T
thx1038
Guest
So you must have closed already. Are you making money back on your suites? Are you at least covering your costs? Has Harry been good?
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J
joel in TO
Guest
I heard yesterday from a real estate agent friend of mine that 1 king's rentals have thus far achieved an occupancy rate of only 11%! She said that many owners are panicking and trying to dump their suites... I have no independent data to back this up but my friend is usually pretty knowledgeable about these things.
E
elook
Guest
I drive along the Gardiner in the late evening a weekend or two back revealed very little lighting in the tower portion. Whether that says any thing is up for debate (and speculation), but I'd be inclined to put at least some faith in that 11% number.
Any thoughts on what would happen in the event of a failure of the rental concept? What would the result be in terms of suite values? Were there any guarantees offered in terms of income potential (can't imagine that anyone would be foolish enough to have offered a guarantee like that, let alone Mirvish).
Something tells me this is a major developing story in the epic tale of "Harry and His Towers."
Any thoughts on what would happen in the event of a failure of the rental concept? What would the result be in terms of suite values? Were there any guarantees offered in terms of income potential (can't imagine that anyone would be foolish enough to have offered a guarantee like that, let alone Mirvish).
Something tells me this is a major developing story in the epic tale of "Harry and His Towers."
B
beaconer
Guest
thx,
I am not an owner, but have been to the building three times to look at about 16 re-sale units over the past half year, and this is what I found out from speaking to a whole lot of people and seeing a whole lot of units (unfortunately, none of which were owners).
The lady in charge of resales at One King West, back in the winter said hotel occupancy was at 30%. That was during slow season. I would not believe 11% hotel occupancy, it would be much higher in my opinion. Even during the slow season, it was evident there were many hotel guests.
The good..
One King west have dropped there hotel/accommodation prices. You can now get a suite for $129 which is very reasonable. They are also advertising a lot on the common accomodation sites. They have monthly rates which are even better.
The bad..
-Maintenance fees on units are extremely high for price per square footage, which make it almost impossible to carry if you opted to rent it yourself. Maintenance fees run approx $1.19/sq foot, however they include cable and internet. For example the maintenance fees for a 429 sq ft unit is over $510.
-It is absolutely a buyers market in the building, (the re-sale lady even admitted that to me). All the units that I looked at had huge price drops from their initial asking prices. It is not uncommon to see a price which had an original asking prices of 285,000 to be listed now in the low 200,000s. There are a lot of unit owners you can tell were first time investors, and cannot absorb the losses.
-None of the units have a stove or an oven. They said they would be stalling counter top elements and replace the microwaves with convection ovens. As it currently stands, this makes it extremely hard for units to be owner occupied for most people.
-A lot of the furnishings are poor. A lot of the stuff is from Ikea, not that there is anything wrong with ikea, but just the way it looked and pieced together was not quality. I.E. Kitchen cabinetry with a clashing woodstyle from a computer desk. The carpetting in the units and hallways, and the tiling the unit shower stalls looked very poor as well.
-Re-sale is also incouraging buyers to use the units as downtown office spaces (i.e. laywers, etc).
-They are currently approx 20 re-sale units for sale, and there have been around that amount for the last half year or so. They sit a very long time during a market where more popular buildings are experiencing multiple offer bids.
-The gym facility was extremely small, smaller than my gym in my last condo. That for me was personally disappointing, and was another example of product inconsistency
---
My opinion for 1 King west as an investment would be that if the building turns around (if indeed it is experiencing losses), now would be a good time to buy as it is a buyers market in the building.
I ran the numbers for all the units I saw and found that there was no way you can make money renting it yourself, unless you have a lot of equity in the unit, or you have a tenant that is paying prices that are way out of whack. That means you would have to opt into their hotel program. It was apparent to me that they have adjusted their prices downward, and expenses have increased (i.e. heard that they were unaware that they have to pay hotel tax,larger than expected maintenance fees, etc), and all the sellers of the unit were desperate. So take that for what its worth.
I hope that helps.
Also, I really hope there is an owner who can prove what I said to be wrong, because I really do like the building.
I am not an owner, but have been to the building three times to look at about 16 re-sale units over the past half year, and this is what I found out from speaking to a whole lot of people and seeing a whole lot of units (unfortunately, none of which were owners).
