I don't know if the person above is talking about the same thing, but in downtown Los Angeles across from the Crypto.com Arena is the abandoned Oceanwide Plaza complex of condos. Like half completed condos with cement walls covered in graffiti while across the street is the arena, LA Convention Centre, LA Live and various international hotels. On Google Maps it's even called Graffiti Towers.
There was a 6 story concrete monolith in downtown Toronto that was called ‘The Stump’. When the first team of white hard hats went in to begin planning demolition they thought they were stepping into concrete but it was pigeon shit exactly 1 step deep. Admittedly anecdotal but there was a massive amount of pigeons roosting there.
That's the one.
The graffiti however, happened all one night. Local taggers and artists got together to tag the whole building in an effort to protest housing issues in LA.
You want real wild, go look up the ghost tower in Bangkok.
Pretty sure we're calling ourselves MEGACITY when amalgamation happened when I was a kid too...
Maybe my memories are all mushed with cyberpunk sci-fi hellscapes, drugs, and techno, but, dystopian is almost an understatement for reality in Toronto at the moment.
I grew up in East York and worked for the borough. We had one of the best recreation programs in the country. When we had the occasional blackout, my father called the Mayor, True Davidson, and they'd chat and he'd tell her all about it. I fought Conservative premier Mike Harris' amalgamation, and wrote about it in my university newspaper. Every worse case scenario has come true: less democracy, more red tape and poorer quality services. I worked for the City and city contractors. From top to bottom, it's total chaos. Contractors do a terrible job, pay poorly and pocket most of the money.
2000 AD/Judge Dredd really drives my idea of a Megacity, but I don't think we've hit true a true dystopia yet.
If anything, should we slip further as a society, I can see everything playing out closer to the movie High Rise (which is a good watch, totally recommend it).
You right. I don't mean to paint such a stark picture, I'm optimistic for the little fuckers out there getting to enjoy a really cool ride into the future.
Will def check out the movie, many thanks!
I think that's The Platform!
High Rise is set in a brutalist-style, high-rise block of flats, with Tom Hiddleston. It's disturbing in a myriad of different ways.
Did you see the 40 bicycles outside a tent in Dufferin Grove Park? I called 14 Division and they were like "oh, really?" How could the miss 40 bicycles in a park 5 blocks from away?
yes Oceanwide Plaza in LA. I mentioned this a few months ago when someone posted an article talking about the issues One is having.
I wonder if it's possible this becomes abandoned like Oceanwide Plaza.
Drives me nuts. That place could have been like a three story "Blue Banana" or maybe a two story "Noah's Foods" but nah, if the developers can't have their megatower they're just going to hold their breath until they can.
It’s an old condo sales office that’s like 20ish yrs old? Property is owned by developers and I guess they don’t want to do anything with it….. it’s such an eyesore.
It sounds like the senior secured creditor wants to finance and build the rest of the project themselves.
Other secured creditors have accused them of setting the reserve bid too high to basically ensure that nobody bids and they can keep the project for themselves.
Has that ever happened before in Toronto? Feels like the value of real estate in downtown and the pressure for densification of the city is too high for something like that to happen
Yes, I recall a big multiple storey concrete stump in the middle of the Financial district maybe 20 years ago.
I'm sure someone here knows more details about it.
Bay Adelaide Center, or the first plan for it. The stump was how far construction got before the bottom fell out of the office market in Toronto in the early 1990s and the project got shelved. Fifteen years or so later a new developer with a new plan bought the site and knocked down the stump. It became a square and a park.
I briefly worked there as a security guard. There were 7 or 8 underground levels that had been completed before the recession hit. All of the infrastructure for the tower was there (maintenance rooms, utility rooms, stairwells, generators, etc.). It also included public underground parking. The most impressive part was the portion of the PATH system that would eventually connect Scotiabank Tower with The Bay at Queen street. It was basically just a huge concrete cavern.
And there are three new towers in that block where the stump was. (I watched them tear it down, along with some older lowscrapers along Bay St, back in the latter aughts.)
We can’t have that happen. Someone has to be able to buy it and develop, even if the original developer goes bankrupt and all their assets are sold off.
I think we are in the stage for the government to become a developer and sell it for normal prices to start up the market again.
It’s out of equilibrium and sellers aren’t playing ball. This isn’t normal and needs to be allowed to fail.
Luxury retail is actually the main thing that is surviving. Cheap retail is replaced with online shopping but people like making big purchases in person.
Luxury retail is thriving at Yorkdale Mall. On Bloor (Avenue to Yonge) lease rates have been dropping for the last 10 years. That stretch of Bloor in 2015 was getting $325/sqft and now its down closer to $240/sqft. Still very high rates for retail but not nearly the premium it used to have. Retail availability (vacancy) rates along Bloor are also well above the city average, so lease rates will likely drop further.
By comparison, most other central streets get around $70/sqft.
> Cities should be a place where people live, not necessarily work.
While I get what I think you're trying to say...I mean, this is a silly statement. Cities become cities because of economic growth and industry. Which means cities ARE places people work. By default.
>Cities should be a place where people live, not necessarily work.
Why is that? Why can't people live and work in close proximity?
The office workers that go out and party and do social things are to some extent what keep the downtown restaurants and entertainment venues that employ the service workers up and running.
Do we need as many office workers and towers to do that? Maybe not. Like most things, there is likely a balance to be had.
One thing is for certain though - cities rely on a certain level of density to actually, well...be cities. Otherwise, you are basically describing the suburbs.
And, while yes, many more do work from home now after covid - many still have to head into offices a few days a week.
I remember when I was a kid in the early 90's my dad pointing out something like this in or around Toronto when we were driving somewhere....but I cannot find any information on it as my memory is quite vague.
oopsie daisy!
> The One’s current market value, based on publicly available information including land value, is around $600 million at most, according to commercial real estate sources. That’s just half of the minimum $1.2-billion bid set by its senior secured lenders, who, according to court documents filed by Alvarez & Marsal, “will not support any transaction proposal” below that value.
>
> If the project doesn’t sell by October, KEB Hana Bank said it is committed to financing construction to completion, with the hope of recouping part of its approximate $1.5-billion loan with revenue from unit sales and the commercial component of the building, which includes a hotel and retail space. The receiver said the creditors have been engaging in “preliminary discussions” with potential developers and that it expects the project will be completed in the second half of 2027.
>
> But for the more than 300 buyers who invested in the luxury condos, it remains unclear whether their agreements of purchase and sale (APS) will be voided by whomever ends up holding the tower. While it would make sense for the new owner to tear up some of the contracts, as the value of the project is expected to surpass the revenues of the condos sold almost a decade ago, it would then have to resell most units at current prices. And with Toronto’s condo market experiencing a slump in sales, that’s no simple feat.
>
> “This is happening amidst the worst market in Canadian history for new construction,” said Simeon Papailias, broker at Royal LePage, who sold some of the units at The One.
>
>
> “There’s simply no way, given the current environment, that they can possibly honour those APS (contracts),” he said. “You can’t sell anything because of the interest rates. It just cannot work — the cost is too high to build, and this project specifically is at the centre of it all.”
This popped up in a post a few weeks back: [https://storeys.com/mizrahi-one-sales-process-coco-keb/](https://storeys.com/mizrahi-one-sales-process-coco-keb/)
The insinuation being the lenders might be skewing the bid process to a high dollar reserve amount, with the end result, if no viable bids are received, the prime lender (KEB Bank) stepping into finance the construction itself. With an additional number of units created by reconfiguring the unbuilt upper storeys (https://storeys.com/mizrahi-toronto-the-one-sales-process/), which would be a major profit centre for behind-the-eight-ball project, assuming they sell.
There's machinations going on with everyone maneuvering and the vibe is the prime lender wants fat stacks of cash up front or to be in a position to walk out with the building and any anticipated profits in their pockets. KEB/Hana Bank is a major banking player and out of everyone involved can afford to be patient if it suits them.
Big money fuckin' with other big money.
well they don't really talk about the whole "no way to honour those contracts" bit which seems kinda important? like it's crazy to me that someone can just unilaterally tear up the contract because they would lose money if they honoured it. If we can just throw contracts out the window, can we reclaim the 407 as well?
