91: How the Purpose-Built Rental Market is Impacting Kelowna with Tradecraft Consulting's Jeff Hancock

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Okay, welcome to the Cologne Real
Estate Podcast.

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I'm your mortgage broker host,
Taylor Atkinson.

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I'm your real estate agent host,
Matt Glenn.

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Although, by looking at this
video, you'd think I was the

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mortgage broker host.

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Yeah, you're in my seat.

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Yeah, good.

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I feel like I got so much power.

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Yeah, well, we just finished the
recording with Jeff Hancock.

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Yeah, he brought it.

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It was awesome.

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Yeah, he's a commercial agent at
William Wright, but also runs a

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consulting company, Tradecraft.

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This guy knows his spreadsheets.

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I freaking love this.

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He's a spreadsheet kind of guy.

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This is stuff Matt and I have been
just bullshitting on the podcast.

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Like, yeah, these numbers, these
numbers.

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And, you know, we're not far off.

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So it was really nice to actually

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have some concrete numbers to look
at.

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But just wild data.

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Yeah, he's done a lot of work on

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this.

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brought it.

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So, yeah, thanks, Jeff.

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It was fun talking to him, you

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know, like it kind of.

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Really good picture of what's

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going on, especially in the
purpose built rental space in

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Kelowna, just construction in
general.

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And it was, it was awesome.

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I mean, one thing that you brought

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up kind of the end is it's not
like the show had a negative feel

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about it, but there was a lot of
like realistic.

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numbers and, you know, deals that
we're looking at vacancy rates and

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where these projects are in the
pipeline.

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So it felt a little bit heavier,
like, oh man, it's tough out

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there, but there is always
opportunity.

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It just shows like, you actually
have to do your research and due

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diligence and speak to guys like
Jeff, you know, and run some

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numbers and you will find
something.

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But yeah, it was very interesting
show.

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I loved it.

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Absolutely.

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And then, so a couple of items of
news here.

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So first one is Taylor's favorite
DCC is up. 2 .4 in Kelowna.

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Your thoughts, Taylor?
Yeah.

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I mean, I don't think that's that
big of an increase.

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Yeah. 2 .4 is reasonable.

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Yeah.

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Is it because there's less
development?

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Is there less development?
Projected less development?

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No. I mean, Yeah. 2 mean, I've
seen some of the data from City of

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Kalina.

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Yeah.

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It looks like on their infill
side, they're getting more

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applications, but kind of a profit
loss, right?

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They're running a balance sheet of
what they need to develop in the

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city.

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You know, it's funny.

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I was in City Hall a couple of
weeks ago doing a building permit

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for myself, sat down.

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I was just paying for it pretty

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easy.

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And hey, FYI, you can do your

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building permit online now.

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which is pretty cool.

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So you just submit all the
documents online?

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That's what I did for my Facebook
suite.

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a online?
That's what I did for my Facebook

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suite.

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Yeah.

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Did it work for you?
Yeah, it worked well.

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It did not work for me.

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Well, I went in beforehand and

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talked to the woman there.

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I can't remember her name.

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Tammy, I worked with.

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It wasn't Tammy.

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It wasn't Tammy.

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But she was wonderful, whoever I

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was with.

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She told me what to do and I went

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home and it like first try.

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So yeah, So yeah, I did it all.

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And then I signed, but for
whatever reason didn't work.

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So I called like two weeks later.

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I'm like, hey, I'm pretty sure

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this should be through by now.

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And she's like, oh, well, you need

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a docusign.

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I'm like, yeah, no, I haven't.

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It's done.

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The system isn't up and right.

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So I think there's still a couple
of kinks.

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But anyways, I went into pay and
there was a guy beside me, you

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know, having a discussion with
someone from the city as you do

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when you're, you know, doing
projects.

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And they listed his DCC fee.

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It was like something like the $60

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,000 range.

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And he's like, what?

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I am building like a shed.

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Well, sir, if it was like attached

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to your house, like it wouldn't be
a DCC fee, but because it's not,

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it's, you know, and this is kind
of the city's explanation for it.

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I won't get into it.

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It was pretty valid on why they

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have to kind of have a standard
set fee for certain areas and

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projects.

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So it makes sense why they need

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that, but pretty tough to swallow
if you're that guy.

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So 60 grand.

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So you're building a shop.

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Like what's the budget for the
shop?

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60 grads.

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Exactly.

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And then you go to, God, geez,
that is a stinger.

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Yeah.

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So guaranteed.

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Yeah.

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He's, he's doing that without a

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permit for sure.

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That's right.

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Also news city Kelowna coming back
to provincial regulations on

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Airbnbs.

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So that means.

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Amen.

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Airbnb is coming to your

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neighborhood, but not to awkward
event.

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Yeah.

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I think it's totally reasonable

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about time.

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Well, yeah.

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Should have never gone above and
beyond in the first place.

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and beyond in the first place.

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That was definitely a major

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fumble.

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Fumbled bank, I'd say.

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Yeah.

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Well, hey, you know what?

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At least they realized it.

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Yeah.

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Like, if you make a mistake, raise
your hand.

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I mean, I never do, but I never
make mistakes.

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Yeah.

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Honestly, Yeah.

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Honestly, I agree completely.

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And then, like, if the vacancy

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rates start coming up like they're
expected to.

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we're talking to Jeff here in the
next few years, like the city

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might, obviously they haven't said
this, it's totally just me making

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this up.

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They might apply for the

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exemption, right?
Yeah, I think you're right.

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think you're right.

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I think everyone at this point

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sees the light at the end of the
tunnel.

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And yeah, speaking of Jeff, like
definitely listen to this podcast

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because it does look like vacancy
is going to stay up or keep

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increasing for the foreseeable
future.

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And if that happens, yeah,
opportunity for Airbnbs to get in

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maybe.

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It's like we said this in the

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show, like we said this in the
show, but it's almost like if

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something's right, you don't have
to stomp on it with every single

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thing you have, like a little
tweak here and there or a couple

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of rules at a time.

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Yeah.

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You know, because like sweet
Jesus, man, this pendulum is just

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keeping us all on our toes.

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like Yeah.

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And the third item is January
21st.

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And the third item is January
21st.

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No 25 % tariff so far.

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And, you know, he's still

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threatening.

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It says it might not be as bad.

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But so far, we got through day
one.

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I mean, the threat alone, though,
still kind of slows.

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Yeah, but he was threatening day
one.

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So we're day two as of recording.

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And he said no. We're in the

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clear.

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Yeah, well, he said probably going

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to be less than 25%.

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And maybe by the end of January.

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But hopefully, he's just full of
shit.

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And we can just move on, right?
But yeah, I agree with you.

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The threat is having already, I
think, the Canadian dollar is down

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on this.

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Yeah, this.

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Yeah, we're getting crushed.

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Yeah.

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So the thread alone is annoying,
but the actual hammer has not

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dropped.

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All right.

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bunch of beauties at the brokerage
so uh bunch of beauties oh yeah me

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included that's what i have to say
about that enjoy the show guys it

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is a good one Okay, welcome to the
show, Jeff Hancock.

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Thanks for joining us.

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Thanks for having me, guys.

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Appreciate it.

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Yeah, it's been a long time trying

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to get you on.

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We met, was it like seven, eight

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months ago?
Yeah.

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Excited for this one.

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Great.

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So we just start our show kind of
like, what's your perfect Friday

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look like?
What do you do in the morning,

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productivity for work, and then
leading into the weekend for some

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fun?
Yeah, you bet.

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That's a good question.

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Perfect Friday.

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I mean, living in the Okanagan,
it's got to be a boat day.

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But yeah, usually, you know, get
up.

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I'm an early riser.

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Start work, sort of clear off

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emails, have a coffee.

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And then basically just take it as

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it comes, right?
Whatever pops up, try and tackle

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it.

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And then if I can scoot off and

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get an afternoon off, then yeah,
on the boat and get on the lake is

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ultimately what I like to do.

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Nice.

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Yeah.

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I love it.

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That's awesome.

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For work, you're kind of wearing

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two hats.

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Do you want to talk about both of

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those quick?
Yeah, you bet.

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So I have a company called
Tradecraft Consulting, and we

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provide consulting services, a
range of consulting services to

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the development community.

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to public entities,

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municipalities, as well as service
providers?

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tell us, forward us, that kind of
stuff.

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We do outside land agent work.

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We do feasibility consulting, just

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sort of a whole host and a whole
range of different services that

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we offer.

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That's sort of my background.

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I've been in the business for
about 20 years, just over 20

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years.

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The majority of that has been in

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00:06:46,840 --> 00:06:47,820
consulting in some form or
another.

264
00:06:48,100 --> 00:06:50,380
And then I also do commercial
brokerage work through William

265
00:06:50,380 --> 00:06:54,640
Wright Commercial here in Kelowna,
focusing on the Okanagan, mostly

266
00:06:54,640 --> 00:06:56,040
income and development stuff.

267
00:06:56,040 --> 00:07:00,040
You know, up here, you have to

268
00:07:00,560 --> 00:07:03,120
wear a bunch of different hats
when you're doing this type of

269
00:07:03,120 --> 00:07:03,200
work.

270
00:07:03,200 --> 00:07:05,240
So two pieces to it, really, it's

271
00:07:05,420 --> 00:07:07,780
the transactional work and the
consulting work.

272
00:07:07,780 --> 00:07:07,860
Yeah.

273
00:07:07,860 --> 00:07:07,960
Yeah.

274
00:07:07,960 --> 00:07:08,860
You were originally in Vancouver,
right?

275
00:07:08,860 --> 00:07:09,240
Correct.

276
00:07:09,240 --> 00:07:09,480
Yeah.

277
00:07:09,480 --> 00:07:11,440
Born and raised in North Van.

278
00:07:11,440 --> 00:07:12,900
And then, yeah, the majority of my

279
00:07:12,900 --> 00:07:13,860
career was down in Vancouver.

280
00:07:13,860 --> 00:07:15,820
I worked with a consulting company

281
00:07:15,820 --> 00:07:18,740
down there called MPC Intelligence
and then worked at Deloitte for a

282
00:07:18,740 --> 00:07:21,760
while in their financial advisory
practice and then transitioned up

283
00:07:21,760 --> 00:07:23,140
here about 13 years ago.

284
00:07:23,140 --> 00:07:23,240
Awesome.

285
00:07:23,240 --> 00:07:27,920
What brought you up here?
How come you decided to come to

286
00:07:27,920 --> 00:07:28,400
Cologne?
That's a good question.

287
00:07:28,400 --> 00:07:30,060
At the time, we had a five -year
-old.

288
00:07:30,060 --> 00:07:31,940
My wife didn't really want to go
back to work.

289
00:07:31,940 --> 00:07:34,600
We sold everything we had down in
Vancouver and it was Operation

290
00:07:34,600 --> 00:07:35,460
Small Mortgage.

291
00:07:35,700 --> 00:07:37,040
We always had summered up here.

292
00:07:37,200 --> 00:07:38,740
We really loved being up here.

293
00:07:38,740 --> 00:07:40,040
We had sort of a social network

294
00:07:40,040 --> 00:07:40,360
built in.

295
00:07:40,360 --> 00:07:42,140
A lot of people had, you know,

296
00:07:42,140 --> 00:07:43,760
kind of migrated up here over the
years.

297
00:07:43,760 --> 00:07:46,480
And yeah, we just kind of took a
shot.

298
00:07:46,480 --> 00:07:49,320
And when we got here, we just
never really looked back.

299
00:07:49,320 --> 00:07:51,360
Now it's home and we love it.

300
00:07:51,780 --> 00:07:52,360
It's great.

301
00:07:52,360 --> 00:07:52,520
Awesome.

302
00:07:52,520 --> 00:07:52,640
Yeah.

303
00:07:52,640 --> 00:07:52,780
Yeah.

304
00:07:52,780 --> 00:07:52,880
Cool.

305
00:07:53,000 --> 00:07:53,100
Okay.

306
00:07:53,100 --> 00:07:53,780
Well, you sent us some amazing

307
00:07:53,780 --> 00:07:54,380
information, which isn't public
knowledge.

308
00:07:54,380 --> 00:07:55,900
And we'll kind of keep that close
to our chest.

309
00:07:55,900 --> 00:07:57,440
Reviewing this, I guess it's an
Excel sheet.

310
00:07:57,440 --> 00:07:59,300
You've converted it to a PDF for
us.

311
00:07:59,300 --> 00:08:01,380
It is wild how much information is
on here.

312
00:08:01,380 --> 00:08:02,440
So thank you.

313
00:08:02,440 --> 00:08:03,180
Yeah, you bet.

314
00:08:03,180 --> 00:08:03,860
This is priceless.

315
00:08:04,000 --> 00:08:04,980
Can you kind of summarize it?

316
00:08:05,060 --> 00:08:07,600
I know summarizing this is going
to be tough, but like in a few

317
00:08:07,600 --> 00:08:10,360
minutes, give us kind of high
level or give the listener high

318
00:08:10,520 --> 00:08:11,780
level what it is, what we're
looking at.

319
00:08:11,780 --> 00:08:12,420
Yeah, you bet.

320
00:08:12,420 --> 00:08:14,160
So it's a supply summary of all of

321
00:08:14,160 --> 00:08:15,120
the purpose -built rental product.

