I find this development (Sugar Wharf as a whole), its staging, and its economics interesting, so here are my thoughts, for discussion purposes.Does anyone know if construction will start on phase 2 before phase 1 is complete?
As mentioned above, logically Phase 2 can't start until the commercial building is substantially finished and LCBO can move offices. That move is expected in Spring 2021. Therefore the earliest Phase 2 could start construction would probably be the second half of 2021. Of course, sales could start before that.
Both Phase 1 and Phase 2 are huge developments by themselves. I think Phase 1 is 1500 units and Phase 2 is 2500 units. Normally I would think you would need significant leeway between the two developments to ensure there is enough capacity for the market to absorb such a large number of units in one area. If Phase 2 were to start shortly after the LCBO moves offices in 2021, that would mean it would start before Phase 1 is even complete (expected occupancy is 2022).
However, a few factors seem to suggest that Phase 2 could move ahead quickly (i.e. shortly after LCBO moves offices). First, Phase 1 sold rapidly and is essentially sold out now. Second, the commercial building seems to be moving at a quick pace, suggesting Menkes wants to get LCBO out of their current building fast (though this could just be attributed to the norm that commercial buildings are built faster). Third, Phase 1 seems to be moving at a quick pace for a large residential building as well - it's not far behind Pinnacle One Yonge, yet I recall it starting significantly later - perhaps because Menkes wants to have Phase 1 substantially complete around the time sales start for Phase 2 so that (a) the area looks nice to encourage sales and (b) its contractors can just continuing working one block over. Fourth, Menkes paid $250 million for the land, which I'm guessing it paid for with debt, so it would want to recoup its costs sooner rather than later to avoid interest. Fifth, I recall reading (and posting in this thread awhile back) about documents suggesting the land for the park would be transferred to the City around 2024 or 2025 (though I assume there are caveats to this), which would probably be the time of substantial completion for Phase 2 if it started construction around 2021/2022. Lastly, perhaps there is an element of wanting to get Phase 2 to market before One Yonge Phases 2 and/or 3 go to market.
TLDR: if I had to bet, I'd say sales start in Q3 2021 and construction in Q2 2022. But I'm an optimist.