Liberty Square/NOA (Markham Ctr, Liberty, 16 + 13 + 10 + 9s, P+S/IBI)

[Le Corbeau]

I was wondering if anyone could help me with a question i have in regards to the Liberty Square Office/Commercial Development in Markham. I noticed the other day when walking through the area (around the IBM campus) that the Liberty Square Towers actually provide underground parking to their tenants.

Now my question is: does anyone know or have any suggestions on how this could be financially feasible for the Liberty Development Corporation (LDC) to offer lease rates (per square ft) are NOT higher then those in other grade A office towers that do not have underground parking, especially when considering the greater construction costs incurred when building underground parking structures????

Any insights, ideas, or possible explanations are greatly welcomed!! Thanks.

 

[marcus_a_j]

I'm not sure exactly, but it might have to do with lower property taxes (in Markham vs. Toronto); but probably the construction costs of building underground parking were incorporated into the costs of the whole development which includes the four condo towers (Eko).

 

[Bentley]

who knows, depending on how good the deal was from the beginning they may have had room to keep leases a little cheaper.

Maybe they bought land really cheaply, maybe they financed the project really well, maybe they negotiated well with the contruction company.

A lot of factors go into commercial developments, and their lease rate will be somewhat reflective of their ability to develop the lands. If they were able to do the process more efficienty and cheaper than the next guy, having a slightly cheaper rent rate might be their competitive edge to keep the building full leased?

 

[Le Corbeau]

Actually I was comparing leasing prices (per square ft) in the Liberty Square Commercial Development with other Developments with Grade A Office space for lease right next door to it in Markham City Centre - so since it was built around the same time as 4 other Office Building Developments, which were also on Greenfield Area, the costs should have all been pretty much the same for all 5 Developers yet only 1 - The Liberty Square Development included underground parking - and still somehow manages to offer leases for office space at exactly the same rate of the other 4....

I hadn't thought about passing on the extra construction costs of the underground parking to the condo owners in the other towers. That scenario interests me very much - do you know if the residents of the condo towers are also permitted to use the underground parking?

Thanks.

 

[Edward]

Or in order to compete with the other offices they are having to keep their rents in line. Thus they are making less profit than their neighbours if indeed it cost them more to build.

 

[marcus_a_j]

I hadn't thought about passing on the extra construction costs of the underground parking to the condo owners in the other towers. That scenario interests me very much - do you know if the residents of the condo towers are also permitted to use the underground parking?

Thanks.

I have no idea whether or not they can use the underground parking for the office buildings. I would think not since they probably have their own underground parking spaces. It is really difficult to determine how they are able to offer the rates they do without looking at all of their pro formas from the whole development and the amortization period to finance the project. It could also be that parking could cost extra, meaning people who work in the building who drive have to pay for a parking pass (of course the company/tenant might cover those costs).

Another thought that came to me is the amount of rentable floor space available. Since the Liberty Towers includes the tallest office building in York Region, there is most likely more floor space to rent out. Larger construction costs are involved (obviously), but basically more space to rent = more revenue.

On a different note, what do you think of the whole development? Based on your initial question it seems that you are looking into renting out space in the area. I think that this development goes along with a lot of the other larger developments in the area (Downtown Markham, Warden/Highway 7) in that they are building mixed-use environments. There is retail at the bottom of the office buildings and there might be some at the base of the condos. My beef is the distance from Highway 7 the office buildings are. They are setback quite a bit plus no sidewalk along Highway 7. It will be interesting to see how it will all turn out once the condos are finished as there is a the potential for a nice little courtyard in the centre of it all that could have some nice little cafes or restaurants. Plus there is the development on the west side of South Town Centre Rd. that will add some more people and retail in the area.

 

[Le Corbeau]

Yeah, i would like to find that out - but assuming that they are not making less profit then their competitors, how could they manage to do that and spend the extra money to build underground parking??

So far only the first suggestion of passing the extra construction costs of the underground parking for Office Building onto the Residents the condos in the development's other towers, either directly buy giving them parking spaces also or indirectly (hidden costs) if they have no access to the underground parking....

 

[Bentley]

Like I said before, there are many factors that could impact their rents. Assuming it cost more to do the underground parking, they could have saved the difference when buying the land originally (compared to what their competitors paid) so all other things being equal they cancel each other out and are able to offer the parking for the same rents.

Maybe the interior of the building was done a little on the cheap side and that made up for the extra costs of digging for parking.

The developers financial situation and ability to finance the project could also make up for the extra costs of digging the parking.

So again, there are loads of factors that might impact their final rents.

They might even just be operating with a lower cap rate because their costs may have been higher, so the investment pays itself off over a longer period of time (lower returns per annum).

