Yes, Park Place IS The Next City Place…

If you like numbers, data, stats, and figures, I’ve got you covered!

Fresh from MLS, these stats will blow your mind when you consider how much of Park Place is investor-owned…

One of the things I get called out for a lot on this blog is generalizing.

Sometimes, I do this because it’s my opinion, and thus an opinion will almost always generalize.  Like saying, “Environmentalists must love the plastic bag ban.”  Is it a generalization to assume that all environmentalists want to ban plastic bags?  I suppose so.  But it doesn’t necessarily mean it’s incorrect…

The reason for this lead-in is because I already know that CityPlace defenders, and pre-construction lovers (like what’s-his-face that doesn’t seem to post on this blog anymore, which is too bad, because I miss going to his website where he has an autographed photo of HIMSELF proudly displayed under ads for new condo developments…), will disagree with my assertion that vacant units, leased units, or units sold right after registration are “likely” investor-owned.

Again – I’m generalizing, I know.

I’m sure somewhere in Park Place there was an owner who was really, really excited to move in and build a life for himself and his family, but alas, he was transferred to North Bay for work, and had to sell his condo.

Somewhere, I’m sure this case exists.

But when a condominium is in occupancy or registered, and units are leased out, it’s because the owner isn’t moving in.  And what is the #1 reason why an owner wouldn’t move in to a vacant unit that he or she just purchased?  Because it’s an investment-condo

As for units sold just after registration, these are also likely investments.  Again – perhaps the owner was living there and decided to move onwards and upwards (likely upwards, if we’re talking about moving out of Park Place…), but in most cases, a unit sold right after registration is an investor-owned unit.

So there you have my generalization, and if you don’t like it, then please send a 1,200 word letter to my manager at 290 Merton Street along with a request that “David Fleming be fired immediately because he is slandering CityPlace unfairly and he could be held accountable for his actions.”  That was a good one…

Yesterday, I posted the video of the hundred-or-so acres of land where thousands and thousands of crappy, cheap, awful condominiums will be built by the disaster known as Concord Adex.

A fellow Realtor who lives in the area told me that “hundreds” of units were for sale or for lease in the three buildings at Park Place – 19, 29, and 33 Singer Court, and I wanted to follow up on that data.

She said “two to three hundred,” and I have to say that she was wrong.

There were not “two to three hundred” units for sale and for lease.

There were MORE!

The one thing I did point out in yesterday’s blog video was that the language barrier that separated my fellow Realtor and I, led me to believe that these numbers reflected current listings, rather than current and past listings.  But the timing of this blog post actually enables me to go back with even MORE data, now that the rubble has been sorted through…

If you recall, last summer I wrote a blog post called “The Most Over-Saturated Condos In Toronto” which was well-received by many, and not well-receieved by those who lived in the buildings I mentioned.  I called these buildings “over-saturated” because in some cases, 15% of the entire building was for sale!  I received a lot of angry comments, and some readers even commented that they would stop reading my blog entirely!

I still have yet to stop crying…

The (non-sensical) argument against my blog was that “Everybody knows new buildings have lots of units for sale and it takes time for the market to absorb them.”  Right.  So…..exactly what I was saying, except, somehow in defence?

I’m of the mindset that condominiums in Toronto that are primarily investor-owned are not necessarily going to a) hold their value, b) keep in good shape, c) be well-run and managed.  I’m sure we could come up with d), e) f), and q), but let’s quit beating this dead horse…

And this brings me to the crux of my issue with Park Place: it’s primarily investor-owned, and the market is saturated.

Let’s take a look at the three buildings and what kind of action there’s been so far in 2012; and keep in mind – I’ve cleaned this data to remove duplicates, re-lists, and units that were unsold.

19 Singer Court – 302 units
Leased – 113
Sold – 16
For Lease – 10
For Sale – 19

So 113 of 302 units were leased, all after the building was first occupied/registered.  Again, I may be generalizing, but assuming that units that are leased out are investor-owned, this means 37% of these units were investor owned, or 43% if you add in the units that were sold.

So now add in the units that are currently for sale and for lease, and you’ll see that a whopping 158 of 302 units – or 52%, are turning over, and you can assume that they’re all investor owned.

The crazy part here is that many investors don’t lease out their units!  Without (really) generalizing, some “cultures” don’t have the time or wherewithal to lease out vacant units, and instead, leave them vacant for months and months on end.  This makes no sense to you or I, but it seems to make sense to them.  Maybe they’re only interested in selling once it’s registered, or maybe they’ve factored in their lost-rent in advance.  Or maybe they’re laundering money – who knows.

