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Some condo developers forge ahead despite market dip

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There was speculation in Toronto’s development industry toward the end of the summer of 2022 that close to 10,000 condo units would be delayed if interest rates continued to rise. Rates have continued to rise, but the sales drop-off appears to have been less than was expected.CARLOS OSORIO/Reuters

As months of slowing sales in new condominiums sees some projects push back their debut into late 2023, other developers are still going full speed ahead.

Todd Cowan of Capital Developments has a somewhat unique insight on this market: Capital ran a successful condo launch right into the teeth of 2022′s sales slowdown, it also occupied a recently finished building across the street from their next project which he is launching sales on now. The 29-storey, 350-unit tower at Yonge and Finch (called Olive Residences) is among the first sales launches of 2023 for Toronto-area developers.

“My contemporaries in the industry were asking me ‘Are you sure you wouldn’t want to delay?’ But we believe at a time like this there are still buyers: they are just very astute and well-healed buyers,” Mr. Cowan said.

The sales environment may not also be as bad as may have been assumed. Toward the end of the summer there was industry speculation that close to 10,000 condo units would be delayed if interest rates continued to rise. Rates continued to rise, but the sales drop-off appears to have been much less severe than expected.

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“We’re definitely seeing projects shelved,” said Pauline Lierman, vice-president market research for Zonda Urban. “I’ve spoken to people on the broker side who say we’ve had projects pushed off. There’s ‘shadow shelving,’ where projects are not necessarily going to marketing stage.”

In the end, Ms. Lierman says she can count maybe 1,500 units that had been in the 2022 pipeline that were then pulled, with close to 27,000 units launching for the year. That figure is not final, Ms. Lierman warns, and while it’s not breaking records, it would track close to the average in recent years.

The Olive Residences by Capital Developments is among the first new condo sites in Toronto to launch this year.Capital Developments

What did happen was a slowdown starting after the record-setting first quarter of 2022 (which saw more than 8,000 units launch), where quarter by quarter about 20 per cent fewer sales were recorded. The data isn’t in on the fourth quarter yet, but the trend appears to have continued.

“There were some launches at what I would call ‘B locations’ in the fourth quarter that didn’t work,” Mr. Cowan said. He said that these “B locations” can sometimes negatively impact design choices in a building. “On some sites you’re really hemmed in. … What people are looking for is efficiency: they don’t want a bowling alley – a long corridor from the front door to the kitchen – they want to pay for space that’s usable.”

His own Olive project he thinks of as a “Triple A”: close to transit, in an area that’s not oversaturated with new offerings and well-designed.

Mr. Cowan is also not anticipating any need to offer incentives to move units, a practice that’s growing more widespread in the GTA.

“You do get requests [for incentives] and you have to make a decision. … You have to have a certain resilience in a way, no question about that,” he said.

“In Hamilton, I’ve seen one year off maintenance fees, a one-year rental guarantee, bonuses for brokerages. I have anecdotally heard townhouse sites slash pricing; there was one that may have dropped $300,000,” Ms. Lierman said.

The latest sales figures for resale condos (often an indicator of demand for preconstruction sales) from TRREB show while the number of listings in December, 2022, were down 55 per cent year over year in Toronto, prices went up by 1.5 per cent. In the 905 markets, sales were down 47 per cent on the year and prices were also down 5.2 per cent.

“I would say the absorptions have reached a bottom stage,” said Ms. Lierman, who says in the third quarter of 2022, only about 40 per cent of condos launched for sale were being purchased. She sees signs that things picked up in December, and expects a modest increase in buyer interest as 2023 begins.

Capital’s recent experience also provides some confidence in the market. Its 8 Elm project in downtown Toronto sold more than 600 units (out of a total of 800 in the 69-storey supertall building) in 2022. And as the company’s Azura building (near Olive Residences) went to full occupancy in mid-to-late 2022, Mr. Cowan said he is seeing few signs of distress among buyers.

“Buyers were able to secure mortgages,” Mr. Cowan said, and while there were the usual assignments of units before closing, it was only about 10 per cent of the building.

“There’s an analogy in all asset classes in the world – all of these equity investors are becoming debt investors, going from higher risk tech stocks to bonds – it’s this whole concept of ‘flight to quality,’ ” Mr. Cowan said. “My mentor was Peter Munk … and he said you don’t nickel and dime: spend a little money on your lobby, don’t do a concrete floor, because it’s worth it. Believe in the relationships, treat people with respect. And we followed that philosophy.”

