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General Construction Updates

Century Park reno
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Oddball said:
Call me insane, but it's maybe never looked better. Exposed and whethered shafts of geometric concrete on a desolate moonscape of construction detritus... I might be a suitable martian colony candidate. :oops: (Onward New Calgary!)
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Not insane. I thought the same thing, when i first looked through the fence, I thought, oh cool...then I realised it was still the same old concrete pieces, but it looks better all open and exposed. I still maintain the biggest issue with the park was the evergreen trees. They aren't good trees for parks.
 
Social Justice said:
That's a good point. However, I think that scenario can only be achieved if the price of condos is increasing, then the investor can eat the costs. If the price is static or declining it would make sense to dump the property or rent it out.

Sorry, I think we're on a tangent now. My original point was that we don't really have a housing affordability crisis in Calgary.
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I agree. My point is that housing affordability can quickly change once things start booming again and you can't count on investors to continue to drive rental construction. (which are at the high end of the market) It's good to see the city taking a continued interest in getting more affordable housing built. It doesn't help that there's no real policy to stop a developer from demolishing affordable housing to build high priced condos.
 
retrofiturbanism said:
This seems odd. Other than foreign investors parking money outside of their country (which happens, I know) it seems strange to imply people spend money on an income generating asset, just to not have it generate any income. I understand short term vacancies- i.e. you just moved out and want to sell, so don't want a lease agreement messing up a sales agreement. But to just forego income because.... reasons?

That being said, supply restrictions in places like California have resulted in massive increases to property value. In places like San Francisco and San Jose, a real estate investment makes you more money in property appreciation than most incomes. Which is why supply restrictions are terrible. It is not the governments job to make you a return on your real estate investment at the expense of everyone else.
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You're overstating the income generated by rental properties. The driving force behind all the rental construction is the rapid appreciation of rental properties after years of stagnating values. These people/entities choosing not to rent aren't in financial positions where income keeps them afloat from expenses and debt as they wait for their units values to appreciate.
 
maestro said:
You're overstating the income generated by rental properties. The driving force behind all the rental construction is the rapid appreciation of rental properties after years of stagnating values. These people/entities choosing not to rent aren't in financial positions where income keeps them afloat from expenses and debt as they wait for their units values to appreciate.
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Hey guys,

I work for a large multifamily owner. We need to consider what each type of ownership group wants.

1. Large asset holders (typically backed by institutional money): When these guys enter a market either through buying existing product or developing new it's simply because in their view, usually long term, the investment meets their requirements of return. For these guys keeping units empty is a matter of managing market pricing. Although it may cost you a month of vacancy it's worth it to hold onto the unit and maintain your market rents. If you're empty for the next year or two that doesn't bust you, but accepting much less than anticipated in the long term will. For these assets holders the buildings are viewed like any other income generating asset, and in that mindset average rents are more important that current vacancy.

2. Accidental landlords: Usually this includes multifamily developers who don't sellout projects. In most cases (hopefully), when they get down to the last unsold units the actual cost of that unit to them is very low if not nil. For these guys it's a tough decision. You can rent for a period of time and make some cash at the expense of wear and tear or you keep it open as inventory hoping for a sale sooner than later. In my experience these companies are not great landlords, their business is to build, sell and move on. We've seen more of these units enter the rental pool recently as guys are hoping the damage and issues of managing rentals are outweighed by future price appreciation.

3. Small time owners: These are the guys we think of most, and you're right for the most part they cannot afford vacancy and don't really care about managing market rents as long as they are full and have decent tenants. Usually this type of owner has older product and will be more flexible when it comes to rates and lease terms.

In terms of affordability Calgary is fairly affordable however one argument for building new affordable is product mix, not all units are equal and in a lot of cases the new inventory fills holes.

final note - the above comments are based on "the rational manager", there are some terrible managers and great managers who will get much different results from the same assets.

Anyway, I've written too much.
 
Thanks for the explanation, and don't worry about writing too much, most of us appreciate good insight like this.
AccUnit said:
Hey guys,

I work for a large multifamily owner. We need to consider what each type of ownership group wants.

1. Large asset holders (typically backed by institutional money): When these guys enter a market either through buying existing product or developing new it's simply because in their view, usually long term, the investment meets their requirements of return. For these guys keeping units empty is a matter of managing market pricing. Although it may cost you a month of vacancy it's worth it to hold onto the unit and maintain your market rents. If you're empty for the next year or two that doesn't bust you, but accepting much less than anticipated in the long term will. For these assets holders the buildings are viewed like any other income generating asset, and in that mindset average rents are more important that current vacancy.

2. Accidental landlords: Usually this includes multifamily developers who don't sellout projects. In most cases (hopefully), when they get down to the last unsold units the actual cost of that unit to them is very low if not nil. For these guys it's a tough decision. You can rent for a period of time and make some cash at the expense of wear and tear or you keep it open as inventory hoping for a sale sooner than later. In my experience these companies are not great landlords, their business is to build, sell and move on. We've seen more of these units enter the rental pool recently as guys are hoping the damage and issues of managing rentals are outweighed by future price appreciation.

3. Small time owners: These are the guys we think of most, and you're right for the most part they cannot afford vacancy and don't really care about managing market rents as long as they are full and have decent tenants. Usually this type of owner has older product and will be more flexible when it comes to rates and lease terms.

In terms of affordability Calgary is fairly affordable however one argument for building new affordable is product mix, not all units are equal and in a lot of cases the new inventory fills holes.

final note - the above comments are based on "the rational manager", there are some terrible managers and great managers who will get much different results from the same assets.

Anyway, I've written too much.
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I was thinking the same thing, the whole area is 10 story brick apartment buildings. Knowing Battistella, this project should shake things up a bit.
Mountain Man said:
Interested to see what Batistella comes up with, that area hasn't seen that much new construction, so there is a strong 80's brick vibe going on there lol.
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Yeah, trying to keep rents up is one of the reasons big landlords offer incentives instead of low rent. Boardwalk offered $40 million in one time incentives in 2017. They do report a measure as vacancy loss, that way they can weigh incentives versus vacancy. They also calculate Estimated Loss-to-lease, a measure of the difference between "estimated market rents and actual occupied rents". Here is the recent quarterly report: https://www.bwalk.com/en-CA/Investors/GetInvestorDocument/316
 
Beltline_B said:
I was thinking the same thing, the whole area is 10 story brick apartment buildings. Knowing Battistella, this project should shake things up a bit.
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I'm guessing it's going to be around 12 storeys with clear glass and every other material used either being black or tan, with a similar massing to Ink.
 
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