But if you take all of these vacant units into account, how high could the percentage of investor-owned units be?

Let’s look at the neighbouring buildings too.

29 Singer Court – 323 Units
Leased – 120
Sold – 45
For Lease – 4
For Sale – 15

Even worse.  51% of these units were leased/sold.

And further 57% of them have been on the market at one point or another for sale or lease.

33 Singer Court – 316 Units
Leased – 122
Sold – 48
For Lease – 7
For Sale – 12

Not that I’m doing this in any order – but this one is even worse!  54% of units in this building have been leased or sold, and 60% of them have been on the market.

Oh – and the most important point here is that I’m not digging back for data int0 2010 or anything – this is ALL from 2012, save for maybe 2% of these that were at the end of 2011.

531.

Yes, that number is correct!  531 units have been leased, sold, or currently are available for lease or sale.  Out of 941 units in the complex.  Keep in mind – I didn’t look at the number of units that were unsuccessfully listed for sale/lease, and I’m sure units were leased off Kijiji and Craigslist.

Is there any doubt that in a building with movement on 531 of 941 units that this complex is primarily investor-owned?

What an absolute disaster.

Many of the owners who leased out their units did so because the building had yet to register, or because they didn’t want to take months to sell.  But what can we expect over the next 18 months?

There are currently forty-six (46) units for sale in the three buildings, and as the whopping three-hundred-fifty-five (355) leases come due in the next year, how many of these units will come onto the market for sale?

Is it far-fetched to suggest that at some point in the next year, perhaps 100 units will be for sale at the same time?  I mean, there are already 46 for sale now, and 355 leases are coming due!  What if HALF those leased units were listed for sale?  It would be mayhem.

What if Unit 701, 1001, 1301, 1401, 1801, 1901, 2001, 2101, 2301, and 2801 were all for sale at the same time?  NINE of the identical floor plan, all for sale at once?  What would you do as a seller?  What leverage could you ever dream of possessing?

Park Place is the new CityPlace, and we haven’t even begun to talk about building deficiencies, lawsuits, lack of infrastructure, and of course the outrageous prices being paid.

Any objections?  I’d love to hear them.

Because I have 531 retorts for anything you can throw at me…

11 Comments

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  1. JC says:

    Correct me if I’m wrong but I seem to recall that CMHC can and has refused to fund high-ratio mortgages in some buildings that have a high ratio of non-owner occupied units.

    I remember a few years back there were a few buildings in the west end that they were refusing to fund if you didn’t have enough of your own skin in the game.

    1. PJK89 says:

      These rules don’t matter if the vast majority of your buyers are coming to the table with cash….

  2. Simon says:

    I guess this is the new normal. When was the last time we saw a new 100% rental apartment building go up in Toronto? Investor-owned condo units are filling that void. As an owner-occupier, yeah, I’d be concerned and worried about all the things you mentioned. I sold my previous condo less than two years into occupancy, partly because it looked as though a significant portion of the units listed in the first year after registration were being snapped up by investors and leased.

  3. Sam says:

    It’s great to be a potential renter who is looking to move into a new unit in PARK PLACE.

    If they negotiate hard enough, they probably end up getting a steal from a property management company who is just trying to get the place filled for an overseas investor.

  4. Terrace Whore says:

    David, lots of us are aware of what’s been going on in the condo market in Toronto. Long gone are the days where the vast majority of a condo building is owner-occupied. Most of us are aware of the percentages of owner-occupied vs. investor-owned. What about your new building, what are the stats on that ? If it’s not 80% or higher owner-occupied, I’d be worried, no ?

    1. @ Terrace Whore

      There are lots of renters in my building, no doubt. I don’t have stats, unfortunately.

      But there is only ONE of my building, as opposed to (eventually) 20 condos in Park Place, and my building is downtown, across from a park, on the TTC, next to infrastructure, etc, etc, etc…

      Park Place may as well be in Markham…

      1. DavidP says:

        I think the renter stats are either on Vutalk or with the board notes/newsletter.

  5. Chuck says:

    what a nightmare…

  6. Ralph Cramdown says:

    Good luck getting a quorum at the owners’ meeting.

    1. Devore says:

      That’s why after a few minutes, a new quorum is formed, because condo corps know people don’t show up. Quorum is no problem, but try passing anything that costs money.

  7. Anonymous says:

    I know you addressed it yesterday but this isn’t even HALF of the planned development…

    Oh… and they’re planning to build more condos on the north side of Sheppard/Leslie…

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