MacLac
Senior Member
‘Ol Danni there will cut her nose off to spite her face if it meant that she would go hat in hand to Justin……in other words - she would rather turn away “free” Justin housing bucks then be grateful
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Downtown Real Estate
- Thread starter Daveography
- Start date
ChazYEG
Senior Member
Yup. It's very unlikely that they don't start phase II next year. Time of the year might change, add they might decide to go for the shorter commercial building first and build the tower right after, if conditions are less than ideal, but everything that I've heard from people involved with this project has shovels in the ground in 2025.
I do think that other things might go ahead in Wîhkwêntôwin (I still have to google how to write this. Saying is easy enough, but writing? oof), but other than Falcon II, I don't see a lot of stuff going ahead.
IanO
Superstar
Really curious to see when and how phase 2 lands. Hearing from folks involved that there are very real concerns about pricing and the current viability of it all.
IanO
Superstar
Across the st. from 'Downtown', but great to see either way.
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CaptainBL
Active Member
Projects we are seeing downtown are struggling to get viable. Edmonton is just not seeing the rental rate growth we need in downtown for some projects to be worth moving forward on. Its double edge, rental rate increases are negatives for renters, but to have some of these downtown projects go forward and provide rental options for renters you need more/higher rental rate growth. Current new build lease ups in Oliver leases are seeing between $2.80 per sq. ft. to $3 per sq. ft. That rental number needs to be higher to compensate for the high construction costs and financing costs that continue to stay high from interest rates.
Kosy123
Active Member
Yeah so far this is what I've been seeing from everyone here and other places, just to summarize. If I missed anything, feel free to point it out.
Possible Negatives?
- high construction costs
- high interest rates
- perception on safety downtown
Possible Positives?
- increased migration for the next few years (driving rent growth)
- Vacancy rates dropping (driving rent growth).
- Possibility of lower interest rates later on this year (lowered financing costs)
- GST cancellation on purpose built rentals (lowered final costs?)
- Property Tax (or the premium, can't remember off the top of my head) for rental apartments being lowered
- And the new $15 billion top up to the apartment construction loan program (possible lower costs?)
Possible Negatives?
- high construction costs
- high interest rates
- perception on safety downtown
Possible Positives?
- increased migration for the next few years (driving rent growth)
- Vacancy rates dropping (driving rent growth).
- Possibility of lower interest rates later on this year (lowered financing costs)
- GST cancellation on purpose built rentals (lowered final costs?)
- Property Tax (or the premium, can't remember off the top of my head) for rental apartments being lowered
- And the new $15 billion top up to the apartment construction loan program (possible lower costs?)
MacLac
Senior Member
Looks like more "Positives" than "Negatives." Well done.......
Kosy123
Active Member
It's a shame that the negatives are big negatives though. I'm an eternal optimist for the city so take my opinion with a grain of salt lol
IanO
Superstar
Looking ahead, I would love to see something like this on the corner of 102st/100Ave.
Greenspace
Senior Member
It's directly related to CMHC financing, which almost all new rental buildings use. The math doesn't add up for Downtown when you take this all into account.
As long as there continues to be an incentive to build Downtown Calgary, and cheaper to build with same rental rates in the suburbs, the case for building concrete Downtown will be challenging. Not impossible but very very challenging.
thommyjo
Senior Member
Is it worth it therefore for the city to simply give grants and funding towards projects in the core?
Instead of needing our entire city to become unaffordable for construction to be possible, shouldn’t we just give a few mil to each project to get them going? The long term benefits and cost savings for property taxes, safety, crime, sprawl, etc must surely make that a better alternative, no?
We can spend 100mil servicing a new suburb, or we can spend 100mil to fund 20 new downtown projects that aren’t tax negative sprawl. Why not the latter?
Kosy123
Active Member
There's also the prospect of the Substantial Completion Standard that could be implemented that could change things, but I'm not sure when that policy is being implemented
Greenspace
Senior Member
I completely agree. Not only that but the benefits of more residents living Downtown are immense and contribute to its long term sustainability. But Council decided otherwise.
One positive motion passed yesterday was to look into extending the CRL. Even one year extension is an estimated $70-100m extra dollars.
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David A
Senior Member
As people continue to return to the office more and if efforts continue to improve safety, order and maintain cleanliness the negatives related to being downtown will diminish and living downtown will become more attractive again. I feel the biggest problems currently are perception related not price, you can't force people to live somewhere if they are not comfortable with the environment with financial incentives.
Greenspace
Senior Member
Of course safety has to be addressed. I've explained this many times, the issue here is shovel-ready projects can't make the numbers work. Not because of safety, but because of economics. If the rental rates are the same in the suburbs as Downtown, which they kinda are, then it's not safety related. It's because building concrete construction is so much more expensive, and the CMHC financing rules don't adjust for things like transportation costs between the suburbs and Downtown for example.
My opinion and assessment of the situation is that we can't afford to miss this opportunity for people to live Downtown with the amount of in-migration. It's an issue of financing developments, not because people are not choosing to live Downtown. The rents in Edmonton overall are too low and the costs are too high. I think you're going to see more proposals for wood frame Downtown, which I'm fine with if that happens, they may not require incentives.
My opinion and assessment of the situation is that we can't afford to miss this opportunity for people to live Downtown with the amount of in-migration. It's an issue of financing developments, not because people are not choosing to live Downtown. The rents in Edmonton overall are too low and the costs are too high. I think you're going to see more proposals for wood frame Downtown, which I'm fine with if that happens, they may not require incentives.