Toronto Pinnacle One Yonge South Block | 296m | 85s | Pinnacle | Hariri Pontarini

The Star Building has been vacant so it's not producing income but, losing money. A weed lot for the next decade would save tens of millions unless they were to find tenants to foot the bill. Who is going to lease and put money into space with a demolition clause and in this market? Seems optimistic like sublet space being taken off market with cancelled hybrid reducing overall vacancies leading to an office building boom.
 
maestro said:
The Star Building has been vacant so it's not producing income but, losing money. A weed lot for the next decade would save tens of millions unless they were to find tenants to foot the bill. Who is going to lease and put money into space with a demolition clause and in this market? Seems optimistic like sublet space being taken off market with cancelled hybrid reducing overall vacancies leading to an office building boom.
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Exactly.
No tenant is going to foot the bill for renoing a decaying office building that hasn't had any TLC since well before Pinnacle bought the property (since the Star was going broke) to have to move out in less than 10 years. And Pinnacle isn't going to foot the bill to spruce up the place because that is just more sunk costs. I suspect they will demo this sooner rather than later - there's plenty of office space on Queens Quay just east of this location that has sat vacant - this is unlikely to be leased out any sooner.
 
Undead said:
They're all investors who don't live in the building so they don't give a shit. And this isn't going forward any time soon.
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Investors care about the value of an investment whether or not they plan to directly consumer the product or service. A real estate investor needs to either sell the property after it appreciates (which means the value needs to increase enough to offset inflation, transaction fees and any interest they've paid with an additional margin for profit) or lease the property to renters in order to get any money from the investment. And properties with poorer views have lower values than those with better views meaning that the rental rates or resale prices they can fetch will be lower. An investor might actually care more since they care only about the property value while some occupants might be happy to accept trade poorer views for greater affordability.
 
Yeah I don't think it's gonna be views making or breaking the deal in this market. In any case, who gives a shit about investors? They should all burn. And this building isn't happening for 10+ years anyway.
 
Undead said:
Yeah I don't think it's gonna be views making or breaking the deal in this market. In any case, who gives a shit about investors? They should all burn. And this building isn't happening for 10+ years anyway.
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Well there's probably a few hundred units on the south wall, many of whom were influenced by the great view. Not everyone who buys a condo is an investor. You should cool your tone.
 
Jeff Morgan said:
As I was walking by this evening I decided to walk up on the elevated walk beside the building. I noticed that both the Café and Dentist Office are closed.
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Their last day was Friday. Demo can’t be far away now.
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Strange Advance said:
I don't get it. Why demo here when Phase 3 of the North Block hasn't even begun sales yet?
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$$$

It costs money to maintain a building, and to sink in significant resources into a building that's not going to be leased out because tenant's know there's no long term future for it doesnt make any sense.
 
Amare said:
$$$

It costs money to maintain a building, and to sink in significant resources into a building that's not going to be leased out because tenant's know there's no long term future for it doesnt make any sense.
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Realty taxes, utilities, insurance and security taxes on a large empty office building would be huge. If it's being demolished anyways, better to do it now and save millions.
 
The realty tax side will result in a lower tax rate. The assessed value will not go down, but probably won't increase yet until they have approvals in place. (Probably...the case law is a little sketchy on this. The ARB had been incorrect on multiple occasions regarding the proper assessment for the market value of properties transitioning to a new and higher and better use. While wrong, the assessment agency had to follow the rulings. Not sure if things have changed in this regard. We all knew that when a company sinks millions in to a development application, they are recognizing the value of the land is higher for an alternate use and lesser for the current use.)

Certainly you would save on the other operating costs by demolishing, if there is no market to maintain tenancies. Insurance, security, management fees if any, maintenance costs, advertising, etc. etc. etc.
 
Jeff Morgan said:
As I was walking by this evening I decided to walk up on the elevated walk beside the building. I noticed that both the Café and Dentist Office are closed.
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The Freshii and INS on the corner are also closed.

I'm not sure about the cafe, but the dentist's office is moving into the podium of the Phase I building, beside the community centre. Presumably Pinnacle offered them the space.
 
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