322
00:08:15,120 --> 00:08:16,780
it's a supply summary of all of

323
00:08:16,980 --> 00:08:18,550
the purpose -built rental product.

324
00:08:18,710 --> 00:08:21,850
that's coming to the market in the

325
00:08:21,850 --> 00:08:22,630
foreseeable future.

326
00:08:22,630 --> 00:08:24,210
This is one of the offerings that

327
00:08:24,210 --> 00:08:26,850
Tradecraft provides to different
clients that are looking to

328
00:08:26,850 --> 00:08:28,570
develop purpose -built rental
product or own purpose -built

329
00:08:28,570 --> 00:08:28,930
rental products.

330
00:08:28,930 --> 00:08:30,270
We help them understand the

331
00:08:30,270 --> 00:08:32,289
market, understand the supply
picture, understand... pricing and

332
00:08:32,289 --> 00:08:33,730
that kind of stuff.

333
00:08:33,730 --> 00:08:35,610
So this is just sort of a high

334
00:08:35,610 --> 00:08:38,710
level spreadsheet for you guys to
get a sense of kind of what

335
00:08:38,710 --> 00:08:39,130
Tradecraft can deliver.

336
00:08:39,130 --> 00:08:40,530
The supply picture, I don't think

337
00:08:40,530 --> 00:08:42,390
it's no real surprise, especially
considering the vacancy rate that

338
00:08:42,390 --> 00:08:43,250
was just announced about a month
ago.

339
00:08:43,370 --> 00:08:46,070
The supply picture in Kelowna has
changed quite dramatically and it

340
00:08:46,070 --> 00:08:46,570
continues to change.

341
00:08:46,570 --> 00:08:45,170
There's a lot of supply in the

342
00:08:45,170 --> 00:08:48,000
pipeline and there's been a lot of
supply delivered over the last,

343
00:08:48,000 --> 00:08:49,680
call it five years.

344
00:08:49,680 --> 00:08:51,920
And I think that's a good thing,

345
00:08:51,920 --> 00:08:55,440
right?
I think from the city standpoint.

346
00:08:55,440 --> 00:08:59,080
And from a renter standpoint, you
know, that's what you want.

347
00:08:59,080 --> 00:09:00,640
You want a healthy vacancy rate.

348
00:09:00,860 --> 00:09:02,000
Everybody has a different opinion

349
00:09:02,000 --> 00:09:06,950
on this, but call it between three
and 6 % is sort of healthy.

350
00:09:06,950 --> 00:09:07,610
certainly getting to that point.

351
00:09:07,610 --> 00:09:08,990
From a developer standpoint, and

352
00:09:08,990 --> 00:09:10,590
maybe from an owner standpoint,
it's obviously a little different.

353
00:09:10,590 --> 00:09:12,650
You're looking at it a little
differently.

354
00:09:12,650 --> 00:09:15,550
So it's, you know, I think a
little concerning for purposeful

355
00:09:15,550 --> 00:09:19,170
rental developers, you know,
starting to look at this market or

356
00:09:19,170 --> 00:09:20,790
have product and development in
this market.

357
00:09:20,790 --> 00:09:24,230
They need to understand that, you
know, things have changed.

358
00:09:24,390 --> 00:09:27,510
And, you know, because of the
supply picture, there may be some

359
00:09:27,510 --> 00:09:29,850
rent compression, they may be
sitting on vacancy for a little

360
00:09:29,850 --> 00:09:31,770
bit longer than they anticipated.

361
00:09:31,770 --> 00:09:33,370
A lot of the these rental

362
00:09:33,370 --> 00:09:36,300
developers, their pro formas were
very tight to begin with.

363
00:09:36,300 --> 00:09:37,900
Building purpose -built rental
product, it's a difficult

364
00:09:38,000 --> 00:09:38,100
endeavor.

365
00:09:38,100 --> 00:09:40,400
The reason why there's been so

366
00:09:40,400 --> 00:09:41,740
much is because the federal
government supported that type of

367
00:09:41,740 --> 00:09:44,120
development through CMHC
financing, which was really the

368
00:09:44,120 --> 00:09:47,960
only financing that a lot of these
developers could get.

369
00:09:47,960 --> 00:09:50,620
So they decided to start building
purpose -built rental.

370
00:09:50,960 --> 00:09:53,660
So a lot of developers were
pivoting from market condominium

371
00:09:53,660 --> 00:09:56,080
product to you know, purpose
-built rental because they could

372
00:09:56,080 --> 00:09:58,020
get these types of projects
financed.

373
00:09:58,020 --> 00:10:01,440
There was an appetite on the
municipal side for these types of

374
00:10:01,440 --> 00:10:01,800
projects.

375
00:10:01,800 --> 00:10:03,400
And, you know, the conditions were

376
00:10:03,600 --> 00:10:03,700
favorable.

377
00:10:03,700 --> 00:10:05,580
There was a really low vacancy

378
00:10:05,640 --> 00:10:05,820
rate.

379
00:10:05,820 --> 00:10:07,560
Rents were, you know, continuing

380
00:10:07,680 --> 00:10:09,800
to increase and, you know, it just
made sense.

381
00:10:09,800 --> 00:10:12,380
But now that things are starting
to change a little bit and that

382
00:10:12,380 --> 00:10:16,120
picture is changing a little bit,
you know, some projects, you know,

383
00:10:16,120 --> 00:10:20,020
that were penciling, you know, not
to say that they're not going to

384
00:10:20,020 --> 00:10:22,760
still pencil, but it's just going
to be a little bit more difficult

385
00:10:22,760 --> 00:10:24,680
for these developers considering,
you know, vacancy in.

386
00:10:24,680 --> 00:10:25,720
you know, rank compression.

387
00:10:25,720 --> 00:10:26,100
Yeah.

388
00:10:26,100 --> 00:10:29,720
So looking at the totals and
correct me if I'm wrong, roughly 4

389
00:10:29,720 --> 00:10:31,580
,963 units are projected to be
coming on.

390
00:10:31,580 --> 00:10:32,100
Correct.

391
00:10:32,100 --> 00:10:32,300
Yeah.

392
00:10:32,300 --> 00:10:32,480
Yeah.

393
00:10:32,480 --> 00:10:33,740
So that's projects that are at

394
00:10:33,740 --> 00:10:35,700
some point through the entitlement
phase, right?

395
00:10:35,700 --> 00:10:40,090
So actual projects, not just, you
know, a piece of land that

396
00:10:40,090 --> 00:10:42,250
somebody bought that they think
they're going to, you know,

397
00:10:42,250 --> 00:10:42,370
deliver.

398
00:10:42,370 --> 00:10:43,090
rental product.

399
00:10:43,090 --> 00:10:45,470
This is stuff that is, you know,
actually been formally introduced

400
00:10:45,470 --> 00:10:48,410
to the city and is working its way
through the entitlements process.

401
00:10:48,410 --> 00:10:48,670
Yeah.

402
00:10:48,830 --> 00:10:49,530
You know, it's funny.

403
00:10:49,610 --> 00:10:52,810
We just had on city of Kelowna and
one of the architects that won the

404
00:10:52,810 --> 00:10:55,210
fast track program talking about
infill and, you know, Matt and I

405
00:10:55,210 --> 00:10:57,130
were talking off air and during
the intro, like.

406
00:10:57,450 --> 00:10:59,470
These things really don't pencil
out yet.

407
00:10:59,470 --> 00:11:01,870
In terms of like an investor, it's
great for infill and to maybe, you

408
00:11:01,870 --> 00:11:04,290
know, take down a single family
house that isn't up to standard

409
00:11:04,290 --> 00:11:06,850
and something better with it.

410
00:11:06,850 --> 00:11:09,090
But we're talking about kind of

411
00:11:09,390 --> 00:11:13,270
the levers of what you can pull to
make it cashflow as an investor.

412
00:11:13,270 --> 00:11:20,690
And then we don't really have a
lot of power, but I guess one of

413
00:11:20,690 --> 00:11:22,550
them would be if rents increase.

414
00:11:22,550 --> 00:11:24,870
Looking at this, I cannot see

415
00:11:24,870 --> 00:11:26,690
rents increasing in the near
future.

416
00:11:26,790 --> 00:11:28,570
And I mean, I've seen it
personally, you know, my buddy has

417
00:11:28,570 --> 00:11:32,130
a basement suite just down the
street from here, tenant left.

418
00:11:32,130 --> 00:11:35,470
going to be getting a lower rent
than what he was.

419
00:11:35,470 --> 00:11:38,770
And I thought it was a pretty
affordable rent to begin with.

420
00:11:39,110 --> 00:11:41,430
I have tenants that are leaving in
West Kelowna, you know, not sure

421
00:11:41,430 --> 00:11:44,570
what the rent's going to do there,
but like, yeah, I guess how long

422
00:11:44,570 --> 00:11:47,490
till we see rents come back up?
Like, are they going to dip down?

423
00:11:47,490 --> 00:11:49,560
Or at least stop going down.

424
00:11:49,560 --> 00:11:49,860
Yeah.

425
00:11:49,860 --> 00:11:50,100
Yeah.

426
00:11:50,100 --> 00:11:51,480
I mean, I mean, that's a really

427
00:11:51,640 --> 00:11:52,000
good question.

428
00:11:52,000 --> 00:11:54,020
You know, I don't think there's

429
00:11:54,020 --> 00:11:54,920
any real, you know, answer.

430
00:11:54,920 --> 00:11:56,160
I mean, I shouldn't say that.

431
00:11:56,160 --> 00:11:58,020
Of course there is an answer, but.

432
00:11:58,020 --> 00:11:59,520
But to predict it is going to be

433
00:11:59,520 --> 00:11:59,940
very difficult.

434
00:11:59,940 --> 00:12:00,760
I'm not sure.

435
00:12:00,760 --> 00:12:03,960
I mean, I think with purpose
-built product, you know, we're

436
00:12:03,960 --> 00:12:05,040
starting to see a lot of
inducements.

437
00:12:05,140 --> 00:12:07,680
So developers that are advertising
a free month's rent or, you know,

438
00:12:08,060 --> 00:12:11,080
additional parking or, you know,
some sort of inducement that we

439
00:12:11,080 --> 00:12:14,320
haven't seen in this market for,
well, as long as I've tracked the

440
00:12:14,320 --> 00:12:15,620
market, right?
Rental developers have never had

441
00:12:15,620 --> 00:12:18,840
to offer any sort of incentive
because it's been such a tight

442
00:12:18,840 --> 00:12:19,960
rental market for so long.

443
00:12:19,960 --> 00:12:20,760
They're trying to protect their

444
00:12:20,760 --> 00:12:21,080
face rate though.

445
00:12:21,080 --> 00:12:22,320
So you're not going to see.

446
00:12:22,420 --> 00:12:24,880
The rental rates, you know, like a
$1 ,700 a month, one bedroom.

447
00:12:24,880 --> 00:12:25,680
They're trying to protect that
number.

448
00:12:25,680 --> 00:12:27,740
They're not going to, you know,
start discounting it dramatically.

449
00:12:27,740 --> 00:12:31,640
The net effect of rent will
probably go down because of these

450
00:12:31,640 --> 00:12:33,420
inducements or the way that
they're trying to incentivize.

451
00:12:33,420 --> 00:12:35,980
But, you know, on the secondary
market, you know, like what you

452
00:12:35,980 --> 00:12:38,940
were just describing, Taylor, like
it will be interesting to see,

453
00:12:38,940 --> 00:12:40,800
right?
I think there's going to be a

454
00:12:40,800 --> 00:12:41,760
flight to quality because now
renters have choice.

455
00:12:41,760 --> 00:12:44,330
So, you know, product that's well
located, you know.

456
00:12:44,330 --> 00:12:46,950
built by a good developer as newer
finishings, you know, that kind of

457
00:12:46,950 --> 00:12:49,870
stuff, maybe location close to the
lake or whatever that may be.

458
00:12:49,870 --> 00:12:53,690
Those guys won't suffer as much on
the vacancy side because again,

459
00:12:53,690 --> 00:12:54,950
renters have more choice.

460
00:12:54,950 --> 00:12:56,930
They'll be able to pick up rental

461
00:12:56,930 --> 00:12:58,590
opportunities in buildings that
maybe they couldn't afford before.

462
00:12:58,590 --> 00:13:01,430
I think that's one thing we had
Wendy Waters on a couple of months

463
00:13:01,430 --> 00:13:01,710
ago.

464
00:13:01,710 --> 00:13:02,970
think that's one thing we had

465
00:13:02,970 --> 00:13:04,950
Wendy Waters on a couple of months
ago.

466
00:13:04,950 --> 00:13:07,950
And that was one of the things she
highlighted too in Vancouver was

467
00:13:07,950 --> 00:13:08,810
basically looking for that
movement of tenants.

468
00:13:08,810 --> 00:13:12,670
And yeah, there will be a dip in,
you know, rental income.

469
00:13:12,670 --> 00:13:15,370
But it's mostly from those people
that have been in those affordable

470
00:13:15,370 --> 00:13:16,770
rentals for a long time.

471
00:13:16,770 --> 00:13:19,070
And they don't want to give up

472
00:13:19,070 --> 00:13:21,930
that because BC Tenancy, we can't
increase the rent that much.

473
00:13:21,930 --> 00:13:24,430
So she's saying like, yeah, maybe
a bit of a lateral move.

