Big, eastern investors starting to buy up Thompson-Okanagan apartments
While the rising prices of single-family homes has gotten the headlines in recent months, another kind of home buying is taking off in the Thompson-Okanagan and it brings big bucks with it.
The international commercial real estate firm, Avison Young, recently sold the 193-unit Lakeview Point apartment complex on Elliot Road in West Kelowna for $63.3 million.
One of the unusual aspects of the sale is it’s the first time Toronto-based Canadian Apartment Property Real Estate Investment Trust, Canada’s largest landlord, has bought into what’s known as a secondary market.
“It’s not an unusual price but it’s a high-water mark price for sure, since it’s West Kelowna," Carey Buntain, one of the Avison Young realtors who made the deal, told iNFOnews.ca. "For CAP (Canadian Apartment Property) it’s their first buy in that kind of market. You’re seeing a lot of that institutional capital flow to secondary markets.”
These big investors normally buy only in larger cities, like Toronto and Vancouver but, especially since COVID-19, medium sized markets have become all the rage.
In February, the Carrington View apartments in Kelowna sold through another company for $54.05 million. Later in the spring, Avison Young reached deals for the City View Garden Apartments in Vernon for $5.5 million and the Brunswick Manor property in Penticton for $5.25 million. It has an active listing for a 60-unit townhouse complex in Kamloops.
Interest in the region by big investors started before COVID but the demand continues to increase.
“We started to see a bit before-hand, due to migration into these areas, particularly, Kelowna and Victoria,” Buntain said. “Where we’ve seen it really accelerate since COVID is in the outlying areas like Langford, Nanaimo, West Kelowna, Kamloops and Vernon. These areas are all starting to garner more interest from private capital that traditionally wouldn’t look there, as well as institutional capital from out East.”
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The company’s Multi-Family Investment Report for Fall 2021 lists three properties selling for $40 million or more in Victoria and Langford in the first half of 2021.
It shows six sales for Metro Vancouver. Two have undisclosed prices but four were for more than $50 million and one was $152 million.
“With COVID, we saw a huge push with people moving to look for more space or larger units or better quality of life so that really propped up demand for these rental units in these outside markets,” Buntain said. “In Toronto and in Vancouver and, in some cases core downtown Victoria, there was a softening in the rental market because of people leaving those areas and moving to areas like Kelowna, like Kamloops, like Nanaimo. There’s been a ton of investment activity and the institutional capital has recognized that trend and they think that’s going to continue for the foreseeable future.”
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— This story was updated at 10 a.m., Nov. 22, 2021, to clarify the Kamloops apartment is an active listing and the Carrington View in Kelowna was sold by another company.
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