Solo on 4th | 16.76m | 5s | Indevelopments | Indevelopments

darwink said:
Interest rates. If it was finished the price would be a cap rate of around 6%.

The old finished price of $22.5 had a cap rate of 4.8%.

Residential seems to be trading hands below financing prices right now, with people assuming further appreciation/near term interest rates cuts, but I would expect instead expect it to sell for a 7% cap, especially given the completion risk. So $12 million if completion is another $3 million?

Really sucks for the financiers and the developer. In a 4% cap environment, they could expect to flip the completed building for $26 million.
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What’s your estimate for how much the developer would have netted in a 4% environment if they sold for $26M, and how much are they losing in the current environment?

I’m just curious how much return there was for a developer on these mid-rise purpose-built rental projects in ideal conditions, and what the financial/risk impact of current interest rates really is.

This seems like a semi-decent build, in a great neighbourhood, so outside of current conditions, I would think it would be attractive to an investor.

For those in the industry, I know that we are likely going to continue to see projects delayed/shelved and that we won’t see much new supply in the current interest environment, but my question to you is whether companies are still spending money on early-stage development (design, permitting, etc.) so projects are shovel-ready for when interest rates stabilize, or are all areas of project development being affected?
 
$4 million on each side of lost profit plus $2-6 million in extra losses for the financiers from the back of the napkin finance math. Compared to if they had completed and flipped at 4% cap.

Clearly delays did this one in in multiple ways.
 
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There's been a lot of fuss around this building the past couple weeks (prepping the new sidewalk, fixing the balconies, etc.). Is this prep work for selling it? Or do you think that there's a buyer already?
 
At least two balcony doors open, so some sort of interior work underway.

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Gullfoss said:
I chatted with someone on site while walking home yesterday...he suggested the Carmichael group or Carslile group or something was completing the project. Not sure if they were the contractor for the bank or if they had purchased the project.
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Site was for sale and wasn’t an appealing price. But Bow Mark just did the sidewalk indem work, so either InDevelopments was on the hook to do it as a condition of DP release, or it sold and an influx of cash has entered the picture because it sold. Not seeing a lot of trades activity though
 
Gullfoss said:
Interesting - any idea of the ask price?

I'd back of envelope valuation at around 20,000 sf of unfinished residential at $450 psf and $1m x 6 retail bays. So that's like $15m +/- 20%?

Disclaimer - I know nothing about valuing real estate
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Have a friend that works for Atlas Group in Vancouver which is some kind of real estate data company. He says it sold at $14.6m to Carslile Group on September 1 in a foreclosure sale. That's pretty close to what we all figured on this board.
 
Gullfoss said:
Have a friend that works for Atlas Group in Vancouver which is some kind of real estate data company. He says it sold at $14.6m to Carslile Group on September 1 in a foreclosure sale. That's pretty close to what we all figured on this board.
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Confirmed - Carslile was the second lien debt holder and had to take the project over after Indevelopments ran out of money.
 
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