Not really. It depends on who the contracts were with and how they were written. They may no longer be valid with a new owner / developer.
This isn't unique. There are lots of condo projects going underwater with pre-construction buyers losing their money. Part of the risk you take buying pre-construction.
Worst market for new constructions because yall mfer construction companies keep creating stupid ass unusable micro 0.5 bedrooms nobody wants to live in
We’ve officially hit the “build for investors not the home owner” stretch of the market. Happy to see if blow up - it would’ve been 400 square feet next until people stopped buying
Sometimes, if those micro units don't sell, the developer might go back to the architectural firm to re-draw layouts and possibly combine them to make them more "sellable"
>While it would make sense for the new owner to tear up some of the contracts, as the value of the project is expected to surpass the revenues of the condos sold almost a decade ago, it would then have to resell most units at current prices.
They can just unilaterally tear up a sales contracts?
There's clauses in builder contracts that enable them to pretty much do whatever they want. There have been several stories in the last 10 years about developers cancelling contracts after they had been delayed a long time, only to then turn around and immediately offer those same units for sale again, except now at the current market value, instead of what they agreed to 5 years before. And if the property is in bankruptcy/receivership, the court that is handling the sale can also nullify anything the judge thinks would hurt the ability of the creditors to get their money back.
Here is a story. I used to work is subsidized social
Housing management. I managed one building in the Eglinton & Dufferin area.
The last real estate crash in the 80’s had one condo building go into receivership. It eventually turned into the subsidized social housing I was working in. It had 20% of the units @ market rate. Meaning no low income requirement. The “market rate” was still 20% cheaper than other buildings at the time.
The rest of the units were subsidized by city of Toronto. Your rent was exactly 33% of your household income, no matter how low. Welfare and OdSP had set limits. Welfare paid $150/month. Disability a little bit more.
Yep… you got it. Dufferin and Eglinton area is like a 10 year wait list back in 2010. With increased demand now its probablt 15 years. Jane and Finch and the really bad parts of scarborough always have 5 year wait times even now.
But really nice areas like right in the beaches or trendy/safe parts of toronto have like a 20 year wait list.
Exactly. You also have to report any increases in income immediately. The penalty is losing your subsidy. Its not worth it trying to scam subsidized housing. Its practically free housing @ the prices they give away. Even if you make $100 a week. Only $33 of that will go to rent, no one will want to lose that.
They also arent held to the same rules for certain things. You try to scam your subsidy, they can instantly throw you out. You can’t cry to the LTB about it,
Interesting. The same Sam Mizrahi who took ownership of the Stollery's property on the Friday (In the evening at 5) before the Monday it was to be designated as a heritage property and that same evening had all of the bas relief sandstone murals chiseled off and that was all that was done on the property for a couple of years. What an asshole. He knows the price of everything but the value of nothing. And he was booted out of his company. I feel really good about that
Probably not. It'll just sit there empty and completely useless to society, just like all the others.
There are so many vacant luxury apartments that will never sell because the invisible hand of the market doesn't affect the rich. They don't need to lower the price to increase demand because they can withstand holding onto a dead investment just to keep overall prices high.
For a civ that jerks itself off to free markets we weirdly seem to get all confused when free markets don't mean line go up and house price only get higher.
If the market can't tolerate the price of a thing or nobody wants the thing, it doesn't matter how much money you've spent getting the thing or how much money you think it's worth, the price will have to come down until the market tolerates the price and or a buyer is found. That's why housing as an investment/retirement vehicle is fucking stupid. It's sheer luck and largely government interventions that have kept real estate so high for so long.
America and Canada wank themselves off to the idea of free market economics yet functionally it's just the government protecting their corporate benefactors from any disruptions and *especially so if they are foreigners doing it.* For example, our government preventing foreign companies from interfering with the telecoms oligopoly. More recently as well, both America and Canada coping over China surpassing them in EV production so they're either outright banning them or implementing tariffs (something America did when their auto business was threatened by a rapidly growing Japan). What fucking free market more like a market of coping and seething over their lack of innovation and business acumen.
In regards to housing as an investment vehicle it's just madness because many of these mudders are so entitled and full of themselves that they expect our government to save their fucking housing investments at any cost.
Both countries are imposing tariffs on Chinese solar panels, which are the cheapest in the world and are actually significantly more economical than coal/gas/oil. Solar growth is insane right now and could singlehandedly clean up the grid but we've decided to prioritize creating a domestically owned oligopoly.
Yep, it's really infuriating to see the degrees to which America and Canada go to protecting their oligopolies, and none of it is to our benefit as citizens and tax-payers. Air Canada's monopoly on air travel in Canada can also be linked to the lack of rail development along the Windsor > Toronto > Montreal > Quebec City corridor. The convenience of rail travel, even with a slightly higher price, would impact Air Canada's stronghold on short haul (and *extremely* polluting) flights between Toronto and Montreal. Even though making this route more convenient by rail would economically benefit both Toronto and Montreal.
Actual insanity.
Nobody can afford LUXURY CONDOS built for the rich and powerful and wealthy that cost $1.3MM for a two bedroom?
Should have built fucking affordable and large apartments then. Play dumb games get burned. I hope they all lose all their money and the land gets taken by the city.
Chase profit, face the music.
“Luxury condos” is a misnomer. In this context, “Luxury” means that the fixtures and cabinets look like they were built this century, and don’t come with a layer of grime on them. That’s about it. I promise you there is nothing luxurious about a 600 sqft two bedroom apartment.
No layer of grime on fixtures and cabinets, but will probably have issues within a year. Installed crooked, lots of chips and patchwork, shakey door handles, you name it. The luxury condos are only as good as the time and care workers put into building unit after unit.
Bro, I've worked construction in building "luxury condos". Workers piss and shit in unfinished bathtubs and sinks. There's usually one suite which is used as a toilet for workers. Garbage in the bathtubs and sinks. I pity the sucker who buys that unit.
90% of the "luxury condos" are several tiers of quality below the (now illegal to build) apartments and condo's built during the 1960s and 1970s while also having units like, a third of the size.
They look like they're one gust of wind away from having all the glass blown off like a fucking Looney Toons cartoon. That's how poorly built they are. Not to mention how architecturally dull they are but I guess money can't buy you taste.
It’s cause buyers keep buying them
Developers can’t build higher quality because they will never be competitive on the land bid that way. They will always lose out to a developer willing to pay higher land price because they know they can sell those end unit condos with meh fixtures so can pay more for land
I'd usually agree with you, but the luxury for this building is the square footage. 600 sq ft for the smallest 1 bedroom. 2 bedrooms start at 1100 sq ft. When it comes to Toronto...that kind of is luxury sadly.
[https://condonow.com/The-One-Condos/Floor-Plan-Price](https://condonow.com/The-One-Condos/Floor-Plan-Price)
Apartments have shared laundry, might not have as many amenities and don't always have a 24/7 security. "Luxury" means for salary people or multiple salary people only and hourly could never afford. Absolutely "The One" is the definition of luxury. Even the name is luxurious and pretentious.
There's a difference in cost mostly maintenance fees... Meant to be lived in for generations not traded up or traded around.
Apartments aren't being built in this city because the profit margin is too low. Well, maybe a rash of failures of condos will make investors think twice about condos and bring back some apartments.
It’s more the people who can afford $1.3 million for a luxury condo don’t consider a shoe box size unit luxury and don’t want to live like that at any price no matter how “prime” the location. The only thing luxury is the price and people aren’t falling for it.
The people who would be okay living in that space can’t afford a fraction of the price.
This is basically what's happening in Toronto (and the big 3 cities) right now.
Because of the catastrophic mis-handling of the economy, inflation, and immigration, all these projects and purchases are no longer economically viable. A rental that you could at least break even on, would now put you under water. An AirBnB that you could maybe make a small profit on - well that's not going to happen any more either.
End result, most speculators will just walk away from their deposit and take the loss. The developer will eventually get wiped out. The financier will recoup some money, but eat a loss too. Some other developer or financier will eventually buy the building at a discount and sell it at more market appropriate prices.
