95: Commercial Real Estate Opportunities in the Okanagan with Venture Commercial's Chris & Jason Wills

Taylor Atkinson: Welcome back to the Columbia Real Estate Podcast. I'm your host, Taylor Atkinson.

Matt Glen: Mortgage broker too.

Taylor Atkinson: I've heard. Yeah. Yeah. I missed that part.

Matt Glen: And I am your real estate agent host That client.

Taylor Atkinson: I thought you were the one that was supposed to have no brainer.

Matt Glen: I honestly do not have a brain. It's like, I have done some questionable shit in the

Chris Wills: last few days.

Taylor Atkinson: Yeah. Well, kids will do that here.

Matt Glen: Yeah. Yeah. Honestly, it's it's real. You get told about it, then it happens, and it's real.

Taylor Atkinson: Yeah. Yeah. Well, only another eight months, and then you'll be, like, hitting Todd next stage? Yeah. Exactly.
Yeah. How's how's everything outside of that?

Matt Glen: Honestly, like, it's awesome. Like, being a father and two kids has been awesome. It's been great, but, like, my brain is still getting eaten the way it feels like.

Chris Wills: But It's been great.

Matt Glen: Work has been pretty good. Tariffs have sucked, honestly. Like, they're just hearing about this all the time. Like, I have showings booked. Like, I had a fourplex for sale.
Actually, half of it is still for sale. We had, like, showings booked. Right? So we had, I don't know, twelve showings over the weekend. Tariffs get announced coming in again.
Like, half the show was canceled.

Taylor Atkinson: So we haven't talked about this at all. I've spoken to a couple of other people, but Yeah. I know you and I were like and everyone was pumping busy through the winter, which was really

Matt Glen: spring, I

Taylor Atkinson: was prepared just to, like, you know, keep going. I thought it was gonna be a crazy market. It has been much quieter, like, for a second.

Matt Glen: It's gotten pretty quiet. Like, super thankful.

Taylor Atkinson: I still have quite a

Matt Glen: bit of stuff going on. But Yeah. It has been, like, noticeably quieter. And it's just because the uncertainty. People don't know.
Are you gonna buy a house and our economy classes next month? Yeah. Right? Like, it's just like there's not really a good answer for that because nobody knows.

Taylor Atkinson: Yeah. I agree. It's not really the house price, what people were Yeah. Yes. Scared of before, like, oh, am I gonna buy at the peak or I wanna buy at the bottom?
Yeah. Now it's just like, am I gonna have my job? Am I

Matt Glen: gonna Yeah.

Chris Wills: Be able to be able

Taylor Atkinson: to say it

Matt Glen: in a couple of months, you know, like, there's so much uncertainty and it's just a hard way of making the biggest decision of your life. Yeah. It sucks so many so you can sympathize with it. But Yeah. This is kind of where it is.
So

Taylor Atkinson: Yeah. Time will tell, I guess, kind of, few more weeks. Maybe things will will balance out.

Matt Glen: I'd say, overall, I'm pretty optimistic about the future. It's just like, tell me get some answers here. Yeah. Yeah. But I think right now.
Tariffs too, like, they affect so many different things. Right? So I have a friend who has local tool business snap on track. Nice. I'm talking to him.
He's like, yeah. So all of our tools remain in the US. Yeah. So it's like, okay. So I guess Snap on is taking on the tariffs for a while, but I don't know how long they can sustain that for.

Taylor Atkinson: Yes? Yeah.

Matt Glen: Crazy. Think about this for everything. Right? There's things you don't even know. I I just happen to know that because he's, like, one of my best friends.

Taylor Atkinson: Yeah.

Matt Glen: So you think about the tariffs and it's not just the twenty five percent tariff. You have all these trucks, like, for building material, if you're renovating your house or building a new house. All the materials, like, let's say, all the faucets or whatever are all from the US or whatever it is. So they've been getting shipped up for century feels like. And then you have all these things.
But then when the tariffs come in, all of a sudden those trucks aren't coming in as much. Right? So now to shift the one thing that you need from the states, even if you buy everything else from Canada, You don't just put it on the trucks that are going in the US anyway, so now your shipping costs go up. Yeah. It's a twenty five percent tariff and then that.
And I feel like there's a ton more of those kinds of things, though. You don't even really know.

Taylor Atkinson: Well, I ended up magnified, and this is what we spoke about with Brandon Agnes in a couple of episodes ago. It was like, So inflation's going up because all these tariffs, but GDP's going down because economically people are struggling, you know, job losses, people aren't spending as much. So it's like, the divide is just growing on both sides.

Matt Glen: Yeah. Like, there's not, like, the the leverable of the interest rates because it might go up. Yeah. So, like, at least in the short term, I don't know what the launcher. But yeah.
Like, all these things just add to uncertainty. Yeah. So, like, you just don't know.

Taylor Atkinson: Well, today's guess that we had on, Dude, yes. Twin Brothers Yeah. Jason and Chris Wills. Bousary Boys represent. Thank you.
Although they played basketball so I can't get on board with that. I got cut in green, ten. I'll never forget that. But, yeah, awesome guys really enjoyed the chat with them. And, you know, funny enough, like, we're talking about tariffs now, but they really started out venture commercial, which you guys will see their signs everywhere.
They started that in COVID. So, you know, we're talking about tough times right now and tariffs and uncertainty. Well, you know, here's two guys that you know, started in a very difficult time, especially in the commercial market with leasing and have been wildly successful.

Matt Glen: When you talk to them, like, they obviously know what's going on. Right? They are

Chris Wills: Yeah.

Matt Glen: Extremely knowledgeable.

Taylor Atkinson: Yeah.

Matt Glen: I knew they were brothers. I didn't know they were twins. Yeah. And then when they came in, they looked the same as like, man, they must be close in each. Yeah.
And it turns out in, like, minutes. Yeah. Yeah.

