Mike, you seem like a reasonable guy. Why would anyone pay $800+/square ft. to own in this building when existing buildings in as good or better locations are selling for about $600/square ft. today. I sincerely doubt that living immediately adjacent to the city's premier gentlemen's club commands that much cache. Or furthermore that the $500,000+ buyers are motivated by the convergence of the city's two main subway lines.
Please illuminate me.
Investor, actually of units sold to date they are averaging over $900 psf. The purchasers to date have mostly been investors and despite your comments - the location and proximity to transit have been important reasons. Personally I believe the strong marketing campaign in combination with the hype that became almost silly created a buying frenzy among the agent community and over 85% of the 594 units have sold. The suite finishes are decent, but not really comparable with other luxury product such as 77 Charles.
Regarding other locations nearby, you should consider that Couture just opened in the last few weeks and has already sold over 50% of total units and you should also consider the macro economic conditions for condos in Toronto - the previous condo unit sales high was 16,224 in 2005, by the end of the third quarter this year that record had already been shattered and the final sales tally this year should be about 21,000 units. Therefore, while 1BE is certainly an anomaly it isn't like nearby projects haven't been selling well.
BTW: When does Kolter intend to sell the property to Bazis???
Caltrane, the property was sold to Bazis towards the end of last year for just under $63 million.
Mark my words. Cost over-runs and delays will cripple this project and the inexperienced Borat- I mean Bazis International will find themselves with specuvestors scrambling to cancel contracts by the time this albatross begins to take shape.
All I can say is let's hope the City of Toronto gets a mighty big letter of credit to clean up the mess!
Investor, the City of Toronto has nothing whatsoever to do with any of the above as you have suggested. Developers and builders do not provide letters of credit to municipalities. A developer/builder must register with the Tarion Warranty Corporation to have legal status in Ontario. Each unit sold is enrolled with the warranty corporation once a sale is finalized and a registration fee is provided to Tarion. In additional all condo projects must post security with Tarion for the project to go forward.
Secondly, Bazis is not the only entity involved in the project, it is my understanding that there are some local investors behind the scenes that are involved.
Lastly, Bazis will be utilizing local contractors to actually build the tower with the experience to build a quality (I mean structural as aesthetic is open to individual taste) product and that can provide solid cost estimates in advance. Given the high $psf that has exceeded even Bazis's expectations in the sales stage I wouldn't be too worried about cost over-runs resulting in the cancellation of the project.
Fair enough. I won't discuss it any further. I will end the topic with this question though- how many years behind schedule is that Crystal Blu project?
Where do you get your information from? Crystal Blu had a preview opening in mid-June 2006 and opened to the public shortly thereafter. They broke ground about 12 months after - which is very fast by any industry standard. The project has had fairly strong reaction from the public since the say it opened, there was a minor permit snag which set them back briefly, but that was cleared up and the excavation is being done in a joint-venture/cooperation with the Uptown by Pemberton. The project is proceeding and should not be too far off the original estimated occupancy dates (which are always off regardless of the builder).