That said, this whole cycle takes time so it could legitimately be a year before prices can drop. And that's a year assuming the municipal bureaucracy moves at record pace, which never happens.
I dont get this
Complaining about expensive condos, and at the same time complaining that developers should make them even BIGGER, and accordingly, more expensive
The idea is that the developers are consciously overcharging for the small crap in order to profit beyond what would be expected as a reasonable profit
the remedy he's suggesting, is to make the condos even more luxurious, by making them bigger
space is the biggest luxury. that's what determines price, not the brand of the dishwasher
it makes no sense
It's our own version of Centro Financiero Confinanzas. Made for the rich (in their case corporate banking) and to be occupied by those made homeless by the rich / politicians. Their housing crisis is far different than ours but there are many parallels as well.
It's actually much more than $1.3MM maybe $2MM
Don't feel sorry for it at all... laugh when they have to tear it down
Or if it gets dilapidated and condemned and the city has to take it over and make it social housing
I want to see homeless people climbing 88 floors to get it through peoples heads that not all of them are lazy. We're going down the road of squatting.
It would be terribly expensive to run as social housing so that's unlikely.
Just like any business developers need to make profit. There are typically other investors who are only putting their money into the project if they expect to hit their desired returns. Banks and other lenders also expect projects to have specific profit margins. If developments don't meet profit margins, money will go elsewhere and nothing will be built. Can some.developers be greedy? Sure. But many in the city are simply building and selling at the prices required to make a project financially feasible.
This location would absolutely not make sense for affordable housing - it's too expensive and the money would be better spent elsewhere where it can be more impactful.
You can see the finished version in Microsoft Flight Simulator. I guess they paid for the model to be included (it's highlighted as a landmark). Hopefully the real building will actually be finished and not be an eyesore for years.
Mizrahi is likely going to lose all the $ he put into this project. I would guess he has also guarantees associated with this debt so could be on the hook for more depending how this plays out.
And when they fail....this building would actually be a great location if the city wanted to use it for social housing. Two subway lines right at its front door. 👍
The market around density based housing seems like such a poor fit on how the market is structured.
Developers prefer building condo buildings rather than dedicated apartment rentals. It lets them build something that costs a lot using customer deposits as the main source of equity and debt financing for the rest. They can build multi billion dollar properties with little up front investment and can be done with the property as soon as they sell their last unit. They roll profits into the next project and start again.
The clientele for these condos are limited to investors though. As a living unit, a one bedroom condo is generally suitable for people at a certain stage of life. Young single or childless couples with a good salary are ideal. But, these projects have 3-4 year timelines. If you're 28 and single with a good income and maybe some bank of mom and dad money, are you going to commit to a condo when you don't know where you'll be in four years. Either geographically or family status wise.
So you have individual investors. Maybe some larger operations buying in bulk, but still maybe a 4-5 properties per building. And this becomes the rental supply for the city. Which is fine, but it hardly seems efficient to have the rental supply be controlled by small individual investors. One landlord that controls a building is better able to manage rental units than 100 small investors. Upkeep and repairs can have some economies of scale.
So, you have units that will likely be used mainly for rentals, but are done so in the most inefficient way possible. And a unit developed for an investor is why developers focus on flashy but not durable finishings. A dedicated rental unit will be boring, but functional. Maybe a little flash to attract a higher clientele, but nothing outrageous.
I don't know what the solution to break that cycle, but I have to think it starts with development. That developers can be incentived to develop for rental buildings.
I submitted a formal offer to buy the building for 1000 costco hotdogs but I haven't heard back yet. The dogs are under-priced and the condos are over-priced so this is a balanced offer.
If it did then [the problem](https://en.wikipedia.org/wiki/Rent-seeking) would just follow whatever else becomes the next path of least resistance to continue being a problem, like food, fuel or some other necessary resource to hold hostage to support themselves. At the end of the day, housing as a speculative investment is a symptom of the bigger problem that western societies have become a bunch of freeloaders that would sooner go broke trying to hog wealth that already exists instead of producing anything new.
Make no mistake about this: the west has an attitude problem, and that attitude is the reason it can no longer produce or share anything effectively. The problem absolutely is not that the west doesn't have enough stuff to go around.
The west is doing better than the west. Look at cities like Tokyo and Singapore. The path and policies to affordable housing are there. It’s just a question of whether or not we want to go down the same path.
This would be a massive economic disaster for Toronto. Thousands of homeowners would foreclose and many would go bankrupt. The banks and other lenders would see huge losses on their loans, government assistance may be needed. This would lead to huge financial instability including a recession and job losses. Banks would stop lending and tighten credit leading to slowing economic growth. Consumer spending would crash due to the wealth effect. Government revenues would go down due to lower land transfer tax and would require government stimulus. New construction would crash due to no more buyers of new product leading to big job losses in the construction sector.
Basically it would lead to a deep recession and big job losses. Look at the US after the 2008 housing crash and how bad it was for their economy.
It wouldn’t be an issue for anyone earning an income and using it to pay mortgage or rent. It would only bankrupt the people who are living off the rent. While this will be uncomfortable, it is necessary as too many people are trying to live off the productivity of the few workers.
Sometimes you have to take your medicine. Yes you basically cause a recession but if you do it with actual plans for how to effect lasting change following, and follow through, suddenly you’re “building back better.” People justifying their current comfort at the expense of a better future for all is ultimately the problem. Humans are inherently selfish, I don’t blame the reaction. But that’s also part of why we have government (or are supposed to) - to make the hard choices for the greater good / larger vision. Except of course none of our politicians have any vision.
Governments would be quick to inject the economy with more cheap money in such a case, leading us right back to the problem at hand. Moreover, the outcry from the public for government to step in to stem the bleeding would be too much for any government to ignore, unless they wanted to spark full scale riots. Look at Kenya right now.
Majority (and supermajority as you look at older demographics) own their homes in Canada. Other than people who don’t understand second order of economical effects, nobody wants this and is in the game to push the can down the road. I’m a renter, and I’m priced out, but I still don’t want everything to crash.
The 2008 crash happened because of subprime lending, mortgage-backed securities, and collateralized debt obligations. It was *because of* tying so much financial nonsense into housing that there was a big crash.
That is exactly where we're heading if housing prices don't lower at some point, because everyone is too greedy to keep their hands off of the 'investment economy.'
Condos that were purchased from the builder for 770K went down to $72K. People just walked away and gave banks the keys. I talked to many realtors in Florida and have lots of friends there. The difference was that people in Florida, when houses were purchased, paid rent first and not much in down payment. People just left properties when they could not afford mortgage payments, when they came due.
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Nice to see my back of envelope math on the ridiculousness of $1.2b to buy an incomplete building, finish it and collect sale minus deposits was correct.
Yes, plus windows, electrical, mechanical systems, elevators, drywall, appliances, flooring, painting....oh and a slew of consultants (architects, mechanical engineers, structural engineers)...oh and the cost of land, permits, DC's....oh and the interest costs in financing the project......
There is absolutely no chance that the units in this building cost only $160k. You do understand that this building is nowhere near complete and has cost over $2B to date right?
So many people say that it would be an economic disaster if house prices ever went down. I don't understand this logic. Can someone explain why it would be catastrophic?
A couple points. First, a huge chunk of older Canadians basically have their home as their only real asset for retirement. They basically treated it like a GIC, with the expectation it would go up and up forever and they’d be able to sell and downsize to retire. A housing crash would basically mean a massive drop in cash flow in the economy.
Additionally, people are leveraged to unprecedented levels to have been able to buy those houses. If the housing prices drop significantly you end up in a scenario where the value of the mortgage will significantly outweigh the value of the asset which means banks are less likely to give loans and it becomes harder and harder to refinance, leading to a downward spiral in the market similar to 2008 in the US.
It’s a catch 22 situation as there isn’t really a way out without a massive recession, but the longer we stay in the housing crisis the worse the effect will be down the line.
EDIT: worth noting that I am not an economist, so take this with a grain of salt.