Taylor Atkinson: They were awesome. And like he said, I mean, they just they seem so passionate about the commercial side and, like Yeah. They're in the leasing and sale purchase inside. Like, it just it's a good combination, but, like, you really need to know how to structure leases or how to read them to set up the opportunity. Yeah.
My other big takeaway on this is I need to get to the mall to get it some outfits.

Matt Glen: I can't believe we broke

Taylor Atkinson: that news to you. I know. When did this come out? The bay is closing. Like, screw tariffs.
Like, this is more important to me. This is the only place I shop once every four years. I told Emily, I'm like, I can't shop at all now that these are the clothes for the rest of my life.

Matt Glen: I hope you like the things I have.

Taylor Atkinson: These all never good. Yeah. And she does not. So but yeah. I think you guys are gonna find a ton of value in this show.
If you wanna know, you know, more about commercial stuff, reach out to them, they're a great resource. Also, apparently, really good bass small players. So Yeah. We'll see him on the courts.

Matt Glen: And this episode, like every episode, sponsored by Century twenty one Assurance Realty, Best Brokerage in town. We are growing building agents. If you're an agent looking for more cooperative brokerage or looking for some help, more great brokers to talk about or if you're a buyer or seller looking for an agent, give us a shout. Love to help you.

Taylor Atkinson: Alright. Enjoy the show. Okay. Welcome to the Columbia Real Estate Podcast. Will's Brothers.
How are

Jason Wills: you doing?

Chris Wills: Excellent. Fantastic. Thanks. Yeah.

Taylor Atkinson: Yeah. Well, we normally like to start our show with like, hey, what's your perfect Friday look like? But since we have twin brothers here, we assume that answer may be similar, may be different, but Let's just start with, like, Venture Commercial. How'd you guys start and tell us a bit of the background story?

Chris Wills: Yeah. Venture Commercial has really started just more out of necessity. I've been in the industry for quite some time. We've been fortunate to learn from a couple great mentors, including my father, and we built a company up to someone was pretty equally Okanagan. We joined forces with the National Brokerage for four years.
And really at that point, I was really kind of

Jason Wills: yearning to having a bit of

Chris Wills: a brokerage and commercial real estate brokerage that was more approachable and had the opportunity to market the way that we wanted and and try to think outside the norms a little bit. And I felt that organization we were with. We were in a bit of a box. And quickest way for me to want to be inspired is it to be told no. And I love the opportunity to search something where we could actually be our own bosses.
And if we had really cool ideas or we wanted to do certain drone elements or want to do that, then nobody could ever say no. And venture commercial was started in March two thousand twenty.

Jason Wills: Yeah. We're really, really excited. What we learned was that we were very lucky being the open login. And it really is about the relationships we have, not necessarily the business card, you know. So when we decided to leave callers, we knew that we had a pretty good grasp on the relationships here in the Alcon logging and kinda what propelled us to, I think, our success.

Taylor Atkinson: Were you guys doing residential before as well, or was it always all commercial?

Chris Wills: No. Always all commercial. Like, our family has always been in commercial real estate, and our dad has worked for one of the largest developers in the Okanagan. Prior to that, he helped redevelop the ass down out of Vancouver. So commercial real estate is really in our blood.
As far as though, we can remember our first jobs were power washing strip centers in Langley. So to be honest, we've been doing it for a really long time. I wouldn't know how to sell residential for the life of me. Wouldn't even know where to start.

Matt Glen: March twenty twenty is a funny great time to start for you guys.

Jason Wills: Yeah. Yeah. Yeah. That's cool. Yeah.
That you know, one

Matt Glen: of the most difficult both in history to start and Yeah.

Jason Wills: You know, at that time, you know, no one knew kind of had the crystal ball ball was about to happen. However, we left the week of the mandatory shutdown. And, you know, we often joke, but the reality was was we leased an office space. We were sitting there putting furniture together. And as of Monday, the mandatory shutdown hit.
And our world's changed, it really turned from us building our business to supporting our clients. And having a lot of conversations with landlords and the tenants of how to navigate through the COVID crisis. So it

Matt Glen: gives you some credibility to going through yourself.

Chris Wills: Yeah. I think they keep to

Matt Glen: be honest, to be quite honest with you.

Chris Wills: I like the adversity. I think that, you know, no matter where venture commercial goes and success that either we see or people that we work with. See, there's the humbleness, the grass roots in the way that it started, and a lot of it was just basically building a website, you know, ourselves or coming up with some marketing initiatives and drone footage or gimbal footage all ourselves.

Matt Glen: You know,

Chris Wills: I do look back and I'm kinda fond of those days because it was like, hey, you either, you know, lie down and you just give up or you say not today. And if I had maybe twenty or twenty five active deals, I think I lost half of them within one week. You probably had some experience. Didn't even really matter if they're buying it or not. People said, I'm not moving forward with this.
Yeah. Nobody knew what that world looked like as far as what can we enforce? You know, is there any penalty here? It was a really weird time.

Matt Glen: Yeah. So what's your brokerage like now is Like, how is it set up here? Managing broker? Are you any of you guys managing broker? Or

Chris Wills: No. No. No. So we have a managing broker. We've got actually, our executive assistants working to get her managing brokers.
So we'll have two managing brokers across the end of the year.

Matt Glen: Nice.

Chris Wills: We have eight full time active commercial agents in house. So that are all dedicated only to commercial real estate. Yep. So with venture commercial, we only do commercial real estate. We stay exactly in our lane.
We actually don't even sell businesses. We really try to stay with what we do really well and what we're passionate about. We've got an office down on Bernard. We've got two full time support staff, and we do have a couple of people who might be joining the smaller brokerage side. So

Taylor Atkinson: Cool. And like I see your signs everywhere, which is like kudos to you guys. A lot of them are leasing signs. Can you tell us about the business model, like, percentage wise or just high level? How much leasing you guys do and and how much in sales?
Like, how's that split up?

