J123 | 99.06m | 30s | Streamliner | DIALOG

[IanO]

In what aspects may I ask? Cost?

High cost to build paired with low $/sqft for both condo and rental vis a vis other markets and a lot of lower priced alternatives leads to very elastic demand.

Many will not pay a premium to live there versus 10-20mins away, whereas in say Toronto many more potential buyers/renters will pay significant premiums to be in certain locations.

Opportunity cost as well for their overall resources and redirecting them to projects in the GTA.

 

[cmd uw]

Well its already an empty lot, so perhaps the worst case is it remains so. The company that previously was going to build on it (from Toronto?) presumably had experience, but that didn't result in any progress.

Hopefully Novesta will bring in people or partner with someone to compensate for the experience they do not have. It is a good location and it is a shame to see it not developed, hopefully it will be soon.

High cost to build paired with low $/sqft for both condo and rental vis a vis other markets and a lot of lower priced alternatives leads to very elastic demand.

Many will not pay a premium to live there versus 10-20mins away, whereas in say Toronto many more potential buyers/renters will pay significant premiums to be in certain locations.

Opportunity cost as well for their overall resources and redirecting them to projects in the GTA.

They have interests across the country and have been focusing primarily in the GTA. I wouldn't necessarily agree with your comment about 'people won't pay a premium' in this location as Maclaren has proven otherwise and it's almost 100% occupied when I last spoke with Edgar.

 

[Clearshades]

Your right to some degree, but the difference between GTA or Vancouver is that the population for such demands here are far and few for the fact that both of the larger cities are wealth magnets and Edmonton is not. We are a city of primarily middle to slightly higher than middle-class city.

 

[David A]

We are pretty good (as a market) at turning the screws on developers. Has led to some really strong competitive developers and real estate players emerging out of the Edmonton market. Oxford started here as did many others.

Yes, I think the key to success is not whether or how lucrative the market is, but understanding it.

Some people may be in awe of these people from far away with lots of resources and supposedly a lot of experience, but it isn't always as impressive as it may seem.

 

[thommyjo]

They have interests across the country and have been focusing primarily in the GTA. I wouldn't necessarily agree with your comment about 'people won't pay a premium' in this location as Maclaren has proven otherwise and it's almost 100% occupied when I last spoke with Edgar.

CX and Macleran are both full (except for the usual turnover of a few suites each month).

I bet mercury block fills with 2-3 months too.

 

[_urbanite]

CX and Macleran are both full (except for the usual turnover of a few suites each month).

I bet mercury block fills with 2-3 months too.

I would also bet that The Hat on 122 fills up quickly as well

 

[IanO]

How long did MacLaren take to lease up?

There is a market for premium buildings/locations, but disproportionately small relative to other cities and that's my point.

Talk to anyone trying to leave at $2.50-$3.00/sqft and you will get the same answer.

 

[cmd uw]

How long did MacLaren take to lease up?

There is a market for premium buildings/locations, but disproportionately small relative to other cities and that's my point.

Talk to anyone trying to leave at $2.50-$3.00/sqft and you will get the same answer.

The fact of the matter is that it suffered through the pandemic but has bounced back to 95%+ occupancy at rates they are getting is a sign of what people will pay here. I can tell you that our Crawford Block is back to achieving rates that push the bar especially for its location. But it too is practically 100% occupied and the market is supporting the rents. Reality is people WILL and do pay more to live in and around this part of downtown - Oliver West/High Street.

As it pertains to 'other cities' the rates they can get for regular product is $3.00/sf and up. So if I have a site in Toronto that I have owned for awhile (have gained a considerable amount of land value lift which can be used as equity), with construction costs that are roughly the same as here but I can get $1-2+ more psf where do you think I will focus my money?

 

[IanO]

Of course some will, but the premium rental price point has struggled, be it Hendrix (which dropped rates), Augustana or MacLaren.

'As it pertains to 'other cities' the rates they can get for regular product is $3.00/sf and up. So if I have a site in Toronto that I have owned for awhile (have gained a considerable amount of land value lift which can be used as equity), with construction costs that are roughly the same as here but I can get $1-2+ more psf where do you think I will focus my money?'

Bingo.

 

[cmd uw]

Your right to some degree, but the difference between GTA or Vancouver is that the population for such demands here are far and few for the fact that both of the larger cities are wealth magnets and Edmonton is not. We are a city of primarily middle to slightly higher than middle-clas

Of course some will, but the premium rental price point has struggled, be it Hendrix (which dropped rates), Augustana or MacLaren.

'As it pertains to 'other cities' the rates they can get for regular product is $3.00/sf and up. So if I have a site in Toronto that I have owned for awhile (have gained a considerable amount of land value lift which can be used as equity), with construction costs that are roughly the same as here but I can get $1-2+ more psf where do you think I will focus my money?'

Bingo.

You realize Hendrix dropped rates when occupancy dropped because the new owners basically removed all of the 'perks' that attracted tenants to the building in the first place. The rate drop has more to do with how the building changed from a management perspective.

 

[soupcrate]

You realize Hendrix dropped rates when occupancy dropped because the new owners basically removed all of the 'perks' that attracted tenants to the building in the first place. The rate drop has more to do with how the building changed from a management perspective.

What perks were removed?

 

[IanO]

^the initial developer incentivized the heck out of it to attract tenants to lease it up and sell it; once that occurred the model was not sustainable with the purchaser.

It is a very common strategy.

 

[thommyjo]

You realize Hendrix dropped rates when occupancy dropped because the new owners basically removed all of the 'perks' that attracted tenants to the building in the first place. The rate drop has more to do with how the building changed from a management perspective.

As someone who lived at the Hendrix when it opened, this is exactly it. They removed free coffee, resident portal and online management for payments and rentals, top floor lounges couldn’t be reserved anymore, resident monthly socials were axed, etc. thankfully we left right before the management change, but our friends still there all left after. Horrible management, repair issues, made you pay by cheque, etc. google reviews give some insights haha.

 

[thommyjo]

Of course some will, but the premium rental price point has struggled, be it Hendrix (which dropped rates), Augustana or MacLaren.

'As it pertains to 'other cities' the rates they can get for regular product is $3.00/sf and up. So if I have a site in Toronto that I have owned for awhile (have gained a considerable amount of land value lift which can be used as equity), with construction costs that are roughly the same as here but I can get $1-2+ more psf where do you think I will focus my money?'

Bingo.

Augustana is doing alright, but the location isn’t peak.

CX, Macleran, the view (condos), etc are all doing fine. I bet cnib will do well too. I don’t think premium rentals have struggled. People are literally paying rates in Edmonton rn that were Toronto and Vancouver prices in 2019 (2200 for a 2bdrm).

 

[Clearshades]

You realize Hendrix dropped rates when occupancy dropped because the new owners basically removed all of the 'perks' that attracted tenants to the building in the first place. The rate drop has more to do with how the building changed from a management perspective.

That is not the point I'm trying to make. As a city, we just don't attract super income or wealthy population in general like Toronto or Vancouver- even Montreal is out of that game and Calgary. We can only sustain so much of clienteles that don't require incentives to move in for money is relatively a non-issue with them. The point you used is valid in our perspective, but when analyzing that against larger wealthy markets - which was done when referencing GTA, it supports my position. The fact that incentives removed caused renters to vacate whereas this wouldn't occur in GTA or Van. Now, 'mismanagement' is a whole different topic entirely.