1 King West owners question

[thx1038]

Beaconer; There were many expenses that weren't factored in. EX: Insurance rates... There were no where on any of the papers. When I called my agent, they said it would be *higher* cost since there would be people coming and going from my unit daily. They also refused to lock a rate with me since they had no idea what prices would be in 2008 ( that was the promised date at the time).

Furthermore, no bank wanted to give me a mortgage, since this was a unique investment property ( however some brokers said, i wouldn't have a problem once they begin construction, apparently it was a similar situation with Met. Soho ).

I'm waiting to see what type of upgrades and features are given to the current owners, That will determine if I stay or go. However, I am leaning towards canceling my contract with Stinson.

When I asked a few general questions, Harry told me that he had no time for first time investors, I don't have time for first time developers who can't get their buildings off the ground. Like I said earlier, i should have bought with Great Gulf or CityPlace, I would have my keys now. HArry is a tru visionary, but he has to get his shit together.

They are no penalties for getting out, since the official 10 day documents were never made.

 

[thx1038]

BY the way below is an email I got, which has already been posted under the NEW Sapphire thread.


-------------------------------------------------------

Progress!

On Friday May 19 th , we met with planners at the City of Toronto and presented to them more drawings of our revised format for the building, explaining in detail how the design addressed their concerns about shadows that would be cast on Nathan Phillips Square. While they appeared comfortable with the ‘direction in which we were going’, they suggested that they would like to see more detailed architectural renderings and floorplates. We took the position that proceeding with a full architectural program would be a major and costly exercise, and that we felt that before doing so we would appreciate resolving things more specifically, in particular the setbacks and building position on the site. To our great relief, FINALLY they provided a sketch outline of the building “envelopeâ€. However, we were only allowed to look at it and make notes, but NOT to take it with us. (Perhaps this will illustrate the surreal nature of the negotiation process we have been going through).
Nevertheless the information was indeed very useful (if not long, long overdue..).
During the following week we prepared detailed scaled (exterior) drawings, reflecting the proportions and positioning.
On Wednesday May 31 st , we met again with the planners to display the schematics. Our impression was that they were pleased with the format. We asked them if they saw any aspects that still seemed particularly problematic. They indicated that they did not immediately see any ‘showstoppers’, and agreed to review the material in detail and give us a written response.
The architect and our planning lawyer will stay in touch with the planners and the councilor, and hopefully nudge the commentary letter as soon as possible.
In the meantime, I have asked the architects to proceed with more detailed drawings.
We have a lot of time to make up.
Concurrently, our potential joint venture partner is ‘crunching numbers’ to determine whether to join in the development.

The next few weeks are likely to be significant ones for the project.
1) we hope to confirm that the planners are comfortable with the design
2) if so, the councilor will likely also be supportive
3) architectural work will resume in earnest
4) with luck, the joint venture can be resolved
5) we will finally close on 56 temperance (end of June)
6) a public announcement can be made (mid June)
7) existing purchasers can select new units (July)
public sales can resume (September)
9) resubmission of plans to City Hall (August)

We will keep you posted on these steps as they are achieved, rather than waiting for monthly updates.

Regards,

Harry Stinson

 

[bizorky]

To our great relief, FINALLY they provided a sketch outline of the building “envelopeâ€. However, we were only allowed to look at it and make notes, but NOT to take it with us. (Perhaps this will illustrate the surreal nature of the negotiation process we have been going through).

Jeez, if that is true, it most definitely is "surreal."

 

[mpolo2]

1King W now has flags around the base of the building. It is a nice touch and it makes it more clear the the place has moved from construction to operations. That said, I dont know why there are as many american flags as canadian flying - not to be too nationalistic but it is not like the ownership is in the US and we are, after all, in canada...

 

[dankind]

5 years later... does anyone still have their units and/or recommend purchasing one in the current market? Just quickly looking at what's available in the building is making it look like a very tempting investment... I'd love to hear what others think and/or how their investments have come along.

