The recent purchase of the long-vacant former Bargain Shop site on Kelowna’s Bernard Avenue is the latest high profile commercial property sale in the city.—Kathy Michaels/Capital News

Central Okanagan commercial real estate market is hot

Kelowna is seeing a number of large-scale developments move ahead.

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Commercial real estate is booming in the Okanagan.

“With so much attention focused lately on the housing market, the bullish march of B.C.’s commercial real estate market has gone seemingly unnoticed,” says Steve Harvey, founder of Business Finders Canada. “Business is good in the Okanagan.”

Kelowna-based Business Finders Canada has had a front-row seat to the local boom. The commercial brokerage has grown steadily over the past decade and is expecting another significant expansion, adding several more brokers in the next year throughout Western Canada to keep up with growing demand.

It also added a new arm – Commercial Finders Group – which will raise the profile of commercial real estate in the Thompson-Okanagan.

There are hundreds of commercial and industrial properties on the market in the region, with an increasing number of interested buyers searching for the right fit.

“One of the gaps we’ve seen is that there are hundreds of properties for sale, but no real way to sift through them. That’s why we launched Commercial Finders Group,” he says. “The Okanagan is a great place to invest and we’re seeing more and more interest in property here from buyers all over Western Canada – and beyond.”

The commercial real estate market has had six consecutive quarters of strong performance, according to the BC Real Estate Association. The association says the strong economy has helped boost key commercial indicators steadily since 2009.

“The commercial market in Kelowna has seen nothing but growth over the past year in all sectors – particularly in the sale of mixed-use development sites in downtown Kelowna,” says Harvey.

Major change has taken hold in key areas of the city, including a 20-storey high-rise, dubbed Ella, planned by Mission Group in one of Kelowna’s trendiest neighbourhoods on Ellis Street. It’s a perfect example of increasing commercial opportunity in the city – with retail outlets and parking on the first five storeys of the condominium.

The city has also seen the recent sale of the long-vacant Bargain Shop building on Bernard Avenue and the sale of 1151 Sunset Drive, along with two iconic towers at One Water Street – one being 36 storeys. Westcorp Development has submitted an application for a development permit to the City of Kelowna for the new design of its proposed hotel on the Willow Inn site. The project will include 174 hotel rooms, 49 residences, conference centre, restaurant and coffee shop next to Kerry Park, retail opportunities in the lobby and on Water Street, and a 16th floor public “sky-restaurant” and culinary venue.

“These new developments will change the landscape in downtown Kelowna – and there are lots more major changes to come in the near future,” says Harvey. “The commercial real estate market is sizzling hot right now.”

Andrew Peller Ltd. recently entered into agreements to buy three Okanagan wineries – Black Hills Estate Winery, Gray Monk Estate Winery and Tinhorn Creek Vineyards – for a combined purchase price of $95 million. And a six-storey Hyatt hotel and an accompanying six-storey mixed-use building at the corner of Enterprise Way and Spall Road are before Kelowna city council.

The boom is being felt across B.C., with the value of commercial sales up nearly 40 per cent in the Lower Mainland. The upward trend is expected to continue into next year.