Toronto The One | 328.4m | 91s | Mizrahi Developments | Foster + Partners

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Tormick said:
There was that article a couple month ago about how the site in receivership wasn't worth the asking price of $1.2B - and there weren't any buyers coming forward at that price. Has anyone heard anything on the street? I'd be interested in other projects that had their receivers finish a project.
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Off the top, there is a difference between an opinion that declares it's not worth the asking price over and that of the price tag will make the prospector buyer's worthwhile. The former suggests quality of build, while the latter more asks whether they can make it work at that price...

...citation of article in question will also help here.
 
Tormick said:
There was that article a couple month ago about how the site in receivership wasn't worth the asking price of $1.2B - and there weren't any buyers coming forward at that price. Has anyone heard anything on the street? I'd be interested in other projects that had their receivers finish a project.
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If anyone has the motivation there's some back of the napkin math you could do to find out a ballpark sale price that'd make it work. Most of the info would be in the KSV reports. Just take the total projected income from the project, take off the cost to complete (including soft costs, carrying costs, etc...), add in a very large contingency/safety/profit margin, and then you'll have what the project should realistically sell for. I'm betting it's far below a billion though.
 
DevDudeToronto said:
If anyone has the motivation there's some back of the napkin math you could do to find out a ballpark sale price that'd make it work. Most of the info would be in the KSV reports. Just take the total projected income from the project, take off the cost to complete (including soft costs, carrying costs, etc...), add in a very large contingency/safety/profit margin, and then you'll have what the project should realistically sell for. I'm betting it's far below a billion though.
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I’m (clearly) not trained in finance but I noticed REITs and other real estate players in Canada and the USA are still making money for investors despite the doom and gloom, and I realize the receiver here isn’t tasked to take a gamble… but if your theory is correct that the income will be greater than costs to finish etc. ... I’m curious why this wouldn’t still be a good long term investment for a REIT or other buyer… with the additional approved 11 storeys* (*big head-start on costs like engineering, architectural etc.).

Willing to be schooled on the other problems/barriers I'm missing (other than existing market conditions ;-). Also, did Sam change his phone number?
 
3Dementia said:
I’m (clearly) not trained in finance but I noticed REITs and other real estate players in Canada and the USA are still making money for investors despite the doom and gloom, and I realize the receiver here isn’t tasked to take a gamble… but if your theory is correct that the income will be greater than costs to finish etc. ... I’m curious why this wouldn’t still be a good long term investment for a REIT or other buyer… with the additional approved 11 storeys* (*big head-start on costs like engineering, architectural etc.).

Willing to be schooled on the other problems/barriers I'm missing (other than existing market conditions ;-). Also, did Sam change his phone number?
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Sorry if I wasn't clear. It's basically algebra to determine what the purchase price needs to be:

Cost to complete (A) + purchase price of project in its current state (B) + profit margin (C) = total projected revenue (D)

You can realistically create projections for A, C, and D. So just rearrange and solve for B. Does that make sense? Mind you, I'm super simplifying things here, but that's the gist of it.
 
That formula works for entities looking to buy this tower. It's a little different for the receivership though, as they looking for parties effected by the defaults to get paid off...so there is likely less wiggle room for them to haggle with the asking price currently. And to my understanding of this.
 
UtakataNoAnnex said:
That formula works for entities looking to buy this tower. It's a little different for the receivership though, as they looking for parties effected by the defaults to get paid off...so there is likely less wiggle room for them to haggle with the asking price currently. And to my understanding of this.
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I mean, they can be as inflexible as they want with the sale price. But no one is under any obligation to purchase the site. And make no mistake, no one is going to make it out of this mess unscathed. No one who provided capital is getting fully paid off on this project. KEB Hana is going to take a massive hair cut on this and I wouldn't be surprised if most equity is completely wiped at the end of the day.
 
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