 

[CityPlaceN1]

Can't answer directly but it is obvious the penthouse units are still empty. Considering the recent boom in high end units that says something, something negative certainly.

 

[Southcore]

5 years later... does anyone still have their units and/or recommend purchasing one in the current market? Just quickly looking at what's available in the building is making it look like a very tempting investment... I'd love to hear what others think and/or how their investments have come along.

There's a forum member (can't remember his name) that owns in 1 King and has given great details about his experience, numbers, etc...he posts in the 'Baby We Got A Bubble' thread in the real estate section of this site. You might want to ask in there. From what I remember he was very pleased with how things are going at 1 King - a lot has changed in Toronto over the last several years. I think 'civdis' still posts on UT maybe send him a PM since he was willing to talk about it here in 2006. EDIT - the person I am referring to may in fact be civdis, could have sworn it was someone else, but just giving you the heads up.

Just be aware of the differences between commercial and residential properties when it comes to mortgages, property taxes, etc.

Re: the penthouses still being available - if I'm not mistaken it would be very hard to get financing on such a unit due to it being in a hotel (same problem Trump people are having), have to pay in full. And at $2.5M+ or whatever it is (I remember a time it was asking $3.4M or something) there are a lot of other buildings (including the Big 4) or Yorkville to compete with. Also somewhat minor is that I don't believe the penthouses have any outdoor spaces - this does play a bit of a factor when you are talking big money, and this has also hurt the sales numbers at the Ritz (some units shave sold around $700 PSF which is crazy considering units in the Thompson or Festival Tower have sold for the same).

 

[Civdis]

There's a forum member (can't remember his name) that owns in 1 King and has given great details about his experience, numbers, etc...he posts in the 'Baby We Got A Bubble' thread in the real estate section of this site. You might want to ask in there. From what I remember he was very pleased with how things are going at 1 King - a lot has changed in Toronto over the last several years. I think 'civdis' still posts on UT maybe send him a PM since he was willing to talk about it here in 2006. EDIT - the person I am referring to may in fact be civdis, could have sworn it was someone else, but just giving you the heads up.

Just be aware of the differences between commercial and residential properties when it comes to mortgages, property taxes, etc.

Re: the penthouses still being available - if I'm not mistaken it would be very hard to get financing on such a unit due to it being in a hotel (same problem Trump people are having), have to pay in full. And at $2.5M+ or whatever it is (I remember a time it was asking $3.4M or something) there are a lot of other buildings (including the Big 4) or Yorkville to compete with. Also somewhat minor is that I don't believe the penthouses have any outdoor spaces - this does play a bit of a factor when you are talking big money, and this has also hurt the sales numbers at the Ritz (some units shave sold around $700 PSF which is crazy considering units in the Thompson or Festival Tower have sold for the same).

Hi all,

Yes, I believe it is me you are referring to. I have owned in this building from the beginning. The first years were a challenge, but now that we have full control of the building and the tax issue has been resolved, things are going quite well. The building has an excellent operations team and revenue continues to grow. The problem with this building is financing. Banks just don't get it, and you need a big downpayment if you can even get financing. This has basically shut out smaller investors as a lot of cash is needed. this has also depressed prices meaning the returns are excellent. I feel it is one of the best values in Toronto, much better returns than a standard condo (and I get to use it as an urban cottage).

let me know if you have any specific questions and I will do my best to answer them.

 

[Southcore]

Actually I have a few questions if you don't mind:

What were the prices originally when the project launched. I vaguely remember the Stinson infomercial (I was a teen back then). I continually see studio units on MLS for $175-200K.

Assuming you are in the hotel pool, how often has your suite been renting out monthly in the last 24 months? How much does seasonality impact occupancy? I'm assuming you still turn a profit even though you use your property occasionally?

Maint fees are quite high (and totally understandable) but what about property taxes and/or any other fees?

I recall you mentioning that performance of the restaurant/bar has been improving your bottom line. Can you expand on that? How is the ROI in general if you don't mind me asking?