Chris Wills: Yeah. We've been asked that a lot lately. I have a passion for leasing, but it's not the only thing we do in Kelowna particularly. I see there's a lot more opportunity for leasing when you're an active agent, where in Vancouver, you might see a little bit more major markets, you might see a little bit more of a balance. Our brokerage in the last two years have done about sixty percent leasing to forty percent sales.
It's it's changing with some of our brokers. Some of our brokers are staying a little bit more in certain build houses as far as investment. But I'm not gonna lie, like, some of my top tier clients, some major strip centers that I've been fortunate to represent for seventeen, eighteen years. I'm a sucker for it, but I love it more than anything. I think a lot of that signage, you'll see, you know, if the commercial properties are a little bit more, you know, high exposure.
You do get see them a little bit more often.

Jason Wills: Yeah. And I think within the Okanagan being in the Valley we're in, it's hard to specialize in one asset class or into sales and or leasing. The reality is is, you know, we've really pride ourselves on servicing our clients, and I think that's why we've had success. But that also comes with some of the smallest, you know, lease deals that can turn into some of the largest sales. Right?
You never know where the business comes from, so we're very fortunate to have clients that trust us on both leases and sales side of it. And naturally, it works for us when, you know, in fact, we always like to say there's no deal too small, you know, and knowing that that small group who might just be open, you know, a software company could turn into building the whole block. Down in, you know, a major city. So

Taylor Atkinson: Yeah. Can you kind of highlight a little bit triple net lease, gross lease? Like, obviously, a lot of, you know, landlords that are in the residential space really love the commercial space because, you know, BC tenancy act is kind of handcuffiness. Why is it so beneficial in the commercial space? Like, how does that look for a lease?

Chris Wills: Well, yeah. You raise a great point and, I guess, going back to step in commercial real estate, you know, you can either own the buildings, you can lease the buildings as a commercial agent. You can make money doing both, which is nice. You know, I'm fortunate to own both residential and commercial properties, and I absolutely steer towards being a commercial landlord over residential landlord just because you can get two parties that can agree on pretty much any terms. There's no Tennancy Act that's governed to exactly the way that deposits are held or terms can be terminated or possession dates.
Everything is pretty fluid depending on what a commercial lease looks like and who is negotiating on both sides. So, really, when you're a commercial landlord, you have a lot more saying the way that you wanna deal with your buildings, dictate how things are being ran, deposits that you can be held monthly rents or annual rents increases. They're not covered or capped. That's all fair market. Know, I'll let commercial landlord has the option of just doing a gross lease, which is fine.
You do notice more in commercial real estate, the evolution of triple net lease, which allows a landlord to be able to recoup any cost or controllables that change over the years. So property taxes, no removal of common area maintenance, and everything can actually be charged back to the commercial tenants typically on an annual basis through camera cancellations. So being a commercial landlord is, in my opinion, a very good thing to be. Yeah.

Jason Wills: I think twelve percent will buy. The residential is governed by the residential tenancy act, whereas the commercial transaction is governed by the lease, and the lease can differ from any type of landlord or developer.

Matt Glen: Awesome. So are you guys Are you involved every year with a renegotiation of the lease? Or are you just

Chris Wills: It depends. Yeah. And typically, a term will be set between three, five, four years. If it doesn't really matter, depends what the two parties agree on. We'll help facilitate that transaction upfront.
If we're fortunate to represent the landlord, a lot of the times they'll engage us to actually work through the whole process of the life term, which is something that we've seen a lot of success with is representing not just the initial deal that, you know, if there's issues that come up with the lease, how can they be solved, Would it enable terms look like extensions, approvals, process through the whole term? We can be part of that whole process.

Taylor Atkinson: We can talk about, like, opportunities in the market in a second. I guess this would be a good segue. But do you see a lot of the opportunities in the lease. Like, when you're going to analyze to list the building or, I guess, to buy either end, if you look at it and go, okay, well, you know, they're on a gross lease. If we were able to switch this over to a triple net, there would be a value add there because I have commercial as well, and it has been more difficult to switch tenants over to a triple net.
Mostly, I think because, you know, they're a little bit nervous of those expenses that are going up, you know, pretty high with inflation on, like, you know, insurance or property tax or anything that, like, you really don't have control over or even just general maintenance costs. So I feel for the tenant in that regard, but also it shouldn't be the burden of the landlord. But, yeah, I guess, you know, to rewind and get back to the question, like, is leasing the majority opportunity

Matt Glen: that

Taylor Atkinson: you guys see to value add?

Chris Wills: Well, such a good question, a loaded question. I think that if you've got a client that has an existing portfolio where we've seen a lot of success reason why we've been able to represent some of these developers and clients that have had long term is a great commercial agent. Typically, we'll find an opportunity if they know what market trends are. Are they, you know, fortunate to work in other markets and they see what other landlords are doing and ways to improve their leases or prove the situation. So I think there's huge upside on that.
The leases are always evolving and changing, and like we brought up COVID, COVID changed commercial leasing in so many different ways as a landlord. When I represent landlords, the way that we look at deposits and security, we scrutinize that so much more than we ever did before COVID. So there's a lot of evolution. I think where there's a lot of opportunity on the commercial side is when you've got clients that maybe have kind of historically owned the building and they just thought that's the way to do it. And they go just they inherited leases where they thought, well, you know what?
When the market was down, we inherited gross leases or we loved gross leases because it was stable rent and clients were happy, tenants were happy. Where we really kinda like our lips is when we find an under valued opportunity that the market changed around it. Actually, really great example is the way that billings are calculated for measurements. So we had one client on Bernard that didn't realize that they could actually gross usable and rentable up. And, you know, as the leases matured and we got them onto a new program, their buildings expanded by fifteen percent just to be able to collect areas that they actually have the right to incorporate back into the leases.
So that'd be one really great example of you know, I think the client was quite happy as the market evolved, particularly in this example, retail. A Bernard shifted over the last fifteen years. So all of a sudden, you got a lot more national tenants actually wanted to be downtown, so they brought that sophistication of what they'd expect from other markets. So There was an evolution in the way that commercial real estate grew. And if you're able to find clients and portfolios that have done it historically an older way, that's where we get to create a lot more value, which this has stuff we really love to do.