474
00:13:24,430 --> 00:13:26,610
But then those lower rents should
come up a little bit.

475
00:13:26,610 --> 00:13:28,210
So it kind of evens things out.

476
00:13:28,210 --> 00:13:29,750
But like time horizon on that, it

477
00:13:29,750 --> 00:13:30,410
would take a long time.

478
00:13:30,410 --> 00:13:31,130
Yeah, 100%.

479
00:13:31,130 --> 00:13:34,810
And that's the million dollar
question is how long, right?

480
00:13:34,810 --> 00:13:39,130
I think there's not going to be a
huge dip in rents.

481
00:13:39,130 --> 00:13:40,650
I think just because.

482
00:13:40,650 --> 00:13:42,390
You know, especially for a new

483
00:13:42,390 --> 00:13:44,670
product, developers can't afford
to offer it at less than, you

484
00:13:44,670 --> 00:13:44,970
know.

485
00:13:44,970 --> 00:13:46,050
Yeah, their financing income.

486
00:13:46,050 --> 00:13:46,130
Exactly.

487
00:13:46,130 --> 00:13:46,470
Right.

488
00:13:46,470 --> 00:13:49,590
So they're in a position where
they'll eat the vacancy and

489
00:13:49,590 --> 00:13:53,010
they'll sit on it and they'll
wait, you know, and then just hope

490
00:13:53,010 --> 00:13:53,370
that.

491
00:13:53,590 --> 00:13:54,710
I think you're going to see.

492
00:13:54,710 --> 00:13:55,950
The supply lever get pulled back.

493
00:13:55,950 --> 00:13:54,710
So you're going to see a lot of

494
00:13:54,710 --> 00:13:56,830
guys, projects that, you know,
even that are on that spreadsheet

495
00:13:56,830 --> 00:13:57,930
that I sent that look like they're
moving forward.

496
00:13:57,930 --> 00:14:01,330
If they're not under construction,
you know, there's a high

497
00:14:01,330 --> 00:14:04,910
likelihood that they may not move
forward and just wait for better

498
00:14:04,910 --> 00:14:04,970
conditions.

499
00:14:05,090 --> 00:14:07,900
You know, every developer is a

500
00:14:07,900 --> 00:14:11,160
little different in terms of
what's driving them, but I could

501
00:14:11,160 --> 00:14:11,640
definitely see that.

502
00:14:11,740 --> 00:14:12,100
happening without the rents where

503
00:14:12,100 --> 00:14:14,000
they are currently, it's going to
be really hard.

504
00:14:14,000 --> 00:14:16,880
A lot of guys are going to be
underwater and they're performing

505
00:14:16,880 --> 00:14:20,540
and they're just not going to be
able to make it work.

506
00:14:20,540 --> 00:14:20,700
Right.

507
00:14:20,700 --> 00:14:21,780
So it's kind of a different story.

508
00:14:21,780 --> 00:14:22,720
kind of a different story.

509
00:14:22,900 --> 00:14:24,340
Like a narrative we've heard,

510
00:14:24,340 --> 00:14:24,620
right.

511
00:14:24,760 --> 00:14:26,300
Is like, we need more housing

512
00:14:26,500 --> 00:14:27,700
supply, which I agree with.

513
00:14:27,700 --> 00:14:28,960
Like, even if you're looking at

514
00:14:29,060 --> 00:14:32,480
this of three and a half, 4 %
vacancy, it's not a lot, but when

515
00:14:32,480 --> 00:14:34,200
you're talking, it's just not
affordable.

516
00:14:34,360 --> 00:14:36,680
So how do we fix both issues,
right?

517
00:14:36,680 --> 00:14:39,680
Like how do we provide developers
opportunity to build and be

518
00:14:39,780 --> 00:14:41,880
profitable and how do we make
affordable houses?

519
00:14:41,880 --> 00:14:41,940
Yeah.

520
00:14:41,940 --> 00:14:42,920
It's definitely, it's a tough

521
00:14:42,920 --> 00:14:43,040
question.

522
00:14:43,040 --> 00:14:44,400
And, you know, I think when you

523
00:14:44,400 --> 00:14:44,580
have...

524
00:14:44,580 --> 00:14:45,480
From the city's perspective and,

525
00:14:45,480 --> 00:14:47,780
you know, from the public's
perspective, the more supply, the

526
00:14:48,840 --> 00:14:51,040
better, right?
The higher the rental rate, the

527
00:14:51,040 --> 00:14:51,500
better provides opportunity.

528
00:14:51,500 --> 00:14:52,180
It creates affordability, all of

529
00:14:52,380 --> 00:14:52,840
those things.

530
00:14:52,920 --> 00:14:53,820
But again, for the guys that are

531
00:14:53,820 --> 00:14:55,940
actually delivering this product
and taking the risk and putting

532
00:14:55,940 --> 00:14:58,940
their own capital at work to work,
excuse me, all of these numbers

533
00:14:58,940 --> 00:15:01,020
drastically impact, you know, the
feasibility of their project and

534
00:15:01,020 --> 00:15:03,200
slight changes in rents or, you
know, slight increases in vacancy.

535
00:15:03,200 --> 00:15:05,700
All of that just ends up being
dollars in the pro forma.

536
00:15:05,700 --> 00:15:09,900
Some of it can kill their
performance and kill the supply.

537
00:15:09,900 --> 00:15:11,700
And then again, like you say, it's
kind of all the supply slows down,

538
00:15:11,700 --> 00:15:12,900
right?
And then vacancy comes back up.

539
00:15:12,900 --> 00:15:13,680
It's kind of a bit of a cycle,
right?

540
00:15:13,680 --> 00:15:15,120
Do you think this will be kind of
a catalyst to start stratifying

541
00:15:15,120 --> 00:15:17,380
some of these properties?
you think this will be kind of a

542
00:15:17,380 --> 00:15:19,560
catalyst to start stratifying some
of these properties?

543
00:15:19,560 --> 00:15:22,280
I was going to ask, going to ask,
how does this affect the pre -sale

544
00:15:22,280 --> 00:15:23,260
market?
Because obviously, we're talking

545
00:15:23,400 --> 00:15:25,060
about purpose -built rentals, but
we bought condos and stuff.

546
00:15:25,060 --> 00:15:28,520
So the rental market really
started to blow up when the pre

547
00:15:28,600 --> 00:15:32,540
-sale market just collapsed, how
started to blow up when the pre

548
00:15:32,540 --> 00:15:33,880
-sale market just collapsed,
right?

549
00:15:33,880 --> 00:15:37,900
developers that were typically pre
-sale guys or would do the

550
00:15:37,900 --> 00:15:40,260
majority of their work building
market condominium product, all of

551
00:15:40,040 --> 00:15:43,800
a sudden needed to keep the lights
on and needed to keep their guys

552
00:15:43,800 --> 00:15:44,120
busy.

553
00:15:44,200 --> 00:15:45,160
And so then they pivoted to

554
00:15:45,160 --> 00:15:45,660
purpose -built rental.

555
00:15:45,660 --> 00:15:47,900
Like I mentioned earlier, they

556
00:15:47,900 --> 00:15:50,960
could finance through CMHC and
they could continue to build as

557
00:15:50,960 --> 00:15:51,200
builders do.

558
00:15:51,200 --> 00:15:53,040
So yeah, I think you're going to

559
00:15:53,040 --> 00:15:55,660
see if the pre -sale market comes
back and with interest rates

560
00:15:55,660 --> 00:15:59,400
dropping, I think that you're
going to start seeing that.

561
00:15:59,460 --> 00:16:02,760
You're already hearing whispers of
things coming around again, which

562
00:16:02,760 --> 00:16:03,460
is great.

563
00:16:03,460 --> 00:16:05,740
So then some of those guys will

564
00:16:05,740 --> 00:16:06,640
pivot back to that product.

565
00:16:06,640 --> 00:16:08,860
and sort of maybe steer away from

566
00:16:08,860 --> 00:16:09,600
the purposeful rental side of
things.

567
00:16:09,600 --> 00:16:11,740
But like, if you're talking about
the condo product that is

568
00:16:11,740 --> 00:16:13,480
currently under construction and
bought by investors and will end

569
00:16:13,640 --> 00:16:16,560
up on the rental market, is that
kind of what you're referring to

570
00:16:16,560 --> 00:16:16,660
matter?
Yeah.

571
00:16:16,660 --> 00:16:16,740
Yeah.

572
00:16:16,740 --> 00:16:18,120
So, you know, typically.

573
00:16:18,120 --> 00:16:21,800
In Kelowna, for high -rise or new
wood frame condominium product, it

574
00:16:21,800 --> 00:16:20,040
was usually about 30 % investor
bought, depending on the project.

575
00:16:20,040 --> 00:16:21,180
So some more, some less.

576
00:16:21,180 --> 00:16:23,000
So like Aqua and Caban, those were

577
00:16:23,000 --> 00:16:23,720
higher percentage of investor
buyers because they were really

578
00:16:23,720 --> 00:16:25,680
marketed as short -term rental
opportunities, which obviously

579
00:16:25,680 --> 00:16:27,080
that's a whole different story in
podcasts.

580
00:16:27,080 --> 00:16:31,920
But the expectation is that a lot
of those units are going to come

581
00:16:31,920 --> 00:16:33,880
back as secondary rental units,
right?

582
00:16:33,880 --> 00:16:34,280
So owner.

583
00:16:34,280 --> 00:16:34,600
rented.

584
00:16:34,600 --> 00:16:32,400
We don't really track that market.

585
00:16:32,400 --> 00:16:34,600
It's a little bit more difficult

586
00:16:34,600 --> 00:16:35,620
to track.

587
00:16:35,720 --> 00:16:39,840
We only really track the purpose

588
00:16:39,840 --> 00:16:42,440
-built rental market, but we've
done some work on that in the past

589
00:16:42,440 --> 00:16:45,320
and looked at, you know, all the
condo product that's completing in

590
00:16:45,320 --> 00:16:47,180
the next, you know, whatever,
three years or two years, probably

591
00:16:47,180 --> 00:16:49,980
two years now, just because
there's not a lot of new stuff

592
00:16:50,280 --> 00:16:53,700
being built, but how much of
that's going to come back to the

593
00:16:53,700 --> 00:16:54,560
rental market.

594
00:16:54,760 --> 00:16:55,720
And it's another like 2000 units

595
00:16:55,720 --> 00:16:57,980
based off of that 30 % investor
bought sort of benchmark.

596
00:16:57,980 --> 00:16:59,340
So yeah, I mean, it's a whole
other.

597
00:16:59,340 --> 00:17:01,300
you know, rental inventory, I
guess, that needs to be considered

598
00:17:01,300 --> 00:17:01,940
for sure.

599
00:17:01,940 --> 00:17:02,460
for sure.

600
00:17:02,460 --> 00:17:05,140
I mean, this is pure speculation
now, but I guess we've seen the

601
00:17:05,140 --> 00:17:05,980
condo market pretty flat.

602
00:17:06,240 --> 00:17:08,560
It seems very saturated, a lot of

603
00:17:08,560 --> 00:17:08,680
listings.

604
00:17:08,680 --> 00:17:10,940
There is getting to be some more

605
00:17:11,079 --> 00:17:11,880
activity in that right now.

606
00:17:11,880 --> 00:17:13,319
So I know firsthand that it's

607
00:17:13,319 --> 00:17:14,260
picking up.

608
00:17:14,260 --> 00:17:14,500
Yeah.

609
00:17:14,500 --> 00:17:16,940
But even for just owner occupied,
I guess, like we've looked at that

610
00:17:16,940 --> 00:17:20,720
market and I think it still has
another six to 12 months of, you

611
00:17:21,450 --> 00:17:25,970
know, on the lower end where
single family homes, it seems like

612
00:17:26,250 --> 00:17:28,710
it's kind of bottomed out and
coming back up.

613
00:17:28,870 --> 00:17:29,110
Yeah.

614
00:17:29,110 --> 00:17:30,990
If we're seeing all these purpose

615
00:17:31,090 --> 00:17:34,450
-built rentals come online, does
that not continue the saturation

616
00:17:34,450 --> 00:17:37,470
of the stratified properties, even
if an owner -occupied wants to buy

617
00:17:37,470 --> 00:17:40,410
that?
So I guess, how long do we think

618
00:17:40,410 --> 00:17:41,990
the condo market's going to stay
down?

619
00:17:41,990 --> 00:17:42,130
Yeah.

620
00:17:42,130 --> 00:17:43,390
I mean, that's a good question.

621
00:17:43,390 --> 00:17:44,530
A lot of renters want to own,
right?

622
00:17:44,530 --> 00:17:49,940
So, you know, they'll pivot back
in and start picking up condo

623
00:17:49,940 --> 00:17:50,960
product, new condo product.

624
00:17:50,960 --> 00:17:51,920
When we start seeing that being

625
00:17:51,920 --> 00:17:54,760
built again and offered to market,
you know, the amount of supply

626
00:17:54,760 --> 00:17:57,300
that we're dealing with both on
the purpose -built rental and on

627
00:17:57,300 --> 00:17:59,240
the secondary market with, you
know, market condominiums that our

628
00:17:59,240 --> 00:18:02,260
investor bought, it's a lot of
product and it's going to be

629
00:18:02,540 --> 00:18:03,280
interesting to see.

