Autograph can pretty accurately predict the price of midrise concrete construction as well as anyone in Edmonton now. The cost per unit in Mercury Block compared to The McLaren came out to be significantly lower despite the more favourable wages at the time of The McLaren's construction.
Rough estimate is $180k/unit vs. $220k/unit (this isn't Gospel, the Edgar team can always correct me).
I have faith in Autograph's ability to build people first spaces, so I'll be happy if they choose to go this route. They could plop another element themed/ MB 3 here, and I'd be happy. More brick this time to fit the area, please.
Sorry, not to go on and on. I'm not asking why these projects weren't cancelled. I'm asking what changed in the economics that shifted highrise projects from greenlit (aka. forecasted as the most profitable form), to sidelined in favor of 6'ish stories. Make sense?
There's substantial risk for a high rise condo developer that needs to pre-sell units to qualify for funding from a financial institution. Consider for example a developer that needs to pre-sell 70% of a project. By pre-selling their project it means that 70% of their revenue is fixed but it doesn't mean that 70% of their costs are fixed. Interest rates, material costs, labour costs, and permit fees can all escalate on 100% of the project and only 30% of the units are left to recoup the cost to complete. Selling the remaining 30% at a higher price than what 70% of the building sold for can be a challenge too. Particularly if there if there is competing product selling at the 70% price which in Edmonton there appears to be. A large well heeled developer can mitigate some of the risk of a large project with futures contracts or by off-loading it onto sub-trades. Others will often put an option clause into their pre-sales contracts that allows them to return a purchasers down payment and cancel a sale at the developers discretion.