The lady in charge of resales at One King West, back in the winter said hotel occupancy was at 30%. That was during slow season. I would not believe 11% hotel occupancy, it would be much higher in my opinion. Even during the slow season, it was evident there were many hotel guests.
The good..
One King west have dropped there hotel/accommodation prices. You can now get a suite for $129 which is very reasonable. They are also advertising a lot on the common accomodation sites. They have monthly rates which are even better.
The bad..
-Maintenance fees on units are extremely high for price per square footage, which make it almost impossible to carry if you opted to rent it yourself. Maintenance fees run approx $1.19/sq foot, however they include cable and internet. For example the maintenance fees for a 429 sq ft unit is over $510.
-It is absolutely a buyers market in the building, (the re-sale lady even admitted that to me). All the units that I looked at had huge price drops from their initial asking prices. It is not uncommon to see a price which had an original asking prices of 285,000 to be listed now in the low 200,000s. There are a lot of unit owners you can tell were first time investors, and cannot absorb the losses.
-None of the units have a stove or an oven. They said they would be stalling counter top elements and replace the microwaves with convection ovens. As it currently stands, this makes it extremely hard for units to be owner occupied for most people.
-A lot of the furnishings are poor. A lot of the stuff is from Ikea, not that there is anything wrong with ikea, but just the way it looked and pieced together was not quality. I.E. Kitchen cabinetry with a clashing woodstyle from a computer desk. The carpetting in the units and hallways, and the tiling the unit shower stalls looked very poor as well.
-Re-sale is also incouraging buyers to use the units as downtown office spaces (i.e. laywers, etc).
-They are currently approx 20 re-sale units for sale, and there have been around that amount for the last half year or so. They sit a very long time during a market where more popular buildings are experiencing multiple offer bids.
-The gym facility was extremely small, smaller than my gym in my last condo. That for me was personally disappointing, and was another example of product inconsistency
---
My opinion for 1 King west as an investment would be that if the building turns around (if indeed it is experiencing losses), now would be a good time to buy as it is a buyers market in the building.
I ran the numbers for all the units I saw and found that there was no way you can make money renting it yourself, unless you have a lot of equity in the unit, or you have a tenant that is paying prices that are way out of whack. That means you would have to opt into their hotel program. It was apparent to me that they have adjusted their prices downward, and expenses have increased (i.e. heard that they were unaware that they have to pay hotel tax,larger than expected maintenance fees, etc), and all the sellers of the unit were desperate. So take that for what its worth.
I hope that helps.
Also, I really hope there is an owner who can prove what I said to be wrong, because I really do like the building.
T
thx1038
Guest
Wel the reason I ask is. I read this bit in Wikipedia...
Facing high levels of dissent from One King West owners at the hotel's lack of profitability, Stinson has decided not to offer the same system to Sapphire Tower purchasers. Instead, the building will now consist primarily of private residences, where the purchaser may occupy the suite or lease it out themselves in a traditional fashion.
I wonder how accurate it is.
I've heard from a real estate agent that only one unit has sold on resale so far, since people are un aware of the profits etc, they are hard to move on resale.
Facing high levels of dissent from One King West owners at the hotel's lack of profitability, Stinson has decided not to offer the same system to Sapphire Tower purchasers. Instead, the building will now consist primarily of private residences, where the purchaser may occupy the suite or lease it out themselves in a traditional fashion.
I wonder how accurate it is.
I've heard from a real estate agent that only one unit has sold on resale so far, since people are un aware of the profits etc, they are hard to move on resale.
B
beaconer
Guest
^^
thx,
I can say definitively, that more than one unit has sold on re-sale. One on the 20th floor with an amazing view and parking spot just recently sold for just under 200,000. Ask your agent friend to look it up.
Thanks for the wiki info. Everything I have seen and found out is consistent with that.
Stinson had to overcome a lot to build that building (i.e. the parking carasol, restoration of historic building, structure for a small imprint,etc,etc) and it appears to be reflected in the maintenance fees which ofcourse takes away from profitability.
elook: If the unit owners have a traditional say/vote like most condos, I wouldn't be surprised to see them vote out Stinson Hospitality as their property management and get a company with more experience to run their hotel operations or rid the building of the hotel concept altogether. Property managment on that scale is a very tough thing to do without a track record (ie. when guests can take a free ride in one of Stinsons luxury cars to anywhere downtown, someone has to pay for that.)