Taylor Atkinson: Yeah. Such a a funny thing. I've been thinking about it a lot lately because, I guess, the most opportunity I see is when I'm buying a property because exactly that. You're scrutinizing it. You're flipping every stone being like, oh, here's the value add.
Here's where I could cut costs. Here's where I could do anything different. You own the property for a few years, you get super complacent. You know? So do you guys generally, like I mean, Matt did ask kind of the annual renegotiation, but do you guys have any kind of offer in terms of, like, we'll just do a review and tell you where the value add is and then Absolutely.

Jason Wills: Yeah. That's mostly our bread and butter is just having discussions with owners and seeing what our opinion is to how to, you know, increase value and or attracting this to the building. I think one of the big ones, you know, when we talk about different asset classes. There really are, you know, five families that own a lot of the land mass here. When we're looking at other opportunities, you know, as the valley has grown, places where traditionally it may have been, you know, industrial sections that now have that large residential components built around it, how can we convert those?
You know, looking at those leases and saying, hey, you know, if we were to demise these areas here, in industrial, for instance, you know, we are able to build mezzanines, and that's something that we've seen a huge trend on moving in the Okanagan is. The cost of land is expensive. The cost of construction is expensive. And landlords want to maximize the amount of billable area they can have. So we're seeing mezzanines being built into these spaces, which traditionally would have been a value add, whereas now it's actually just increased on the size that you can lease or sell, and they can actually charge for that, you know, just as much as they are in the ground floor area.

Chris Wills: So That'd be a good example of all those evolutions in our market. And it typically is trends from other markets that have also experienced, you know, this kind of growth and the land getting so expensive. What are they finding ways to find value out? I think to one of your questions was, Our involvement with those clients typically isn't as, you know, consultant on an hourly fee or anything. We've been fortunate and it's just kind of the way that we were raised is if you can bring value up front and not just be a transactional agent, someone actually is part of that relationship from start to finish.
Whether it's the tiny little lease project at first. If you can kind of create value and you can show that expertise and you become part of that little family, that's the stuff that we've always loved to do. So it happens to work out. You do a couple of leases and all of a sudden, they wanna acquire a couple more buildings, so they wanna sell one or two and stuff. And that's that's kinda how our bread and butter has been.
It's not really through consultant fees or, you know, charging. And quite honestly, the developer and the investor also has to buy into a little bit of the value add that we have. We have lots of clients that say, we're good. We don't care how other people do it. This is the way we've done it.
They have to truth this is we probably don't create much value for that client in that relationship. So maybe we just move to someone that actually sees that value because you also don't wanna have to re train the whole program, like, if you're happy with it and it works, I'm gonna confuse it completely by changing. Let's just use, you know, usable versus rentable and I start, you know, telling you, you gotta read all the Boma standards. You might say, look, I've got a full time job somewhere else. This is a passive income producing property for me, Chris, stop it.
You're confusing my world. You're creating chaos. You know,

Taylor Atkinson: you mentioned there's five families in Columbia that probably owned the majority, which is totally fair. But there are a lot of, like, smaller landlords that maybe own one or two spaces. You cannot be up to speed on education of, like, even just square footage, how much, you know, it's leasing for. So to have somebody that's, like, fully into it as well as writing the leases, yeah, there's huge value there. I think Matt and I have been reached out like, quite a lot in the last year, you know, probably from residential landlords getting annoyed to wanting to switch over to commercial.
So can we kind of talk about asset classes in the Okanagan? You know, what are they? And, you know, geographically where you see kind of the opportunity you know, obviously, Kelowna Central is pretty hard place to make things pencil. I mean, I'm just putting words in your mouth. I'll I'll let you guys talk.
But, yeah, maybe we can just start with what are the asset classes for commercial and geographically where do you like them right

Matt Glen: now?

Jason Wills: I mean, where we've seen a big trend here is to answer your question is, you've got your retail asset class, industrial, office, and multifamily. Those are what we specialize in. You know, because we're in a valley and there's only so much land. What we have seen is the trend upwards to the north and south of Congrats and sobering and Penticton. Where there was a massive demand and boom actually was in the industrial sector.
And that was throughout the COVID period. You know, when we saw some prices just absolutely skyrocketing in Kelowna and so investors, a, COVID did change the way the world looked. A lot of people knew that they could start to work remotely, and so the focus then said, well, where can we find affordable land? And that was in Vernon and Penticton? You know, it was a thirty five minute drive for Sony when that was in Calgary or Vancouver.
That was a normal commute. By the way, you got a beautiful drive, you know, like, I was

Chris Wills: a nice creative creative creative creative. So that's where

Jason Wills: we started to see a huge shift. And again, because a lot of the five families at home, a lot of land mass, they had to get creative late country, you know, we've seen a massive boom in the industrial doctor out there, Vernon, and Penticton is awesome. Because I have certain clients, I'm personally more focused on,