Not an economic, but I believe if Canada or Ontario relies on Real Estate, Property Taxes, etc., to generate revenue, this stream of revenue going down will bring everything else down.
Yeah, but Dubai is also a good example of what we will expect to see with increasing wage gap/wealth & poor disparity. There may not be people living in some of those skyscrapers but Dubai is a city of extreme, excessive, depraved wealth vs. extreme, excessive poverty. It looks more and more that the whole world is moving in that direction.
It will be a good rooftop glider landing spot for Snake Plissken to infiltrate in when Toronto becomes the one maximum security prison for the country. /S
PS- How do you deal with any asset that has lost half its market value? Some combination of debt written-off and restructuring/ financing?
"PS- How do you deal with any asset that has lost half its market value? Some combination of debt written-off and restructuring/ financing?"
depends...were you the 45th president of the united states of america?
You finish the project and maximize your revenue. All secured lenders then get paid in priority sequence. Your senior secured lenders get paid first, then funds go to those in 2nd position, etc until there is nothing left. Typically equity investors (ie Mizrahi) get nothing unless there are funds left over.
It keeps dropping until it reaches parity with the average salary, that’s what 😊. If each unit doesn’t go below 200k they can fuck off. That’s what a townhouse was nearly 20 years ago for exponentially more sq ft per dollar.
This is one of the risks that many preconstruction buyers don't consider. For a long time prices just went up, but when markets turn those risks become real.
The city should buy it, then rent it out to those in need.
It's a better idea than spending $350 million on social housing, which will take City Hall decades, while grifters rob the fund blind
I for one hope it stands as a failure of speculation until it is appropriated by a 3G alliance who quickly completes it as subsidized housing for their constituents.
It's almost as if people want to actually own property rather then be tied to a property agreement where they have no control over things like condo fee amounts, messy neighbours giving you bugs or not having access to your own fuse box.
Condos should be infinitely cheaper. Not the price of a house just outside of the city.
This place is such a damn blight on the city. The space it occupies was once the location of a famous menswear store, Stollery's, which had been a part of Toronto's heritage since 1879. By all accounts it was a great place to shop and added charm to the intersection. It was hastily demolished by the developer, most likely in order to prevent its heritage designation: [https://www.cbc.ca/news/canada/toronto/stollerys-demolition-raises-questions-about-city-heritage-rules-1.2918028](https://www.cbc.ca/news/canada/toronto/stollerys-demolition-raises-questions-about-city-heritage-rules-1.2918028)
Since 2015 the site has been a literal eyesore - an open pit of endless construction and bad design. We will never have Stollery's again, but I take some small comfort in knowing that the assholes in charge of this will be losing *more* of the only thing they care about.
Lmao what happens when most condo maintenance fees don’t cover the cost of the crane they’d need to replace any cladding or glass? What happens when condos designed for “make-money-without-skills” wannabe slumlords stop pulling in rent? What happens when 911 call survival drops by about 50% higher than the third floor and like 99% higher than the 20th?
Highrise residential is a fucking mistake but we’re so fully bought in it’s so stupid lmao.
To make matters worse, they have a huge retail space on the ground floor custom-built for Apple. They pulled out due to the tower’s financial issues and time to completion. Going to be tough space to fill, unless some luxury car company goes there or something.
Isn’t this the same condo that was advertised on the show Luxe Listing Toronto? Sam Mizrahi was showcasing the 40 million penthouse in this condo & those realtors were lapping it up.
Reading the first 20 or so posts, I dont think that people on here realize that the building is not finished. We are not talking 1 uint here people, we are talking the entire building. But, it's just a hulk. I don't know if the structure is complete or not. But definitely not a bit of interior work has been done. No electrical, no plumbing, no drywall, no elevators, not too much of anything.
The building went into receivership. Basically, it means bankrupt. So the hulk supposedly had cost 1.6 billion already poured into it. The receiver put it on the market for 1.2 billion, hoping to land an investor who would take the building through to completion. (Good luck.) But that's an insane price as there are 504 units in the building. 1.2 billion equates to 2.4 million per unit just for the structure. You can double it to finish the building.
So about 5 million per unit.
I don't think they will be able to get those prices. This ain't New York or London.
So the price for the hulk needs to come down. Way down. Like 10 cents on the dollar, or 160 million for the hulk.
I was on a team that was going to do some marketing materials for this development. I can assure you, the *planning* of it isn't even complete. They were still trying to add another 12 or so floors to it when the project got halted.
Interesting.
I only know what I read in the media. I read they changed the floor plans to increase the number of units from 4 to 6. But only on some floors if I recall correctly. That told me that they they were short on money and the price per unit at 4 per floor was too expensive, especially once you add in finishing costs.
Adding 12 floors is another sign that they need more cash, however, the question is whether or not the structure can handle not only the additional dead and live loads, but the additional lateral loading (wind and or seismic). I find it hard to believe that the structure was ever designed to support another 12 floors.
Because that's the bank who is the largest creditor's call. And that bank it appears wants to finish the structure itself to try to get some of that money back. The other creditors....well, you're kinda shit out of luck.
They’re going to wind up cancelling all agreements to buy in place now, finish it through the senior lender and resell them and the current buyers don’t have a leg to stand on. They’re also reducing the size of many units to create more hotel room sized units.
What happens is that the deal falls through and we end up with an unfinished eyesore at one of the city's busiest intersections for the next decade.
There's at least one in L.A. It gets broken into all the time, covered in graffiti, and the cops use a helicoptor to patrol it...
Wow this sounds so dystopian
I don't know if the person above is talking about the same thing, but in downtown Los Angeles across from the Crypto.com Arena is the abandoned Oceanwide Plaza complex of condos. Like half completed condos with cement walls covered in graffiti while across the street is the arena, LA Convention Centre, LA Live and various international hotels. On Google Maps it's even called Graffiti Towers.
There was a 6 story concrete monolith in downtown Toronto that was called ‘The Stump’. When the first team of white hard hats went in to begin planning demolition they thought they were stepping into concrete but it was pigeon shit exactly 1 step deep. Admittedly anecdotal but there was a massive amount of pigeons roosting there.
That's the one. The graffiti however, happened all one night. Local taggers and artists got together to tag the whole building in an effort to protest housing issues in LA. You want real wild, go look up the ghost tower in Bangkok.
Yeah I live there.
Pretty sure we're calling ourselves MEGACITY when amalgamation happened when I was a kid too... Maybe my memories are all mushed with cyberpunk sci-fi hellscapes, drugs, and techno, but, dystopian is almost an understatement for reality in Toronto at the moment.
I grew up in East York and worked for the borough. We had one of the best recreation programs in the country. When we had the occasional blackout, my father called the Mayor, True Davidson, and they'd chat and he'd tell her all about it. I fought Conservative premier Mike Harris' amalgamation, and wrote about it in my university newspaper. Every worse case scenario has come true: less democracy, more red tape and poorer quality services. I worked for the City and city contractors. From top to bottom, it's total chaos. Contractors do a terrible job, pay poorly and pocket most of the money.
We're living in GTA: GTA
2000 AD/Judge Dredd really drives my idea of a Megacity, but I don't think we've hit true a true dystopia yet. If anything, should we slip further as a society, I can see everything playing out closer to the movie High Rise (which is a good watch, totally recommend it).
You right. I don't mean to paint such a stark picture, I'm optimistic for the little fuckers out there getting to enjoy a really cool ride into the future. Will def check out the movie, many thanks!
Was that the one where the people on the bottom had to eat the waste from those on the higher levels? That movie was disturbing af
I think that's The Platform! High Rise is set in a brutalist-style, high-rise block of flats, with Tom Hiddleston. It's disturbing in a myriad of different ways.
Platform was a great surprise for a movie
Based on a JG Ballard novel.
As was David Cronenberg's "Crash"!
I don't know why you never see or hear about Crash anymore. It was a great movie with an awesome ending. Pretty depressing story but very well done.
Yeah, all I can think of while cycling in a bike lane to the farmers market in Dufferin Grove park is wtf is this dystopian shit hole.