So 7 years later where do you see this property going in the future? I take it you are still in it for the long haul?


Thanks in advance for answering anything above. Greatly appreciate. I love walking though the path through this building, I think it's location is second to none. If it were a pure residential building I'd move there in a heartbeat

 

[Civdis]

I will answer to the best of my ability without being too detailed. This has been a complicated project as many know.

1. Original prices were about what they are today so there has been very little price appreciation due to the reasons I outlined above. I paid $249,000 for a superior studio on the 41st floor with an amazing view of the St Lawrence neighbourhood and lake. I would be luck to get $270k for it today, so price appreciation has not been good. You have to be very careful with pricing in this building. The really cheap suites have horrible layouts and no view (some are actually interior suites looking into an atrium).

2. It doesn't really matter if your individual suite leases as it is a total pool concept where everyone shares all of the income from the building. My monthly income ranges from a low of $900 in January to a high of close to $3,000 in September. My average is around $1900 per month. With maintenance fees of $550 and taxes of $350, and I am left with $1,000 per month to service debt or use as cash-flow.

The cap rate on this property works out to about 5% (Net operating income divided by all cash investment). That is not bad compared to the cap rate most condo investors are achieving in Toronto. I am a commercial property developer who achieves 8-10% cap rates on my projects so 1 King does not exactly qualify as one of my better investments. On the other hand, that is not why I bought it. I bought it as an urban cottage that can generate income when not used.

I have been quite happy with the investment. With the financing I arranged, it pays for itself completely and I get to have some fun with it. Long term, I think this is a great investment for cash investors. You can't beat the location and the I think it is a wonderful building (although 88 Scott will impact my view somewhat).

Hope that helps.

 

[Southcore]

Very interesting. Thanks for the response.

Mods, not sure why this thread is even in this sub forum. Probably should be in the real estate section

 

[MYUrbanToronto]

I will answer to the best of my ability without being too detailed. This has been a complicated project as many know.
............
Hope that helps.

Thanks for the answer. Just curious, how big is the studio unit in that building? Or there is multiple sizes?
Do you sell unit or need another investor for your commercial property that is going to be developed?

 

[Freakydisco]

Hi all,

Yes, I believe it is me you are referring to. I have owned in this building from the beginning. The first years were a challenge, but now that we have full control of the building and the tax issue has been resolved, things are going quite well. The building has an excellent operations team and revenue continues to grow. The problem with this building is financing. Banks just don't get it, and you need a big downpayment if you can even get financing. This has basically shut out smaller investors as a lot of cash is needed. this has also depressed prices meaning the returns are excellent. I feel it is one of the best values in Toronto, much better returns than a standard condo (and I get to use it as an urban cottage).

let me know if you have any specific questions and I will do my best to answer them.

Hi there. I know this post is super old, but I’m curious to know if you still have the unit at One King West and if you have anything to share from the years since this thread. Is the hotel program still worth it? Did you leave? Have there been problems?

I’m from Toronto—born and raised—so I’ve know about this building since it’s inception… however I’ve recently relocated to the US full-time and I’m looking to keep a small property back home that will not be a burden. More importantly I want a place that pays for itself. I currently own two full homes and I’m tired of the stress. One King West seems like an ideal situation for someone in my position. I only intend to be in Canada for a month or two every year (and not consecutively), so why not have the property working for me in my absence? My only concern is that I would likely be paying for this property “in cash” with a HELOC rather than with proper cash, so I need the suite to pay for itself and also be paying back the loan. I don’t necessarily want or need it to make a profit, but I would definitely want to break even so that it covers all fees, taxes, and pays back the loan. I could pay in cash, but with the cost of housing these days I’d prefer to sell both my homes, buy ONE property, and use that home equity to buy a suite at One King West. If the numbers at the building are good, I can see this being feasible… but no realtors have responded to my inquiries for more information.