Chris Wills: you know, the opportunities to finding a building that's how to utilize rather than finding, you know, a multifamily site and really going boss to the wall on a major development that has so much risk upfront. I tend to be a little bit more, especially with clients looking for value add properties as I like existing. I like markets that have almost a history of established market rents like and I know that sounds a little odd. But when you can find a market that hasn't had huge rental increases and you understand and you can look at a building and say, well, if I do this and I do this, maybe I can attract a certain type of tenant. You build off a tenant mix and you get a bit of a cool little vibe and help going.
Then all of a sudden, you're being developer in a unique way opposed to we've had so many clients who say, you know what? I've been a successful doctor for my life. I wanna build an apartment building. To me, I feel like that is so risky and there's so many players in that market. You guys probably know more than we do, but you're so governed by so many external forces to me.
It's too much risk. For me to say, with an expert advice, this is how I do this. Right now, I've been focusing heavily on the Vernon upside. I think Vernon is a beautiful downtown setting, reminds me of what Bernard used to be fifteen years ago, which was beautiful buildings, some historic kind of characters, you know, some cool tenants, and some vibe, and stuff. But hasn't really evolved to the next stage and we're starting to see that downtown Bernard.
Let me be really clear that I'm well aware that there are challenges in downtown, where there's challenges with retail, there's definitely challenges in the restaurant industry right now. A lot of my closest friends own some of the nicest restaurants in town, and I hear it. But from a commercial standpoint, from a commercial opportunity, some of that land, you know, in these downtown markets will only mature in price And if you have that right strategy on how to to find good tenants, you know, even just, you know, upgrades to the exterior or, like, listening to some of the challenges this other retailers have had in that unit before and say, why don't we upgrade this? Why don't we bring more power? Why don't we add a better HVAC system, which maybe allows for a cafe to be here instead of, you know, a bridal store, which it's been for fifteen years.
Like, ways to evolve. And I think if you can create a tenant mix, that's the kind of stuff I love. You know, one starts. Now you get that cool little trendy bar, then you get that cool little clothing retailer, and all of a sudden you get a hub that people wanna drive from all around town or where it comes to you. That's stuff I love.
Passionable to have.

Matt Glen: That's awesome. What are you guys seeing in the office space in clothing and learning?

Chris Wills: It's not as bad as everyone thinks. Yeah. I guess, we did an article in CasNet where it wasn't the death of the office. It was just evolving, and it just changed. The app's the truth is, you know, I have one side of my shoulder that says, Everyone wants to work from home, everyone wants to work remote, everyone wants extremely flexible hours.
But then, you know, we're one of the largest commercial brokerages in the Okanagan doing a significant volume of the deals, and the office market has been really busy. There has been a lot of new product

Matt Glen: that's been put on the market over

Jason Wills: the last couple of years.

Chris Wills: Yeah. There's an expectation because of that land value and because of the construction cost that there's gotta be, you know, a pro form a rent that's targeted and hit. So there's some certain pressures on some of the newer stuff, which was, I think, why we

Matt Glen: see a little bit of ACU done some

Chris Wills: of the largest transactions on the office side. There's still quite a demand for people wanting to be out of home in a nice professional office setting. So

Jason Wills: Yeah. And I think to add to that, that's a great question because people have to evolve. Right? And I've seen that in banks, for instance, you know, when you look at their office, traditionally, it would be and you go into the CEO's office. It's a big boardroom.
You know, coaches on the other side. They have adapted, they have changed in the gauntlet and mean, which is just fine. I mean, a lot of the other things, as Chris alluded to, one of the larger deals we did was converting an entire floor with a patio to day care. Facilities. So, you know, having to evolve, get creative on those types of deals are helping in that office asset class.

Matt Glen: Awesome. The bay closing at the ball. Like, what is that gonna do to like, the corona? Yeah. This is

Jason Wills: a really interesting one to be quite frank. Yes. It's a big hit. However, I think landlords are a little bit happy about that. Those leases were secured at very low net rents.
Some of them were Oh, yeah. Historic a lot of land. Right? And now we're seeing the rezoning applications for higher density. I think this is an opportunity for landlords to recapture a big chunk of their properties and be able to service and densify it or create, you know, what we see maybe at Orchard Park Mall where they start demising and leasing to other types of tenants that maybe have a little bit more of

Chris Wills: a longevity to him. So I have a close friend who's about golf pro. He just has nothing to do with commercial real estate. Every time we're playing golf, he'll say, I wanna be in the parking lot business. That is what I wanna be in.
And I know, like, we're kinda dodging because there's some sensitivity to the Hudson Bay stuff. I've seen a lot of the projects or there's some Okanagan based shopping centers that are listed for sale right now. And the clients that we are working and looking and doing the performance in the accurate math. C is a massive opportunity rather than a liability that one of the largest kind of retailers in Canada going down. They're looking at it going, wow.
There's a lot of area right there, and that property allows for height and they get a little insighted.

Jason Wills: Yeah. I think companies should look at this and figure out a way that they're changing their business model. I mean, e commerce is a huge one. Right? People can typically just click a button and have something show up the next day.
And I think this is gonna be a kind of a rude awakening for those large big box shops to sit there and figure out how can we get this to a point where we can still make them profit,

Chris Wills: see we can talk about this for hours. Like, we just get excited about it, but that's the interesting thing about being in what our industry is. And I don't wanna my wife is a residential real term. Like, there's so much value in what that side does. In commercial, for us, you have an opportunity to almost learn a lot about how businesses operate, and you have to start to understand that in your asset class that you particularly stay with.
To say, okay. Well, how have things evolved and trying to be above and beyond that? Like, if Jay is really understanding four percent mezzanine gross ups. Like, he has to understand what that means, you know, on both sides of his clients that own the property, but also at the tenants what the impact might have, what can you do. For me, retail, like, which I just love.
It's not the only asset class I do. I just happen to have a passion for it. You start to learn how businesses evolve, and you start seeing, for the most part, like an example, you don't see eight thousand square foot restaurants anymore. COVID changed that. Right?
My best rental is one of the largest franchises in Canada. We sat on the beach during COVID, and we talked about ghost kitchens, and we talked about what Skip meant to be like Skip, do we hate Skip? The way you get the dishes, etcetera. The way that we had to start to evolve because historically, you just did a hundred and twenty top leaf locations. You just bread and butter, you know exactly where it was, what you needed park and ratio, and tenant mix.
And all of a sudden, we have like, we kinda changed the way we look real estate. We started I say, we he did. Am I going to be involved? Start looking at eight hundred square foot spaces instead of twelve hundred. And we learned how to be lean and mean and build the kitchens a little more economically and stuff.
So I love it because you get kinda not just what are commercial lease rates? What are retail rates? What are, you know, land selling per acre? You start to evolve the client's business, and you start to understand that. And and then if you're smart, you can figure out ways to create value add on that side.

