Cannabis companies keen on Kelowna

Cannabis companies keen on Kelowna
Edmonton, Kelowna to see cannabis-infused real estate booms: Re/Max
Growing flowers of cannabis intended for the medical marijuana market are shown at OrganiGram in Moncton, N.B., on April 14, 2016.

Two cities in Western Canada have been named the next commercial real estate “hot spots” for the cannabis market, according to a report.

Both cities are expected to see significant commercial growth, the annual investor report from real-estate firm Re/Max Commercial found. That’s because legalization is providing a “new segment” of demand, especially for retail space, said Elton Ash, regional executive vice-president at Re/Max Western Canada.

Kelowna and Edmonton set to be hot spots in cannabis real estate: RE/MAX

Real estate firm RE/Max Commercial says that Kelowna, B.C., and Edmonton are both expected to see positive commercial growth in the coming months as a result of cannabis legalization.

Both cities are expected to see significant commercial growth, the annual investor report from real-estate firm Re/Max Commercial found. That’s because legalization is providing a “new segment” of demand, especially for retail space, said Elton Ash, regional executive vice-president at Re/Max Western Canada.

Prices for commercial real estate in the southern B.C. city are anticipated to see an uptick, as approval for cannabis retail licences will be “extremely competitive” amid high demand once the substance becomes available.

“There is obviously uncertainty as to how commercial retail prices will be affected in the future,” Ash said in a phone interview. “But the bottom line of the report is there will be greater pressure on retail outlets on all markets across Western Canada based on cannabis demand.”

Kelowna, which is located in the Okanagan Valley, has already identified more than 900 potential zoned sites for dispensaries.

“There is obviously uncertainty as to how commercial retail prices will be affected in the future,” Ash said in a phone interview. “But the bottom line of the report is there will be greater pressure on retail outlets on all markets across Western Canada based on cannabis demand.”

Lease rates for industrial spaces in the area are also expected to rise as marijuana companies vie for more space to house their operations, says the annual Commercial Investor report.

Kelowna, in southern British Columbia, has identified more than 900 retail spaces that could host cannabis companies. Lease rates for industrial spaces in the area are expected to rise as more cannabis companies jockey for space to set up shop, Ash explained.

This increase comes after Kelowna’s real estate market saw an eight per cent decrease in total sales value for its commercial property year over year.

Kelowna, in southern British Columbia, has identified more than 900 retail spaces that could host cannabis companies. Lease rates for industrial spaces in the area are expected to rise as more cannabis companies jockey for space to set up shop, Ash explained.

Meanwhile, it is anticipated that vacancy rates will continue to drop and lease rates will rise moderately for the remainder of the year in Edmonton thanks to the arrival of Aurora Cannabis.

But in Vancouver, commercial property sales have dropped significantly, and Ash said that’s due to the challenge of finite land. There is however significant demand evidenced by the growing tech industry, he said, citing Amazon coming into Vancouver.

READ MORE: Ontario Real Estate Association calls for stronger protections against marijuana grow ops

But in Vancouver, commercial property sales have dropped significantly, and Ash said that’s due to the challenge of finite land. There is however significant demand evidenced by the growing tech industry, he said, citing Amazon coming into Vancouver.

New construction, particularly in the Leduc and Nisku areas of the city, has been burgeoning amid the addition of a 74,322 square metre medical marijuana production facility and a 37,161 square metre auto parts and distribution warehouse from Ford Canada.

“Cannabis is adding an additional demand segment to the overall market, for industrial or retail,” said Elton Ash, regional executive vice-president at RE/MAX of Western Canada on Wednesday.

VANCOUVER—Two Western Canadian cities — Kelowna and Edmonton — are positioned to be commercial real-estate “hot spots” for Canada’s post-legalization cannabis market, according to a new report.

Cannabis plants intended for the medical marijuana market grow at OrganiGram in Moncton, N.B., on April 14, 2016. (Ron Ward / THE CANADIAN PRESS)

Meanwhile, Re/Max anticipates that lease rates will rise moderately in Edmonton thanks to the arrival of Aurora Cannabis, a Canadian licensed producer with an 800,000-square-foot production facility.

TORONTO — Two cities in Western Canada have been named the next commercial real estate "hot spots" for the cannabis market, according to a report.

Meanwhile, Re/Max anticipates that lease rates will rise moderately in Edmonton thanks to the arrival of Aurora Cannabis, a Canadian licensed producer with an 800,000-square-foot production facility.

Real estate firm Re/Max Commercial says that Kelowna, B.C., and Edmonton are both expected to see positive commercial growth in the coming months as a result of cannabis legalization.

The cannabis industry is “slowly” absorbing existing industrial spaces and development lands, which contributed to the rise in lease rates, he added.

Prices for commercial real estate in the southern B.C. city are anticipated to see an uptick, as approval for cannabis retail licences will be "extremely competitive" amid high demand once the substance becomes available.

Kelowna, which is located in the Okanagan Valley, has already identified more than 900 potential zoned sites for dispensaries.

He acknowledged that small businesses face challenges when increasing lease rates combine with employee retention problems stemming from affordability issues.

Lease rates for industrial spaces in the area are also expected to rise as marijuana companies vie for more space to house their operations, says the annual Commercial Investor report.

This increase comes after Kelownas real estate market saw an eight per cent decrease in total sales value for its commercial property year over year.

“There’s no quick fix,” he said. “On the other hand, this is a great opportunity for smart businesses and landlords.”

Meanwhile, it is anticipated that vacancy rates will continue to drop and lease rates will rise moderately for the remainder of the year in Edmonton thanks to the arrival of Aurora Cannabis.

New construction, particularly in the Leduc and Nisku areas of the city, has been burgeoning amid the addition of a 74,322 square metre (800,000 square foot) medical marijuana production facility and a 37,161 square metre (400,000 square foot) auto parts and distribution warehouse from Ford Canada.

"Cannabis is adding an additional demand segment to the overall market, for industrial or retail," said Elton Ash, regional executive vice-president at Re/Max of Western Canada on Wednesday.