Toronto Cumberland Square | 253.92m | 75s | KingSett Capital | Giannone Petricone

Mongo said:
I agree with Tuscani01. By the time that a project currently being proposed reaches the "shovels in the ground" stage, the economy should be well along in its recovery. It is still possible (in my opinion) that this recession will have little long-term effect, other than delaying those projects that have not yet put shovels into the ground by a year or so. Toronto is one of the few cities in the world that I would say this about. It has been hit far less severely than other cities, due to the strong Canadian banking system, and was sustaining a high level of high-rise construction before the current downturn began. Given the continuing inflow of population into the GTA, I see no reason why the high level of construction should not continue, once credit starts flowing again -- and early indications are that the worldwide banking system has finally started lending again after the latest Obama banking initiative.

BMyers, are all the proposals, whether one, two, or three towers, about the same total area? Because if they are, I definitely want to see the one-tower version! I assume that it would be about the same size (and height?) as 1BE itself.

Bill
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Actually, Ontario is probably the worst off province in Canada right now. While our banks are doing well globally, our economy isn't based solely on finance. Manufacturing has collapsed, retail sales have slowed significantly and still thousands are being laid off this seemingly impenetrable Canadian banking system.

I expect this crisis to have deep implications; it would just seem very shallow and overly optimistic to see it otherwise.
 
They can demolish Cumberland Terrace as long as that soup place run by the Indian women stays. Awesome food. Maybe they can dig around it.
 
Filip said:
Doubt it the economy's going to bounce back that quickly, and even if it were to bounce back the real estate market is definitely put down for the next 5-10 years minimum.

The late 80s crash took nearly a decade to correct itself, and today we are in far worse in terms of the global economy.
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Tell that to the people in the industry. There is a great deal of optimism and I know of a few projects that are just going to ride out the storm through the application process. Financing for construction is the only hurdle that is holding back developers at the moment, but even that will soon be corrected thanks to government action. These developers are spending thousands of dollars on the application process, engineering studies, architect drawings, and even marketing plans. Im sure they would stop all work if they were really that worried.

The population isn't going to stop increasing, and all of these people will need places to live. Add to that the flight of people back into downtown from the burbs and developers have nothing to worry about. If they can propose a good quality project, they will get their sales.
 
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I am an agnostic about where the next few years will take us, but I have some leanings towards pessimism. People in the industry are generally speaking, the last people I would ask for an opinion on this matter. They are not disinterested parties, and have more to gain by talking up the market than by talking it down.

One argument that does not hold water is the "population growth" idea (people are coming, so they have to live somewhere). Toronto's CMA grew by 9.19% between 2001 and 2006, but it also grew 9.4% between 1991 and 1996. That earlier growth didn't stop the market from tanking, seriously, during those years. In fact, there is a lot of recourse that people take in difficult times, such as staying at home with their parents longer, living with a roommate, etc. There is abundant spare capacity.
 
Tuscani01 said:
Tell that to the people in the industry. There is a great deal of optimism and I know of a few projects that are just going to ride out the storm through the application process. Financing for construction is the only hurdle that is holding back developers at the moment, but even that will soon be corrected thanks to government action. These developers are spending thousands of dollars on the application process, engineering studies, architect drawings, and even marketing plans. Im sure they would stop all work if they were really that worried.

The population isn't going to stop increasing, and all of these people will need places to live. Add to that the flight of people back into downtown from the burbs and developers have nothing to worry about. If they can propose a good quality project, they will get their sales.
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What government action? The government can't force banks to lend, they can only try to make the environment for lending a bit more palpable.. Right now it's fairly sour. Look at the TSX, up 150 points one day and then down 300 the next... Losses after losses.
Banks won't lend to developers unless they've amassed significantly high sales now (forget the 70% threshold, it must be by now in the 80% range).. Banks also regulate the mortgage market, the cause of this global disaster. They will not be lending so freely to new buyers, meaning less of a market, meaning barely any sales. Look at sales in the past few months. Certain projects haven't even managed more than a sale or two a month. This is only the beginning.

I read an interesting article from a professor at the London School of Economics who gave a grim view on the future of our economy. This is nothing we've seen before; never in the history of our planet has the global economy collapsed in unison. A bank failure in London ends up bankrupting a nation halfway around the world.. I guess those are the implications of globalization, and maybe a lesson learned for all... But trust me, this isn't going to just go away.
 
Archivist said:
One argument that does not hold water is the "population growth" idea (people are coming, so they have to live somewhere). Toronto's CMA grew by 9.19% between 2001 and 2006, but it also grew 9.4% between 1991 and 1996. That earlier growth didn't stop the market from tanking, seriously, during those years. In fact, there is a lot of recourse that people take in difficult times, such as staying at home with their parents longer, living with a roommate, etc. There is abundant spare capacity.
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Home prices were low during the 90's, but that didn't stop people from buying. Look how fast the suburbs exploded during this period. The growing population just looked for the best deals. Land was cheap, and home prices were a steal. Developers still made their profits.