Taylor Atkinson: Mhmm. There's so much unpacked there. First off, I am in Florida. I did not realize the babe was cold.

Matt Glen: Oh, it was cold. I was just That's

Taylor Atkinson: that's where I get all my jeans from, which I've got a hole in my knee and everything. Yeah. Okay. Well, I'm I'm headed there after this.

Chris Wills: Right now. Yeah.

Taylor Atkinson: When does it close? I One thing I wanted to ask there and I've been doing this for years now at my building is, like, investing in the business owners. Right? Like, if they're successful, you'll be successful. If their profits go up, know they can afford the higher lease rates.
And you just you want that cohesive community. I'm happy to invest in it. I guess the hard part for most people might be, how do you quantify what the returns going to be? Like you said, paint the exterior. I know my building needs to be painted.
We did the roof. We did the boiler system, like, we're doing a bunch of work on it. Mhmm. Those things, I can't turn around and go to tenants and say, hey, you know, we we just replace the roof. We're up in your rate.
I guess if you're on a triple

Chris Wills: net lease.

Jason Wills: Yeah. Exactly. I'm I'm I'm Chris here going.

Taylor Atkinson: Yeah. I'm answering my own question.

Chris Wills: I think I just got it.

Jason Wills: Yeah. Second okay. So I inherited

Taylor Atkinson: I inherited a lot of gross net leases, so I didn't have that ability then. But I guess, do you guys do you do comparables like residential real estate? Would you go say, hey, you know what? This building, three blocks away, has a beautiful exterior, updated this, and updated that, and that's why their lease rates are higher than yours.

Chris Wills: Yes. And probably nowhere near as sophisticated as the residential side is. I admire the stats and the data and how easy it is to get in the residential side. In fact, I still don't know all the tools available on the matrix system because in residential, there's so many transactions happening in two bedrooms, two bathrooms in this market. You get to start seeing somewhat trends and you can build a bit of a case for a client.
Like, let's just hypothetically say you've got a restaurant, a cafe, and a retailer, the parking's gonna come to play the location. There's so many other variables and we don't see so many transaction happen on a monthly basis that you can say, like, a year off by twenty two cents. If you're fortunate to have commercial real estate, then I do wanna touch up the point of entry of commercial real estate at one point. But I find there's landlords that see a larger picture and they say, okay, you know what? I could do this deal right now.
It's gonna pay me exactly what I want. But is this gonna be the benefit to the community, to the existing tenant mix, if it's a mixed use building? How does this actually complement the immediate area versus okay. I've got this really cool, you know, use, but maybe they're a startup. But I can see they're gonna work their butt off.
But they want me to invest a little bit of pain outside or they wanna have channel that sign in. Truly want something that's gonna require a little bit more of an investment that I've historically ever had to do with other tenants. That's an evolution. And I think thing that frustrates me the most with my industry, with some of my colleagues, with some of the landlords that I've worked closely that don't wanna deal with commercial agents, or they just they have their own system, is when they do lazy deals. That's what really bothers me mean, is there's an opportunity to evolve and to bring something to a market that, you know, could be a really good thing for not just the nickels and dimes of, you know, the rents, but could be a building block off of the rest.
So in your instance, like, there's nothing wrong with the fact that you've inherited those things and this is kinda the way you've done it. But if you take a flyer on maybe that, you know and I'm just using way examples, but that gluten free bakery a couple that's really working hard at the farmers market. But they're gonna bring something that's been unique and shake it up. Like, that's pretty cool. And all of a sudden, you get that next use that goes, you know, I'm cool hair salon that really would love to be beside this youth and energy.
That's the opportunity. Like, that's where you start. I don't ever advise clients to just go buy something, put lipstick on it, and just say, hey. Hopefully, they come. Like, there's gotta be a strategy of how you get there instead of just spending clients cash because that never really works well for agents as well.
And you just start saying, well, build it and they will come. There's gonna be some thoughtfulness to it.

Taylor Atkinson: Yeah. Another point, you know, you touched on there is entry level. So, yeah, I get people reaching out to, like, hey. What am I approved for for commercial mortgage? Just like, well, it's based on the debt coverage ratio.
Right? So do you guys wanna talk a little bit about that? How do you, I guess, not preapproved, but, like, vet a potential new client that's coming in that wants to buy commercial space? Like, how does that converse

Chris Wills: to foremost patients? Like us along with rather great colleagues that we work with other brokerages that kind of do a lot of commercial real estate. There's no such thing as a a quick, fast, easy, brainless transaction. I think that you have to understand the client a little bit about what their risk tolerance is because, you know, capitalization rates and then some other things there is risk in any type of commercial real estate or any type of real in general. I think patience and I think that your point of entry is difficult in the Okanagan, quite frankly, it's not cheap to get into commercial real estate.
You know, you don't commonly find a two hundred thousand dollar little tiny office travel unit. That's very, very rare. You're talking probably multiple millions of dollars. If you're talking about acquisition of land and developing, there's as I've mentioned, better have some experience with that or at least have the end user or your home business that you're evolving. Like, you you gotta have some pop the cards ready for that.
What I find really interestingly token agonist, there's a lot of historical money. There's clients and developers that have owned stuff forever and they have no succession plan. So for me, I was trying to kind of think, like, what would be ways that I would encourage people to get into commercial real estate that have no experience whatsoever in it. And unless your family's given you a building, which congratulations. That's awesome.
But it doesn't happen a whole lot. I think there's a lot of clients out there that are starving for a mentor, for mentees, like something to say, hey, like, I built this. I worked my butt off since the sixty seventies eighties. I went through crazy times. I went through COVID all by myself, and now I have no legacy.
And I think you'd be surprised on how many developers are out there that if somebody wanted to get into the industry and learn and really work, there would be kind of a unique approach into that. So I know that's a little holistic, but I've got several clients that don't have any succession plans and they just loved commercial real estate and they just loved developing and they loved, you know, owning those buildings. I'm surprised that they don't have somebody that's just ready to take them over. I've I've asked a lot of questions out there if I was just somebody wanting to get a commercial thing, maybe an uncle or neighbor or something like that.