630
00:18:03,280 --> 00:18:04,660
I don't really have an answer for

631
00:18:04,660 --> 00:18:06,460
you in terms of like how long.

632
00:18:06,460 --> 00:18:06,660
Yeah.

633
00:18:06,660 --> 00:18:08,100
It's funny when you think about
causes of this, right?

634
00:18:08,100 --> 00:18:11,340
Because like everyone points to
land prices being kind of the

635
00:18:11,340 --> 00:18:11,920
driving factor.

636
00:18:11,920 --> 00:18:15,320
But then like Taylor and I were

637
00:18:15,320 --> 00:18:18,960
talking about this, like if you
talk about a fourplex, you buy the

638
00:18:18,960 --> 00:18:20,360
property for a million, million
one or something.

639
00:18:20,360 --> 00:18:23,700
And then you build a place, cost
you two and a half million bucks

640
00:18:23,700 --> 00:18:26,720
or whatever it is, two million
bucks to build it.

641
00:18:26,720 --> 00:18:29,980
But you drop that price for the
land 20%, like which is not going

642
00:18:29,980 --> 00:18:32,680
to happen, but like a big, that's
like $200 ,000 off, which really

643
00:18:32,680 --> 00:18:33,220
doesn't help.

644
00:18:33,260 --> 00:18:35,040
It helps a little, obviously.

645
00:18:35,040 --> 00:18:36,580
Everything helps, but it's not the
golden ticket.

646
00:18:36,580 --> 00:18:38,980
Then you think about how does this
cash flow?

647
00:18:38,980 --> 00:18:41,340
Rents could go up or building
costs come down, but prices of

648
00:18:41,340 --> 00:18:43,200
stuff is not going to come down.

649
00:18:43,200 --> 00:18:44,380
Wages are not going to come down.

650
00:18:44,380 --> 00:18:47,530
What has to change?
It feels like the only two things

651
00:18:47,530 --> 00:18:50,870
that could realistically change
are land prices or rents.

652
00:18:50,870 --> 00:18:51,090
Right.

653
00:18:51,090 --> 00:18:53,730
And there's kind of like the land

654
00:18:53,730 --> 00:18:55,490
prices come down a bit and the
rents go up.

655
00:18:55,490 --> 00:18:57,770
Like what has to happen for that
to happen?

656
00:18:57,770 --> 00:19:00,020
We're kind of seeing the opposite
of that though.

657
00:19:00,060 --> 00:19:02,700
I mean, like rents are coming down
and land prices are going up.

658
00:19:02,860 --> 00:19:05,100
I think land prices are kind of
plateaued, but yeah, coming down.

659
00:19:05,100 --> 00:19:08,260
So like what has to happen?
It's almost like our spike, like

660
00:19:08,260 --> 00:19:10,180
the COVID spike just threw
everything out of whack.

661
00:19:10,260 --> 00:19:10,340
Right.

662
00:19:10,340 --> 00:19:11,200
Like just so badly.

663
00:19:11,200 --> 00:19:14,300
And then like everyone was living
the gravy train and then just kind

664
00:19:14,300 --> 00:19:16,980
of the opposite and kind of like a
pendulum.

665
00:19:16,980 --> 00:19:17,380
Yeah.

666
00:19:17,380 --> 00:19:19,000
I mean, that inflation spike was

667
00:19:19,000 --> 00:19:20,660
brutal for a lot of developers,
like the cost side.

668
00:19:20,760 --> 00:19:22,820
The cost side was always, for a
lot of guys, it was pretty

669
00:19:22,820 --> 00:19:23,920
manageable, pretty predictable.

670
00:19:24,560 --> 00:19:25,600
And then they would bank on

671
00:19:25,600 --> 00:19:26,840
increased revenue, whether it's
market condominium prices

672
00:19:26,840 --> 00:19:29,220
continuing to go up or rents
continuing to go up.

673
00:19:29,220 --> 00:19:30,520
That's how they would make it
work.

674
00:19:30,520 --> 00:19:32,220
But then, yeah, inflation and
interest rates, obviously, that

675
00:19:32,220 --> 00:19:34,660
just really threw, I think, a lot
of developers into.

676
00:19:34,660 --> 00:19:36,740
a position where, yeah, they just
couldn't make their numbers work

677
00:19:36,740 --> 00:19:37,420
anymore.

678
00:19:37,420 --> 00:19:38,620
But to your point, Matt, I think

679
00:19:38,620 --> 00:19:40,760
even on the revenue side, there's
not enough upside to make it work,

680
00:19:40,760 --> 00:19:42,260
right?
So we are seeing land prices

681
00:19:42,260 --> 00:19:45,380
starting to correct specifically
for purpose -built rental product,

682
00:19:45,380 --> 00:19:45,780
which is great.

683
00:19:45,900 --> 00:19:47,220
We're still seeing guys able to

684
00:19:47,220 --> 00:19:51,700
rationalize a land buy based off
of today's rental rates and

685
00:19:51,700 --> 00:19:55,020
vacancy rates, still saying, okay,
look, I can still make this work

686
00:19:55,020 --> 00:19:57,800
as long as this land is 70 bucks a
buildable square foot or whatever.

687
00:19:57,800 --> 00:19:59,780
whatever the number is for them.

688
00:19:59,780 --> 00:20:00,420
Those are really the only two

689
00:20:00,420 --> 00:20:04,400
things that can kind of give, you
know, the cost piece is kind of,

690
00:20:04,920 --> 00:20:05,900
it is what it is.

691
00:20:05,900 --> 00:20:07,340
It's really about getting either a

692
00:20:07,340 --> 00:20:11,640
really good land buy or, you know,
catching the market at a place

693
00:20:11,640 --> 00:20:12,680
where, you know, rents continue to
go up.

694
00:20:12,680 --> 00:20:14,740
And I've seen lots of developers
pro formas on the rent side, like

695
00:20:14,740 --> 00:20:17,180
looking at the 6 % to 8 % a year
for the three years while they're

696
00:20:17,180 --> 00:20:17,940
building this thing out.

697
00:20:17,940 --> 00:20:19,440
And then at that point, so at

698
00:20:19,440 --> 00:20:21,160
stabilization, then they're like,
oh, these numbers work.

699
00:20:21,580 --> 00:20:22,560
Even then, it's still pretty
tight.

700
00:20:22,560 --> 00:20:24,620
Low double -digit IRR, maybe even
below that.

701
00:20:24,620 --> 00:20:29,040
And that's a big bet, saying that
this thing's going to go up 6 % to

702
00:20:29,040 --> 00:20:33,060
8 % or rents are going to go up 6
% to 8 % over the course of the

703
00:20:33,060 --> 00:20:35,340
three years while we're building
this thing.

704
00:20:35,440 --> 00:20:39,080
then at So, you know, now, you
know, guys that were in that

705
00:20:39,120 --> 00:20:41,680
position and round in 21 or 22 and
are now completing.

706
00:20:41,680 --> 00:20:41,960
And, you know.

707
00:20:41,960 --> 00:20:42,160
Yeah.

708
00:20:42,320 --> 00:20:45,500
Not only did they get killed with
inflation, the rents are there.

709
00:20:45,500 --> 00:20:47,240
are there.

710
00:20:47,240 --> 00:20:49,560
So like, just like talking this

711
00:20:49,560 --> 00:20:52,660
out loud, do you talk like it does
feel like there's going to be an

712
00:20:52,660 --> 00:20:56,320
opportunity to buy some of these
because like you have these

713
00:20:56,620 --> 00:20:59,080
developers that pre -sale is just
not penciling.

714
00:20:59,180 --> 00:21:02,090
So they're just not doing it.

715
00:21:02,090 --> 00:21:03,410
So they're just basically.

716
00:21:03,410 --> 00:21:06,150
for no other reason than to keep
their, well, other reasons, but

717
00:21:06,210 --> 00:21:08,030
like main reason is just to keep
their crews going.

718
00:21:08,030 --> 00:21:09,650
They're building these rental
projects that are just breaking

719
00:21:09,750 --> 00:21:10,370
even at best.

720
00:21:10,370 --> 00:21:12,570
And then once the market does kind

721
00:21:12,570 --> 00:21:15,930
of shift, like you're going to
have all these people holding

722
00:21:15,930 --> 00:21:16,810
these things.

723
00:21:16,810 --> 00:21:19,830
Are they just going to be like, do

724
00:21:19,830 --> 00:21:23,730
I really want to have this
building?

725
00:21:23,730 --> 00:21:25,750
Yeah, it's a great observation,
observation, Matt, because when

726
00:21:25,750 --> 00:21:28,250
you're a purpose -built rental
builder, there's two businesses,

727
00:21:28,250 --> 00:21:30,050
right?
There's the development of the

728
00:21:30,050 --> 00:21:30,930
property and the construction of
that.

729
00:21:30,930 --> 00:21:32,630
And then there's the management of
it.

730
00:21:32,630 --> 00:21:34,430
right and so there's lots of
developers and builders that are

731
00:21:34,430 --> 00:21:36,790
you know very good at building but
They don't have the infrastructure

732
00:21:36,790 --> 00:21:39,250
to actually operate and manage the
building because that takes

733
00:21:39,250 --> 00:21:39,490
people, resources.

734
00:21:39,490 --> 00:21:41,810
You need to have Edna in the

735
00:21:41,810 --> 00:21:42,470
rental office.

736
00:21:42,470 --> 00:21:42,770
Yeah, exactly.

737
00:21:42,770 --> 00:21:44,310
It is an operating business.

738
00:21:44,310 --> 00:21:46,010
A lot of guys aren't necessarily

739
00:21:46,010 --> 00:21:49,330
prepared for that, especially
because they just pivoted into

740
00:21:49,330 --> 00:21:55,620
this product because it was the
only thing to get going.

741
00:21:55,620 --> 00:21:57,640
Basically, the market pushed them
into it.

742
00:21:57,640 --> 00:21:58,000
Yeah, exactly.

743
00:21:58,000 --> 00:21:59,380
Everybody was saying, we got to

744
00:21:59,380 --> 00:22:03,120
build more rental, more rental.

745
00:22:03,120 --> 00:22:05,080
The city was on board.

746
00:22:05,220 --> 00:22:06,720
Again, the federal government's
financing it.

747
00:22:06,780 --> 00:22:08,060
Okay, we can do this.

748
00:22:08,060 --> 00:22:10,940
idea was, okay, we're going to

749
00:22:10,940 --> 00:22:14,040
stabilize this and then we're
going to turn around and sell it

750
00:22:14,040 --> 00:22:16,080
to a REIT or to a pension fund or
whatever that may be, private

751
00:22:16,080 --> 00:22:16,440
investor group, whatever.

752
00:22:16,440 --> 00:22:17,300
But what we're seeing now is... a

753
00:22:17,300 --> 00:22:20,150
lot of the REITs and a lot of the
guys that were active in the

754
00:22:20,210 --> 00:22:21,930
Okanagan are looking at the supply
picture.

755
00:22:21,930 --> 00:22:25,610
And there, I mean, these are very
sophisticated groups and they're

756
00:22:25,610 --> 00:22:28,370
going, no, we're not interested in
buying up there.

757
00:22:28,370 --> 00:22:31,950
So there's going to be a lot of
guys that are going to have to

758
00:22:31,950 --> 00:22:34,430
figure it out and hold it probably
longer than they thought.

759
00:22:34,430 --> 00:22:36,590
And, you know, there might be some
investors that are going to, you

760
00:22:36,590 --> 00:22:39,290
know, maybe not getting the type
of return that they thought they

761
00:22:39,290 --> 00:22:40,290
were going to get.

762
00:22:40,290 --> 00:22:40,510
Right.

763
00:22:40,510 --> 00:22:41,970
So it's going to be interesting
for sure.

764
00:22:42,070 --> 00:22:43,190
be interesting for sure.

765
00:22:43,740 --> 00:22:44,740
Like the government did kind of

766
00:22:44,740 --> 00:22:46,780
want this by, you know, really
pushing CMHC, like the MLI Select,

767
00:22:46,780 --> 00:22:48,740
like it was the only option for
developers.

768
00:22:48,740 --> 00:22:49,000
100%.

769
00:22:49,000 --> 00:22:50,220
Now that they've achieved what

770
00:22:50,220 --> 00:22:51,740
they want, now what?
Yeah.

771
00:22:51,920 --> 00:22:53,580
Like the vacancy rate goes up.

772
00:22:53,580 --> 00:22:54,520
It just feels like they come up

773
00:22:54,520 --> 00:22:56,340
with, It just feels like they come
up with, like something happens,

774
00:22:56,340 --> 00:22:58,560
they come up with all these things
and it goes too far.

775
00:22:58,600 --> 00:22:59,080
Pendulum times.

776
00:22:59,080 --> 00:23:01,300
Yeah, they go too far.

777
00:23:01,360 --> 00:23:02,140
Like, it's crazy.

778
00:23:02,140 --> 00:23:03,020
Instead of little tiny.

779
00:23:03,020 --> 00:23:05,040
Yeah, it's a little tweak here and
there.

780
00:23:05,040 --> 00:23:07,200
It's just kind of right the ship.

781
00:23:07,200 --> 00:23:08,220
It's like, no way.

782
00:23:08,220 --> 00:23:09,340
Everybody to the left.

