Two new tower projects in Kelowna are pushing the Okanagan city’s office market into a taller and bolder future.
Kelowna-based developer Mission Group has announced it is building a 16-storey office tower, The Block, at the corner of Bernard Ave. and St. Paul St., in the downtown core.
Pending permissions, The Block will include 85,000 square feet of class-A office space on levels six through 16, as well as four levels of parking and 16,000 sq. ft. of street-level retail.
It’s part of a 1.5-acre complex by Mission Group that also includes two residential towers, the Brooklyn, which is under construction and Bertram, which will launch for sales in the spring.
“We’re very bullish on Kelowna’s downtown in general,” said Luke Turri, executive vice-president with Mission Group. “In the past few years we’ve started to invest quite a bit in the historic core of downtown with residential condo towers. What we’ve seen in that time is certainly a maturing of Kelowna’s economy and also an enhanced interest in downtown Kelowna in general.”
He said pre-releasing has just launched on The Block and they expect to start construction this coming fall.
Meanwhile, construction work continues on Landmark 7, a 23-storey tower by Al Stober Construction that will add about 250,000 square feet to the Landmark District.
More than 3,500 people already work in buildings at the Landmark district in mostly technology, professional services, education and retail.
The building is part of a cluster of office towers that have risen in the district since 1994, creating a commercial district separate from downtown on the south side of Highway 97 between Burtch and Spall roads.
Landmark 7 is expected to complete in mid-2022.
Stephen Webber, an associate vice-president with Colliers International in Kelowna, said the two projects represent the most prominent office buildings currently being built or planned in the city, which has seen its office vacancy rate drop by about half in the last two years.
The local industrial, residential and office markets have all been strong and are fuelling the need for job space, but there has emerged a disparity between the various office classes, with older product getting emptied almost as soon as new product becomes available, Webber said.
The current vacancy rates are 1.7 per cent in class-A, 3.4 per cent in class-B and 7.3 per cent in class-C. Altogether the rate is 4.1 per cent for the Okanagan city of about 130,000, which is starting to claim technology as a major employer.
Overall, Kelowna has just under two million square feet of class-A office inventory across 46 buildings and a total office inventory of just under four million square feet, according to Colliers.
Webber said there will likely be an uptick in overall vacancy once Landmark 7 and The Block open in coming years. To what extent is unclear.
The typical users for the new space will include a mix of professional services and maybe tech companies.
In the 18 hours prior to speaking with Postmedia, Webber said he heard from an accounting firm from Calgary that was seeking office space as part of a move to Kelowna and from a small architecture firm from Alberta looking to relocate to Kelowna as soon as possible.
“That’s your typical kind of user,” he said. “The growth is still happening. The influx and new businesses that are opening and new businesses that are coming here have been absorbing (space) fairly steadily.”
Mission Group’s Turri sees his project as a major step for downtown core that hasn’t seen much new office space.
“To be able have that shared energy of the residential and the office and the supporting retail is just going to create a new presence in this part of the downtown,” he said.
Turri said it’s likely that the space will leased by several tenants, rather than to a single business.
“Certainly, we would make the building available for an entire floorplate or multiple floorplates should tenant demand go there,” he said.
The Vatican owns more than 5,000 church and investment properties around the world, a central office at the Catholic Church revealed for the first time Saturday, according to several news outlets — but the church is struggling with a budget deficit, plus years of alleged mismanagement tied to its investment strategy.
Most of the Vatican’s real estate holdings (4,051) are in Italy, the majority of which are used by church-affiliated groups or rented out at reduced prices instead of getting leased at market rate, according to a report from the church-run Administration of the Patrimony of the Holy See (APSA) obtained by Reuters, Catholic News Service and other outlets.
Forbes has reached out to the Vatican for comment.
The Roman Curia — the Catholic Church’s central administrative body — ran a $76.3 million operating deficit in 2020, down from a $93.2 million deficit in 2019, according to a budget statement obtained Saturday by the Jesuit America magazine. In an interview with the church-run Vatican News, church official Father Juan Antonio Guerrero Alves called the Curia’s 2020 performance “better than what we expected,” partly because the church slashed expenses during the coronavirus pandemic. The church reported a larger overall deficit in 2020 than 2019, however, largely due to a drop in unrealized financial gains.