Jason Wills: Yeah. And I think maybe if I can add to that, Taylor, because it's a great question again. And the first thing I'm gonna ask that client is, are you an owner occupier or are you an investor that is gonna let me understand their risk profile. And then I'm going to say, for instance, as investor, we're gonna do deep dive into the leases. We're gonna say, what income are you buying?
Where's the upside? Where can we create value? What are the limitations of that lease that you need to be aware of moving forward before you sign on the dotted line because for instance, there might be a fantastic tenant in place. And they might have fifteen lease renewals that, you know, have already identified those lease rates Well, then you need to put that in your pro form a and understand that this is the max income that you're gonna get versus somewhere where it's, hey, you know, we got a couple year leases in here, but they're incredibly under market. They have no renewal periods.
And here's the opportunity for us. Oh, by the way, realize that you know, I would advise that this maybe you do wanna do a little bit of an a building upgrade here. I might have someone in my back pocket who'd be a perfect tenant looking for that space, but we need to do x, y, and z to get you there. But that's the value add that we provide to, I'd say, an investor buyer. It's somebody who's an owner occupier, that's pretty simple.
But what I would say is if you want to become an owner occupier, you may want to look at building a larger facility that we could then tenant and you can become a landlord as well, use portion as in your investment. So you know, if you're gonna be building something, you might as well build it to its max potential than just what you need. And who knows? You either lease that space out

Chris Wills: or your business then grows into it. So Jay's answer is better than mine.

Taylor Atkinson: Well, you know, I like both of them to your point, Chris. I can act as a nephew. Like, if you have some uncles that are looking to pass down the torch. And for you, Jay, I think something that, like, the light bulb went off there for me is, do you guys ever I'm assuming this doesn't happen frequently, but Is there ever an opportunity during the purchase where you would do, like, a lease buyout? Or if there's an existing tenant, that's part of the condition of, like, hey, you know, you have to find a way to terminate this because that lease is so undervalued.
Like, we can't even be approved you know, for financing because the lease rate is so low. Absolutely.

Matt Glen: Yeah.

Jason Wills: Absolutely. Yeah. And those are difficult conversations to have. And there's sometimes you can see the writing on the wall for a business who might just be looking for a way out too. So, yeah, we get really creative, you know.
One thing we haven't really chatted about commercial real estate is we wear many hats. You know, if anyone that's looking to get into this business, it's really challenging. It's not as simple as finishing your soccer school business degree and then walking in. We need to understand the art of the deal. We need to understand what?
How am I wearing that day? So am I wearing a tenant rep release? My landlord rep for release? If I'm buying for a purchaser or selling for, you know, somebody every one of those deals are a different type of direction and strategy as to how we approach them. So, you know, when you get into this business, there's a lot to learn.
We're always constantly learning, but this is where we get excited. And I think we've been fortunate to develop some pretty great relationships with owners that I would say Chris is a really good example of two or three of his clients that people would line up for days to get to meet. But, you know, Chris does them on their cell phone because he's done a great job of looking through those doing a deep dive and understanding, hey, how can I create value in your portfolio, which then puts us in their inner circle? So it's really neat and something that the reason why I love commercial real estate.

Chris Wills: Yeah. And I think one thing that you raise is ways to get at least his potential. Right? A lease can be four pages. It can be sixty, seventy, eighty pages.
Like, there's just a wholly different types out there. What I do love about it is that leases are pretty enforceable, though. Like, they're not easy to get out of. There's ones that are a little bit easier than others, but there's always unique clauses and you know, when we talk about bringing on new licensees, we're like, you're not going and you're not, like, swinging for the fences for the home runs with the big, you know, thirty, forty million dollar land transactions, you do need to understand commercial leases. Even if that's below you and you don't want to.
Like, we wouldn't bring them on in our brokerage if that was below them

Matt Glen: to be quite honest with you.

Chris Wills: You have to understand what you're selling. And what's happened really cool is when I was, you know, kind of a baby in this industry. I did tiny little leases, but you kinda learned this huge repertoire of, like, oh, like, that's an interesting class. That's an interesting class. I wonder how I can use that for landlords or for tenants.
And, you know, we come across portfolios for sale where we question if the leases were read because if they were read, you've realized that what they've been valued at you can't make those numbers make sense. Like, I saw one portfolio sale where it was promoting the fact that you could build on kind of vacant land. But that national anchor had a no build on all of his parking and you know, you have to understand that kind of stuff. And I think that a really great landlord understands the intricacies of tiny little leases because that's kinda, you know, the building blocks of most of commercial real estate. There are other asset classes don't get me wrong, you know, multifamily if you're just selling land and all of those things.
But where we nerd out is kind of the small little details.

Taylor Atkinson: Is there any class I mean, we kinda spoke about opportunities. Is there any class that you feel saturated right now? I'll go first. I think multifamily.

Chris Wills: But why we haven't brought it

Matt Glen: up Yeah. Okay.