I’m also rather confused by a current MLS listing which states that the unit in question earned over $127,000 gross last year. Is that a realistic number? And if so, how much of that goes to the owner? The numbers you posted years ago don’t exactly gel with some of the conflicting things I’ve read elsewhere, which makes me believe that other sources are somewhat dishonest. Would you recommend the building and the program to someone in my shoes?

 

[Civdis]

Hi there. I know this post is super old, but I’m curious to know if you still have the unit at One King West and if you have anything to share from the years since this thread. Is the hotel program still worth it? Did you leave? Have there been problems?

I’m from Toronto—born and raised—so I’ve know about this building since it’s inception… however I’ve recently relocated to the US full-time and I’m looking to keep a small property back home that will not be a burden. More importantly I want a place that pays for itself. I currently own two full homes and I’m tired of the stress. One King West seems like an ideal situation for someone in my position. I only intend to be in Canada for a month or two every year (and not consecutively), so why not have the property working for me in my absence? My only concern is that I would likely be paying for this property “in cash” with a HELOC rather than with proper cash, so I need the suite to pay for itself and also be paying back the loan. I don’t necessarily want or need it to make a profit, but I would definitely want to break even so that it covers all fees, taxes, and pays back the loan. I could pay in cash, but with the cost of housing these days I’d prefer to sell both my homes, buy ONE property, and use that home equity to buy a suite at One King West. If the numbers at the building are good, I can see this being feasible… but no realtors have responded to my inquiries for more information.

I’m also rather confused by a current MLS listing which states that the unit in question earned over $127,000 gross last year. Is that a realistic number? And if so, how much of that goes to the owner? The numbers you posted years ago don’t exactly gel with some of the conflicting things I’ve read elsewhere, which makes me believe that other sources are somewhat dishonest. Would you recommend the building and the program to someone in my shoes?

My unit grossed $48k last year, high floor, 07 Suite type. It is in the rental pool as a 1.2 Revenue factor. My unit would like sell for $550k but it is really hard to find a unit for sale that is in the rental pool. People in the pool love the income and do not want to sell. Most listings you see are not in the pool.

 

[Civdis]

Hi there. I know this post is super old, but I’m curious to know if you still have the unit at One King West and if you have anything to share from the years since this thread. Is the hotel program still worth it? Did you leave? Have there been problems?

I’m from Toronto—born and raised—so I’ve know about this building since it’s inception… however I’ve recently relocated to the US full-time and I’m looking to keep a small property back home that will not be a burden. More importantly I want a place that pays for itself. I currently own two full homes and I’m tired of the stress. One King West seems like an ideal situation for someone in my position. I only intend to be in Canada for a month or two every year (and not consecutively), so why not have the property working for me in my absence? My only concern is that I would likely be paying for this property “in cash” with a HELOC rather than with proper cash, so I need the suite to pay for itself and also be paying back the loan. I don’t necessarily want or need it to make a profit, but I would definitely want to break even so that it covers all fees, taxes, and pays back the loan. I could pay in cash, but with the cost of housing these days I’d prefer to sell both my homes, buy ONE property, and use that home equity to buy a suite at One King West. If the numbers at the building are good, I can see this being feasible… but no realtors have responded to my inquiries for more information.

I’m also rather confused by a current MLS listing which states that the unit in question earned over $127,000 gross last year. Is that a realistic number? And if so, how much of that goes to the owner? The numbers you posted years ago don’t exactly gel with some of the conflicting things I’ve read elsewhere, which makes me believe that other sources are somewhat dishonest. Would you recommend the building and the program to someone in my shoes?

I just checked the MLS, that listing is highly deceptive. The income they are quoting is total revenue booked by the hotel, not even close to what the owner would get after wages, management, FFE etc. That unit is a 1.4 factor meaning the owner likely grossed $56k last year. Subtracting taxes and condo fees, you would be around $40k. Having said that, the income level would support $550k debt at 5.5%. Considering your circumstances, this could be a good investment.