Toronto Mirvish Village (Honest Ed's Redevelopment) | 85.04m | 26s | Westbank | Henriquez Partners

ehlow said:
This development actually takes into account the type of built environment people enjoy walking near and enjoy being in, and attempts to create one, which is amazing.

- Many narrow storefronts instead of a huge glass wall with one massive store.
- Public market that invites you to walk in and explore.
- Variations in height & style, yet they have an overall theme, and they create a nice facade/wall together.

This is the first time in a while I've seen a condo development do a really good job making the place enjoyable to be in. I love it.
Click to expand...

Excellent points, heartily concur but it's not a actually a "condo development" - all rental. 50% 2 - 3 bedrooms and some 4 bedrooms.
 
Torontovibe,

As much as I love the idea of keeping the old houses the reality is that I bet most of them are run-down to the point where you would have to gut them to the shell anyways.
 
Like Arnold said in the movie Kindergarten Cop, "it's not a condo". Or was it tumour? Anyway, yes, it's not a condo development or a tumour.
 
If they can't move the Honest Eds sign to Dundas Square they should already recreate it and place it there
 

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The rental aspect of this proposal is very interesting to me. What I did want to know though was why would a developer choose to go the route of condo's or rentals. Is there a financial reason to it or something else? I'm sure there's someone here that could shed some light on the subject for me.
 
Condos were deemed more profitable from a development standpoint for decades for a few reasons. First, rent increases were limited by law, and that meant that you couldn't expect to realize increasing returns from rental properties. That changed under Harris I believe, and new rentals can respond to market demand. However, rentals still weren't economically attractive because the time horizon on the profit was in the decades. Contrast that to condos, and you could see the total profit on a project in years instead of decades. The developer also got to take its profit and leave the building in the hands of others to manage, which cut out a huge area of concern.

However, in the last few years rentals have come back (sort of). The reason has to do with interest rates: they are very low. Government bonds pay very little, and people who would normally want to hold them for cash flow and predictable profits have turned to housing instead, where they can earn a few percentage points higher (at least) than government bonds. In Canada, rental vacancies are very low in general, and extremely tight in places like Vancouver and to an extent here in Toronto (since a lot of people who buy condos here rent them out, we have seen and will see a a lot of supply with all the new buildings, but it still won't push up the vacancy rate very high). That means rentals provide an almost guaranteed income stream, which is what the world's investors spend trillions to get with bonds. It is also a way to diversify your portfolio. Hence, builders are finding it profitable to build rentals again - but there is still the issue of profit in years vs. decades, which is why it is still relatively uncommon in Toronto.

This is just speculation on my part, but from a business perspective it seems also to cut out some risk from a large project like this: you aren't trying to sell the whole project, only part of it, so it hedges you if Toronto sales or prices fall in general.
 
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571 BLOOR ST W
Ward 19 - Tor & E.York District

(EAST BLOCK)-The proposed development is located on at least two discrete east and west sites separated by Markham St, which together are proposed to accommodate 71 ,005 m2 of residential uses and 17,555 m2 of non-residential uses, resulting in a combined FSI of 6.25.

Proposed Use --- # of Storeys --- # of Units ---
Applications:
Type Number Date Submitted Status

OPA & Rezoning 15 160328 STE 19 OZ May 21, 2015 Under Review

_____________________________________________________________________________________________________________________


585 BLOOR ST W
Ward 19 - Tor & E.York District

(WEST BLOCK)-The proposed development is located on at least two discrete east and west sites separated by Markham St, which together are proposed to accommodate 71 ,005 m2 of residential uses and 17,555 m2 of non-residential uses, resulting in a combined FSI of 6.25.

Proposed Use --- # of Storeys --- # of Units ---
Applications:
Type Number Date Submitted Status

OPA & Rezoning 15 160338 STE 19 OZ May 21, 2015 Under Review
 
What does the Bad Boy's outlet mean for the redevelopment timeline? (This is one of my most anticipated developments in the city)
 
agoraflaneur said:
Condos were deemed more profitable from a development standpoint for decades for a few reasons. First, rent increases were limited by law, and that meant that you couldn't expect to realize increasing returns from rental properties. That changed under Harris I believe, and new rentals can respond to market demand. However, rentals still weren't economically attractive because the time horizon on the profit was in the decades. Contrast that to condos, and you could see the total profit on a project in years instead of decades. The developer also got to take its profit and leave the building in the hands of others to manage, which cut out a huge area of concern.

However, in the last few years rentals have come back (sort of). The reason has to do with interest rates: they are very low. Government bonds pay very little, and people who would normally want to hold them for cash flow and predictable profits have turned to housing instead, where they can earn a few percentage points higher (at least) than government bonds. In Canada, rental vacancies are very low in general, and extremely tight in places like Vancouver and to an extent here in Toronto (since a lot of people who buy condos here rent them out, we have seen and will see a a lot of supply with all the new buildings, but it still won't push up the vacancy rate very high). That means rentals provide an almost guaranteed income stream, which is what the world's investors spend trillions to get with bonds. It is also a way to diversify your portfolio. Hence, builders are finding it profitable to build rentals again - but there is still the issue of profit in years vs. decades, which is why it is still relatively uncommon in Toronto.

This is just speculation on my part, but from a business perspective it seems also to cut out some risk from a large project like this: you aren't trying to sell the whole project, only part of it, so it hedges you if Toronto sales or prices fall in general.
Click to expand...


Like condos, it's driven by investors. Prices for rental units are skyrocketing. There is no justification to buy and hold on to rental property in Vancouver where rents are extremely low relative to the property value. The value is in reselling at a future date as individual units or as a building or simply to park money in a relatively stable economy. We're quickly reaching that point in Toronto too. Neither are quite Melbourne yet.
 
Yeah cap rates in Vancouver are dipping below 3% and in Toronto I believe they are closer to 5%, which is more amenable to an income investor. Many Vancouver rentals are more expensive to buy per unit than the cost to build new, which is another thing driving the new rental buildings. The only reason to buy at a 3% cap rate is if you want to park your money somewhere safe, which a lot of people are doing in Canada, or you are speculating that the property will appreciate enough to give you a justifiable profit for the risk, which of course has been a very successful strategy for the last 30 years. However, it is my understanding that most of the new rentals being built will not be sold but rather held long term for income, though I am not an industry professional so I could be wrong.
 
The substantial increase in development charges has a lot to do with the recent, small shift to rental units.
 
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