You’ve all heard the incessant radio ads, and you’ve undoubtedly heard about it from a friend or family member.
Now I’m here to review this new project; this project that I knew was a sham as soon as it was launched.
I’d rather call this “8.5-Foot-High-Ceiling Lofts, Times Two.”
Do the math for the price and for the ceiling height, and it just doesn’t add up…
As soon as I heard the radio ad, I already knew what the real story was…
There’s no way in hell that any developer in the city is going to build condos with true 17-foot-ceilings when they can build TWICE the number of units in its place.
If a builder receives approval to construct a building that is 40 meters high, he can build “X” number of units with 8.5-foot ceiling height, or “0.5X” number of stories with 17-foot-ceiling height.
Unless he can charge TWICE the price for these supposed 17-foot-high-ceiling units, what incentive would he have to build them?
So why not split the difference, and build 2-storey units with 8.5-foot ceiling heights, and keep 1/3 of the unit open all the way up so you can market it as SEVENTEEN-FOOT-HIGH-CEILINGS?
This has been done before.
Over, and over and over…
But Liberty Market Lofts is the first development to yell “SEVENTEEN FOOT CEILINGS” from the top of every tall building in the city, for all to hear.
And you know what? It’s working!
I visited the sales centre on Tuesday afternoon with a colleague of mine, and she told me afterwards that I was “rude, condescending, and full of attitude.”
Not unlike myself…
I’m just tired of the average consumer being taken advantage of. People don’t know any better, so perhaps it’s their fault for being naive. But after I heard that there were people sleeping outside on the sidewalk the night before the launch of Liberty Market Lofts on the weekend, I felt a little sick to my stomach.
Here are my reasons…
1) These aren’t true 17 foot ceilings.
Here is a crude mock-up that I made in paint on my laptop, but I think this graphic speaks for itself.
You have your kitchen on the main floor, your bedroom on the second floor, and your living/dining room has 17-foot-ceilings. Hardly what people are expecting when they hear “Seventeen-foot-high-ceilings,” but by then they’ve probably been lured in by all the glam & glitz in the sales centre.
2) They are promising Fall, 2011 possession.
There is no way this project will be finished in 2011, and when I challenged the sales girl on this, she said, “yuh-huh, they will.” I told her that no condominium in the history of Toronto (or anywhere, for that matter), has ever been finished on time, and I find 26 months to market, sell, finance, construct, and move people into this building to be a tad tight for time.
I think they should have promised 2012, since it will probably take until 2013.
But doesn’t 2011 sound “right around the corner?”
West Side Lofts has had my deposit for almost FIVE YEARS and they have only now constructed the first five levels of this sixteen-storey condominium. I’m still two years out for that project…
3) The developer has never completed a condominium.
Boulevard Developments has never actually built a condo, but they have started building one on King Street known as “Victory Condos.” They claim to have thirty years experience because they work “with” Lifetime Urban Development Group.
The true story? Daddy’s kids decided to open their own development company…
I don’t trust developers who have never built anything before. Sure, daddy has deep pockets, and there’s no way he’s going to let junior and his bro fail, but there’s nothing to say that this project won’t be delayed substantially.
4) The Price.
All other things considered (ie. the three points above), I have to look at PRICE first and foremost, and I just can’t understand why people are willing to pay $440 per square foot for Liberty Market Lofts.
Here is my fundamental position on any pre-construction condos: there has to be an inherent discount on real estate that does not yet exist, if you are going to wait four years for it to be completed.
Otherwise, you can buy resale and take possession, TODAY!
Liberty Market Lofts are priced around $440 per square foot. Sure, they sold some units over the weekend in their “Grand Opening” sale for $398 per square foot, but let’s assume the bulk of the units are $420 – $440 per square.
Electra Lofts at 1029 King Street is literally a stone’s throw away, and also offers “Seventeen-foot-high-ceilings” if you consider a 2-storey unit with a small opening above the living room to be “seventeen-foot-high-ceilings.”
A 2-storey unit at Electra Lofts sold last month for $320,000, and was 750 square feet. That’s under $427 per square foot.
Sure, Liberty Market Lofts have far better upgrades, are will be newer, sexier, and have a building with a gym, a basketball court, and other amenities that you may or may not use, but why WAIT four years to take possession when you can have this unit at Electra Lofts NOW?
It makes no sense.
However, the masses proved me wrong.
Over the weekend, the project sold 130 units, and another 140 units were already sold during pre-pre-sales to real estate agents and their clients. The building has 280 units, which means that there are, in theory, only ten units left.
Keep in mind that the rescission rate on pre-construction is usually about 25-40%, so of the 130 units sold over the weekend, somewhere between 30 – 50 of them will be coming back.
But get THIS – when I walked in to the sales centre yesterday, they didn’t have a pricing sheet for me. Why? Because the figure-heads were actually meeting upstairs to decide what to RAISE prices to!
They told me they’d have new pricing sheets by day’s end.
What a sham.
Speaking of shams, look at the artist’s rendering below.
See that red dot that I superimposed? That’s actually where Toy Factory Lofts is, but the folks at Liberty Market Lofts just decided to leave it out of the map! No biggie, it’s just a five-story, 215-unit building spread over an acre of land…..nobody sees that anyways. Well, at least they left in the Gardiner Expressway, which most of these units stare directly at…
But my favorite part, I had to save for last!
“Rules” are for losers, as are government regulations to the mortgage industry, etc.
Sure, we did away with the 40-year-amortization, and the zero-percent-down purchases, but the good folks at Bank of Montreal have found a way around that!
They’re offering buyers at Liberty Market Lofts an “exclusive opportunity” to BORROW the funds they need for the downpayment on a loft, and pay only the monthly interest on the loan!
So basically, BMO is offering to extend a loan or a line-of-credit to people with no money, so that they can put a downpayment on a condo that they can’t afford.
The chart is there for all to see! A $45,000 loan “only” comes with $124.21 in interest per month, until the project is finished, at which time you need to come up with the full $45,000 loan amount in cash, and then obtain a mortgage on the remaining balance (but you can only obtain the mortgage through BMO, of course).
What a disgrace.
I’d expect this from the lenders in the United States, but not in our country.
This new development epitomizes all that is wrong with the real estate industry, and our economy.
When people were lined up and sleeping on the sidewalk for the launch of “One Bloor,” it signaled the absolute mania of our real estate market. Shortly thereafter, our real estate market dropped of a cliff to the tune of 10%…
But now, people have long-since forgotten, and they are sleeping on the sidewalks for the launch of a project that is overpriced and ridden with blatant misleading advertising!
In pre-construction real estate, you get what you pay for, only if you’re very, very lucky.
For those people paying $440 per square foot for a condo that will likely take four years to see the light of day, I question WHY they don’t just buy a resale condo for anywhere from $375 – $500 per square foot and take possession TOMORROW.
And if you’re one of the people borrowing money from BMO to fund your downpayment, good luck, and God bless you…