Taylor Atkinson: Yeah. I mean, specific to the Okanagan right now, I feel there's a lot of units coming on online. I mean, we just had a podcast with Jeff Hancock and we kinda disclosed that. But any other, like, commercial asset class that you're like, this has had, like, a pretty good runway for the last couple years, but I feel, you know, at least per square foot. So let

Chris Wills: Jay speak to what he's naps with me. I would say I've met a lot of really smart developers. People that have dealt with huge portfolios in other markets, come to Columbus, and I'm gonna apply my secret sauce to the Okanagan. And I think they quickly realized, you know, those five or six families that we were talking about have a very good staple and kind of a grapple on what happens in this market. Like to answer your specific question, I wouldn't be building an office building.
If I had you know, fifty million dollars. Understanding this market, I would know that there's some pretty big developers that are in that game. And I don't think that I'd wanna go head to head with them because I think that historically they've fallen that land since the fifties and sixties they've built structuring companies that can facilitate those builds and the tenant improvements and everything involved. I think I'd stay away from office, one hundred percent. I think Jay's probably got more of a natural easier answer who would ask Quest to stay away from right now.

Jason Wills: Yeah. I mean, I I love industrial That's my world. And I would say that the market is gonna be completely over saturated with a small pay industrial coming in the next two to three years. About five years ago, there was a massive demand and there was a lot of success on airport business part being converted from travel. Lots I've divided to one acre parcels that have built small bay industrial on it.
And I know of at least three other projects have now put that on hold is really slowed down in terms of the demand for small bay. One thing I will add to that too when we talk about value add is about seven years ago developer came out of Vancouver, and they started creating these small bay industrials with forty percent mezzanine, which they charged on. This was fantastic. It really kind of coggling of all the other developers. And now that is essentially how you build these.
They're cookie cutter to be the exact same product. And what we're seeing from the feedback from market is we don't want mezzanine. We want four walls where we can operate high racking, you know, warehouse, logistical services versus having mezzanine, which most of the time just compiles tires and poker room.

Chris Wills: There's so many poker reasons. No. Scratch bars and everybody drinks in the

Taylor Atkinson: I love that. Yeah. Thank you for the authenticity. There's probably a lot of empty spaces that are costing money and people are losing money in them playing poker. But Yeah.
Before we kinda just wrap this up, is there anything you wanted to touch on that we haven't led the conversation to?

Chris Wills: I'm really excited for, as Jay alluded to, the north and south Okanagan, I think that major developers have been focusing really hard on Kelowna. And I think that, you know, far as an opportunity for somebody that's getting new into commercial real estate as an investment. I think there's got to be a little bit more risk tolerance, but a little bit more of an opportunity to look into, say, West Kelowna, which is already probably missed. Panticton, which is kind of now saturated as far as lots of interest. And I think, Panticton, it's already evolving.
But I think that, you know, you're sort of seeing a lot more multifamily down there. When residential typically comes is when the commercial seems to benefit. As I mentioned, I love Vernon, to

Matt Glen: be quite honest with you, I don't

Chris Wills: know why I'm, you know, walk through your listing. I love that building. I think there's so much cool upside and potential. So I would say that I'm really excited about the Okanagan in general. There's some pretty cool things I still think we could be done or really fortunate

Jason Wills: to be here. And, I mean, the Okanagan is a little bit of a bubble. And we're really fortunate to be here and to be a part of this community because it's somewhere everyone wants to be. And I think this guy's the limit for us.

Taylor Atkinson: Yeah. I mean, you guys kinda it's cool. You get to kinda shape the culture a little bit. Right? Of, like, the type of tenant class and, like, who's Yeah.

Jason Wills: Can you tell my wife that? I'll I'll drive by and say, hey, look at that and she goes, I don't care.

Chris Wills: Everyday's new, which is really cool. If you get some of the calls and says, I got this really cool cons and I'm hoping you can help me. And then all of a sudden that kind of takes foot and and plans and stuff. So I do I do love the fact that we can drive down and my daughters will say, hey, you did that dealer. Hey, I know you've been trying to get them to come to corona by the way, Olive Garden is not coming to Kelowna.
We try to rally in Thailand. No. I was like, I love that stone day.

Jason Wills: Like, Kia. I mean, we everyone tries

Chris Wills: to get an old grass to see

Jason Wills: what shop.

Chris Wills: Yes. Right. But in Seoul. We tried to in Drilling Town and telco across

Matt Glen: the city.

Chris Wills: I know.

Jason Wills: Yeah. And then the random of albernetes. Yeah.

Chris Wills: Yeah. You don't have the land.

Jason Wills: That's the problem. You start to look at the ALC and agricultural land. And, again, there's only a lot of people that we're

Matt Glen: still in the field. Yeah.

Chris Wills: Good to go. So Yeah.

Jason Wills: They caught on to that, actually. Yeah. You can't sell Lamboool. And they call them

Chris Wills: J and A. J and A. Sucker for traveling. He's in every Topgolf weekend. I love

Matt Glen: I know he I guess also weather a bit tougher here. Yeah. Picking up the golf balls and sticks into the snowmobile.

Jason Wills: Trust us. We've have worked with quite a few people looking

Chris Wills: to bring those brands here. It's a bit of a challenge.

Matt Glen: Yeah. Yeah. I can imagine. Well, it's been awesome.

Chris Wills: Appreciate it.

Matt Glen: Thank you, guys. Yeah.

Taylor Atkinson: Honestly, thank you guys so much for coming by. Like, it was a blast chatting to you. If anyone does wanna reach out to talk leases, selling buying. How do they reach out? What's the best way?

Chris Wills: You can view us on our website at venturecommercial dot c a. Probably easiest way to connect us through there. Or call to hang one of our signs.

Taylor Atkinson: Yeah. Yeah. No kidding. Like, every second block.

Chris Wills: That that sounded brutal. I didn't mean to that.

Matt Glen: That's my mom. I just need to

Taylor Atkinson: know that. Yeah. You guys are everywhere. I love it. So thanks again for coming on.
I really appreciate it.

Chris Wills: Thanks for your attention. Thanks.