $29.5 million ($500,000 per suite).
The properties were sold and marketed by Peter Gibson of C&W and Steve Laursen of Royal LePage. Centurion Apartment REIT purchased Knox Village in a forward sale while CAPREIT Limited Partnership purchased Proxima.
Both properties were sold by Kerkhoff: Develop-Build, with headquarters in Chilliwack, BC, and another office in Kelowna. Both are residential rental properties.
Kelowna a very active market
“The Kelowna market is very, very, very active,” Laursen told RENX in an interview. “We have a huge number of buyers from Vancouver and Toronto coming into the market now, compared to what it was three or four years ago, where they looked at it, but they weren’t really there. .
“Now some of the biggest developers and REITs in the country are very, very active and they want to be in Kelowna.
“We are very tight on the pitch. Our vacancy rate in the rental market is probably around 1%. . . and everything increases in price from year to year.
Gibson said Kelowna has always been one of three cities in British Columbia that have been on the radar of institutional investors.
“Generally, institutional buyers don’t buy from places where there is a population of less than 100,000 people. That said, they are starting to try to find this type of rental product,” he said.
“But, all the major players are now in Kelowna and each is looking to expand their portfolio. So looking forward to it, it’s probably going to be quite a busy time.
The acquisition of Knox Village
Gibson said Knox Village’s forward sale to Centurion is the result of a growing industry trend.
“A lot of institutions are active in buying this product, but it doesn’t exist,” Gibson said. “What they do is they enter into a forward purchase agreement with the developers. It is currently under construction, but when we made the contract, they were finalizing everything. »
In a forward sale, the buyer agrees to acquire a property while the site is being developed.
“This is a new method of transaction in which we are very active at the moment. We currently have over $1 billion in deals under contract and more we are working on in Western Canada,” Gibson said.
“From the developer’s point of view, it reduces development risks for them. They know they have an institutional buyer who buys it at the end of the day who can help them with their financing and for the buyer it’s a way for them to get a new product.
“A lot of these large REITs are trying to get more new products in comparison to older apartment buildings.”
Knox Village will offer a gym, underground parking and an abundance of nearby green space. The property, located at 1420, 1430, 1440 and 1450 Cara Glen Court, had a lot of interest and multiple offers.
“Knox Mountain would be the focal point of downtown Kelowna’s recreational activities for residents. Lots of hiking trails, mountain biking trails, etc. said Laursen. “This site is located seven minutes from downtown Kelowna and it is also on the side of Knox Mountain.
“So right out of your backyard you can walk and you’re on multiple hiking trails for miles and miles of hiking and mountain biking that will take you all the way to Okanagan Lake.
“So it’s a beautiful setting in a residential area, but still with easy access to downtown and also a 15 minute drive or bus ride from UBC Okanagan.”
Sale Proxima Urban Homes
Proxima Urban Homes offers a gym and a roof terrace with barbecue grills, a picnic area and an abundance of green space. This property also had a lot of interest and multiple offers.
Proxima is located at 1229 Richter Street and was built in 2021.
“Proxima is located right in downtown Kelowna. It was originally built to be condo spec. This is a stratified building located right in downtown Kelowna, in Kelowna’s newest residential and commercial area,” Laursen said.
“It’s a four minute walk to Okanagan Lake. It has all the amenities of the city center within 50 meters of their doorstep. And it was a finished product with rent stabilized at some of the highest rents in Kelowna.
Laursen said Kerkhoff has been a family business in business since the early 1970s, building one of Kelowna’s first downtown skyscrapers. In recent years, the company has built the two largest residential towers in the city.
Currently, it is building the One Water development with two towers of 36 and 29 floors, comprising 426 units.