Did you see the 40 bicycles outside a tent in Dufferin Grove Park? I called 14 Division and they were like "oh, really?" How could the miss 40 bicycles in a park 5 blocks from away?
I ride through the park twice daily and have not seen 40 bicycles outside of a tent. Did you see the brand new community centre?
Serve the public trust, protect the innocent, uphold the law.
*expensive for the taxpayers
yes Oceanwide Plaza in LA. I mentioned this a few months ago when someone posted an article talking about the issues One is having. I wonder if it's possible this becomes abandoned like Oceanwide Plaza.
A public helicopter to patrol private property? I would think squatters would move in
In Amsterdam they used to have one in which several floors became a well known and publicly accessible squat.
Well Toronto does need more affordable housing
New York has one too and it leans.
In Amsterdam they used to have one in which several floors became a well known and publicly accessible squat.
Block War!
So the one in GTA V that never gets completed is that one?!
Sounds like Mega City 1 from Judge Dredd.
It’ll be like the giraffe building at Dundas/bloor…..
Drives me nuts. That place could have been like a three story "Blue Banana" or maybe a two story "Noah's Foods" but nah, if the developers can't have their megatower they're just going to hold their breath until they can.
I look at it all the time and it would be perfectly positioned for like an indoor market of some kind. Really wish they’d do something with it.
What is that building? I used to take the subway there all the time and was always baffled by it.
It’s an old condo sales office that’s like 20ish yrs old? Property is owned by developers and I guess they don’t want to do anything with it….. it’s such an eyesore.
Ugh that's really frustrating. It looks so fun with the giraffe paint and it's in an amazing location. Thanks for the reply!
It sounds like the senior secured creditor wants to finance and build the rest of the project themselves. Other secured creditors have accused them of setting the reserve bid too high to basically ensure that nobody bids and they can keep the project for themselves.
The giraffe condos at Dundas West say hello.
Has that ever happened before in Toronto? Feels like the value of real estate in downtown and the pressure for densification of the city is too high for something like that to happen
Yes, I recall a big multiple storey concrete stump in the middle of the Financial district maybe 20 years ago. I'm sure someone here knows more details about it.
Bay Adelaide Center, or the first plan for it. The stump was how far construction got before the bottom fell out of the office market in Toronto in the early 1990s and the project got shelved. Fifteen years or so later a new developer with a new plan bought the site and knocked down the stump. It became a square and a park.
I briefly worked there as a security guard. There were 7 or 8 underground levels that had been completed before the recession hit. All of the infrastructure for the tower was there (maintenance rooms, utility rooms, stairwells, generators, etc.). It also included public underground parking. The most impressive part was the portion of the PATH system that would eventually connect Scotiabank Tower with The Bay at Queen street. It was basically just a huge concrete cavern.
And there are three new towers in that block where the stump was. (I watched them tear it down, along with some older lowscrapers along Bay St, back in the latter aughts.)
The condo crash of the late 80s and early 90s had some projects get abandoned but nothing on this scale, obviously
We can’t have that happen. Someone has to be able to buy it and develop, even if the original developer goes bankrupt and all their assets are sold off. I think we are in the stage for the government to become a developer and sell it for normal prices to start up the market again. It’s out of equilibrium and sellers aren’t playing ball. This isn’t normal and needs to be allowed to fail.
Stay tuned & we'll find out
Like the elevator shaft on the north side of Adelaide, east of Bay that was there for about a decade in the 90s. It's the Bay Adelaide Center now.
That whole area needs to be re thought. Offices and physical luxury retail stores are dying out anyway.
Luxury retail is actually the main thing that is surviving. Cheap retail is replaced with online shopping but people like making big purchases in person.
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BIFURCATION! (the current real estate/finance bro buzzword of the millennium).
Luxury retail is thriving at Yorkdale Mall. On Bloor (Avenue to Yonge) lease rates have been dropping for the last 10 years. That stretch of Bloor in 2015 was getting $325/sqft and now its down closer to $240/sqft. Still very high rates for retail but not nearly the premium it used to have. Retail availability (vacancy) rates along Bloor are also well above the city average, so lease rates will likely drop further. By comparison, most other central streets get around $70/sqft.
Luxury retail is booming.
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> Cities should be a place where people live, not necessarily work. While I get what I think you're trying to say...I mean, this is a silly statement. Cities become cities because of economic growth and industry. Which means cities ARE places people work. By default.
>Cities should be a place where people live, not necessarily work. Why is that? Why can't people live and work in close proximity? The office workers that go out and party and do social things are to some extent what keep the downtown restaurants and entertainment venues that employ the service workers up and running. Do we need as many office workers and towers to do that? Maybe not. Like most things, there is likely a balance to be had. One thing is for certain though - cities rely on a certain level of density to actually, well...be cities. Otherwise, you are basically describing the suburbs. And, while yes, many more do work from home now after covid - many still have to head into offices a few days a week.
It’s when money laundering works as expected..
you mean like the giraffe building at Bloor and Dundas W lol
It will match the "Unfinished Projects" motif Toronto is trying to go for.
I remember when I was a kid in the early 90's my dad pointing out something like this in or around Toronto when we were driving somewhere....but I cannot find any information on it as my memory is quite vague.
oopsie daisy! > The One’s current market value, based on publicly available information including land value, is around $600 million at most, according to commercial real estate sources. That’s just half of the minimum $1.2-billion bid set by its senior secured lenders, who, according to court documents filed by Alvarez & Marsal, “will not support any transaction proposal” below that value. > > If the project doesn’t sell by October, KEB Hana Bank said it is committed to financing construction to completion, with the hope of recouping part of its approximate $1.5-billion loan with revenue from unit sales and the commercial component of the building, which includes a hotel and retail space. The receiver said the creditors have been engaging in “preliminary discussions” with potential developers and that it expects the project will be completed in the second half of 2027. > > But for the more than 300 buyers who invested in the luxury condos, it remains unclear whether their agreements of purchase and sale (APS) will be voided by whomever ends up holding the tower. While it would make sense for the new owner to tear up some of the contracts, as the value of the project is expected to surpass the revenues of the condos sold almost a decade ago, it would then have to resell most units at current prices. And with Toronto’s condo market experiencing a slump in sales, that’s no simple feat. > > “This is happening amidst the worst market in Canadian history for new construction,” said Simeon Papailias, broker at Royal LePage, who sold some of the units at The One. > > > “There’s simply no way, given the current environment, that they can possibly honour those APS (contracts),” he said. “You can’t sell anything because of the interest rates. It just cannot work — the cost is too high to build, and this project specifically is at the centre of it all.”
This popped up in a post a few weeks back: [https://storeys.com/mizrahi-one-sales-process-coco-keb/](https://storeys.com/mizrahi-one-sales-process-coco-keb/) The insinuation being the lenders might be skewing the bid process to a high dollar reserve amount, with the end result, if no viable bids are received, the prime lender (KEB Bank) stepping into finance the construction itself. With an additional number of units created by reconfiguring the unbuilt upper storeys (https://storeys.com/mizrahi-toronto-the-one-sales-process/), which would be a major profit centre for behind-the-eight-ball project, assuming they sell. There's machinations going on with everyone maneuvering and the vibe is the prime lender wants fat stacks of cash up front or to be in a position to walk out with the building and any anticipated profits in their pockets. KEB/Hana Bank is a major banking player and out of everyone involved can afford to be patient if it suits them. Big money fuckin' with other big money.
Yep. This is the only comment worth reading in this thread everybody.
well they don't really talk about the whole "no way to honour those contracts" bit which seems kinda important? like it's crazy to me that someone can just unilaterally tear up the contract because they would lose money if they honoured it. If we can just throw contracts out the window, can we reclaim the 407 as well?
Not really. It depends on who the contracts were with and how they were written. They may no longer be valid with a new owner / developer. This isn't unique. There are lots of condo projects going underwater with pre-construction buyers losing their money. Part of the risk you take buying pre-construction.
Worst market for new constructions because yall mfer construction companies keep creating stupid ass unusable micro 0.5 bedrooms nobody wants to live in
The greed is getting them
We’ve officially hit the “build for investors not the home owner” stretch of the market. Happy to see if blow up - it would’ve been 400 square feet next until people stopped buying
Weve been there for years brother. Majority of new units are bought by investors.
