Friday, April 1, 2011

How to Beautify Cityplace in Downtown Toronto

I used to think that architecture, in a Toronto context, was governed solely by city guidelines, land site constraints, and the market reality that developers need to sell 80% of a building before it gets built.

Essentially, design has to be formulaic across Toronto in order for a condo project to move forward quickly.

As I was writing my bo0k on the preconstruction condo buying process I became engrossed in the idea that there could be a better way....but what was it?

I then came across an interesting blog article by Ingrid Fetel. Ingrid, author of the upcoming book The Aesthetics of Joy, researches how people emotionally react to things.

For example, Ingrid found was that surface treatments with colour, like stripes, can be used to create feelings of abundance.

How can this be applied to Cityplace?

This long stretch of wall at Harbour View Estates is a great example why people hate the buildings. It's bleak, lacks character and it screams suburbia.

Adding a little colour is a simple thing we could do if we demanded a higher standard.

Thanks to Ed from UrbanToronto and D Hussey Properties for the inspiration to write this.

Thursday, March 31, 2011

Cadillac Fairview Betting Big on Downtown Montreal

Cadillac Fairview has invested $150 million buying land around the Montreal Bell Centre and plans on building a similar style development to Maple Leaf Square in Toronto (See here). Maple Leaf square, following in the footsteps of LA Live in LA and Victory Park in Dallas, is a hugely successful development that capitalizes on the brand of pro franchises in Toronto. This bodes well for the proposed Montreal development since there is no stronger brand there than the Habs.

Here's a quick Comparison to the Actual Maple Leaf Square and proposed development in Montreal:

Maple Leaf Square: Next to Union Station
Proposed Montreal: Lucien-L'Allier Station

Office Component
Maple Leaf Square: 10 Storey
Proposed Montreal: 27 Storey

Maple Leaf Square: 872 units between two buildings (54 and 50 Storeys)
Proposed Montreal: 700 units between three buildings (Two 44 Storey buildings and one 25 Storey building)

Maple Leaf Square: $500 million (2005)
Proposed Montreal: $400 Million

Prices at Maple Leaf Square started at about $450 psf with a 25% deposit structure. This was much higher than competition from nearby Montage at Cityplace. Montage was about $300 psf with a more flexible deposit structure. Expect this project to charge a premium over others as well.

Worth it?

While Montage topped out at about $500psf....Maple Leaf Square approached $700psf this year.

People saw good value living at Maple Leaf Square and units were sold quickly. I expect to see the same thing when Cadillac Fairview starts the sales in Montreal later this year.

Anecdotally, from the Real Estate agent community, i've been told that a huge component of the buyers at Maple Leaf square were overseas investors. Wonder if the same will hold true in Montreal.

Saturday, March 19, 2011

Greatest Real Estate Marketing Video Ever

EMBED-Epic Home Sale Commercial - Watch more free videos

Thanks to the folks at BuzzBuzzHome and CondoChris for bringing this video to my attention.

The principals of Neo Property, Ian Adams and Adrian Jenkins invested a huge production budget into making an action packed real estate marketing commercial...and it's damn well entertaining.

To create this video here are some of the line item for costs:

  • Producer's Fee
  • Director's Fee
  • Actors wages
  • Production crew fee (including equipment, make up and production team)
  • Props and costumes (helicopter, guns, uniforms, lingerie)
  • Permits to the city
  • Catering for production crew
  • Post production costs (editing, music and graphics)
The high costs make it a dangerous game to continue making more, but if they have a solid marketing plan behind it, I can definitely see it working out.

Despite the critics from Thought Catalog calling it a "terrible ad" this video will be sure to go viral. Already with 14,000 views on Youtube (16 days after uploading), this video will make Neo Property the number one luxury brokers in the mind of Australians.

To me, it also illustrates the point of how people sell real estate. It's all sizzle and no steak.

The production company, Platinum HD, definitely understands how real estate sales works. They purposely eliminated all silly adjectives (awesome, stunning, etc) , numbers, and cliche's ("in the heart of the best neighborhood").

To them, it's all about creating an experience to the buyer and sellers.

Thursday, March 10, 2011

In Memory of Paul Oberman

I'm sure we've all met people who we knew were world class. For me, Paul Oberman was that special type of person.

I’ve known Paul for almost 6 years. I first met him while I was teaching his nephews physics and math at a private school. After some time talking to the family about how much I love real estate, they finally introduced me to him.

Since then, he always treated me like family. I'd make it a point to have lunch with him every quarter to talk about opportunities in the city, how to structure deals, and where Toronto was going.

Toronto was Paul's favorite subject. Paul was extremely passionate about making the city look and feel world class. His never ending motivation was inspiring. I fondly remember that after I won the audition to host Inside Toronto Real Estate, Paul was one of the first people I told. We immediately brain-stormed different topics we could discuss on air.

Sadly, Paul only appeared once.

On his appearance, Paul's passion for urban design was so powerful, he was the one questioning the other guest, Councilor Adam Vaughan. Even though I was the actual host of the show….who actually should be leading the discussion, I let him go. How could you stop him?

I always asked him, these debates you have are not income generating, and most of these properties you want to see changed you don't even own, why do you care? He told me it was too much of an injustice to let things stay the way they are and he wanted to set an example if you build a city the right way, it is actually profitable.