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Through Parvis, Real Estate Investment Opportunities Abound – Storeys

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As we collectively ride the ongoing inflation rollercoaster, it’s only natural — and wise — to consider how you can make your financial foundation as stable as possible.

For many, investing is a preferred way to protect and grow wealth. And in the last several years, Canadian real estate has seen an unprecedented boom in interest from all angles, including the investment realm.

Today, investors are increasingly keen to stake claim on real estate assets as a means of diversifying their portfolio. Understandably so, considering the Canadian market’s demonstrated fundamentals of low supply and high demand lend themselves to steadily increasing value.

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Making the sourcing and securing of such assets easy, Parvis Invest – a Canadian marketplace for real estate investing – offers a portfolio of curated, high-quality real estate developments to its investors through a user-friendly platform.

READ: Money Matters: This Online Marketplace Makes Real Estate Investment Easy

Parvis’ selection of real estate products is strategically built via direct collaboration with developers and property owners, plus team insights, analytics, and industry data. Opportunities also undergo vetting by the company’s Investment Committee, which has insight and experience from the worlds of real estate development, private equity, tech, law, and finance.

Capturing the essence of Parvis’ curated offerings, a new 24-storey condo development called Centra invites investors to get in on the ground floor of something special in Surrey, BC. The building’s developer, Everest Group, boasts a team with more than 150 years of combined experience in international real estate and construction management, with more than 30 successfully completed projects and over 1,000 acres of land developed.

The project, five months into its 24-month building schedule, brings 164 residential condominiums — plus three townhomes and two levels of underground parking — to one of Canada’s fastest-growing cities (and the fastest-growing in BC; Surrey’s population is expected to more-than double in the next decade).

Located at 13868 101 Ave, the building is near a host of restaurants and shops, as well as Simon Fraser University, Memorial Hospital, and Skytrain access. Downtown Vancouver is just a short drive away, serving spots to tuck into for a bite, a live show, or an afternoon of shopping. And at the end of the day, residents can comfortably return to their lush, green, and calm family-friendly neighborhood.

For investors, Centra’s risk profile is classified as moderate to high level of risk, because it’s a new construction building. Two factors that help de-risk this project, relative to comparable new developments, are that over 80% of its units are pre-sold, and Parvis investors will receive a preferential equity return of 17.5% IRR. The Parvis equity return is in priority to the remaining equity invested.

Even further assurance is provided by way of a corporate guarantee by Everest, and personal guarantees by its directors. The condominium’s minimum investment is $20,000, with a total equity raise of $18,500,000.

By spring 2023, Parvis will also introduce its secondary market, which will give investors the chance to liquidate and sell their investment ahead of time, should they wish — big moves, for a traditionally illiquid asset class. For Centra, there are no transaction or management fees for investors to pay, and in the case one chooses to sell on Parvis’ secondary market, the seller only pays 1% commission.

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Centra (Parvis)

Also currently available for investment is a fully-tenanted residential building in Kitchener, Ontario, classified under the Parvis Core Plus Strategy, which typically features a longer investment horizon with a low to moderate risk profile for investors, and a targeted IRR of 9% to 16%. The building is located at 199 Ahrens Street, is home to 16 units ranging from one to three bedrooms, and was purchased by its developer below market value.

Renovations to the interiors by Mike Beer Investments, plus repositioning of the building and property, promise to increase its annual rental income by nearly double — and the financing for these upgrades is already in place.

This building’s minimum investment is $10,000, with a five-year investment term, and an average projected annual return of 16%. The product’s total equity offering is $1,700,000.

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Kitchener (Parvis)

Within walking distance of several parks, cafes, restaurants, and shops, the address is perfectly situated just north of downtown Kitchener’s main strip. And with GO Transit also only steps away, residents have day trips at their fingertips.

Like with Centra, there are no transaction or management fees related to this building for investors, and in the case one chooses to sell on Parvis’ secondary market when the option opens up, that 1% seller commission comes into play.

It’s no question that 2022 was filled with trials, and ended with uncertainty for many sectors. But through marked financial growth, multiple instances of professional recognition, and licensing approvals secured, Parvis came out of last year an anomaly: exceptionally grounded, stable, and strong.

