Cannabis lighting up growth in Kelowna’s industrial sector
KELOWNA - There’s a smoking hot industrial land market being fired up in Kelowna these days due, in large part, to the cannabis industry.
The City of Kelowna only allows pot to be grown in land zoned Industrial, so there is now only a 1.5 per cent vacancy rate and development is moving to the north end of Kelowna next to Lake Country.
“The emerging cannabis sector has shown a voracious appetite for industrial space, for larger format growing operations, processing facilities (concentration) and research and development space,” Kris McLaughlin wrote on his website for MCL Real Estate, of which he is Director.
That includes two buildings on McCarthy Road (just south of Beaver Lake Road) totalling more than 372,000 square feet for The Flowr Corporation plus a 60,000 square foot building on nearby Jim Bailey Road for GTEC Holdings, another cannabis company.
That makes up almost 35 per cent of the 1.25 million square feet of industrial projects underway or proposed in the next few years.
McLaughlin’s list does not include anything for Trek Cannabis Corp., which is advertising for a master grower to manage 200,000 square feet of growing space. Its website says it hopes to lock down two Okanagan properties by the end of May, although there’s nothing to say they will be in Kelowna.
“We can’t build more land,” McLaughlin told iNFOnews.ca, noting that Kelowna is constrained by geography and the Agricultural Land Reserve.
“We’re getting tighter and tighter on the industrial dirt side because we have more and more people looking for warehousing and distribution options,” he said. “That’s why we’re seeing $1.5 million an acre for an industrial piece of dirt, say in the airport business park, for example.”
It’s also contributing to a resurgence in industrial development and redevelopment in the North End of Downtown.
One example is EcoLock. It expects to start construction this spring on a 112,000 square foot, five storey, self-storage and co-work building on Bay Avenue.
McLaughlin does see the North End eventually evolving away from industrial use as more commercial and residential moves in, but that could take 20 years.
McLaughlin also sees a change in building design as ceilings have to be higher to accommodate more automation.
In terms of the value for industrial land, it’s gone up 10 to 15 per cent over the last year, he wrote. The priciest industrial land in the city is the U-Haul property on Enterprise, worth $23 million.
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