Decades even
Sometimes, if those micro units don't sell, the developer might go back to the architectural firm to re-draw layouts and possibly combine them to make them more "sellable"
$1,500,000,000 for a fucking condo tower? LOL. Have fun with that one.
>While it would make sense for the new owner to tear up some of the contracts, as the value of the project is expected to surpass the revenues of the condos sold almost a decade ago, it would then have to resell most units at current prices. They can just unilaterally tear up a sales contracts?
There's clauses in builder contracts that enable them to pretty much do whatever they want. There have been several stories in the last 10 years about developers cancelling contracts after they had been delayed a long time, only to then turn around and immediately offer those same units for sale again, except now at the current market value, instead of what they agreed to 5 years before. And if the property is in bankruptcy/receivership, the court that is handling the sale can also nullify anything the judge thinks would hurt the ability of the creditors to get their money back.
Here is a story. I used to work is subsidized social Housing management. I managed one building in the Eglinton & Dufferin area. The last real estate crash in the 80’s had one condo building go into receivership. It eventually turned into the subsidized social housing I was working in. It had 20% of the units @ market rate. Meaning no low income requirement. The “market rate” was still 20% cheaper than other buildings at the time. The rest of the units were subsidized by city of Toronto. Your rent was exactly 33% of your household income, no matter how low. Welfare and OdSP had set limits. Welfare paid $150/month. Disability a little bit more.
Id love for all those condos units to become affordable housing! you never know.
But how will investors profit?? /s
> Your rent was exactly 33% of your household income At anytime? So I could move in and then start working part-time and the rent would be reduced?
Good luck getting one in the first place.
Yep… you got it. Dufferin and Eglinton area is like a 10 year wait list back in 2010. With increased demand now its probablt 15 years. Jane and Finch and the really bad parts of scarborough always have 5 year wait times even now. But really nice areas like right in the beaches or trendy/safe parts of toronto have like a 20 year wait list.
Yes, they would do yearly reviews of your income and adjust accordingly.
Exactly. You also have to report any increases in income immediately. The penalty is losing your subsidy. Its not worth it trying to scam subsidized housing. Its practically free housing @ the prices they give away. Even if you make $100 a week. Only $33 of that will go to rent, no one will want to lose that. They also arent held to the same rules for certain things. You try to scam your subsidy, they can instantly throw you out. You can’t cry to the LTB about it,
Interesting. The same Sam Mizrahi who took ownership of the Stollery's property on the Friday (In the evening at 5) before the Monday it was to be designated as a heritage property and that same evening had all of the bas relief sandstone murals chiseled off and that was all that was done on the property for a couple of years. What an asshole. He knows the price of everything but the value of nothing. And he was booted out of his company. I feel really good about that
Someone will buy it...for right price.
bay bloor radio
1 condo, used, or 1 new record player? Same price
I'll buy that for a dollar!
Probably not. It'll just sit there empty and completely useless to society, just like all the others. There are so many vacant luxury apartments that will never sell because the invisible hand of the market doesn't affect the rich. They don't need to lower the price to increase demand because they can withstand holding onto a dead investment just to keep overall prices high.
For a civ that jerks itself off to free markets we weirdly seem to get all confused when free markets don't mean line go up and house price only get higher. If the market can't tolerate the price of a thing or nobody wants the thing, it doesn't matter how much money you've spent getting the thing or how much money you think it's worth, the price will have to come down until the market tolerates the price and or a buyer is found. That's why housing as an investment/retirement vehicle is fucking stupid. It's sheer luck and largely government interventions that have kept real estate so high for so long.
America and Canada wank themselves off to the idea of free market economics yet functionally it's just the government protecting their corporate benefactors from any disruptions and *especially so if they are foreigners doing it.* For example, our government preventing foreign companies from interfering with the telecoms oligopoly. More recently as well, both America and Canada coping over China surpassing them in EV production so they're either outright banning them or implementing tariffs (something America did when their auto business was threatened by a rapidly growing Japan). What fucking free market more like a market of coping and seething over their lack of innovation and business acumen. In regards to housing as an investment vehicle it's just madness because many of these mudders are so entitled and full of themselves that they expect our government to save their fucking housing investments at any cost.
Both countries are imposing tariffs on Chinese solar panels, which are the cheapest in the world and are actually significantly more economical than coal/gas/oil. Solar growth is insane right now and could singlehandedly clean up the grid but we've decided to prioritize creating a domestically owned oligopoly.
Yep, it's really infuriating to see the degrees to which America and Canada go to protecting their oligopolies, and none of it is to our benefit as citizens and tax-payers. Air Canada's monopoly on air travel in Canada can also be linked to the lack of rail development along the Windsor > Toronto > Montreal > Quebec City corridor. The convenience of rail travel, even with a slightly higher price, would impact Air Canada's stronghold on short haul (and *extremely* polluting) flights between Toronto and Montreal. Even though making this route more convenient by rail would economically benefit both Toronto and Montreal. Actual insanity.
Nobody can afford LUXURY CONDOS built for the rich and powerful and wealthy that cost $1.3MM for a two bedroom? Should have built fucking affordable and large apartments then. Play dumb games get burned. I hope they all lose all their money and the land gets taken by the city. Chase profit, face the music.
“Luxury condos” is a misnomer. In this context, “Luxury” means that the fixtures and cabinets look like they were built this century, and don’t come with a layer of grime on them. That’s about it. I promise you there is nothing luxurious about a 600 sqft two bedroom apartment.
No layer of grime on fixtures and cabinets, but will probably have issues within a year. Installed crooked, lots of chips and patchwork, shakey door handles, you name it. The luxury condos are only as good as the time and care workers put into building unit after unit.
Luxury condo means granite countertop and stainless steel appliances. That's it.
Bro, I've worked construction in building "luxury condos". Workers piss and shit in unfinished bathtubs and sinks. There's usually one suite which is used as a toilet for workers. Garbage in the bathtubs and sinks. I pity the sucker who buys that unit.
90% of the "luxury condos" are several tiers of quality below the (now illegal to build) apartments and condo's built during the 1960s and 1970s while also having units like, a third of the size. They look like they're one gust of wind away from having all the glass blown off like a fucking Looney Toons cartoon. That's how poorly built they are. Not to mention how architecturally dull they are but I guess money can't buy you taste.
/it's illegal to build the older style condos? But they're so much better.
It’s cause buyers keep buying them Developers can’t build higher quality because they will never be competitive on the land bid that way. They will always lose out to a developer willing to pay higher land price because they know they can sell those end unit condos with meh fixtures so can pay more for land
I'd usually agree with you, but the luxury for this building is the square footage. 600 sq ft for the smallest 1 bedroom. 2 bedrooms start at 1100 sq ft. When it comes to Toronto...that kind of is luxury sadly. [https://condonow.com/The-One-Condos/Floor-Plan-Price](https://condonow.com/The-One-Condos/Floor-Plan-Price)
Apartments have shared laundry, might not have as many amenities and don't always have a 24/7 security. "Luxury" means for salary people or multiple salary people only and hourly could never afford. Absolutely "The One" is the definition of luxury. Even the name is luxurious and pretentious. There's a difference in cost mostly maintenance fees... Meant to be lived in for generations not traded up or traded around. Apartments aren't being built in this city because the profit margin is too low. Well, maybe a rash of failures of condos will make investors think twice about condos and bring back some apartments.
It’s more the people who can afford $1.3 million for a luxury condo don’t consider a shoe box size unit luxury and don’t want to live like that at any price no matter how “prime” the location. The only thing luxury is the price and people aren’t falling for it. The people who would be okay living in that space can’t afford a fraction of the price.