The Vatican’s financial practices — and particularly its real estate holdings — have drawn scandal and scrutiny for years. Pope Francis reorganized how the church’s real estate investments are overseen last year, following years of sometimes fraught attempts to reform the Curia amid claims ofembezzlement and endemic financial mismanagement. Several people are on trial for allegedly scamming the church out of millions of dollars in connection with its London real estate investment nearly a decade ago.
The Toronto real estate market, having boomed for the better part of the pandemic, is finally taking a rest
Author of the article:
Is it just me or is life starting to feel a little normal again?
Summer is in full swing, restaurants are open for business, and vaccines are now pretty easy to come by.
The pandemic is far from over, but still there’s a subtle ease to life again that feels good.
Perhaps it was this week’s announcement that the federal government would be moving forward with reopening the Canada-US border in early-August.
Or the news that Ontario’s colleges and universities would be returning to in-person classes this fall.
Things are inching back to a pre-pandemic status quo.
The Toronto real estate market, having boomed for the better part of the pandemic, is finally taking a rest. Things are quiet. It’s lovely.
Which begs the question: what comes next?
While most experts agree that it was a combination of low interest rates, pent-up demand, and changing buyer priorities that joined forces to drive sales to record levels, even through multiple stay-at-home orders, the undercurrent of it all has been something entirely more structural.
A healthy balanced market is when, simply put, there is an equal level of buyers and sellers.
When there are more sellers than buyers, you have a “buyer’s market.”
When you have more buyers than sellers, you have a “seller’s market.”
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Broadly speaking, with the exception of a few blips along the way, Toronto has been a seller’s market for as long as I have been in the business.
In the neighbourhoods popular with upsizing young families, bidding wars are simply the norm.
And why is that? Some might say that it’s because of the widely adopted practice of underpricing as a means of driving multiple offers.
And while, yes, that certainly brings more buyers to the table and thus adds an overt layer of competition, that’s not it. It’s just a symptom of the broader issue.
And this issue is this: if we had sufficient supply in the city of Toronto to meet demand, our current market conditions would be vastly different.
They wouldn’t be spilling out into the secondary markets around us.
The pandemic just shone a light on what has been a mounting reality: our population has grown faster than our housing supply and our government has failed to address it.
At 1.8 million homes behind the G7 average, Canada falls dead last in the number of housing units per 1,000 residents.
Frustratingly, the top-down solutions to this impending crisis have been interruptions to the demand cycle: playing with interest rates, tightening lending qualifications, introducing non-resident speculation and vacancy taxes.
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These are Band-Aids. At best they are tools to be used to slow things down while the real solutions come down the pike. We need density. We need intensification. We need thoughtful, strategic building policies that marry environmental responsibility with pragmatic solutions to sprawl.
Instead, the most recent federal budget promised an additional $2.5B over five years to address affordable housing via their Rapid Housing Initiative.
This is a drop in the bucket.
We need expedience not hand wringing.
If government flipped a switch tomorrow it would still take four to five years to see the housing units come to market. The time was yesterday.
So, for those wondering what comes next in our real estate market, it’s a safe bet that once people have enjoyed their summer of reprieve from the strange pandemic reality we find ourselves in, the market will reawaken.
It will simply have to in order to meet the return of students and the backlog of immigration produced by almost 18 months of closed borders. The demand-driven rental and condo sectors that have “softened” and “balanced” these past months will surely surge.
And it was predictable. Market forces, while undeniably complicated and nuanced, have a few inescapable fundamentals – until we prioritize sufficient supply to meet demand, housing unaffordability will be the norm. That part isn’t rocket science.
Welcome back to the Real Estate newsletter, which arrives on the heels of a mystery being solved.
Reporters and readers alike have been trying to figure out who paid $25 million for San Marino’s famed USC presidential mansion, and records finally revealed that the buyer was Chinese billionaire Tianqiao Chen. It makes a lot of sense, as the philanthropist recently donated $115 million to Caltech for neuroscience research, and the university dedicated a new 150,000-square-foot facility to him that opened earlier this year just a mile away from the home.
It’s still a great time to sell, and this week saw a few celebrities test their luck in the high-risk, high-reward real estate market. “Charlie’s Angels” star Shelley Hack did about as well as one can do, selling her Santa Monica Craftsman for $11.43 million — or $2.58 million more than her asking price.
Actress Helen Mirren and director Taylor Hackford are hoping for similar success in Hollywood Hills, where their colossal compound on 6.5 acres is on the market for $18.5 million. If the power couple get their price, it’ll be one of the priciest sales the ritzy neighborhood has seen so far this year.
