Toronto U Condominiums | 183.79m | 56s | Pemberton | a—A

The land cost was pretty high: $32 Million.

They paid $5 mil in cash and $27 mil in a VTB (vendor take back) mortgage.
 
cdr108 said:
thanks Mike.

I was assuming the construction cost quoted was for the building structure, and not including finishes like flooring, appliances, cabinetry, etc?

that's what I was referring to when I asked about cost for finishes ... the level of standard finishes aren't that impressive here except for the european kitchen appliances IIRC.
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I'm not sure how the report seperated costs... typically (I'm speaking in very broad terms here) - high-rise construction costs are in the low $200s psf. So that is materials and labour and depending on the project that would be under 45% of the overall budget.

Every project is obviously different and given what the psf this project is selling for (about $640) the costs are likely higher than what I've suggested is an average for most budgets (GTA new condo average psf is somewhere in the $430 range right now).
 
thanks BMyers ... $32,000,000 / 850,000 SF = $37.65 PSF land cost ... not that expensive when gross SF taken into account.

+ construction cost = $110 PSF; so why are they selling for $600 PSF again?

BMyers said:
The land cost was pretty high: $32 Million.

They paid $5 mil in cash and $27 mil in a VTB (vendor take back) mortgage.
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Supply and demand. As always, prices are set at the point that maximizes total income. Said price has nothing to do with the production costs. (Other than the obvious point that the total income should be greater than the total expenses, which is obviously the case here.) If they feel that they can find enough suckers to get away with $600 psf prices on a project with $150 psf cost, then they are free to do so.

edit -- oops, I posted at the same time as the post just above.
 
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BMyers said:
The land cost was pretty high: $32 Million.

They paid $5 mil in cash and $27 mil in a VTB (vendor take back) mortgage.
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Interesting discussion. This land sale is harder than most to analyze.

(a) The agreement was apparently made three or four years prior to the actual sale of the land in October 2008.

(b) The sale included a total of just over 100,000 square feet of land area, but about 30,000 square feet of that is to be donated free of charge (I believe) to the city as a park. That's a higher proportion than any other project which I am aware of, and well beyond typical requirements for contributions toward community amenities. About 70,700 square feet of the site is to be built upon, and at the registered sale price of $32,166K, that works out to more like $455 per square foot of site area or about $40 per square foot of Buildable Gross Floor Area.

(c) Comments which I have heard indirectly indicate that there were also offsets against an additional donation which was made to St. Michael's College (amount unknown), and renovation work to another building on the campus which was done by Pemberton / Metrus.

(d) Vendor Take Back (VTB) mortgages are not unusual in the development scenario, but they usually are intended to cover the anticipated time period for the planning process including application for rezoning. This usually follows the registration of a land sale. In this case, the rezoning apparently happened first. Terms for the VTB were not disclosed, making it hard to account for its effect on the sale price.

(e) I don't know whether the sale price was contingent on the terms of the rezoning application. Usually this would not be the case, but in this case, as mentioned, the rezoning was done before the registration of the deal.

All in all, it was a bit of an unusual deal, and without inside information, it's pretty hard to say what the "true" land price here would have been after all adjustments.

None of this is intended to contradict what anyone else has said in this thread, but just to point out that several considerations go into a land price. In this case especially it's pretty darn difficult to do a comparison to other deals, as you're really getting into apples and oranges.
 
Mongo said:
Supply and demand. As always, prices are set at the point that maximizes total income. Said price has nothing to do with the production costs. (Other than the obvious point that the total income should be greater than the total expenses, which is obviously the case here.) If they feel that they can find enough suckers to get away with $600 psf prices on a project with $150 psf cost, then they are free to do so.

edit -- oops, I posted at the same time as the post just above.
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Each area has it's averge price per square foot. It's not whether anyone is a sucker if they are paying for it, it's just the price that the area demands. Why would Gucci put their store on Bloor st and pay more than if it were on Queen St. Are they a sucker? It's because Bloor st is more valued than Queen St. It's exactly the same point. At the end of the day, you are investing to make money regardless of the how much the developer makes out of the project. What's important is the price in comparison with other projects and the market value. If it's a good price for the area, then it's a good investment.
 
cdr108 said:
thanks BMyers ... $32,000,000 / 850,000 SF = $37.65 PSF land cost ... not that expensive when gross SF taken into account.

+ construction cost = $110 PSF; so why are they selling for $600 PSF again?
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Cdr,

With all due respect you are missing over two thirds of the typical budget costs (I would also suspect the materials cost is higher than $110 and the net square-footage of what is actually for sale as unit space is what is important for a high-rise - typically around 15% of the budget, whereas you've suggested just over 6%).

I'm guessing this is your attempt to infer that there is somehow a $400psf profit?

Mongo said:
Supply and demand. As always, prices are set at the point that maximizes total income. Said price has nothing to do with the production costs. (Other than the obvious point that the total income should be greater than the total expenses, which is obviously the case here.) If they feel that they can find enough suckers to get away with $600 psf prices on a project with $150 psf cost, then they are free to do so.
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You guys are insane if you think the budget is anywhere close to $150psf - soft costs alone would approach that figure. Prices are not necessarily set to maximize total income (that strategy would result in far more failed projects) - the speed of the delivery of the units at the lowest risk possible often sets the prices. These are typically based on in depth market research studies. This perception that most developers are getting away with highway robbery and 300% profit margins is ridiculous - the upward creeping prices in Toronto have just as much to if not more to do with supply side vs demand side economics (you all noticed that prices on new product hardly dipped at all even when the bottom fell out of the high-rise condo market last fall and winter - developers don't have the margins or ability to reduce costs by very much).
 
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From the above mentioned article;

"Future residents will be able to enjoy a number of mod-cons including a fully featured gym, library and a "party room", which is actually a bar so you need never even leave home to get drunk with your friends."

lol The rest of the article is written in a serious tone and then they end with this. Just thought it kinda of funny.

Cheers!
 
Mike in TO said:
Cdr,

With all due respect you are missing over two thirds of the typical budget costs (I would also suspect the materials cost is higher than $110 and the net square-footage of what is actually for sale as unit space is what is important for a high-rise - typically around 15% of the budget, whereas you've suggested just over 6%).

I'm guessing this is your attempt to infer that there is somehow a $400psf profit?



You guys are insane if you think the budget is anywhere close to $150psf - soft costs alone would approach that figure. Prices are not necessarily set to maximize total income (that strategy would result in far more failed projects) - the speed of the delivery of the units at the lowest risk possible often sets the prices. These are typically based on in depth market research studies. This perception that most developers are getting away with highway robbery and 300% profit margins is ridiculous - the upward creeping prices in Toronto have just as much to if not more to do with supply side vs demand side economics (you all noticed that prices on new product hardly dipped at all even when the bottom fell out of the high-rise condo market last fall and winter - developers don't have the margins or ability to reduce costs by very much).
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i pulled the info from Daily Commercial News in post 636.
 
Mystery Man TO said:
You can just see the storm that's forming oveer this one, particularily with the 37s on top of the green space at the corner of Bay and St Joseph, but the real horible part are all the townhomes ... on ... Bay ... Street! That's just stupid.
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Yes, I agree! Townhouses do not belong on a major downtown street. It should be retail all along Bay street, in a nice 6 level podium.
 
I also couldn't believe that they would be putting townhouses on Bay. Seems out of place.
 
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