Vancouver Commercial Real Estate Podcast

Providing real-time insight into today's commercial real estate industry.

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May 31, 2023
VCREP #98: BC’s Best Kept Secret with Marianne DeCotiis

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This week, Cory and Matt welcome back Marianne DeCotiis, commercial real estate broker who has since moved from Langley and is now reporting from the William Wright Commercial office in Kamloops.

We are opening the Kamloops real estate market and digging in! How has the commercial market changed and developed over the past few years? How easy is the market to navigate? What is the current state of supply? How have the operations of the commercial real estate market shifted? A great deal of information for the VCREP community this week, worth a second listen to make sure you digest it all.

Marianne is back and providing us with fantastic insight. This is another information packed episode you do not want to miss out on. Enjoy!

We’re letting you in on BC’s best kept secret: Kamloops! Commercial broker Marianne DeCotiis breaks down everything you need to know about the Kamloops commercial real estate market. Find out why you need to invest in Kamloops now, before it’s too late!

Who is Marianne DeCotiis?

I have been working with Cory and William Wright Commercial for the last eight years, originally in the Langley office. When Cory wanted to open an office in Kamloops, he gave me the opportunity to join the team. I was excited because it’s a growing community and has been a second home for me with a lot of my family living there.

Kamloops is the 6th William Wright Commercial office and we’re very excited about it. What is happening with the Kamloops market that makes it so exciting?

Population growth is definitely part of it. There are also a lot of high profile industries in Kamloops like Thompson Rivers University, mining, the tournament capital of BC, etc. Kamloops is a hub for distribution and the rail lines. It’s also close to Revelstoke on the way to Calgary, and in the middle of the Okanagan, making it perfect for transportation. 

On making the move to Kamloops & current rental rates:  

It was very hard to find a vacant unit in Kamloops when I first moved here. I was offered a one bedroom basement suite for $1700. There was a downtown option for $1900 that was two bedrooms, one bathroom but had a green bathtub. We’re seeing Burnaby rental rates in Kamloops, which is really surprising.

When you’re looking at multi-family buildings in Kamloops, you’re paying less than in Burnaby but getting the same rental rates. That’s the opportunity that exists in Kamloops.

What are cap rates like in Kamloops? How does Kamloops compare to the Lower Mainland

I pulled an example of two buildings that sold around the same time last year for the same price – one in Kamloops and one in Burnaby. The Kamloops building is 53 units, built in 2014, sold at a 4.47% cap rate with a sale price of $11,250,000. The Burnaby building is 41 units, built in the 1970s, sold at a cap rate of 2.5% with a sale price of $11,250,000.

So for the same price you get a newer, larger building and much better cap rate. Plus, the vacancy rate is basically less than zero in Kamloops. It’s very low so tenanting a building isn’t a problem.

Cory Wright on cap rates for industrial real estate in BC: 

Cory: We looked at an example of an industrial building in the Aldergrove/Cloverdale area; it was 8800 square feet with an asking price of $5.5 million and an average lease rate of $18-20/square foot. In Kelowna you could buy 25% more square footage for less than half the price with a similar lease rate.

Contrast that with Kamloops. Kamloops hasn’t had the same pop as we’ve seen in Kelowna or Victoria, but the metrics are similar. It just hasn’t taken off yet.

What is the population of Kamloops? 

Kamloops has 104,000 people. We’re seeing about 8.4% growth over the last five years, which is higher than the national average.

What asset class would you recommend to an investor with $1-2 million wanting to invest in Kamloops? 

I’d definitely sayindustrial real estate. Smaller bay industrial is a hot commodity right now. There’s very little inventory.

How is the Kamloops commercial real estate market right now?

I’m encountering sellers with 2021 prices and it’s hard to get them excited about selling their property now. I have a lot of sellers in “wait and see” mode. Their buildings have quadrupled in value so there’s no reason for them to sell.

Leasing is going wild. We took over a shopping centre when I arrived in March and we had 18,000 square feet of leasable space. We have already filled 16,500 of that. That was really exciting!