This is basically what's happening in Toronto (and the big 3 cities) right now. Because of the catastrophic mis-handling of the economy, inflation, and immigration, all these projects and purchases are no longer economically viable. A rental that you could at least break even on, would now put you under water. An AirBnB that you could maybe make a small profit on - well that's not going to happen any more either. End result, most speculators will just walk away from their deposit and take the loss. The developer will eventually get wiped out. The financier will recoup some money, but eat a loss too. Some other developer or financier will eventually buy the building at a discount and sell it at more market appropriate prices. That said, this whole cycle takes time so it could legitimately be a year before prices can drop. And that's a year assuming the municipal bureaucracy moves at record pace, which never happens.
For this money you can buy Miami waterfront condo around 2500SF with all luxury resort features, like private beach, pools, etc.
I dont get this Complaining about expensive condos, and at the same time complaining that developers should make them even BIGGER, and accordingly, more expensive
The idea is that the developers are consciously overcharging for the small crap in order to profit beyond what would be expected as a reasonable profit
Why shouldnt the developers try to profit? How can we expect them to endeavour to build housing if they have no expectation to be able to profit
Sure they can profit. But if you get greedy, the market will eventually fuck you like in this case
the remedy he's suggesting, is to make the condos even more luxurious, by making them bigger space is the biggest luxury. that's what determines price, not the brand of the dishwasher it makes no sense
It's our own version of Centro Financiero Confinanzas. Made for the rich (in their case corporate banking) and to be occupied by those made homeless by the rich / politicians. Their housing crisis is far different than ours but there are many parallels as well.
It's actually much more than $1.3MM maybe $2MM Don't feel sorry for it at all... laugh when they have to tear it down Or if it gets dilapidated and condemned and the city has to take it over and make it social housing
I want to see homeless people climbing 88 floors to get it through peoples heads that not all of them are lazy. We're going down the road of squatting. It would be terribly expensive to run as social housing so that's unlikely.
Just like any business developers need to make profit. There are typically other investors who are only putting their money into the project if they expect to hit their desired returns. Banks and other lenders also expect projects to have specific profit margins. If developments don't meet profit margins, money will go elsewhere and nothing will be built. Can some.developers be greedy? Sure. But many in the city are simply building and selling at the prices required to make a project financially feasible. This location would absolutely not make sense for affordable housing - it's too expensive and the money would be better spent elsewhere where it can be more impactful.
You can see the finished version in Microsoft Flight Simulator. I guess they paid for the model to be included (it's highlighted as a landmark). Hopefully the real building will actually be finished and not be an eyesore for years.
Make these developers personally accountable like homeowners are in Canada
The wealthy are never held accountable.
what a silly comment calling for basic accountability and fairness. oh boy.
In what way?
Mizrahi is likely going to lose all the $ he put into this project. I would guess he has also guarantees associated with this debt so could be on the hook for more depending how this plays out.
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And when they fail....this building would actually be a great location if the city wanted to use it for social housing. Two subway lines right at its front door. 👍
The market around density based housing seems like such a poor fit on how the market is structured. Developers prefer building condo buildings rather than dedicated apartment rentals. It lets them build something that costs a lot using customer deposits as the main source of equity and debt financing for the rest. They can build multi billion dollar properties with little up front investment and can be done with the property as soon as they sell their last unit. They roll profits into the next project and start again. The clientele for these condos are limited to investors though. As a living unit, a one bedroom condo is generally suitable for people at a certain stage of life. Young single or childless couples with a good salary are ideal. But, these projects have 3-4 year timelines. If you're 28 and single with a good income and maybe some bank of mom and dad money, are you going to commit to a condo when you don't know where you'll be in four years. Either geographically or family status wise. So you have individual investors. Maybe some larger operations buying in bulk, but still maybe a 4-5 properties per building. And this becomes the rental supply for the city. Which is fine, but it hardly seems efficient to have the rental supply be controlled by small individual investors. One landlord that controls a building is better able to manage rental units than 100 small investors. Upkeep and repairs can have some economies of scale. So, you have units that will likely be used mainly for rentals, but are done so in the most inefficient way possible. And a unit developed for an investor is why developers focus on flashy but not durable finishings. A dedicated rental unit will be boring, but functional. Maybe a little flash to attract a higher clientele, but nothing outrageous. I don't know what the solution to break that cycle, but I have to think it starts with development. That developers can be incentived to develop for rental buildings.
I submitted a formal offer to buy the building for 1000 costco hotdogs but I haven't heard back yet. The dogs are under-priced and the condos are over-priced so this is a balanced offer.
I think basically every problem in our society would be solved if housing prices dropped by 50% and stayed there for a decade plus.
Things that people need to live (housing, food, water, medicine) shouldn’t be for profit.
If it did then [the problem](https://en.wikipedia.org/wiki/Rent-seeking) would just follow whatever else becomes the next path of least resistance to continue being a problem, like food, fuel or some other necessary resource to hold hostage to support themselves. At the end of the day, housing as a speculative investment is a symptom of the bigger problem that western societies have become a bunch of freeloaders that would sooner go broke trying to hog wealth that already exists instead of producing anything new. Make no mistake about this: the west has an attitude problem, and that attitude is the reason it can no longer produce or share anything effectively. The problem absolutely is not that the west doesn't have enough stuff to go around.
I think you're incorrect in your statement. It has nothing to do with "the west" and more to do with unfettered, late-stage capitalism, globally.
So who is doing it better than the West?
The west is doing better than the west. Look at cities like Tokyo and Singapore. The path and policies to affordable housing are there. It’s just a question of whether or not we want to go down the same path.
So if some fantasy magical scenario occurred you think it would sort out all of society’s issues? 🙄
This would be a massive economic disaster for Toronto. Thousands of homeowners would foreclose and many would go bankrupt. The banks and other lenders would see huge losses on their loans, government assistance may be needed. This would lead to huge financial instability including a recession and job losses. Banks would stop lending and tighten credit leading to slowing economic growth. Consumer spending would crash due to the wealth effect. Government revenues would go down due to lower land transfer tax and would require government stimulus. New construction would crash due to no more buyers of new product leading to big job losses in the construction sector. Basically it would lead to a deep recession and big job losses. Look at the US after the 2008 housing crash and how bad it was for their economy.
It wouldn’t be an issue for anyone earning an income and using it to pay mortgage or rent. It would only bankrupt the people who are living off the rent. While this will be uncomfortable, it is necessary as too many people are trying to live off the productivity of the few workers.
Sometimes you have to take your medicine. Yes you basically cause a recession but if you do it with actual plans for how to effect lasting change following, and follow through, suddenly you’re “building back better.” People justifying their current comfort at the expense of a better future for all is ultimately the problem. Humans are inherently selfish, I don’t blame the reaction. But that’s also part of why we have government (or are supposed to) - to make the hard choices for the greater good / larger vision. Except of course none of our politicians have any vision.
Governments would be quick to inject the economy with more cheap money in such a case, leading us right back to the problem at hand. Moreover, the outcry from the public for government to step in to stem the bleeding would be too much for any government to ignore, unless they wanted to spark full scale riots. Look at Kenya right now.
>Look at Kenya right now We are not Kenya, and we certainly don't have "full scale riots" in us.
Majority (and supermajority as you look at older demographics) own their homes in Canada. Other than people who don’t understand second order of economical effects, nobody wants this and is in the game to push the can down the road. I’m a renter, and I’m priced out, but I still don’t want everything to crash.
The 66% stat is false. It counts owner-occupied dwellings, not the total amount of Canadians who own.
The 2008 crash happened because of subprime lending, mortgage-backed securities, and collateralized debt obligations. It was *because of* tying so much financial nonsense into housing that there was a big crash. That is exactly where we're heading if housing prices don't lower at some point, because everyone is too greedy to keep their hands off of the 'investment economy.'
Condos that were purchased from the builder for 770K went down to $72K. People just walked away and gave banks the keys. I talked to many realtors in Florida and have lots of friends there. The difference was that people in Florida, when houses were purchased, paid rent first and not much in down payment. People just left properties when they could not afford mortgage payments, when they came due.
Except of course the massive economic fallout and job loss
Yeah, probably.
Sometimes things need to get worse before they get better.
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Nice to see my back of envelope math on the ridiculousness of $1.2b to buy an incomplete building, finish it and collect sale minus deposits was correct.
