Kelowna realtor all smiles after $86M deal, and there’s more coming
It’s not every day that a Kelowna realtor concludes a deal for $86.5 million.
But for Royal LePage Kelowna realtor Steven Laursen, the Knox Village deal is just the start.
Over the past 14 months Laursen co-brokered the deal to have Centurion Real Estate Investment Trust buy the 238-unit townhouse project off Clifton Road from Kerkhoff Construction, and it’s not even built yet.
“When Centurian was ready to remove their subject waiver, I did call up the point person for Centurion - we became fairly close over months of working with him – so I congratulated him and said I was very excited about the deal being done and I said to him: ‘I’m looking forward to getting together and taking you out to celebrate.’” Laursen told iNFOnews.ca.
"He said: 'We’ll do that at some point in time but, for now, just go find me more.’ He was very to the point. We were just texting the other day and he was still at it: 'Go find me more. I need more here in Kelowna.’"
The deal works out to $336,500 per door, lower than the record $500,000 per door sale that Laursen helped close in January for the Proxima apartments.
That was also a Kerkhoff rental project that was fully leased and sold for $26.9 million to Canadian Apartment Properties Real Estate Investment Trust. The higher price it due to its prime downtown location at Richter Street and Clement Avenue.
Laursen was also involved with Peter Gibson of Cushman and Wakefield in Vancouver (who he worked with on the Knox Village deal) in a $44.75 million sale to All Island Equity Real Estate Investment Trust for 212 rental units in four Kelowna buildings and one in Penticton earlier this year.
There’s no slowdown on the horizon for these kinds of deals.
“Every year you feel like it’s OK we’ve hit that peak now,” Laursen said. “No, we just keep on going. The problem is, we’re just so limited on inventory right now that it’s making it challenging for people to purchase anything in the city. There’s a lot of people looking from Vancouver and Toronto, Calgary and Edmonton.”
The Real Estate Investment Trusts seem to have discovered the Kelowna market about four or five years ago and the buying has just increased since then, Laursen said.
For the most part, the trusts want newer buildings where maintenance and renovation costs are low and interest from renters is high.
Some, though, are buying older buildings where they renovate as tenants move out and increase the rents.
But, that wasn’t an issue for Proxima, which was fully leased out and could still justify the $500,000 per door cost because rents were still making it possible.
“A lot of these renters are looking for homes for the longer term,” Laursen said. “People are finding it challenging to find rental units in downtown Kelowna.”
It doesn’t help that Kelowna has the lowest vacancy rate of any major metropolitan area in the country at 0.6%.
READ MORE: Kelowna has lowest vacancy rate of any major Canadian city and that's not a good thing
Developers are building premium apartments with amenities that will attract renters, many of whom recognize that they may never be able to afford to buy as the average price of single-family homes in the Central Okanagan passed the $1 million mark last year.
READ MORE: 2021 record year for Okanagan real estate sales
“I don’t think the Okanagan is affordable living anymore,” Laursen said. “It’s a tough situation we’re in right now. We need more product built in the city. We do need to see some more single-family development being built.
That means, with real estate trust jumping in and buying new projects, that could free up resources for developers like Kerkhoff to get out there and build more.
All this is good news for a realtor in Laursen's situation, especially after closing an $86.5 million deal that will be complete when the final units are finished next year.
“It definitely puts a smile on your face,” he said. “But it’s a labour of love, that’s for sure.”
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