783
00:23:09,340 --> 00:23:09,460
Totally.

784
00:23:09,630 --> 00:23:10,650
just feels like they Pendulum
times.

785
00:23:10,650 --> 00:23:12,010
Yeah, they Everybody to the right.

786
00:23:12,010 --> 00:23:12,590
Totally.

787
00:23:12,590 --> 00:23:15,480
And we get there and it's just
like, like, sweet Jesus, man.

788
00:23:15,480 --> 00:23:19,840
I mean, this is going to be a
really hard one to analyze.

789
00:23:19,980 --> 00:23:24,480
I don't know if you've spent a lot
of time on it, but Airbnb, like.

790
00:23:24,480 --> 00:23:28,520
Has it affected these numbers that
much, or is the data just not

791
00:23:28,520 --> 00:23:30,720
there yet?
Yeah, there hasn't really been any

792
00:23:30,720 --> 00:23:32,280
consolidated data that we can
point to.

793
00:23:32,280 --> 00:23:34,240
I mean, there's lots of chatter
and people saying, oh, there's

794
00:23:34,240 --> 00:23:36,360
another 3 ,000 units that have
come back to the market.

795
00:23:36,360 --> 00:23:39,800
I haven't done any of that
research myself, so I'm not 100 %

796
00:23:39,800 --> 00:23:44,400
sure where that ends up, but
there's been an effect.

797
00:23:44,560 --> 00:23:44,900
There's no question.

798
00:23:44,900 --> 00:23:46,160
Again, on the secondary market,

799
00:23:46,160 --> 00:23:47,460
like you were just talking about,
it's more anecdotal, but your

800
00:23:47,460 --> 00:23:52,260
buddy who just said - said - How
long do we hold it and lose money

801
00:23:52,600 --> 00:23:53,840
while rent goes down?
You're right.

802
00:23:53,840 --> 00:23:55,300
It's definitely had an effect.

803
00:23:55,300 --> 00:23:56,060
I'm just guessing, as we were

804
00:23:56,060 --> 00:23:58,320
talking about the pendulum
swinging, it's like, well, you

805
00:23:58,320 --> 00:24:01,480
guys already pushed it so far this
way, and then you added on 400

806
00:24:01,480 --> 00:24:03,340
players to keep it that way.

807
00:24:03,340 --> 00:24:03,440
Yeah.

808
00:24:03,440 --> 00:24:04,720
players to keep it that way.

809
00:24:04,720 --> 00:24:05,200
Yeah.

810
00:24:05,200 --> 00:24:06,720
I think the city of Kelowna is
recognizing that as of a couple of

811
00:24:06,720 --> 00:24:09,440
days ago, they just said they were
going to go to council.

812
00:24:09,820 --> 00:24:10,720
That's just for personal
residents.

813
00:24:10,720 --> 00:24:11,200
That's basement suites.

814
00:24:11,200 --> 00:24:11,800
basement suites.

815
00:24:11,800 --> 00:24:11,900
Yeah.

816
00:24:11,900 --> 00:24:12,480
Essentially, they're just trying

817
00:24:12,720 --> 00:24:14,660
to align with the provincial regs
because they had pushed it even

818
00:24:14,660 --> 00:24:15,620
further than what the province had
suggested.

819
00:24:15,620 --> 00:24:15,920
Yeah.

820
00:24:15,920 --> 00:24:16,900
They should have done that from

821
00:24:16,060 --> 00:24:16,440
day one.

822
00:24:16,440 --> 00:24:18,040
We love you, City of Columbia.

823
00:24:18,040 --> 00:24:18,380
Come on.

824
00:24:18,380 --> 00:24:18,580
Yeah.

825
00:24:18,580 --> 00:24:20,320
That was a fumble for sure.

826
00:24:20,320 --> 00:24:20,900
Yeah.

827
00:24:21,060 --> 00:24:22,120
I think they recognize that.

828
00:24:22,120 --> 00:24:23,860
They heard a lot from the tourism

829
00:24:24,380 --> 00:24:25,940
industry over the last summer.

830
00:24:25,940 --> 00:24:27,460
I think that's going to correct.

831
00:24:27,520 --> 00:24:28,680
I also feel that if we're over 3 %
for two years, we're going to get

832
00:24:28,680 --> 00:24:29,540
probably exempted or at least -
partially exempted.

833
00:24:29,640 --> 00:24:32,000
I think the city will probably
create a new zoning bylaw and do

834
00:24:32,000 --> 00:24:32,500
it more specific.

835
00:24:32,700 --> 00:24:33,540
for short -term rentals.

836
00:24:33,540 --> 00:24:37,580
Maybe some of the projects like
Aqua and stuff that were designed

837
00:24:37,680 --> 00:24:39,260
and originally approved for that
use, I could maybe see them going

838
00:24:39,260 --> 00:24:41,680
back and saying, okay, look, we'll
allow this under these conditions.

839
00:24:41,680 --> 00:24:44,400
It was on the shadow market, but
it was a lot of inventory that all

840
00:24:44,500 --> 00:24:46,600
of a sudden was available and has
affected the rental market for

841
00:24:46,600 --> 00:24:46,860
sure.

842
00:24:46,960 --> 00:24:47,720
Another thing the city is reading

843
00:24:47,720 --> 00:24:48,720
this morning is upping the DCCs,
Taylor's favorite.

844
00:24:48,720 --> 00:24:49,300
Are they?
Yes.

845
00:24:49,300 --> 00:24:49,620
You have to.

846
00:24:49,620 --> 00:24:49,940
It's pretty.

847
00:24:49,940 --> 00:24:50,040
Yeah.

848
00:24:50,040 --> 00:24:50,120
Yeah.

849
00:24:50,120 --> 00:24:50,560
They have to.

850
00:24:50,560 --> 00:24:53,060
It's kind of with inflation, I

851
00:24:53,060 --> 00:24:53,460
guess.

852
00:24:53,460 --> 00:24:55,260
But it's pretty nominal, to be

853
00:24:55,260 --> 00:24:55,380
honest.

854
00:24:55,380 --> 00:24:57,080
They could have gone probably a

855
00:24:57,220 --> 00:24:57,740
lot higher.

856
00:24:57,740 --> 00:24:59,720
Certainly, if you look at Metro

857
00:24:59,720 --> 00:25:01,200
Vancouver and what's happening
down there, it's nothing like

858
00:25:01,200 --> 00:25:01,480
that.

859
00:25:01,480 --> 00:25:04,640
I think it was two and a half

860
00:25:04,640 --> 00:25:06,060
percent is what they were talking
about.

861
00:25:06,060 --> 00:25:07,720
So every little bit is difficult,
especially from a developer

862
00:25:07,720 --> 00:25:08,060
standpoint.

863
00:25:08,060 --> 00:25:09,020
But, you know, we want

864
00:25:09,020 --> 00:25:09,260
infrastructure.

865
00:25:09,260 --> 00:25:10,660
We want a nice place.

866
00:25:10,740 --> 00:25:10,900
place.

867
00:25:10,900 --> 00:25:13,640
So when we had Ryan Smith on, it

868
00:25:13,760 --> 00:25:15,000
was like he did phrase it pretty
well.

869
00:25:15,000 --> 00:25:18,780
He's like, you know, you're kind
of shooting yourself in the foot

870
00:25:18,780 --> 00:25:23,160
because like you build this
beautiful city.

871
00:25:23,160 --> 00:25:23,380
But like.

872
00:25:23,380 --> 00:25:24,820
That's what it comes with the cost

873
00:25:24,820 --> 00:25:28,040
of, you know?
So like, yeah, you can complain

874
00:25:28,040 --> 00:25:29,980
about it, but it has to be there.

875
00:25:29,980 --> 00:25:30,780
Yeah, exactly.

876
00:25:30,780 --> 00:25:31,440
Yeah, exactly.

877
00:25:31,620 --> 00:25:32,560
And you know what?

878
00:25:32,560 --> 00:25:36,000
The city of Kelowna, I think they
do a really good job in terms of

879
00:25:36,000 --> 00:25:38,080
trying to keep it as fair as they
can and to manage it and manage

880
00:25:38,380 --> 00:25:41,200
expectations around it and to pass
it along, you know, gradually.

881
00:25:41,200 --> 00:25:42,820
And I think the development
community would echo what I just

882
00:25:42,820 --> 00:25:42,900
said.

883
00:25:42,900 --> 00:25:43,460
Like, you know, there's always

884
00:25:44,230 --> 00:25:46,370
going to be guys grumbling
whenever it costs them money.

885
00:25:46,370 --> 00:25:50,490
But at the end of the day, I
think, you know, we could be in a

886
00:25:50,490 --> 00:25:51,230
lot worse situations.

887
00:25:51,230 --> 00:25:52,770
And again, pointing to Metro Van,

888
00:25:52,770 --> 00:25:55,170
like what's happening down there
is crazy.

889
00:25:55,170 --> 00:25:56,490
Some of the costs that those guys
are passing.

890
00:25:56,490 --> 00:25:57,570
like 30 % increases.

891
00:25:57,710 --> 00:25:58,950
Like, I mean, that's pretty tough

892
00:25:58,950 --> 00:26:01,550
to swallow that, right?
Wasn't it down in the Soyuz?

893
00:26:01,550 --> 00:26:05,630
It was like 60 % on their property
taxes or something that went up.

894
00:26:05,630 --> 00:26:08,790
That's from just like years and
years of no tax increase at all,

895
00:26:08,790 --> 00:26:12,840
of no tax increase at all, right?
Which is the silliest way to run a

896
00:26:12,840 --> 00:26:13,400
city.

897
00:26:13,460 --> 00:26:15,240
Like Vernon kind of did the same

898
00:26:15,240 --> 00:26:17,360
thing back in the day.

899
00:26:17,360 --> 00:26:20,190
And that's why they have all these

900
00:26:20,190 --> 00:26:22,290
legacy infrastructure issues that
they're dealing with.

901
00:26:22,290 --> 00:26:26,150
And then they're eventually going
to have to pass that along.

902
00:26:26,150 --> 00:26:29,190
And then instead of doing two and
a half percent a year, 3 % or

903
00:26:29,350 --> 00:26:33,210
whatever, you know, it's a game of
politics, but you know, yeah.

904
00:26:33,210 --> 00:26:36,710
I mean, this is kind of one of our
wrap up questions, but I want to

905
00:26:36,710 --> 00:26:41,470
focus on this for a while anyways,
but like with an investor cap on,

906
00:26:41,470 --> 00:26:42,950
where's the opportunity?
know, the opportunity?

907
00:26:42,950 --> 00:26:49,400
What would you be buying?
Yeah, that's a good question.

908
00:26:49,400 --> 00:26:52,140
I think covered land place, a lot
of the sophisticated guys that I

909
00:26:52,140 --> 00:26:53,960
deal with, that's what they're
looking for is income with either

910
00:26:54,080 --> 00:26:56,400
some development spin or the
ability to subdivide and sell off

911
00:26:56,400 --> 00:26:58,780
or bring their cost base down or
reposition through aggressive

912
00:26:58,780 --> 00:26:59,920
leasing or whatever.

913
00:26:59,920 --> 00:27:00,880
Those types of assets are still

914
00:27:00,880 --> 00:27:01,000
selling.

915
00:27:01,000 --> 00:27:02,480
There's a lot of guys out there

916
00:27:02,480 --> 00:27:04,080
looking for that kind of stuff.

917
00:27:04,080 --> 00:27:05,560
And that could be anything from...

918
00:27:05,560 --> 00:27:08,400
a strip mall to, you know, an
underutilized industrial piece to,

919
00:27:08,400 --> 00:27:10,060
you know, a purposeful rental
building, right.

920
00:27:10,060 --> 00:27:11,060
That needs to be repositioned or
whatever.

921
00:27:11,060 --> 00:27:13,400
So that's where I would be looking
to put my money in is something

922
00:27:13,400 --> 00:27:15,260
that, you know, you could get a
little bit of income and then

923
00:27:15,260 --> 00:27:18,050
still have upside like long -term
do some planning.

924
00:27:18,050 --> 00:27:18,230
Yeah.

925
00:27:18,230 --> 00:27:18,370
Yeah.

926
00:27:18,370 --> 00:27:20,310
Whether it's excess land or
whether it's, yeah, development or

927
00:27:20,310 --> 00:27:21,010
redevelopment or whatever.

928
00:27:21,070 --> 00:27:21,190
Right.

929
00:27:21,190 --> 00:27:24,090
But there's some way to add value,
you know, down the road.

930
00:27:24,090 --> 00:27:24,150
Right.

931
00:27:24,150 --> 00:27:24,270
Yeah.

932
00:27:24,290 --> 00:27:25,490
I know there's been, and maybe
there's already been publications

933
00:27:25,490 --> 00:27:26,930
on it, but like starting to tax
vacant land.

934
00:27:26,930 --> 00:27:29,410
Do you know anything about that?
Like, where's that kind of going?

935
00:27:29,410 --> 00:27:31,930
Because obviously they're trying
to force people to develop land

936
00:27:31,930 --> 00:27:33,450
that they're just holding onto.

937
00:27:33,450 --> 00:27:34,870
But personally, I feel it's kind

938
00:27:34,870 --> 00:27:36,770
of the wrong way because it just
doesn't make sense to develop some

939
00:27:36,770 --> 00:27:37,050
land yet.

