Stober Group is the latest developer flouting conventional wisdom by betting the housing market isn’t too depressed to sell and complete projects.
And while the 10-storey first tower of Stober Group’s two-phase Kelowna-based project, Movala, sold out in a flash amid propitious conditions three years ago, its 14-storey second phase is currently 60 per cent sold, despite a decidedly rockier market.
That’s because Movala was brought to market with intention, Lisa Lock, CEO of Stober Group, told RENX.
“The way the market and economy are right now, there’s a gap in the middle, and the luxury buyer is still active in the market,” she said. “They’re less affected by fluctuations in interest rates because they’re a little more mature.”
Those buyers are typically nothing if not discerning, as Stober Group is all too aware, but it knew how to get their attention.
The Kelowna-based developer chose the city’s coveted South Pandosy neighbourhood — think Vancouver’s Kitsilano, Toronto’s Queen West, Montreal’s Lower Plateau — where residents will have seamless waterfront access.
It only begins with the location, Lock said.
Optimizing space at Movala
Movala comprises 325 units across two towers, optimizing space with suite sizes ranging from 525 to 2,031 square feet in the 10-storey building, and 507 to 2,914 square feet in the second tower. While prices begin at around half a million dollars, they escalate to $3.4 million.
Indoor and outdoor amenity space is in excess of 40,000 square feet, while the retail component is just under 17,000 square feet.
That required Stober Group flouting yet more conventional wisdom by hiring Begrand Fast Design Inc., a company whose body of work spans major American and Canadian cities, to conceptualize the interiors.
“Typically when you do a multifamily project, you have to work with interior designers used to working with multifamily products, but the bulk of Begrand Fast’s work is in single-family homes,” Lock said.
The result is a condominium development offering such an array of floor plans that, internally, Stober Group has jettisoned jargon like “Floor Plan A, B or C,” Lock said.
“They have a very large client base here,” she added of Begrand Fast, “and using them has been a really incredible pay-out for us because they’re known in the local market, known for their quality and for their luxury-end product. The specification they’ve come up with for this project has really hit the market and have done really well.”
Those specifications are especially salient to the buyers Stober Group is targeting with Movala. Liquid and equity-rich, vagaries in the economy don’t matter much to these mature buyers’ sharp eyes.
“Single-family home and design aesthetic”
Nicole Begrand-Fast, founder and creative director, lent her personal expertise to the project and married single-family sensibility to vertical-build reality.
“It’s very rare for (single-family design to be used in condos),” Lock said. “I’ve been doing this for over 20 years and I don’t know that I’ve seen an example of this.
“It’s the larger scale that requires more co-ordination. You have to source products that are suited for multifamily, which Nicole did a fantastic job with. That single-family home and design aesthetic really appeals to our target market.”
Lock said Stober Group also struck gold using Greyback Construction because the project is being delivered on budget — another rarity in her 20-plus years in the industry. But it’s especially impressive considering chaotic price fluctuations for construction materials that have wreaked havoc on development pro formas since the pandemic began.
The company, however, also benefits from an intimate knowledge of the market. Stober Group was founded in the Okanagan in 1957 by Al Stober. It is now a second-generation, family-operated firm under siblings Carolyn and Ken Stober who also administer the family’s community foundation.
Lock joined Stober Group as COO in May of 2023, and stepped into the CEO’s role in November.
‘Kelownafornia’
Although Movala is demonstrating savvy marketing can surmount external variables like economic uncertainty, there is clearly something else brewing in B.C.’s Okanagan Valley — despite two years of languid market activity.
Taylor Musseau, partner and EVP of sales and marketing at MLA Okanagan, said the region’s good weather, bucolic scenery and abundant outdoor activities have attracted young blood.
That’s especially true of what she called “Kelownafornia” — and despite the local 19-year-old University of British Columbia satellite campus.
“I’ve been here my whole life and it had more of a retirement demographic maybe 10 years ago, but now there’s a lot of tech jobs here and a stronger younger demographic,” she said. “Demographics in Kelowna have, overall, shifted.”
The price of a single-family home in Kelowna has dipped below $1 million partly as a result of weaker market activity, but there could be another reason at play — one that might provide insight into just how the city is changing.
“We are adding more condos, so that’s probably bringing down the benchmark price,” she said. “We’re becoming a pretty young city that’s just starting to add more density with more smaller forms of homes at different price points.
“We’re catering more to investor buyers, young buyers, and younger people in general.”
But tailwinds remain.
Buyers largely remain on the sidelines as local tourism — the area is renowned for its copious wineries, trails and lakes — has slowed. It’s no coincidence that Kelowna recently introduced severe short-term rental strictures, and that could also have ramifications for the city’s burgeoning condo market.
However, Musseau believes the Bank of Canada dropping its overnight lending rate by three-quarters of a point in recent months is, instead, a buoyant trendline.
“We just need to see a few more of those, so it’s going to take a little bit of time,” she said. “But we’re certainly in the right direction.”