Simply put, Paul was a pit-bull. He will fight for what’s right and won't stop until it happens....and he wanted a better Toronto.
It’s ironic that the day we had that conversation was during the time of the airshow. A CF-18 flew by his office, we stopped talking instantly. I found out that we had something else in common: we both loved planes. It’s devastating to know that he was actually killed flying one.

The whole city of Toronto, myself included, will dearly miss him.

Paul Oberman's Memorial Service
Memorial Service:
The Design Exchange
234 Bay Street,Toronto
Friday March 11, 2011 @ 11:00 AM

Thursday, March 3, 2011

REal Experts Condo Report December 2010

The numbers are in for December 2010.

Top 5 projects selling projects

5. Garden Villas 3(Stacked) by Great Gulf Homes (Eglinton and Winston Churchill - Mississauga)

Total: 94 Units
Sales: 23 (including those in the 10 day rescission period by the end of Dec '10)
Average Price $239 psf

4. DNA3 - Tower A & B by Canderel Stoneridge (King St W and Dufferin)

Total: 536 Units
Sales: 24 (including those in the 10 day rescission period by the end of Dec '10)
Average Price $560 psf

3. Stonebrook II by United Lands (Lake Shore and Southdown - Mississauga)

Total: 225 Units
Sales: 25 (including those in the 10 day rescission period by the end of Dec '10)
Average Price $369 psf

2. Limelight - North Tower by Daniels (Mississauga City Centre)

Total: 353 Units
Sales: 31 (including those in the 10 day rescission period by the end of Dec '10)
Average Price $454 psf

1. Treviso Condos by Lanterra (Lawrence Ave W and Dufferin - North York)

Total: 411 Units
Sales: 41 (including those in the 10 day rescission period by the end of Dec '10)
Average Price $471 psf


  • With 20,349 sales, 2010 is the 2nd best year in record for sales (next to 22,408 in 2007)
  • December sales within historical range of 600-700 units
  • Year over year price appreciation is 13.4%

REal Experts Conclusion:
  • Fastest selling units are in the former City of Toronto shows a "flight to quality" as investors focus near transit
  • Affordability will soon push first time buyers outside areas heavily served by transit
  • Will see more woodframe style products being built to maintain affordability

Sources: Realnet and The Lyon Report

Friday, February 25, 2011

Toronto Real Estate Bubble Analysis

Is Toronto in a real estate bubble? This is the question I'll aim to answer here.

So the common complaint is that Canadians are stretched and taking on too much debt. From the below chart we see that household debt-to-income is climbing.

Yes this is very bad, and I hope the trend slows down because if it continues it would handcuff our economy in the future. Does this mean we are a nation that is not credit worthy like the US. Short answer is no.

As we can see from the above chart, asset growth is high. Assets include everything from stocks, bonds, savings, and yes, your home.

I can feel the argument, well if prices fall, then a huge chunk of our assets would be wiped out. This will cause a cascade throughout the market with panicked sellers right?

I'll answer that question with another question: If prices fell 20% would you rush out to sell it and lose all your equity because you're afraid it will fall further?

Of course not. Your not stupid, and generally no one else is that stupid. You will sit and hold out until things get better.

How can we measure our ability to hold out? We have to measure our ability to service the debt we have.

From the below chart, we can see that even though debt to income is high, our ability to service the debt is within historical norms.

OK ya, I can hear the argument, our ability to service debt is easy now because rates are so low.

What if rates go up? Everyone paying debt with low interest rates would be bankrupt right?

That would make sense if everyone was servicing debt with these very low rates.

From looking at the below chart Canadians are not dependent on low rates. The interest rates people are paying is still well above the bank rate (which gives us a buffer even if rates rise).

The reason why the buffer exists is that the rates people are actually paying didn't go down as fast as the bank rate.

Another argument I hear is that prices are just too high, and what goes up must come down.

The way we should measure house prices is how much of your income goes towards housing. Like my good friend Calum Ross says, you don't buy a house, you take on a payment.

For the average priced of a home in the Toronto Real Estate board, based on current average incomes, the percentage of income going towards housing is still relatively low historically. Meaning that if either rates, property taxes, prices or utility costs go up, we are still buffered.


Additionally, how do we measure if people are teetering on the brink of losing their home? A good way is to see how many mortgages are 3 months in arrears. That number is at 0.5% of all mortgages in Canada.

Another thing, The Toronto job market is stable, jobs are being created modestly and population growth to the GTA is high.

So the only way prices are to fall 20%+ is if rates go up massively, incomes go down drastically, if suddenly there is a mass migration out of the GTA, or there is huge calamity that causes people to lose their jobs.

If you think that's going to happen you might as well buy a bunker and stock up on canned tuna.

Thursday, January 6, 2011

Save Transit City

Here is a great infographic from the Toronto Environmental Alliance on the bang for buck of transit dollars.

Access to transit is an absolute necessity for real estate values to grow in a city. For examples, of what not to do, go visit cities in the States where barriers because of poor transit and poor urban planning cause massive ghettos where people are forced to live in an area because of poverty.

I blogged about this previously here. It's sad to see that Toronto is following down the path of many major cities where the rich live close to transit and the poor do not (see recent work from Dr Hulchanski from U of T here). If this trend continues, you will see property values neighborhood drop.

Tell Rob Ford and Toronto City Council we want Transit City. Sign and Retweet!