940
00:27:37,050 --> 00:27:37,390
Yeah.

941
00:27:37,390 --> 00:27:39,310
So it might not get the best
development out of it.

942
00:27:39,310 --> 00:27:39,390
Yeah.

943
00:27:39,390 --> 00:27:40,650
So it might not get the best

944
00:27:40,650 --> 00:27:40,930
development of it.

945
00:27:40,930 --> 00:27:41,050
Absolutely.

946
00:27:41,050 --> 00:27:41,230
Yeah.

947
00:27:41,230 --> 00:27:41,750
Yeah.

948
00:27:41,990 --> 00:27:44,670
And then province is pushing that,
which again, doesn't make any

949
00:27:44,670 --> 00:27:45,250
sense to me.

950
00:27:45,390 --> 00:27:46,110
Another example of all levels of

951
00:27:46,110 --> 00:27:49,010
government using development and
land as sort of the piggy bank and

952
00:27:49,010 --> 00:27:53,670
not understanding what the knock
-on effect is and how that can end

953
00:27:53,790 --> 00:27:55,330
up contravening what they're
trying to accomplish, right?

954
00:27:55,330 --> 00:27:58,210
Which is building supply and
developing a tax base and all of

955
00:27:58,210 --> 00:27:58,930
those things.

956
00:27:58,930 --> 00:28:01,390
I don't really know a lot about

957
00:27:59,330 --> 00:28:01,630
that, but it sounds asinine to me.

958
00:28:01,770 --> 00:28:03,170
yeah i guess what's the feedback

959
00:28:03,170 --> 00:28:05,350
you're getting when you're being
contracted by developers right now

960
00:28:05,350 --> 00:28:07,070
and like you come up with
performers and they're kind of

961
00:28:07,070 --> 00:28:09,490
like yeah that just doesn't pencil
like here's our thoughts here's

962
00:28:09,590 --> 00:28:11,150
what guess what's the feedback
you're getting when you're being

963
00:28:11,150 --> 00:28:13,050
contracted by developers right now
and like you come up with

964
00:28:13,050 --> 00:28:15,470
performers and they're kind of
like yeah that just doesn't pencil

965
00:28:15,530 --> 00:28:17,550
like here's our thoughts here's
what needs to happen?

966
00:28:17,790 --> 00:28:19,470
Yeah, it's difficult for sure.

967
00:28:19,470 --> 00:28:20,830
You know, right now it's a lot of

968
00:28:20,970 --> 00:28:21,250
wait and see.

969
00:28:21,250 --> 00:28:22,670
So the work that we do, it's, you

970
00:28:22,830 --> 00:28:25,550
know, present as much information
as we can, you know, show them the

971
00:28:25,550 --> 00:28:30,370
lay of the land, show them the
numbers, and then you can make a

972
00:28:30,370 --> 00:28:32,290
go or no go decision.

973
00:28:32,290 --> 00:28:33,970
Right now, a lot of the decision

974
00:28:33,970 --> 00:28:35,150
is no go.

975
00:28:35,150 --> 00:28:36,810
You know, there's some guys that,

976
00:28:36,810 --> 00:28:40,090
you know, have owned land for a
long time.

977
00:28:40,090 --> 00:28:43,890
So their cost -based is a little
different or they have some

978
00:28:43,890 --> 00:28:45,070
advantage.

979
00:28:45,070 --> 00:28:49,250
like the high streets of the

980
00:28:49,250 --> 00:28:52,030
world, guys like that, that are
very, very good at what they do.

981
00:28:52,030 --> 00:28:52,570
They're super efficient.

982
00:28:52,570 --> 00:28:53,270
They know their product.

983
00:28:53,470 --> 00:28:56,400
You know, they've stripped all the
fat out of the process.

984
00:28:56,400 --> 00:28:59,400
Like those guys are always kind of
fine.

985
00:28:59,400 --> 00:29:03,120
They can always figure out how to
make it work and continue to

986
00:29:03,120 --> 00:29:03,220
build.

987
00:29:03,220 --> 00:29:05,240
But, you know, for one of

988
00:29:05,240 --> 00:29:07,600
developers or guys that are, you
know, moving into a new product

989
00:29:07,600 --> 00:29:10,840
type or whatever, it's a tough
time to make things work right

990
00:29:10,840 --> 00:29:11,600
now.

991
00:29:11,600 --> 00:29:11,980
Yeah.

992
00:29:11,980 --> 00:29:15,830
So High Street just developed an
upper mission, right?

993
00:29:15,970 --> 00:29:16,170
Beautiful.

994
00:29:16,310 --> 00:29:16,470
Yeah.

995
00:29:16,470 --> 00:29:18,670
Just financed one up there and
it's...

996
00:29:18,670 --> 00:29:18,890
Yeah.

997
00:29:19,070 --> 00:29:20,610
I mean, it's fantastic.

998
00:29:20,610 --> 00:29:20,870
Yeah.

999
00:29:21,030 --> 00:29:21,750
I mean, it's fantastic.

1000
00:29:21,750 --> 00:29:24,230
And the prices that they're
offering up there and it's condo

1001
00:29:24,410 --> 00:29:24,630
product.

1002
00:29:24,870 --> 00:29:25,230
Yeah.

1003
00:29:25,230 --> 00:29:27,470
It's unbelievable, right?
But like good space.

1004
00:29:27,470 --> 00:29:27,810
Oh, yeah.

1005
00:29:27,810 --> 00:29:28,870
Like efficiently built, you know.

1006
00:29:28,870 --> 00:29:31,510
So I guess why can't more people
do that?

1007
00:29:31,510 --> 00:29:32,970
Well, it's a lot of hard work.

1008
00:29:32,970 --> 00:29:33,050
work.

1009
00:29:33,050 --> 00:29:33,730
That's for sure.

1010
00:29:33,730 --> 00:29:35,890
I mean, I think Scott Butler and

1011
00:29:35,890 --> 00:29:38,430
his team, Christina Wilson and
everybody else over there, I mean,

1012
00:29:38,430 --> 00:29:39,110
they do an amazing job.

1013
00:29:39,110 --> 00:29:40,670
They work really hard at, again,

1014
00:29:40,670 --> 00:29:43,470
just construction efficiency and,
you know, making sure that their

1015
00:29:43,470 --> 00:29:45,130
design is best it possibly can be.

1016
00:29:45,130 --> 00:29:44,050
You know, getting a good price on

1017
00:29:44,050 --> 00:29:45,800
their land, you know, making a
good buy.

1018
00:29:46,260 --> 00:29:46,400
Right.

1019
00:29:46,460 --> 00:29:47,960
That's critical to those guys.

1020
00:29:47,960 --> 00:29:49,460
Like they have a very regimented
approach.

1021
00:29:49,460 --> 00:29:56,220
And, you know, if it doesn't work,
they don't try to make it work.

1022
00:29:56,220 --> 00:29:56,420
Right.

1023
00:29:56,420 --> 00:29:57,460
Like they just move next, you

1024
00:29:57,460 --> 00:29:59,840
know, and they move on.

1025
00:29:59,840 --> 00:29:59,980
Yeah.

1026
00:29:59,980 --> 00:30:01,240
That's for They don't get
emotional about it.

1027
00:30:01,240 --> 00:30:05,740
That's a takeaway from my point of
view is like, you know, we can

1028
00:30:05,740 --> 00:30:10,220
blame the government, city,
whatever we want to blame.

1029
00:30:10,220 --> 00:30:11,800
But like at the end of the day,
some developers.

1030
00:30:11,800 --> 00:30:14,390
you know, quote unquote developers
just made really bad decisions

1031
00:30:14,390 --> 00:30:18,450
buying land that was overpriced
and like, and it kind of forces

1032
00:30:18,450 --> 00:30:20,150
the market in a direction it
shouldn't go.

1033
00:30:20,150 --> 00:30:23,230
And that can take a few years, but
yeah, effectively that happened

1034
00:30:23,230 --> 00:30:25,670
over the last few years, like bad
decisions on.

1035
00:30:25,670 --> 00:30:18,450
buying land assemblies or a couple
of single family houses that they

1036
00:30:18,450 --> 00:30:20,010
thought was going to pencil out.

1037
00:30:20,010 --> 00:30:20,570
And it just didn't.

1038
00:30:20,570 --> 00:30:20,990
Yeah.

1039
00:30:20,990 --> 00:30:21,510
Yeah.

1040
00:30:21,510 --> 00:30:24,390
I mean, which even at the time,
like I remember seeing

1041
00:30:24,390 --> 00:30:26,930
transactions in 2020, Matt, you
probably do too.

1042
00:30:26,930 --> 00:30:30,350
And you run the numbers and you're
like, Howard, that makes no sense.

1043
00:30:30,350 --> 00:30:32,930
And, you know, that's 20 % higher
than what anybody could pay.

1044
00:30:33,170 --> 00:30:34,350
And yet this guy bought it.

1045
00:30:34,350 --> 00:30:35,770
And now you're seeing, I mean,

1046
00:30:35,990 --> 00:30:38,330
I've never seen so many
receiverships in my 22 years in

1047
00:30:38,330 --> 00:30:39,230
the business.

1048
00:30:39,230 --> 00:30:40,430
And that's going through 2008 too.

1049
00:30:40,430 --> 00:30:40,570
Right.

1050
00:30:40,570 --> 00:30:42,530
And I mean, the amount of

1051
00:30:42,530 --> 00:30:44,730
receivership in, you know, the
lower mainland, the Okanagan and

1052
00:30:44,770 --> 00:30:45,670
the island right now is mind
boggling.

1053
00:30:45,750 --> 00:30:47,010
And that's a direct reflection of
that, right?

1054
00:30:47,090 --> 00:30:49,350
Is that, you know, guys that just
were making bad decisions and, you

1055
00:30:49,350 --> 00:30:52,310
know, the guys like High Street
or, and there's a million I could

1056
00:30:52,310 --> 00:30:54,610
probably name here, but like those
types of developers don't make

1057
00:30:54,610 --> 00:30:57,850
those bad decisions, right?
And they're the ones that you see

1058
00:30:57,850 --> 00:30:59,030
for the next 30 years, years,
right?

1059
00:30:59,290 --> 00:30:59,650
Yeah.

1060
00:30:59,650 --> 00:31:01,050
So I guess it's just kind of like

1061
00:31:01,050 --> 00:31:02,710
a, you know, unfortunate part of
the natural cycle.

1062
00:31:02,710 --> 00:31:04,630
There's going to be some tough
times out.

1063
00:31:04,630 --> 00:31:06,950
for everyone, but it's going to
happen, going to happen, I guess.

1064
00:31:07,270 --> 00:31:09,930
And a lot of those pedigree
developers, they're licking their

1065
00:31:09,930 --> 00:31:11,490
chops, right?
This is a great time to buy,

1066
00:31:11,490 --> 00:31:12,850
right?
They're watching all these guys

1067
00:31:12,850 --> 00:31:13,710
floundering and going into
receivership.

1068
00:31:13,710 --> 00:31:18,080
And now this is when they can open
up the war chest and go and buy a

1069
00:31:17,360 --> 00:31:18,440
bunch of land cents on the dollar,
right?

1070
00:31:18,440 --> 00:31:18,740
Yeah.

1071
00:31:18,740 --> 00:31:19,040
Okay.

1072
00:31:19,040 --> 00:31:20,660
Lastly, just to kind of wrap it
up.

1073
00:31:20,660 --> 00:31:23,820
So you did indicate there's a
pretty big student rental going

1074
00:31:23,860 --> 00:31:25,640
out at UBCO, like 40 acres.

1075
00:31:25,760 --> 00:31:25,940
Yes.

1076
00:31:25,940 --> 00:31:28,020
That's a lot of units coming on
for student housing.

1077
00:31:28,120 --> 00:31:30,060
And like right now we're in a
space where internationally, I

1078
00:31:30,200 --> 00:31:32,920
don't think there's probably going
to be a huge intake for

1079
00:31:32,920 --> 00:31:33,440
international students.

1080
00:31:33,440 --> 00:31:33,680
Yeah.

1081
00:31:33,680 --> 00:31:35,100
I think we're pretty well
supported, you know, domestically

1082
00:31:35,100 --> 00:31:39,520
at UBCO, but yeah, I guess what
does student housing rentals do as

1083
00:31:39,540 --> 00:31:41,140
well?
Because that's going to take just

1084
00:31:41,140 --> 00:31:43,180
rentals in general off the market.

1085
00:31:43,180 --> 00:31:43,480
Yeah.

1086
00:31:44,080 --> 00:31:46,120
I mean, I think You know, to your
point with this new federal

1087
00:31:46,120 --> 00:31:48,340
immigration rules and the way
things are changing, I think all

1088
00:31:48,340 --> 00:31:52,020
universities across the country
are expecting enrollment to be

1089
00:31:52,020 --> 00:31:52,360
down significantly.

1090
00:31:52,360 --> 00:31:54,200
And a lot of those students that

1091
00:31:54,200 --> 00:31:55,540
were coming from overseas needed,
obviously, rental housing.

1092
00:31:55,540 --> 00:31:57,260
It's going to be a big impact.

1093
00:31:57,260 --> 00:31:29,780
There's no question.