 

[Le Corbeau]

On a different note, what do you think of the whole development? Based on your initial question it seems that you are looking into renting out space in the area. I think that this development goes along with a lot of the other larger developments in the area (Downtown Markham, Warden/Highway 7) in that they are building mixed-use environments. There is retail at the bottom of the office buildings and there might be some at the base of the condos. My beef is the distance from Highway 7 the office buildings are. They are setback quite a bit plus no sidewalk along Highway 7. It will be interesting to see how it will all turn out once the condos are finished as there is a the potential for a nice little courtyard in the centre of it all that could have some nice little cafes or restaurants. Plus there is the development on the west side of South Town Centre Rd. that will add some more people and retail in the area.

Actually I'm in the planning profession and i was just wondering how those developers (Liberty Development Corporation) could offer or build an Office Development with something that the Town of Markham says isn't feasible: Underground parking. They seem to think (from what I heard) that only lower density office towers with surface parking is what current market conditions will/could support. So that's why this case in particular has me a little than more curious about the Liberty Square Development.

As for the development itself, I think that you are right on in saying that building mixed-use Office/Commercial/Residential is the way to go. I'll be the first to tell you that I’m not a fan of suburban developments but they are a reality that isn't going to go away so this development actually provides a decent model or template that could be - and is being - followed (the IBM Campus off of South Town Centre Blvd is another example, minus the residential component but still innovative in its own way).

Also i think that your question about the abnormally large setback is very interesting. When i was looking at the plans for the development, the setback space along Highway 7 was suppose to be used as a 'greenbelt buffer' from the highway with a cute little pedestrian path somewhere in the middle with trees lining it on both sides.... That of course hasn't happened and i wonder if it ever will. One thing is for sure though - they (the developers and the city) can't leave that space the way it currently is, even if it means the city retaking that portion of the land to widen the Hwy 7 so a dedicated bus route could be added....

 

[taal]

Actually I'm in the planning profession and i was just wondering how those developers (Liberty Development Corporation) could offer or build an Office Development with something that the Town of Markham says isn't feasible: Underground parking. They seem to think (from what I heard) that only lower density office towers with surface parking is what current market conditions will/could support. So that's why this case in particular has me a little than more curious about the Liberty Square Development.

As for the development itself, I think that you are right on in saying that building mixed-use Office/Commercial/Residential is the way to go. I'll be the first to tell you that I’m not a fan of suburban developments but they are a reality that isn't going to go away so this development actually provides a decent model or template that could be - and is being - followed (the IBM Campus off of South Town Centre Blvd is another example, minus the residential component but still innovative in its own way).

Also i think that your question about the abnormally large setback is very interesting. When i was looking at the plans for the development, the setback space along Highway 7 was suppose to be used as a 'greenbelt buffer' from the highway with a cute little pedestrian path somewhere in the middle with trees lining it on both sides.... That of course hasn't happened and i wonder if it ever will. One thing is for sure though - they (the developers and the city) can't leave that space the way it currently is, even if it means the city retaking that portion of the land to widen the Hwy 7 so a dedicated bus route could be added....

Let me get this straight, and correct me if I'm wrong:
The IBM campus is innovative ... In any way?

Okay I'd like to see any justification to back that up.
In any case, my take on "campus" and I should know
It's a large 4 story build surrounded by an ENDLESS see of parking, so far the eye can't see in some directions and greanary which is very well maintained AND private..... could go on but I"ll stop my self.

The "Liberty Development" is a step in the right direction expect for the huge set back off HIWAY7 ... not to mention it's 100% car oriented, the way the above ground parking is set up on the backside of the building and most of the shop entrances are there.

There's a development across the street which I really hope will have a retail component but I know it won't.

 

[Transportfan]

Also i think that your question about the abnormally large setback is very interesting. When i was looking at the plans for the development, the setback space along Highway 7 was suppose to be used as a 'greenbelt buffer' from the highway with a cute little pedestrian path somewhere in the middle with trees lining it on both sides.... That of course hasn't happened and i wonder if it ever will. One thing is for sure though - they (the developers and the city) can't leave that space the way it currently is, even if it means the city retaking that portion of the land to widen the Hwy 7 so a dedicated bus route could be added....

Why do they even need a buffer from the so-called "highway". Hwy 7 is now a street so why not develop it as such instead of isolating Downtown Markham?

On the topic of Hwy 7, some food for thought. Markham is considering calling portions of 7 "Avenue 7". Stupid. Here's a better idea: Consider how Toronto's crosstown streets got their names: Steeles, Finch, Sheppard, etc. Chose a historical person or landmark who lived or which was located at the 7/Yonge intersection and you've got an appropriate name for the road across the entire region.

 

[Le Corbeau]

Why do they even need a buffer from the so-called "highway". Hwy 7 is now a street so why not develop it as such instead of isolating Downtown Markham?

On the topic of Hwy 7, some food for thought. Markham is considering calling portions of 7 "Avenue 7". Stupid. Here's a better idea: Consider how Toronto's crosstown streets got their names: Steeles, Finch, Sheppard, etc. Chose a historical person or landmark who lived or which was located at the 7/Yonge intersection and you've got an appropriate name for the road across the entire region.

