Old Is New Again: Eleven Residences

Here is something truly unique.

A five year old condo, which really an apartment building, but is actually a condo, is refurbished and re-launched.

Do you follow?  Read the rest, and you will…

elevenresidences.jpg

I could have called this post, “The Lesser of Two Evils.”

Or maybe, “The Best of Both Worlds.”

Actually, those two kind of contradict eachother, but that’s okay.  The new project at 11 St. Joseph’s Street is enough to confuse anyone…

It’s not quite pre construction, but these units aren’t what I would call resale either.

They’re actually refurbished condominium units which are selling like hot cakes!

Let’s start from the beginning…

Five years ago, a condominium at 11 St. Josephs’s Street was completed, but the developer took a different route than 99.99% of the other condos in Toronto.

Traditionally, a developer will build a condominium and sell off each unit to owners, and then upon forming a Toronto Standard Condominium Corporation, the developer will transfer ownership over from himself to the individual unit owners collectively.

At 11 St. Joseph’s Street, the developer sold ALL the units to one single owner.

And that owner has been running the building like an apartment ever since.

The 200+ units have been rented out for the past five years, and the only real difference between the building at 11 St. Joseph’s Street and any other rental building is that 11 St. Joseph’s Street is was actually registered as a condominium corporation.

Word on the street (ie. from the sales centre) is that so many people who rent in the building have been asking, “Can I actually buy one of these units?”  Eventually, the owner started to listen…

Last year, Uptown Rosemont Inc. decided that perhaps there was actually more money in condominium sales than in renting condos in the long term.

It was decided that the owner would refurbish every single unit in the building, and sell them off individually.

The plan worked.

The building sold over 50% the very first weekend.

But what intrigues me this project is that it combines some aspects of pre-construction, and some aspects of resale.

However, it should be noted that every single red flag that is raised with pre-construction projects is effectively lowered by the “Eleven Residences.

All the problems I have with pre-construction condos have been combated by the developers of this project.

Construction Delays

The major issue with pre-construction (hard to narrow it down!) are the delays.  When the developer tells you the building is going to be ready in the Fall of 2010, you should really factor in at least 18 months for delays.  And if the project was only delayed by 18 months, you should consider yourself lucky!

The building at Eleven Residences is already completed as it was finished five years ago.  Each unit is being “gutted” and refurbished with new finishes and appliances, so what’s the worst that could happen?  What kind of delays could we expect?  A client of mine bought a condo here today (hence this blog post…) and she is closing on August 3rd.  The tenant has already vacated the unit (this was a rental building, remember) and “construction” on my client’s new condo will begin as soon as our deal firms up.

Occupancy & Registration

There’s nothing worse than taking “occupancy” of your new condo and paying the “phantom mortgage” or occupancy fee.  It’s like paying rent on condo you own.

You wait, and wait….and wait some more, and finally, when the Gods take pittance on thee, the building is registered and you can go ahead with final closing.

Eleven Residences is already registered as TSCC 1781, and thus there will be no “occupancy” and no wasted money.

Material Changes

I remember getting that first (of about twenty…) notices in the mail from West Side Lofts letting me know about the changes they had made to the project and my unit.

They sent a nice, well-written letter to inform me of the “exciting” changes going on at West Sides!

“Guess what?!?!  Your 10-foot ceilings are going down to 8-foot so we can squeeze in another floor!”  Exciting!

There won’t be any major changes at Eleven Residences.  The units are existing, and what you see is what you get.

Features & Finishes

Check this out:

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Gorgeous, eh?

Another major issue I have with pre-construction is that the features & finishes in the model suites never match what you actually get.

It’s like buying a “base model” car, even though the one you test drove has about $15,000 in upgrades.

And just when you think you’re aware of what you actually signed up for, the sales centre calls you in about six months before occupancy to “pick your finishes,” to which they add, “bring your cheque-book!”  Try walking out of there with less than $2,000 in upgrades…

The finishes at Eleven Residences are all standard, and there are no upgrades!  Everything is already upgraded!

Hardwood floors, stainless steel appliances, double-thick quartz counters, and the whole nine yards.

All you have to do is pick the colours

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So what else do I like about this project?

I love the location – right between Yonge & Bay Streets, and in the heart of “the action.”  How can you go wrong with this quaint, one-way, side-street?

I like the size of the building – not too big, not too small.

The amenities are fantastic – rooftop patio with hot tub, BBQ, tanning beds.  The gym is brand new, and fully stocked.

But the BEST part about this building are the maintenance fees.

The units are assessed at $0.45 per square foot, and that includes all utilities; heat, hydro, water.

And since the current owner of TSCC 1781 has been running the building for five years, they know what the building costs to run, they have budgeted for the future, and thus the maintenance fees likely won’t go up 40% inside of two years like most pre-construction condos.

I haven’t seen a project like this in all my time in real estate: a condominium corporation owned by one individual/company who in-turn re-sells each unit as a “re-launch” of sorts.

Who says that old can’t be new once again…

7 Comments

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  1. Mr M says:

    Thanks for the awesome write up. I wish I had seen it earlier.

    Really appreciate your kind words.

    @ LC – A reserve fund study is being conducted by Trow, which will be made available to all purchasers at the time of closing. We take our reputation very seriously and would not jeopardize it over a few repairs (if any) need to be done. Rest assured.

  2. Mr M says:

    Thanks for the awesome write up. I wish I had seen it earlier.

    Really appreciate your kind words.

    @ LC – A reserve fund study is being conducted by Trow, which will be made available to all purchasers at the time of closing. We take our reputation very seriously and would not jeopardize it over a few repairs (if any) need to be done. Rest assured.

    Thanks again!

  3. Thank you for sharing this article. It just tells us how amazing this condo is… Oh just look at the view… it is fantastic!

  4. Oooo says:

    Any news on how many new listings are coming up? Is the trend still above what you are used to?

  5. Joe says:

    Who is the developer?
    Who is doing the design?

  6. LC says:

    You’re forgetting about their reserve fund studies. This isn’t a “new” building, it’s a building that has been occupied for 5 years. I’d be curious to see the state of their mechanical, elevator, comms systems, etc.

    Since the building is existing and purchasers are effectively buying resale, they aren’t covered by TARION. And at 5 years, assuming the performance audits are closed, buyers have pretty much no protection, other than another 2 years of major structural left on the original warranty.

    They may be at $0.45/sf now, but unless the above checks out, they’ll be well over in the not so distant future.

  7. JG says:

    I think the location is excellent! If i was in the market to purchase, i would definitely be taking a closer look at these units.

    the fact the maintenance fees are reasonable and includes heat, hydro, and water! Thats excellent!

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