How the Kelowna Wildfires Affect Your Commercial Investments

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Back in action! Cory and Melissa have returned to the studio. This week we are joined by Jeff Hancock who specializes in land development and is joining us all the way from the William Wright Kelowna office.

Jeff is here to discuss from first hand experience the repercussions and affects the recent forest fires have on the local market over there. These annual occurrences have become a part of life for this vibrant Okanagan city that has over the past few years has become a bubble for real-estate development.

Jeff also unpacks a comprehensive overview of the commercial real estate landscape in Kelowna. This episode might be compact, but it’s packed with the latest, need-to-know information. Lets go!

After another devastating summer of wildfires in BC, we sit down with Jeff Hancock of the William Wright Commercial Kelowna office to discuss how climate change impacts real estate. Will the Kelowna wildfires affect your commercial investments? Find out!

Who is Jeff Hancock?

I started my career in Vancouver about 20 years ago on the development consultancy side. I then moved to Kelowna 10 years ago with my family. I transitioned to a role with the City of Kelowna, started my own consultancy and then joined the team at William Wright Commercial specializing in development land.

What impact have the fires in Kelowna had on the real estate market?

When the fires are happening, it’s all hands on deck. But in the Okanagan, we’re used to wildfires. They don’t always happen to the same scale as this year but it doesn’t seem to have a noticeable effect on demand for the type of real estate I transact.

There may be some impact on the single family, residential side but it’s not as noticeable on the commercial side.

The groups coming into the Okanagan market are more sophisticated and want to be here for the long term. They know this is a really strong growth area. So the ebbs and flows of wildfires or floods, they take those in stride and continue to push forward with their business plan.

So you’re not seeing an effect by the wildfires on buyers?

Now that there’s smoke down in the Lower Mainland, it feels like we’re all in it together. The whole province is affected, even if we’re more impacted up here.

But people still want to move to the Okanagan, whether it’s because of our lifestyle factors, growing economy, UBCO, etc. Nothing has changed there. Once everything is under control with the fires, we move on.

We may need to adjust and get a little bit smarter about how we build things. All of the municipalities in the Okanagan are moving towards that.

How has the Kelowna real estate market been lately?

We’ve ebbed and flowed like every other market in the country. But the fundamentals remain strong here. The type of developer or investor who is looking in the Okanagan has really changed in the last little while. We’re bullish on things up here for the long term.

We continue to not build enough housing for the population that wants to move here, which is a concern. Developers recognize that this is a place of continued growth and upside for their investments.

Are you still seeing the same demand from developers for land in the Kelowna area that you were seeing a few years ago?

When things are slower and more challenging, you get a different buyer in the market. I’m seeing a lot of people who are looking for opportunities. The pressure from buyers is still there, even if the deal volume has slowed.

A lot of groups are on the sidelines, just waiting for the right opportunity to jump back in. When they do, that will be a gamechanger for the Okanagan. It’s going to elevate the Kelowna market.

Will there ever be an oversupply in Kelowna?

If you look at the macro factors, Kelowna is one of the fastest growing cities in Canada. We’re constrained by geography and so it’s hard to find land to develop here. We are also so far behind on the type of housing we need to build, meaning all of the supply upcoming is going to be absorbed very quickly.

Kelowna is very far away from an oversupply situation, if we ever see one. Especially when you factor in all of the plans for growth in the city, such as the new UBCO campus, it’s unlikely an oversupply issue will ever happen.

Are developers concerned with the changes put in place by the new Kelowna city council? Are they not as developer-friendly as the previous council?

It is a topic that is top of mind. In my opinion, some of the decisions made by the current council were not the most prudent.

But again, developers who are here for the long term understand that councils come and go. They may have to deal with a less development-friendly council for a few years but they still want to be here for the long term.

The young, dynamic staff we have in Kelowna are very progressive and very smart. Those are the people I deal with daily. That’s where I would focus my attention as a developer. Councils come and go but it’s really about the staff.

During the height of the pandemic when interest rates were low, a lot of people invested in commercial and residential real estate in Kelowna. Now that it’s a different story with interest rates, where is the Kelowna market heading?

Sentiment is very positive. Kelowna is still very young and there is lots of room for growth. Right now, we’re at the bottom of the trough and we’re going to start to ramp up again. As interest rates and construction costs stabilize, I think we’ll see more and more growth.

The level of sophistication coming into the market – big groups who are interested in developing at scale – really changes everything. We’ll see that over the next 10 years as Kelowna continues to mature.

Where and what would you invest in Kelowna?

Beds and sheds! Purpose built rental and well-positioned industrial will be strong for the foreseeable future. The office marketis also quite underrated in Kelowna. Strata office in the right location and at the right scale would be interesting.

Almost any asset class in the Okanagan for the long term is a good bet. You may have to wait a little longer depending on the asset class. But at the end of the day, everything is going to go up here because it has to.

It comes down to executing properly. You have to provide the right sized product with the right amenities. Brokers can add a lot of value to that process. There is a lot of value-add by having the right broker on your side.

The 6 Pack: Getting to Know Development Land Specialist at William Wright Commercial Kelowna, Jeff Hancock

Favourite bar or restaurant in Kelowna?

BNA. It’s a local, family-owned bar and restaurant in a super cool heritage building. It has bowling lanes and awesome food. It’s a great time!

What would your last meal be on death row?

It’s got to be some sort of delicious pasta, like a spaghetti bolognese with garlic bread.

Favourite band or musician?

Tyler Childers. He’s a country guy from Kentucky. He’s fantastic.

What’s your go-to karaoke song?

Purple Rain.

A book recommendation for our listeners

Canary in a Covid World, which my brother-in-law actually contributed to. It’s a collection of essays written by people who were prominent voices during the covid time.

What is something you’ve purchased for under $1500 that has had a positive impact on your life?

The firepit in my backyard. It might have been slightly over $1500 but it was close!

• William Wright