Good question - but i think the City of Markham wants to turn Highway 7 into a main thoroughfare parallel to Highway 407 and they are even talking about widening Hwy 7 to add 2 dedicated bus lanes so i don't know how pleasant of an experience it would be for a pedestrian to walk right along Hwy 7 on a sidewalk with that much vehicle traffic moving through at such high rates of speed. These type of things usually depend on the main function of the road/street and the city has already seemed to have decided on that.

As for the naming of the streets that's one of the best ('non-linear/numerical") ways to go about it -just look at almost all the street and metro names in the city of Montreal and they are all named after people of some historical importance - it also helps, in a small way, to foster a sense of understanding and learning about the history of a city (and its people).

 

[Transportfan]

^^ Not surprised at all they would widen 7. It's only 4 lanes now and has no curbs. And although it would be 6 lanes, other 6 lane streets are developed with buildings.

 

[marcus_a_j]

Wouldn't it make sense to encourage people to walk more since there will be a dedicated bus lane? The TOWN of Markham has recently finished widening Warden from 7 to just south of Alden. They are going in the wrong direction imo in terms of urbanizing the area. It seems like the Town wants these nice, pedestrian-friendly, mixed-use neighbourhoods, but doesn't help to connect them together.

 

[Chuck]

Wouldn't it make sense to encourage people to walk more since there will be a dedicated bus lane? The TOWN of Markham has recently finished widening Warden from 7 to just south of Alden. They are going in the wrong direction imo in terms of urbanizing the area. It seems like the Town wants these nice, pedestrian-friendly, mixed-use neighbourhoods, but doesn't help to connect them together.

Your comments are incorrect as both Warden and Highway 7 are regional roads controlled by York Region. In fact, Markham has even requested that the region stop converting 4 lane roads into 6 lane roads. See the following article:

Town asking region to come up with alternative plan
By: Caroline Grech

In the face of overwhelming public opposition to widenings of 16th and Bayview avenues, Markham council voted unanimously to ask York Region to find other ways to bring in its transit plan.

Council passed two motions Tuesday night asking the region to expand its environmental assessment to include alternatives such as more effective use of existing lanes, light rail and improved rapid transit service.

York Region council still has the final decision on its plan to widen Bayview Avenue and 16th Avenue at Kennedy Road, McCowan Road, Yonge and Leslie streets to six lanes. The additional lanes would include room for high occupancy vehicles.

The added lanes fit into a regional plan for rapid transit, York chief administrative officer Bruce Macgregor said.

“It’s part of our roads network providing essential transit services in our community,†Mr. Mcgregor said, adding regional reports have said the capacity is needed.

“If you don’t balance the road widening needs with the need to move more people, you end up with concentrations in other areas,†Mr. Mcgregor said, adding traffic will just move from one street to another.

“There’s no easy answer – that we know for sure

Other options will be available in time, Mr. Mcgregor said.

More than 12 residents, some representing ratepayers associations, outlined their concerns, which span from increased noise and air pollution to a lack of safety from turning the roads into six lane highways.

“Extra lanes reduce the quality of life with light pollution and it contributes to urban sprawl,†Unionville resident Peter Miasek said, listing increased greenhouse gases, air quality and health issues also chief among his concerns.

“It contradicts what the government has been trying to do in reducing carbon emissions.â€

“No city has been able to build their way out congestion,†Mr. Miasek added.

Mr. Miasek’s petition against the widening of 16th Avenue had more than 700 signatures.

For Sujatha Sivarajah, whose home abuts 16th Avenue, more lanes equals more worrying about the safety of her children.

“As a young mom of two children, I’m concerned about safety. I can’t imagine what it would be like with a six-lane highway near my back yard. I can hear the cars whizzing by beyond the speed limit,†Ms Sivarajah said.

The meeting also saw a presentation from staff at York Region, who stressed the extra lanes are not to accommodate more cars but to accommodate Viva and YRT.

With each speaker, the standing room only crowd filled the chamber with raucous applause.

For Mark Ho, widening the roads just doesn’t make sense.

“I’m against it. It contradicts what the government has been trying to do in reducing carbon emissions,†Mr. Ho said.

Only one resident came to support the road widening.

“The Town of Markham is looking at a 50-per-cent population increase. We’re looking at council to look at a balanced solution. We think there is a more balanced approach than simply saying no to expansion. Something has to be done to accommodate the people moving to the lovely Town of Markham,†Al Pickard, president of the Legacy Community Ratepayers Association, said, adding without expansion, people will be sitting in traffic longer and damaging the environment.

“This resolution tonight, redefines how we need to approach traffic problems,†Mayor Frank Scarpitti said, adding traffic problems have to be solved in an integrated system.

The mayor was careful to point out a comprehensive transit plan is in the works at the regional level and several transit solutions are being investigated, including carpooling, rapid transit and the subway coming into York Region.