If these are the attributes you want to see in your own investment portfolio, Parvis can help you get there.


This article was produced in partnership with STOREYS Custom Studio.

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Historic Muskoka Resort Hits the Market for $12M – Storeys

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Written By
Erin Nicole Davis

An iconic Muskoka resort has just hit cottage country’s real estate market. 

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For those looking for a new business venture in the summertime hot spot, Windermere House has just been listed for $12M.

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Windermere House

The sprawling, long-time landmark sits on Lake Rosseau — one of the “Big Three” Muskoka lakes — and is known for its quintessential Old Muskoka charm mixed with modern luxury and amenities. Beloved by both tourists and local cottagers, the picturesque resort has been synonymous with Muskoka tourism since 1870. 

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Windermere House

Known as ‘The Lady of The Lake,’ this 56-room resort hotel sits in a prime location in the Village of Windermere, overlooking the stunning lake. Offering a dose of timeless charm, its historic features include original stone architecture, a charming veranda, and classic Muskoka-style windows. The hotel features several food and beverage outlets, full-service spa capabilities, and a 3,200 sq. ft. of function space that ranges from a private boardroom to state-of-the-art conference facilities. 

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Windermere House

With quintessential cottage country recreation front and centre, the 6.62-acre resort features a heated outdoor swimming pool, tennis court, sand beach, marina, and golf course. 

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Windermere House

The new owner of the property will have the opportunity to take up residence in Windermere Cottage, the traditional four-bedroom private cottage with a separate entrance from Fife Avenue that can also be rented as an additional resort property. Or, as the listing highlights, there’s also the option to personalize a penthouse “cottage” suite within the hotel. 

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Windermere House

The Muskoka chair-filled property includes three detached staff houses, an older, staggered row-style 10-plex, and ample on-site parking. 

While its price tag isn’t within reach of everyone, considering that most of the sprawling cottages on the lake sell for upwards of $5M — coupled with its inevitable income-generating potential — the property may be considered a steal for someone in the market for a breezy new business venture.

Find the full listing here.

Written By
Erin Nicole Davis

Erin Nicole Davis is a born and raised Toronto writer with a passion for the city and its urban affairs and culture.

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Toronto building home to historic pub to be converted into new hotel – blogTO

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Toronto is getting a new hotel by expanding an old hotel that has spent decades not being a hotel. I know, very confusing, but I can totally explain.

A four-storey building that has stood at the southwest corner of Church Street and Richmond Street East for over 140 years could soon undergo a significant transformation.

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The building at 124 Church Street was originally constructed as a hotel in the 1880s, and after 14 decades, a developer has filed plans to bring the property back to its roots with a renovation and expansion supporting a new boutique hotel.

M&G Hotels Limited has big plans for the property, filing a minor variance application that calls for a YY Architecture Studio-designed addition extending the building’s roofline and providing additional space for hotel and other hospitality uses.

This address has been home to McVeigh’s Irish Pub since 1962, and despite major changes on the horizon for the property, it looks like the bar will maintain its presence in the building, and be left practically undisturbed through the renovations.

Plans for the site show little modifications in store for the first two levels of the existing building, aside from a new elevator shaft and other small changes.

The current space occupied by McVeigh’s is listed simply as “existing bar” and “existing kitchen” in plans, a good indication that the establishment will maintain its long-term presence at the intersection.

New floors would be added above the current parapet, bringing the existing four-storey building to an increased height of six levels.

A total of 24 hotel suites are planned on levels three through six, topped by a new rooftop bar and terrace.

The rejuvenated hospitality property will reportedly operate under the branding Clover Hotel, and this will not be the first time that the site or even the current building has been home to a hotel.

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Diagram of the proposal showing additional floors and rooftop bar space. Image via City of Toronto development application.

The southwest corner of Church and Richmond has been home to bars and hotels since the mid-19th century, and the current 1882-built structure was originally constructed as a hotel, replacing an earlier timber hotel building dating back to the 1850s.

Opened as the Windsor Hotel and later renamed the New Windsor Hotel in the early 20th century, the building was maintained as a hotel into the 1960s.

Plans to expand the building and open a hotel are just some of the big changes happening to the property.

The existing building at 124 Church Street stands as the lone holdout against a huge condo development now under construction that will soon tower over the property’s south and west elevations.

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