Is Kamloops as supply-constrained as places like Vancouverand Victoria? What is development like?

We are getting a bunch of new developments happening, which is exciting to see. One developer is building 400+ condos downtown, which will help with housing the people wanting to move here. On the north shore of Kamloops, they’re also introducing automatic zoning for four-plexes. They’re also building a lot of new developments in that area.

If you come to me and tell me what you want, I’m not just sitting and waiting for that property to come to market. I’m getting on the phone and doing my job to find the property for you.

Kamloops is one of the best investment opportunities in the province right now. It’s about having a professional in the market who can find you those assets.

On residential realtors working in commercial real estate: 

We see a lot of residential realtors wearing the hat of a commercial broker, but we don’t recommend that. They have training in residential but not commercial, which involves other aspects like environmental reports, financing structures, zoning, official community plans (OCPs), etc.

In one example a residential realtor sold a plot of land but didn’t look at the OCP and what the land was zoned for. It ended up costing his client a lot of money.

What’s the best area to look at in Kamloops?

I’ve been suggesting a lot of places to clients that are in Kamloops, but about 15 minutes from the city centre. And I get a lot of no’s to those suggestions. That’s because when you live in Kamloops, everything is a 5-10 minute drive away. So adding another 20 minutes isn’t ideal.

Everyone wants to be in the city centre of Kamloops or as close as possible to the city centre.

What cap rates can people expect in Kamloops? 

In multi-family, we’re still around a 4-4.5% cap rate in Kamloops. That asset class is in demand, so the cap rate is lower. Most people who want to get into investing choose multi-family because it’s similar to residential and easier to understand.

But you can get a beautiful building with good tenants and long term leases for a 5-5.5% cap rate. That’s in the core of Kamloops, AAA locations. Compare that to a 3.5% cap rate in Vancouver. You’re not sacrificing on the vacancy rate in Kamloops either.

The 6 Pack: Getting to Know Kamloops William Wright Commercial Agent, Marianne DeCotiis

What is your last meal on death row? 

It would probably be a charcuterie board with really good bread. And with some good wine, of course.

What is one book you recommend to our listeners?

I’m listening to Grit by Angela Duckworth. I’m not sure if I’d recommend it yet but it seems good so far. It’s about persevering and what it takes to be really successful.

What is your favourite band or musician?

I’ll go with Sublime this time.

What is your go-to karaoke song? 

Lime in the Coconut!

What is something you’ve purchased for under $5000 that has had a positive impact on your life?

I have to say my dog, Bruce. He was nowhere near $5000 but he’s just the best.

Favourite restaurant in Kamloops? 

I’m going to go with The Stock Pot Cafe. They have delicious breakfast, you get a ton of food for $12 and the service is great. My mom and I love to go to C-Lovers for fish and chips once in a while too.

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Vancouver Commercial Real Estate Podcast

For all the curious minds interested in commercial real estate investing, grab a coffee and pull up a chair because we have exclusive stories and tips from commercial real estate brokers, investors, developers, economists, urban planners, and everyone in-between. From the successes and failures to the motivations and lessons learned, the Vancouver Commercial Real Estate Podcast is your insight into commercial real estate in Vancouver, Victoria, Kelowna, and beyond.

What's the best real estate market to invest in? What are the commercial real estate asset classes and property types? Hosted by Cory Wright, founder of William Wright Commercial, and co-hosts Adam and Matt Scalena of the Vancouver Real Estate Podcast, our podcast opens the door to real estate investing for everyone from beginner investors to experienced real estate professionals. New episodes are released every Tuesday. Follow the Vancouver Commercial Real Estate Podcast on Apple Podcasts, Spotify, Google Podcasts, or your favourite streaming platforms.

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This communication is not intended to cause or induce breach of an existing agency agreement. E&OE: All information contained herein is from sources deemed reliable, and have no reason to doubt its accuracy; however, no guarantee or responsibility is assumed thereof, and it shall not form any part of future contracts. Properties are submitted subject to errors and omissions and all information should be carefully verified. All measurements quoted herein are approximate.