1094
00:31:29,780 --> 00:32:00,660
You know, UBCO, again, is well
positioned and they have a pretty

1095
00:32:00,660 --> 00:32:02,640
significant growth plan, which may
be tempered a bit now, again,

1096
00:32:02,640 --> 00:32:04,620
based off of these new regs.

1097
00:32:04,620 --> 00:32:05,400
But basically, the rental housing,

1098
00:32:05,400 --> 00:32:06,160
even if it's geared for students.

1099
00:32:06,460 --> 00:32:09,960
I mean, some of it is really

1100
00:32:09,960 --> 00:32:14,500
geared to students, like just like
from a design standpoint, from a

1101
00:32:14,500 --> 00:32:16,360
pricing standpoint, the way that
their leases are structured and

1102
00:32:16,360 --> 00:32:16,760
everything else.

1103
00:32:16,760 --> 00:32:18,800
So I think that will just remain

1104
00:32:18,800 --> 00:32:21,160
specific to students, specifically
at the university.

1105
00:32:21,160 --> 00:32:22,180
But students also would rent.

1106
00:32:22,180 --> 00:32:24,460
stuff in the city, downtown, it's

1107
00:32:24,890 --> 00:32:26,690
part of the overall demand
picture.

1108
00:32:26,690 --> 00:32:28,550
There's not going to be as much of
it, right?

1109
00:32:28,550 --> 00:32:31,110
So that, again, is going to
influence the overall absorption

1110
00:32:31,470 --> 00:32:32,590
of all this rental product that's
coming.

1111
00:32:32,590 --> 00:32:34,310
Where are these 40 acres on John
Handel?

1112
00:32:34,310 --> 00:32:36,870
Yeah, just kind of off of
Appaloosa or in that way, kind of.

1113
00:32:36,870 --> 00:32:36,970
Okay.

1114
00:32:36,970 --> 00:32:37,050
Yeah.

1115
00:32:37,050 --> 00:32:38,190
Dang, that's a lot.

1116
00:32:38,190 --> 00:32:39,850
Yeah, it's a big project.

1117
00:32:39,890 --> 00:32:43,050
All of this stuff is going to be
phased out over years, right?

1118
00:32:43,050 --> 00:32:43,590
Yeah, yeah, yeah.

1119
00:32:43,710 --> 00:32:44,670
It shows big numbers at build

1120
00:32:44,770 --> 00:32:46,470
-out, but is that a 15 -year build
-out?

1121
00:32:46,470 --> 00:32:48,570
Is it, you know, like who knows,
right?

1122
00:32:48,570 --> 00:32:53,010
So again, rule of thumb, we would
expect like 150 units a year to

1123
00:32:53,010 --> 00:32:55,260
come out of a project like that.

1124
00:32:55,260 --> 00:32:56,760
And maybe on a good year, maybe

1125
00:32:56,760 --> 00:32:58,820
it's two buildings, right?
Maybe it's 300.

1126
00:32:58,820 --> 00:33:01,200
But like right now, it's probably
going to be like one building.

1127
00:33:01,200 --> 00:33:02,040
like one building.

1128
00:33:02,040 --> 00:33:03,100
Because just even anecdotally, the

1129
00:33:03,100 --> 00:33:05,020
condos on Academy, they've slowed
down quite a bit.

1130
00:33:05,020 --> 00:33:08,440
And Mission Group has a bunch of
rental up there as well, right?

1131
00:33:08,440 --> 00:33:08,600
Yeah.

1132
00:33:08,600 --> 00:33:10,260
So it's wild to look at this.

1133
00:33:10,260 --> 00:33:11,280
wild to look at this.

1134
00:33:11,280 --> 00:33:12,560
So yeah, just under 5 ,000.

1135
00:33:12,940 --> 00:33:13,880
Units, bedrooms, right,
essentially coming on?

1136
00:33:13,880 --> 00:33:14,140
Yeah, units.

1137
00:33:14,140 --> 00:33:15,740
Well, that's like 3 % of our

1138
00:33:15,740 --> 00:33:16,280
population in Kelowna.

1139
00:33:16,280 --> 00:33:17,500
We're at like 150 ,000.

1140
00:33:17,500 --> 00:33:18,970
So like 3 % added.

1141
00:33:18,970 --> 00:33:20,430
Is that going to be a direct

1142
00:33:20,430 --> 00:33:23,470
correlation to vacancy then?
Is that just going to bump it by

1143
00:33:23,510 --> 00:33:24,710
2%, 3 %?
%?

1144
00:33:24,710 --> 00:33:25,730
Yeah, it's hard to say.

1145
00:33:25,730 --> 00:33:27,070
It was funny because there was a

1146
00:33:27,070 --> 00:33:30,910
big bulge of rental product that
came through kind of 2019.

1147
00:33:30,910 --> 00:33:33,690
It was like 2015 to 2019.

1148
00:33:33,690 --> 00:33:35,130
There was a big surge of new

1149
00:33:35,130 --> 00:33:35,530
rental product.

1150
00:33:35,530 --> 00:33:36,730
At the time, talking to appraisers

1151
00:33:36,730 --> 00:33:39,780
and other industry experts, the
expectation was that a vacancy is

1152
00:33:39,780 --> 00:33:43,580
going to go up probably a point or
a point and a half, or we might

1153
00:33:43,580 --> 00:33:46,480
get up to close to 3%.

1154
00:33:46,480 --> 00:33:47,780
And then the statistics came out

1155
00:33:47,780 --> 00:33:50,540
and it had gone down, right?
The market had absorbed all of

1156
00:33:50,540 --> 00:33:52,220
that product, no problem.

1157
00:33:52,220 --> 00:33:53,360
But I think we've gotten to a

1158
00:33:53,360 --> 00:33:53,940
saturation point.

1159
00:33:53,940 --> 00:33:56,300
And then also, that coincided with

1160
00:33:56,300 --> 00:33:59,260
the most aggressive immigration
policy in the history of the

1161
00:33:59,360 --> 00:33:59,920
country.

1162
00:33:59,920 --> 00:34:01,120
Basically, an open door policy as

1163
00:34:01,120 --> 00:34:02,260
many people.

1164
00:34:02,260 --> 00:34:03,060
come in as possible.

1165
00:34:03,060 --> 00:34:05,580
So, you know, now that that's
changed and we have all this

1166
00:34:05,780 --> 00:34:08,810
supply and again, you know, just
your point around, you know, the

1167
00:34:08,810 --> 00:34:12,670
student housing demand and there's
going to be, you know, I think a

1168
00:34:12,670 --> 00:34:17,050
big effect and whether we end up
at, you know, is it over five?

1169
00:34:17,650 --> 00:34:18,489
I don't know.

1170
00:34:18,489 --> 00:34:20,250
You know, I guess collectively

1171
00:34:20,250 --> 00:34:24,310
too, like what do you guys think?
Because in the past five years,

1172
00:34:24,310 --> 00:34:27,389
yeah, we saw a ton of, you know,
immigration to Kelowna, whether

1173
00:34:27,389 --> 00:34:29,949
that's, you know, it's probably
mostly domestically, but it's

1174
00:34:29,949 --> 00:34:31,530
because, yeah, it's a beautiful
place to live.

1175
00:34:31,530 --> 00:34:34,670
But it was also a little bit more
affordable than comparably some of

1176
00:34:34,670 --> 00:34:35,290
the bigger cities.

1177
00:34:35,290 --> 00:34:36,949
But now we're getting up there

1178
00:34:37,050 --> 00:34:37,909
where it's not so affordable.

1179
00:34:37,909 --> 00:34:39,530
Are we still going to see people

1180
00:34:39,530 --> 00:34:43,070
being able to move here?
Is that going to drive vacancy up?

1181
00:34:43,070 --> 00:34:44,730
population growth is not
increasing as much?

1182
00:34:44,850 --> 00:34:45,830
as much?
Well, we certainly dropped.

1183
00:34:45,830 --> 00:34:51,409
We were the fastest growing CMA in
Canada for a couple of years

1184
00:34:51,409 --> 00:34:51,730
running.

1185
00:34:51,730 --> 00:34:54,300
And now I think we're 21st.

1186
00:34:54,719 --> 00:34:56,380
Our population growth has slowed.

1187
00:34:56,380 --> 00:34:58,120
We kind of always ebb and flow a

1188
00:34:58,120 --> 00:34:58,460
little bit.

1189
00:34:58,460 --> 00:34:59,760
And next year, we could be higher

1190
00:34:59,760 --> 00:35:00,880
on that list.

1191
00:35:00,880 --> 00:35:02,300
But lack of affordability in

1192
00:35:02,300 --> 00:35:03,300
Kelowna is nothing new.

1193
00:35:03,820 --> 00:35:04,840
That's certainly precluded people

1194
00:35:04,840 --> 00:35:05,560
from coming here.

1195
00:35:05,560 --> 00:35:06,920
But I do think that the lifestyle

1196
00:35:06,920 --> 00:35:10,220
and the way the city's shaping up
and some of the other things that

1197
00:35:10,440 --> 00:35:11,840
are happening, I think UBCO being
a big one, right?

1198
00:35:11,840 --> 00:35:13,640
as a driver for growth and for
industry and everything else.

1199
00:35:13,760 --> 00:35:18,200
I think that we're safe to say the
population isn't going to decline.

1200
00:35:18,200 --> 00:35:19,900
We may slow a little bit and then
pick up speed again.

1201
00:35:19,900 --> 00:35:24,220
Kelowna is just too nice of a
place and people want to be here.

1202
00:35:24,220 --> 00:35:26,760
So all of this rental supply
hitting the market and the rent

1203
00:35:26,760 --> 00:35:28,640
compression that's expected, maybe
that's going to allow other people

1204
00:35:28,780 --> 00:35:31,900
that maybe said, hey, I can't
really afford to be up there.

1205
00:35:31,900 --> 00:35:32,800
Now look again and say, well, you
know what?

1206
00:35:33,020 --> 00:35:37,660
I can make that work, right?
It's dropped 300 bucks a month or

1207
00:35:37,660 --> 00:35:37,780
whatever.

1208
00:35:37,780 --> 00:35:39,000
I can make that work and I'll make

1209
00:35:39,000 --> 00:35:39,460
the move, right?
Yeah.

1210
00:35:39,460 --> 00:35:42,260
Also, that's a lot of construction
and a lot of construction jobs.

1211
00:35:41,420 --> 00:35:42,660
construction and a lot of
construction jobs.

1212
00:35:42,660 --> 00:35:43,660
For sure.

1213
00:35:43,660 --> 00:35:44,140
For sure.

1214
00:35:44,140 --> 00:35:46,680
Yeah, that's a big one, Matt.

1215
00:35:46,680 --> 00:35:48,440
You know, hopefully we can find

1216
00:35:48,440 --> 00:35:51,920
work for those guys because, you
know, once a lot of the product

1217
00:35:52,080 --> 00:35:55,360
that you see being built currently
finishes, I don't know where those

1218
00:35:55,360 --> 00:35:57,980
guys are going to go, right?
Other than back to Alberta.

1219
00:35:57,980 --> 00:36:01,060
Well, they can come work in my
basement because it's taken me

1220
00:36:01,060 --> 00:36:02,740
like three years to build this.

1221
00:36:02,740 --> 00:36:03,740
three years to build this.

1222
00:36:03,740 --> 00:36:04,400
There you go.

1223
00:36:04,400 --> 00:36:04,600
Yeah.

1224
00:36:04,600 --> 00:36:07,660
You might be able to get a good
deal.

1225
00:36:07,660 --> 00:36:07,880
Yeah.

1226
00:36:07,880 --> 00:36:09,580
Yeah, it'd be interesting to see

1227
00:36:09,580 --> 00:36:12,770
on that side if things do come
down a bit.

1228
00:36:12,770 --> 00:36:16,390
Well, this has been awesome, man.

1229
00:36:16,390 --> 00:36:18,590
We're going to jump into a wrap

1230
00:36:18,590 --> 00:36:18,770
-up question.

1231
00:36:18,770 --> 00:36:20,890
I know I already asked you one of

1232
00:36:20,890 --> 00:36:20,970
them.

1233
00:36:20,970 --> 00:36:21,370
All right.

1234
00:36:21,370 --> 00:36:25,010
If you could give your 20 -year
-old self any advice, what would

1235
00:36:25,010 --> 00:36:25,950
you do?
Buy real estate.

1236
00:36:25,950 --> 00:36:26,070
Nice.

1237
00:36:26,070 --> 00:36:28,010
As much of it as you can.

1238
00:36:28,010 --> 00:36:31,810
What if you were 20 right now,
would you?

1239
00:36:31,810 --> 00:36:32,990
I would still buy real estate.

1240
00:36:32,990 --> 00:36:33,670
Me too.

1241
00:36:33,670 --> 00:36:36,310
I love that answer because I would
do.

1242
00:36:36,310 --> 00:36:37,070
Yeah, 100%.

1243
00:36:37,070 --> 00:36:37,590
Yeah.

1244
00:36:37,590 --> 00:36:40,650
I think in the long term, As the
long term, there's always ups and

1245
00:36:40,650 --> 00:36:40,950
downs.

1246
00:36:41,000 --> 00:36:41,340
Of course.

1247
00:36:41,340 --> 00:36:42,920
I love that answer, man.

1248
00:36:43,040 --> 00:36:43,480
Yeah.