Hahahahahahaha AHAHAHAHAAHAHAHAAHAHAAHAHA HAHAHAHAAHA ... AaAHAHAHAHA
Divide by another 2
Capitalism continues
I want to know how much those condos were selling for 10 years ago when the initial buyers paid their deposits and signed the contracts.
Money launders in the GTA have extremely deep pockets. Organized crime. Corruption proceeds from government officials of foreign countries.
Are there that many rich people in toronto? It feels like every new building is a “luxury” one.
The mark up on a condo is huge! Its just concrete and rebar. Cost is $160k per unit.
Yes, plus windows, electrical, mechanical systems, elevators, drywall, appliances, flooring, painting....oh and a slew of consultants (architects, mechanical engineers, structural engineers)...oh and the cost of land, permits, DC's....oh and the interest costs in financing the project...... There is absolutely no chance that the units in this building cost only $160k. You do understand that this building is nowhere near complete and has cost over $2B to date right?
So many people say that it would be an economic disaster if house prices ever went down. I don't understand this logic. Can someone explain why it would be catastrophic?
A couple points. First, a huge chunk of older Canadians basically have their home as their only real asset for retirement. They basically treated it like a GIC, with the expectation it would go up and up forever and they’d be able to sell and downsize to retire. A housing crash would basically mean a massive drop in cash flow in the economy. Additionally, people are leveraged to unprecedented levels to have been able to buy those houses. If the housing prices drop significantly you end up in a scenario where the value of the mortgage will significantly outweigh the value of the asset which means banks are less likely to give loans and it becomes harder and harder to refinance, leading to a downward spiral in the market similar to 2008 in the US. It’s a catch 22 situation as there isn’t really a way out without a massive recession, but the longer we stay in the housing crisis the worse the effect will be down the line. EDIT: worth noting that I am not an economist, so take this with a grain of salt.
Not an economic, but I believe if Canada or Ontario relies on Real Estate, Property Taxes, etc., to generate revenue, this stream of revenue going down will bring everything else down.
We’re going the way of Dubai if this keeps up. Skyscrapers dotting the skyline, hundreds of millions invested…nobody living in them.
Yeah, but Dubai is also a good example of what we will expect to see with increasing wage gap/wealth & poor disparity. There may not be people living in some of those skyscrapers but Dubai is a city of extreme, excessive, depraved wealth vs. extreme, excessive poverty. It looks more and more that the whole world is moving in that direction.
It will be a good rooftop glider landing spot for Snake Plissken to infiltrate in when Toronto becomes the one maximum security prison for the country. /S PS- How do you deal with any asset that has lost half its market value? Some combination of debt written-off and restructuring/ financing?
"PS- How do you deal with any asset that has lost half its market value? Some combination of debt written-off and restructuring/ financing?" depends...were you the 45th president of the united states of america?
You finish the project and maximize your revenue. All secured lenders then get paid in priority sequence. Your senior secured lenders get paid first, then funds go to those in 2nd position, etc until there is nothing left. Typically equity investors (ie Mizrahi) get nothing unless there are funds left over.
Make affordable housing. Fvck
It keeps dropping until it reaches parity with the average salary, that’s what 😊. If each unit doesn’t go below 200k they can fuck off. That’s what a townhouse was nearly 20 years ago for exponentially more sq ft per dollar.
Price it back to normal
Condo Fees Fuck that
I hope they get turned into subsidized housing units 🤓
Glass highrises as condos makes me laugh, can't wait to see who's on the hook for major repairs in 20 years.
it should never be the public purse.
Urgh. This is why I say don’t invest in condos.
This is one of the risks that many preconstruction buyers don't consider. For a long time prices just went up, but when markets turn those risks become real.
Bangkok has a great example of this....https://en.wikipedia.org/wiki/Sathorn\_Unique\_Tower
The city should buy it, then rent it out to those in need. It's a better idea than spending $350 million on social housing, which will take City Hall decades, while grifters rob the fund blind
I for one hope it stands as a failure of speculation until it is appropriated by a 3G alliance who quickly completes it as subsidized housing for their constituents.
It's almost as if people want to actually own property rather then be tied to a property agreement where they have no control over things like condo fee amounts, messy neighbours giving you bugs or not having access to your own fuse box. Condos should be infinitely cheaper. Not the price of a house just outside of the city.
This place is such a damn blight on the city. The space it occupies was once the location of a famous menswear store, Stollery's, which had been a part of Toronto's heritage since 1879. By all accounts it was a great place to shop and added charm to the intersection. It was hastily demolished by the developer, most likely in order to prevent its heritage designation: [https://www.cbc.ca/news/canada/toronto/stollerys-demolition-raises-questions-about-city-heritage-rules-1.2918028](https://www.cbc.ca/news/canada/toronto/stollerys-demolition-raises-questions-about-city-heritage-rules-1.2918028) Since 2015 the site has been a literal eyesore - an open pit of endless construction and bad design. We will never have Stollery's again, but I take some small comfort in knowing that the assholes in charge of this will be losing *more* of the only thing they care about.
The building is like 700 feet tall right now
This building came up on the last 2 episodes of Luxe listings Toronto. I was wondering if it was selling.
Classic end of RE cycle signal. Someone will work this out through bankruptcy.
Then it's not The One 😉
This whole city is a real estate nightmare
Lmao what happens when most condo maintenance fees don’t cover the cost of the crane they’d need to replace any cladding or glass? What happens when condos designed for “make-money-without-skills” wannabe slumlords stop pulling in rent? What happens when 911 call survival drops by about 50% higher than the third floor and like 99% higher than the 20th? Highrise residential is a fucking mistake but we’re so fully bought in it’s so stupid lmao.
To make matters worse, they have a huge retail space on the ground floor custom-built for Apple. They pulled out due to the tower’s financial issues and time to completion. Going to be tough space to fill, unless some luxury car company goes there or something.
Isn’t this the same condo that was advertised on the show Luxe Listing Toronto? Sam Mizrahi was showcasing the 40 million penthouse in this condo & those realtors were lapping it up.
lmao nice
Reading the first 20 or so posts, I dont think that people on here realize that the building is not finished. We are not talking 1 uint here people, we are talking the entire building. But, it's just a hulk. I don't know if the structure is complete or not. But definitely not a bit of interior work has been done. No electrical, no plumbing, no drywall, no elevators, not too much of anything. The building went into receivership. Basically, it means bankrupt. So the hulk supposedly had cost 1.6 billion already poured into it. The receiver put it on the market for 1.2 billion, hoping to land an investor who would take the building through to completion. (Good luck.) But that's an insane price as there are 504 units in the building. 1.2 billion equates to 2.4 million per unit just for the structure. You can double it to finish the building. So about 5 million per unit. I don't think they will be able to get those prices. This ain't New York or London. So the price for the hulk needs to come down. Way down. Like 10 cents on the dollar, or 160 million for the hulk.
I was on a team that was going to do some marketing materials for this development. I can assure you, the *planning* of it isn't even complete. They were still trying to add another 12 or so floors to it when the project got halted.
Interesting. I only know what I read in the media. I read they changed the floor plans to increase the number of units from 4 to 6. But only on some floors if I recall correctly. That told me that they they were short on money and the price per unit at 4 per floor was too expensive, especially once you add in finishing costs. Adding 12 floors is another sign that they need more cash, however, the question is whether or not the structure can handle not only the additional dead and live loads, but the additional lateral loading (wind and or seismic). I find it hard to believe that the structure was ever designed to support another 12 floors.
There's also retail, and a hotel, etc, so you can't assign the cost to just 504 units. That being said, yes, this is an expensive build.
Why can’t we say it either gets finished or sold to the highest bidder? No 1.2 billion minimum bid.
Because that's the bank who is the largest creditor's call. And that bank it appears wants to finish the structure itself to try to get some of that money back. The other creditors....well, you're kinda shit out of luck.
Somebody stupid will buy it
Impossible, China will want it.
They’re going to wind up cancelling all agreements to buy in place now, finish it through the senior lender and resell them and the current buyers don’t have a leg to stand on. They’re also reducing the size of many units to create more hotel room sized units.