On a different note, I saw several Pantages Hotel units, and I know far less about them, but they do seem to be running a lot smoother, but I have nothing to back that up except for the fact that they do not have the same re-sales volume and price drops as 1KW.
thx,
I can say definitively, that more than one unit has sold on re-sale. One on the 20th floor with an amazing view and parking spot just recently sold for just under 200,000. Ask your agent friend to look it up.
Thanks for the wiki info. Everything I have seen and found out is consistent with that.
Stinson had to overcome a lot to build that building (i.e. the parking carasol, restoration of historic building, structure for a small imprint,etc,etc) and it appears to be reflected in the maintenance fees which ofcourse takes away from profitability.
elook: If the unit owners have a traditional say/vote like most condos, I wouldn't be surprised to see them vote out Stinson Hospitality as their property management and get a company with more experience to run their hotel operations or rid the building of the hotel concept altogether. Property managment on that scale is a very tough thing to do without a track record (ie. when guests can take a free ride in one of Stinsons luxury cars to anywhere downtown, someone has to pay for that.)
On a different note, I saw several Pantages Hotel units, and I know far less about them, but they do seem to be running a lot smoother, but I have nothing to back that up except for the fact that they do not have the same re-sales volume and price drops as 1KW.
R
roch5220
Guest
If I were an owner, I would be a little nervous as well, overall. I looked into initially buying a unit, but am happy I didn't. I looked at the hotel website the other day and was quite disappointed at the overall impression it gave me vs other sites (I guess its economies of scale). They should be lucky that most find hotels on sites like expedia.
Also, at the price range of 1KW's cheapest units, you have alot of compitition with hotels like the Metrop. alway being cheaper. But the price of 1KWs cheapest units are pretty good for what you get, even though they call them suites, they are kinda more like JR suites.
Also, at the price range of 1KW's cheapest units, you have alot of compitition with hotels like the Metrop. alway being cheaper. But the price of 1KWs cheapest units are pretty good for what you get, even though they call them suites, they are kinda more like JR suites.
A
alklay
Guest
The project was exceedingly risky to begin with (an investment in an unproven scheme - at least in this market - with unknown resale values and and an unknown management team) and it appears that the risk is not paying off.
R
roch5220
Guest
Sidenote - it is also early as well. As the team becomes more experienced, and the hotel becomes more established/recognized, I would say the future should be better. Once they have a following (hence business travellors who find a hotel they like and stay loyal), occupancies will increase and they can raise prices to where they should be. I still think its a great product with a great location. They need to gain more experience though marketing themselves to firms within the core. Once (hopefully) this initial opening phase passes, I think the project will be successful, and when positive signs of their business plan execution start to show results, that might be a time to buy a few units. Don't forget that the Empire State building sufferred for a significant period when it opened before becoming one of the most profitable buildings around.
B
building babel
Guest
That was because of the Depression and World War 2.
E
elook
Guest
Of course the Empire State Building opened in the midst of the Great Depression in 1931, whereas 1 King West is opening in the midst of a boom period. Hardly comparable.
B
building babel
Guest
Though, in a way, Harry is facing a far worse enemy ... Harry.
S
Suicidal Gingerbread Man
Guest
^
Wow, that's pretty cold. You're saying Harry is worse than an economic depression AND war.
Wow, that's pretty cold. You're saying Harry is worse than an economic depression AND war.
B
building babel
Guest
Within the context of the battle he's waging, to make this thing work, is he not his own worst enemy in many respects?
E
elook
Guest
I wonder whether that last article on him was a bit of a setup for Harry to claim 1 King West isn't his fault. I noticed a different tone in that piece - it seemed that Harry was willing to talk about the shortcomings of the building, and at the same time, distance himself from his role as a percieved decision maker.
Anyhow, aside from that, anyone notice if the Starbucks is opening soon? Didn't see it in the Door Open pics, but I did notice they added a door in the horridly finished glass area that leads from King St. to the restaurant seating area.
Anyhow, aside from that, anyone notice if the Starbucks is opening soon? Didn't see it in the Door Open pics, but I did notice they added a door in the horridly finished glass area that leads from King St. to the restaurant seating area.