This time we will either see the same type of development (sprawl) outside of the greenbelt, or the growth occurring within already developed areas (such as downtown). If the trend of moving back downtown holds up, the development will just continue to happen in the city.
 
Tuscani, of course people still buy, I'm not claiming nothing will get built. But I am saying that population growth has nothing to do with it, and I believe we're likely to have at least one year like 1994, where four buildings over 12 storeys were completed in Toronto, the tallest being 21 storeys. That's what happened in the 1990's. If that happens, we'll all have to settle for a lot less action than we've been used to for some time.
 
Archivist said:
Tuscani, of course people still buy, I'm not claiming nothing will get built. But I am saying that population growth has nothing to do with it, and I believe we're likely to have at least one year like 1994, where four buildings over 12 storeys were completed in Toronto, the tallest being 21 storeys. That's what happened in the 1990's. If that happens, we'll all have to settle for a lot less action than we've been used to for some time.
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You are right, not many buildings over 12 storeys were built, but look at what was being built during that period. Downtown saw a slowdown, but the suburbs continued to grow. Today, the suburbs are built out and the greenbelt is preventing them from sprawling outward. The growth can either decide to leapfrog the greenbelt, or it can be redirected downtown. I really don't see it leapfrogging the greenbelt since traffic is still a major issue. If transit can be improved downtown, we will see the growth that occurred in the 90's throughout the suburbs to take place downtown and in other urban centres in the GTA.

Sure, we may not see times like the last 5 years for a long time, but the bubble we have been in for those 5 years has been HUGE! Even if you sliced that growth in half, it would still be pretty substantial. Once the projects that have made it through this far are complete, there will be a need for more. There aren't many on the pipeline at the moment, so any developer planning to jump in in 2 years will likely be safe. Only the best will survive, and I don't see why this project can't be one of the best. This could work out in our favour in terms of the quality of projects coming out in the next few years.
 
In terms of this particular project, yes, I think it's overdue and I hope that it happens as planned.
 
Tuscani01 said:
You are right, not many buildings over 12 storeys were built, but look at what was being built during that period. Downtown saw a slowdown, but the suburbs continued to grow. Today, the suburbs are built out and the greenbelt is preventing them from sprawling outward. The growth can either decide to leapfrog the greenbelt, or it can be redirected downtown. I really don't see it leapfrogging the greenbelt since traffic is still a major issue. If transit can be improved downtown, we will see the growth that occurred in the 90's throughout the suburbs to take place downtown and in other urban centres in the GTA.

Sure, we may not see times like the last 5 years for a long time, but the bubble we have been in for those 5 years has been HUGE! Even if you sliced that growth in half, it would still be pretty substantial. Once the projects that have made it through this far are complete, there will be a need for more. There aren't many on the pipeline at the moment, so any developer planning to jump in in 2 years will likely be safe. Only the best will survive, and I don't see why this project can't be one of the best. This could work out in our favour in terms of the quality of projects coming out in the next few years.
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You're forgetting one crucial aspect of this project. It's mostly high end rentals. Both segments of the market have severely deteriorated in the past few months.
 
Tuscani01 said:
Home prices were low during the 90's, but that didn't stop people from buying. Look how fast the suburbs exploded during this period. The growing population just looked for the best deals. Land was cheap, and home prices were a steal. Developers still made their profits.

This time we will either see the same type of development (sprawl) outside of the greenbelt, or the growth occurring within already developed areas (such as downtown). If the trend of moving back downtown holds up, the development will just continue to happen in the city.
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Not sure what you are talking about - most developers were losing money, there were mass layoffs in the development industry throughout the early 1990s, a number of fairly large companies went bankrupt, housing starts bottomed out in the mid 1990s and were half the level they are today. Condo sales basically stopped - one year in the early 1990s there were a grand total of just over 600 high-rise condo sales in the entire GTA for a year.
 
Mike in TO said:
Not sure what you are talking about - most developers were losing money, there were mass layoffs in the development industry throughout the early 1990s, a number of fairly large companies went bankrupt, housing starts bottomed out in the mid 1990s and were half the level they are today. Condo sales basically stopped - one year in the early 1990s there were a grand total of just over 600 high-rise condo sales in the entire GTA for a year.
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Reread what I wrote about development patterns. Things are different today.
 
The housing market also crashed in the burbs and single family new home sales evaporated resulting in a number of developers going under and significant layoffs throughout the industry... anyway this isn't the thread to discuss previous market cycles. Hopefully this project will go forward sooner than later, but we could be in for a long cold winter in terms of housing - especially the top end of the market (which this project would be aimed at) - harmonization essentially results in an additional 6% sales tax on most of the units that would likely be construction in the proposed Cumberland Terrace project - given the current state of the condo market it's just about the worst timing possible to introduce a massive tax increase on new homes/condos.
 
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