1249
00:36:43,480 --> 00:36:45,580
I mean, we live in such a
beautiful place.

1250
00:36:45,580 --> 00:36:47,240
we live in such a beautiful place.

1251
00:36:47,240 --> 00:36:49,820
You got to be able to weather it

1252
00:36:49,820 --> 00:36:52,260
and you got to have a bit of a
longer term vision.

1253
00:36:52,260 --> 00:36:55,080
But I mean, if you have those two
things.

1254
00:36:55,080 --> 00:36:55,420
all day long.

1255
00:36:55,420 --> 00:36:57,040
I am very bullish on Kelowna real

1256
00:36:57,140 --> 00:36:59,200
estate, all asset classes, all
types over the long term.

1257
00:36:59,200 --> 00:36:59,520
long.

1258
00:36:59,680 --> 00:37:00,840
I would agree.

1259
00:37:00,840 --> 00:37:03,360
This whole time that we've been
talking, sorry, normally we just

1260
00:37:03,360 --> 00:37:04,260
let you talk.

1261
00:37:04,260 --> 00:37:05,540
Matt, what would you do?

1262
00:37:05,600 --> 00:37:07,520
Thank God you asked me too.

1263
00:37:07,520 --> 00:37:08,800
No, I just love that because we're

1264
00:37:08,800 --> 00:37:10,620
talking about, oh, this is down.

1265
00:37:10,620 --> 00:37:12,900
How are these numbers going to

1266
00:37:12,900 --> 00:37:14,020
pencil?
To me, I'm just thinking, man,

1267
00:37:14,020 --> 00:37:14,920
this is an opportunity.

1268
00:37:14,920 --> 00:37:15,720
This is an opportunity.

1269
00:37:15,720 --> 00:37:18,840
Obviously, I'm not the only one
thinking this because people are

1270
00:37:18,840 --> 00:37:20,460
still doing stuff, but it might
suck.

1271
00:37:20,460 --> 00:37:25,500
It might be hard for a couple of
years, but man, just put it in

1272
00:37:25,620 --> 00:37:28,320
your numbers when you run them and
then get there.

1273
00:37:28,320 --> 00:37:29,640
I'm with you, Matt.

1274
00:37:29,640 --> 00:37:30,940
If you can make it work, work, I

1275
00:37:30,940 --> 00:37:33,200
think now's a great time to buy.

1276
00:37:33,200 --> 00:37:35,120
And I'm not saying that just...

1277
00:37:35,120 --> 00:37:36,200
Because that's what most brokers
would say.

1278
00:37:36,200 --> 00:37:37,340
I truly believe it.

1279
00:37:37,340 --> 00:37:38,860
And I think, again, long term,

1280
00:37:38,860 --> 00:37:41,300
there's no downside to real estate
in Kelowna.

1281
00:37:41,300 --> 00:37:44,480
I mean, look, you got to buy the
right stuff.

1282
00:37:44,480 --> 00:37:45,580
There's just room for error.

1283
00:37:45,580 --> 00:37:46,320
error.

1284
00:37:46,320 --> 00:37:48,740
You can make a mistake buying real
estate and it's going to resolve

1285
00:37:48,740 --> 00:37:48,980
itself.

1286
00:37:48,980 --> 00:37:51,700
Any other asset class, you could

1287
00:37:51,700 --> 00:37:51,940
lose everything.

1288
00:37:51,940 --> 00:37:52,060
Yeah.

1289
00:37:52,060 --> 00:37:55,980
But with real estate, most errors
can just be... corrected with just

1290
00:37:55,980 --> 00:37:56,600
waiting it out.

1291
00:37:56,600 --> 00:37:58,420
It might be a few years, but just

1292
00:37:58,420 --> 00:37:59,140
wait it out.

1293
00:37:59,140 --> 00:38:00,700
You can't buy anything for three

1294
00:38:00,700 --> 00:38:02,620
or four years, but then you can.

1295
00:38:03,140 --> 00:38:04,480
I have a lot of stocks that have

1296
00:38:04,480 --> 00:38:05,120
gone to zero.

1297
00:38:05,120 --> 00:38:06,740
have a lot stocks that have gone

1298
00:38:06,740 --> 00:38:07,340
to zero.

1299
00:38:07,340 --> 00:38:08,440
They're not coming back.

1300
00:38:08,440 --> 00:38:09,680
That's a great point.

1301
00:38:09,680 --> 00:38:11,560
Also, another point on here, you

1302
00:38:11,560 --> 00:38:14,600
and I, all three of us really, see
behind the scenes and movers are

1303
00:38:14,600 --> 00:38:14,800
moving.

1304
00:38:15,020 --> 00:38:16,720
There's a lot of money in the city

1305
00:38:16,720 --> 00:38:17,420
and a lot of money.

1306
00:38:17,420 --> 00:38:18,700
Going around, like people are

1307
00:38:18,700 --> 00:38:20,620
setting up, they're kind of
setting up for the next future and

1308
00:38:20,620 --> 00:38:22,120
like buying things that you don't
see.

1309
00:38:22,240 --> 00:38:23,340
So like a lot of people that I've
talked to are like, oh, should I

1310
00:38:23,340 --> 00:38:26,580
buy this condo right now?
Step back and look at the big

1311
00:38:26,580 --> 00:38:26,640
picture.

1312
00:38:26,640 --> 00:38:27,740
It's like, yes, like if it works

1313
00:38:27,740 --> 00:38:29,700
for you now, it's good for you
now, right?

1314
00:38:29,700 --> 00:38:30,540
The tap hasn't dried up.

1315
00:38:30,540 --> 00:38:31,380
People are still moving around,

1316
00:38:31,380 --> 00:38:34,200
right?
Can't see as much in the city, but

1317
00:38:34,200 --> 00:38:35,740
like there's still... A lot of
stuff going on.

1318
00:38:35,740 --> 00:38:36,140
A hundred percent.

1319
00:38:36,140 --> 00:38:38,340
So I've been in this market for 13

1320
00:38:38,340 --> 00:38:40,180
years and I've never seen so many
like sophisticated, well

1321
00:38:40,180 --> 00:38:40,600
-capitalized development groups
from the lower mainland, branded

1322
00:38:40,780 --> 00:38:44,740
groups from the lower mainland,
from Calgary, from Edmonton that

1323
00:38:44,740 --> 00:38:46,870
want to be in this market.

1324
00:38:47,570 --> 00:38:48,870
Before you talked to them about it

1325
00:38:48,870 --> 00:38:51,990
five years ago, eight years ago,
and they'd say, no, I'm not

1326
00:38:51,990 --> 00:38:52,790
interested in the Okanagan.

1327
00:38:52,790 --> 00:38:54,130
Now they want to be in the

1328
00:38:54,130 --> 00:38:54,390
Okanagan.

1329
00:38:54,490 --> 00:38:55,490
Show me some side check.

1330
00:38:55,490 --> 00:38:56,890
Let's run some numbers, that kind
of thing.

1331
00:38:56,890 --> 00:38:59,370
So that says a lot to me because
those guys usually are the

1332
00:38:59,370 --> 00:39:00,790
canaries in the coal mine, right?
They're ahead of the curve.

1333
00:39:00,790 --> 00:39:01,650
a lot of stuff happening.

1334
00:39:01,650 --> 00:39:03,170
Even, you know, talking to the

1335
00:39:03,170 --> 00:39:06,010
city and you guys, you know, I had
Ryan Smith on the growth that the

1336
00:39:06,010 --> 00:39:09,830
city has earmarked and some of the
exciting things, all of that, it

1337
00:39:00,450 --> 00:39:11,210
just builds on itself, right?
And it creates more momentum.

1338
00:39:11,370 --> 00:39:13,760
And yeah, it's a bit of a blip
right now.

1339
00:39:13,760 --> 00:39:16,020
And, you know, maybe the market's
soft, no surprise.

1340
00:39:14,000 --> 00:39:15,680
That's just what the market does,
right?

1341
00:39:15,680 --> 00:39:17,700
It cycles, you know, it's a great
time to position for the next big

1342
00:39:17,700 --> 00:39:18,160
run, right?
Because it will happen.

1343
00:39:18,160 --> 00:39:19,600
There's no question.

1344
00:39:19,860 --> 00:39:21,160
Off the air, And the air, I was

1345
00:39:21,160 --> 00:39:24,220
talking to Taylor, how do I?
buy one of these?

1346
00:39:24,220 --> 00:39:26,920
How do I buy a fiveplex or a
sixplex?

1347
00:39:26,920 --> 00:39:29,060
Come on, tell me what I need to
do.

1348
00:39:29,300 --> 00:39:30,720
Let's do it because I believe it.

1349
00:39:31,500 --> 00:39:32,080
I'm all in.

1350
00:39:32,080 --> 00:39:37,240
It's happening and it might not
cash flow over the next two,

1351
00:39:37,240 --> 00:39:40,500
three, four, five years, but like
20 years, I'm definitely going to

1352
00:39:40,500 --> 00:39:41,220
be patting myself on it.

1353
00:39:41,220 --> 00:39:42,860
Yeah, I told you to write me that

1354
00:39:43,000 --> 00:39:43,360
blank check.

1355
00:39:43,440 --> 00:39:44,020
I still haven't got it.

1356
00:39:44,020 --> 00:39:45,000
buy I still haven't got it.

1357
00:39:45,000 --> 00:39:47,860
Yeah, you can take that blank

1358
00:39:47,860 --> 00:39:50,740
check to any bank you want and
they'll tell you the same thing.

1359
00:39:50,740 --> 00:39:52,200
Speaking of charities, Jeff,
what's your favorite charity?

1360
00:39:52,200 --> 00:39:53,360
Favorite charity?
Well, I'd say the Okanagan Food

1361
00:39:53,360 --> 00:39:53,460
Bank.

1362
00:39:53,460 --> 00:39:54,420
My wife does a lot of volunteer

1363
00:39:54,420 --> 00:39:54,820
work there.

1364
00:39:54,820 --> 00:39:56,160
We've supported them a lot.

1365
00:39:56,240 --> 00:39:58,460
She had a really great time at the
golf tournament last year or last

1366
00:39:58,460 --> 00:39:58,660
summer.

1367
00:39:58,660 --> 00:40:00,240
So yeah, that would be my charity

1368
00:40:00,240 --> 00:40:01,120
of choice.

1369
00:40:01,120 --> 00:40:01,680
Awesome.

1370
00:40:01,680 --> 00:40:03,320
I love that one.

1371
00:40:03,320 --> 00:40:05,100
How can Taylor or I or our

1372
00:40:05,100 --> 00:40:07,180
listener help you?
What can we do for you?

1373
00:40:07,180 --> 00:40:08,320
For me?
That's a good question, actually.

1374
00:40:08,440 --> 00:40:09,140
I don't know, Matt.

1375
00:40:09,140 --> 00:40:10,940
You guys are helping me, you know.

1376
00:40:10,940 --> 00:40:12,660
by having me on the podcast.

1377
00:40:12,660 --> 00:40:14,040
So I appreciate that.

1378
00:40:14,040 --> 00:40:17,720
You know, I love talking to Taylor
about the business and now you,

1379
00:40:17,720 --> 00:40:21,260
Matt, like hopefully we can
connect and continue to chat.

1380
00:40:21,260 --> 00:40:25,050
I'm always up for, you know,
coffees and networking and, you

1381
00:40:25,150 --> 00:40:26,590
know, sitting down and having
conversations with people in the

1382
00:40:26,590 --> 00:40:28,630
industry and all aspects of the
industry, you know, whether it's

1383
00:40:28,630 --> 00:40:31,010
on the lending side, whether it's
on the transactional side, you

1384
00:40:31,010 --> 00:40:31,590
know, the more people you talk to,
the more opportunities to pop up.

1385
00:40:31,590 --> 00:40:32,530
And like, for instance, this
opportunity.

1386
00:40:32,530 --> 00:40:38,070
So yeah, no, I appreciate you guys
having me on and let's just

1387
00:40:38,070 --> 00:40:39,430
continue to grow the relationship,
right?

1388
00:40:39,430 --> 00:40:41,650
Keep trying to do some business.

1389
00:40:41,650 --> 00:40:42,490
I love it.

1390
00:40:42,490 --> 00:40:44,610
Well, thank you so much for this
spreadsheet as well.

1391
00:40:44,610 --> 00:40:45,740
Yeah, no problem at all, guys.

1392
00:40:45,740 --> 00:40:46,180
My pleasure.

1393
00:40:46,180 --> 00:40:48,040
If you have questions or stuff
comes up, just let me know because

1394
00:40:48,040 --> 00:40:51,000
we're always neck deep in that
part of the market and we're

1395
00:40:51,000 --> 00:40:52,380
always updating the numbers and
looking at new stuff.

1396
00:40:52,380 --> 00:40:52,440
Awesome.

1397
00:40:52,440 --> 00:40:52,680
Sounds good.

1398
00:40:52,760 --> 00:40:53,700
Well, thanks for coming on, man.

1399
00:40:53,700 --> 00:40:54,220
Pleasure, guys.

1400
00:40:54,220 --> 00:40:55,080
Thank you very much.

1401
00:40:55,080 --> 00:40:55,460
Thank you.

1402
00:40:55,460 --> 00:40:56,180
Yeah, that's great.

1403
00:40:56,480 --> 00:40:56,860
Thank you.