If you don’t believe me regarding the seller’s market, believe the data. The numbers are in for June, and Southern California’s median home price soared to $680,000 last month. That’s an all-time high, shattering a record that stood for all of … 31 days.
Some news on what may come ahead: UC Berkeley researchers published a new report on a California Legislature bill that would allow denser home building in single-family zones. The study says the bill, which passed the state Senate, would produce an uptick in the state’s housing supply, but it likely wouldn’t cause the mass redevelopment that skeptics fear.
While catching up on the latest, visit and like our Facebook page, where you can find real estate stories and updates throughout the week.
Shortly after, the couple flew to Pasadena to meet the scientist — a trip that led Chen to give Caltech $115 million for neuroscience research, one of the largest gifts the university had ever received. In 2016, he founded the Tianqiao and Chrissy Chen Institute for Neuroscience at Caltech complete with a three-story, 150,000-square-foot facility on campus that was dedicated to the couple earlier this year.
He’ll have a short commute if he ever visits it, because his home sits about a mile away from the facility.
Hack and her husband, director Harry Winer, are walking away with a huge profit. Not only did they haul in significantly more than their original asking price of $8.5 million, but they also paid just $1.6 million for the property in 1988.
The secluded compound sits about a mile from the ocean in Santa Monica’s North of Montana neighborhood. Across half an acre, there’s a 99-year-old main home, one-bedroom guesthouse, rustic barn and manicured backyard with a deck and pool surrounded by gardens and fruit trees.
Power couple will either sell or lease
Space is at a premium in Hollywood Hills, but not on the sprawling hillside compound of actress Helen Mirren and director Taylor Hackford. The power couple’s longtime property, which spans 6.5 acres at the foot of Runyon Canyon Park, listed for sale at $18.5 million.
If you’re eyeing a shorter stay, it’s also available to be leased at $45,000 per month.
At 6.5 acres, it’s the second-largest property currently available in Hollywood Hills. To put its relative size into perspective, only three estates on the market in the star-studded neighborhood claim more than 3 acres.
According to the listing, there have only been four owners — all famous — since the home was built more than a century ago: “The Squaw Man” actor Dustin Farnum, writer Mark Hellinger, “Perry Mason” producer Gail Patrick, and Mirren and Hackford, who acquired the estate in the 1980s.
June’s median home price of $680,000 tops the previous record of $667,000, set in May, according to data released Tuesday by data firm DQNews. It represents a 22.5% increase from June 2020, when the market in the six-county region slowed significantly as sellers pulled homes off the market because of COVID-19 stay-at-home orders.
Since then, a dramatic rebound has seen 11 straight months of double-digit median home price rises.
Experts credit multiple factors: the fast-expanding buyer market of millennials, more demand for space as more people work from home, and ultra-low mortgage rates, which are attracting wealthy investors who compete with the middle class for limited housing stock.
Housing bill put in perspective
A bill advancing through the California Legislature to allow for denser home building in single-family zones would be likely to produce an uptick in the state’s housing supply, but the so-called upzoning probably won’t cause mass redevelopment, according to a report published Wednesday.
Andrew Khouri and Ari Plachta write that the study by the Terner Center for Housing Innovation at UC Berkeley offers the most detailed analysis yet of the potential effect of Senate Bill 9, designed to allow up to four homes on most single-family lots and spur the construction of badly needed new housing.
Because of the way unit development would pencil out, the study found that “the vast amount of single-family parcels across the state would not see any new development,” said David Garcia, policy director at the Terner Center, which supports the bill written by Senate President Pro Tem Toni Atkins (D-San Diego).
SB 9 passed the state Senate and is expected to be taken up in the Assembly Appropriations Committee by Aug. 27. If approved, it would go to a final vote in the Assembly and then to Gov. Gavin Newsom’s desk. The Terner Center study found that under the bill, a total of 714,000 new homes would make financial sense to build, and it would take years to build them — if they ever are, since not all homeowners would want to sell or develop their own property.
What we’re reading
USC is on a selling spree. After unloading its presidential mansion, the school is offering up another home it owns in the Hollywood Hills for $4.25 million, according to House Beautiful. Designed by Frank Lloyd Wright, the stunning abode is listed on the National Register of Historic Places.
If you’re bidding for a home, there’s an increasing chance that the other contenders aren’t trying to live there. They could be an investor, a house flipper, or even a hedge fund, according to NBC News, who reported that investment groups are scooping up homes across the country thanks to their unmatchable financial firepower.
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