Ramada by Wyndham Kelowna Hotel and Conference Center

Image Credit: Ramada by Wyndham

Kelowna’s Ramada Hotel and Conference centre is a big, sprawling, prominent, long-standing feature of the city, sitting right across the highway from Orchard Park mall.

It has 135 guest rooms, 6,750 square feet of meeting rooms, indoor pool, spa, fitness centre and restaurant.

It’s for sale for almost $32 million yet the building itself is assessed by B.C. Assessments at a mere $112,000.

READ MORE: Kelowna’s Ramada Hotel for sale for $32 million

And no, that's not a typo even though it’s well below the value of an average priced house in Kelowna.

In contrast, the Twin Creeks Inn in Lumby and Armstrong Motel buildings are worth around $800,000 each.

Even Kelowna’s Prestige Beach House, with its 67 rooms bounded by a busy Highway 97 on one side and overlooks street people hanging out at the Gospel Mission homeless shelter on the other, has a building value of $176,000.

Other hotels buildings in the Kamloops and Okanagan regions are worth millions.

The Coast Kamloops building is assessed at $6.6 million. It’s sister hotel in Kelowna, the Capri, comes in at $4.5 million and the Coast Penticton is assessed at $654,000.

These don't include land values which, for the Ramada, come in at more than $15 million.

So, why the super low valuation for the Ramada building?

It’s not brand name, age of the building or how well it’s maintained.

It all comes down to land value.

“All market properties are valued on the highest and best use of the site and hotels are valued using the income approach to value,” Tracy Shymko, acting assessor for the Thompson-Okanagan for B.C. Assessments, explained in an email to iNFOnews.ca.

“With the Ramada Hotel, we have reached a point where the market value of land zoned C9 has surpassed the income value generated by hotel sales. When that happens, the property is ripe for redevelopment.

"Redevelopment may or may not happen depending on the motivation of the owner however, the favourable zoning provides a high market value for land if the owner wishes to sell. When a property’s highest and best use value is as vacant, the improvements are valued at a nominal value until they are demolished.”

That’s echoed by the Royal LePage Kelowna listing for the sale of the property.

“The hotel is sited on a 4.33 acre ‘trophy’ piece of real estate fronting Highway 97 at two controlled intersections,” the listing says. “This property has both current as well as future development potential.”

The nearby Kanata Hotel has buildings valued at $6.6 million. The Comfort Inn is valued at $4.6 million and the Sandman at $7.8 million. All are along the same highway stretch as the Ramada.

Even the vintage (1928) Plaza Hotel in Kamloops carries a value of $1.2 million.

That’s for sale for $6.75 million. It has a total assessed value (building and property) of $3.9 million.

READ MORE: Historic downtown Kamloops hotel for sale

And it’s not just bigger city hotels that carry these higher building values.

The Prestige Vernon Lodge building is assessed at $3.3 million and the Penticton Lakeside Resort comes in at $19.4 million.

Even the recently-renovated, 34-room Westridge Motor Inn in Osoyoos has a building value of $1.8 million. It’s for sale for almost $6 million.

READ MORE: Investors turning away from the Okanagan commercial real estate market

One outlier in all of this is the huge Marriott Grand Okanagan on Okanagan Lake in downtown Kelowna. It carries a total assessed value of $72.8 million but the building is only assessed as being worth $3.1 million.

This comes despite the fact it has 260 guest rooms, 60 vacation homes and condos, a fitness centre, pools, 35,000 square feet of meeting space and a 14,000 square foot “Grand Ballroom.”

“The other hotels are valued on the income approach” the email from B.C. Assessment’s Shymko said. “The income approach produces a value for the full real estate value.

"However, B.C. Assessment is legislated to provide a land, building and total value for all improved properties. To do this, we take the total value achieved by the income the real estate and subtract the land value as vacant which gives a land, building and total value.”

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