Manulife Place Renovations | 145.99m | 36s | AIMCo | MdeAS

What do you think of this project?

  • Total voters
    22
thommyjo said:
Yeah, I hope it means the planned tower becomes 25-40 stories of more reasonable rentals ($1400-2300s). Area needs more bodies and the premium stuff is over saturated.
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I also agree with you 100%....should remain residential. Plus the last thing our office market (and almost every other) needs is more space TBH.
 
kcantor said:
for the big players, it’s never just the value of the asset today and whether it’s at a historic high or a historic low. it’s about the value of the asset in 10 years vs the value of potential alternative investments in 10 years (or whatever their investment horizon is) whether those alternatives are industrial space in the golden horseshoe, canadian or international equities, canadian or international bonds, canadian or foreign currencies.

at $120 psf (if that is the number), selling the building today would net roughly $100 million. reinvested at 10%, that would be worth roughly $235 million in 10 years.

leasing the current vacant space could well cost $25 million. releasing the current leased space as leases expire could well cost another $25 million while capital upgrades and renovations could easily require another $50 million.

the building would then have to be worth at least $335 million - or $390 psf - at the end of that 10 years (the $100 million they could get for selling it today, the $100 million it will cost to own it over the next 10 years, plus the $135 million they could earn elsewhere over those 10 years) for it to make sense not to sell it for $120 psf today.
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Timing isn’t everything it is the only thing.
Just because something performed at 10% over the last 10 years doesn’t mean it will do the same over the next. Just saying given AIMCOs past performance they are a day late and a dollar short
 
As much as it would be great for our skyline to have another shiny new office tower in the Ice District, I completely get why CWB is being hesitant on following through with their new HQ plans. I would much prefer a residential tower here to bring in much needed life at all hours and not just 9-5 office workers. It would be a huge win for Manulife to lure in a stable and large employer like CWB and it would likely breathe in some new life on one of the most loved buildings in this city.
 
Glenco said:
Timing isn’t everything it is the only thing.
Just because something performed at 10% over the last 10 years doesn’t mean it will do the same over the next. Just saying given AIMCOs past performance they are a day late and a dollar short
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i wasn’t meaning to imply that aimco earned 10% per year over the past 10 years so that should be their hurdle rate going forward (i don’t know what their returns actually were over the past 10 years)

what i was saying is that today’s values and options going forward based on anticipated returns for each of those options is what determines whether to sell as well as what to buy. past performance for the portfolio or for the asset being kept or sold are immaterial (when there are no tax implications which is the case here).

the decision is strictly “will our returns be better by keeping this asset or by selling it and redeploying the capital” and the question is valid whether the asset is at “peak value” or at an all time low. it also doesn’t matter whether the asset is real estate, equities, bonds, foreign currency or cash (with the exception of maintaining some portfolio diversification as a risk mitigation strategy).
 
The rumours on this one... from an RFP hitting the streets in the coming weeks to the building getting shopped to CWB moving in?!?! At this point, let's just hope SOMETHING happens!
 
What's going to happen to any of our office towers as vacancies grow and valuations go down? Downtown accounts for 10% of our City's tax base. If the tax base shrinks it will affect all taxpayers.
 
Valuations are down and write-downs have occurred and is impacting the tax base.
 
Greenspace said:
What's going to happen to any of our office towers as vacancies grow and valuations go down? Downtown accounts for 10% of our City's tax base. If the tax base shrinks it will affect all taxpayers.
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Personally I'm doubtful vacancies would grow any more than they already have. You're seeing the tail end of covid, less work from home, population growth in the region, and continued scale up efforts for startup firms, which over the mid term will create demand for office.
 
Hope you're right. Many companies still have existing leases and have not negotiated new deals yet which likely will be less space, not the same. Same goes for government offices. The real issue is valuations of commercial office buildings is way down everywhere and that affects taxes.
 
^ I think it’s only going to continue to get worse. I worked in Commerce Place in 2019, been back working there again recently and it’s not even remotely close to how busy it used to be. And AFAIK Commerce has little vacancy.
 
IanO said:
Valuations are down and write-downs have occurred and is impacting the tax base.
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Cut and paste in almost all other downtowns right about now. The office asset class isn't that hawt right now...in fact, it's the exact opposite.
 
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