Remember when we were kids and we had “do-overs”? Re-plays, and second-chances?
I would imagine that the folks at Cresford Developments would LOVE to have a do-over with Merton Yonge Condos.
A couple weeks ago, they tore down their sales centre. Now we find out that the project didn’t get financing and won’t move ahead…
See that staircase to nowhere?
And see the handrail that leads to nothing?
Once upon a time, there was a sales centre behind this staircase, but now it’s just a pile of gravel that used to be the site to purchase one of Merton Yonge Condos.
I believe I wrote about this development way-back-when. Aaaaah yes, here it is.
I recall the insane amount of hype that surrounded this project and just how ridiculous the sales atmosphere was.
Walking into the sales office was like walking into a night club. There was some pretty fly-jive music playing, and of course I was greeted by three very attractive females. I asked them for some information on the project, and they told me that they wouldn’t be handing out ANY info until the “official launch.”
It sounds so…….”exclusive.”
It was like the best kept secret in the city, and you had to be at the official launch to find out the what, when, who and of course how much.
On the day of the official launch, I showed up at the corner of Merton Street & Yonge only to find massive security guards in yellow jackets much like you would see outside a downtown Toronto nightclub. And much like the nightclubs that we hate, yet continue to frequent, these over-grown man-children refused to let me inside.
Apparently, I didn’t have the magical pink wrist-band.
Pink wrist-bands? Seriously? Is that what real estate sales has come to?
I looked inside the sales office and it seemed to be the most happening party that ever happened.
It resembled Friday night at Maro except there were more lights on, and a lot more cheese; both in terms of the food people were eating and in terms of the sales tactics the developers were using.
It’s a time tested technique – make a consumer believe that he or she is getting something:
a) that nobody else is getting
b) before anybody else can get it
c) at a different price or with different options than anybody else
d) make them wait in order to get it
In this case, the consumers bought right into the laser-light show that Merton Yonge Condos had designed for them, and the project sold 35% the first weekend.
That was then, this is now.
And between then and now, the project, apparently, only sold another 10%.
So back in October, they sold 35% in one weekend. And then during the course of the next eight months they only sold another 10%?
Sounds like the first 35% of sales was purely based on hype.
I think everybody should take a lesson from these guys:
What did the say again? What was it they sang about back in the ’80’s?
DON’T BELIEVE THE HYPE!
That’s right, don’t believe the hype.
Don’t get lured in by the pretty girls at reception, the pink wrist-bands, the valet parking, the security guards, the flashy power-point presentation, the soft yet hip Top-40 music, the wine & cheese, the social elite that frequent condo launches, and of course, the promise of a “fantastic investment.”
Merton Yonge Condos was selling units at almost $600 per square foot, or $640 when you include parking.
I didn’t believe the hype back then, yet I could believe that 35% of the building sold on opening weekend. And these are FIRM sales, which doesn’t take into account all the people that signed papers and gave deposit cheques but changed their minds during the mandatory ten-day rescission period.
A few weeks ago, the sales centre at Merton Yonge Condos was torn down, as it was assumed that the project would go ahead.
Then just this past week, we in the industry with our ears to the ground heard that the developers were unable to obtain financing!
They had sold less than 50%, and yet they went ahead and tore down the sales centre in anticipation of breaking ground.
The financiers said, “No way, Jose,” and they’ve left the developers in a dilly-of-a-pickle.
What’s the dilly?
Well, if they need to get 60%, 70%, or 80% sold in order to obtain financing, how can they sell when the sales centre is now a pile of rubble?
Just in case you forgot:
As a consumer, ask yourself how this mess could have been avoided.
Unfortunately, I blame the developer for this mess. Surely they had enough experience to know not to tear down the sales centre before they had financing, right? Especially considering our current economy and how tough lending institutions have become with their loan procedures?
I wrote about the developer in October of 2008 and I raised some questions as to how they intended to balance FIVE projects all at once across the downtown core. Sure enough, at least one of their projects is about to go under.
They were three years late on Bloor Street Neighborhood, and it seemed to me that they were more interested in selling new projects than finishing existing ones.
As a consumer, you can do your research and shy away from developers without good track records.
But this mess at MYC ultimately lays with the decision to demolish the sales centre before it was time to do so.
When the market was at its peak, it was very uncommon to see a project go under.
I remember when Mode started handing back deposits, and I heard from a few unfortunate souls that bought there.
But now it’s becoming more common for a development here-or-there to close up shop and call it a day, and there is no better example of the hype implosion than One Bloor.
How long will the corner of Yonge & Bloor be a pile of bricks with a fence around it?
Time will tell.
But at least it will be a constant, physical reminder of the hype that can surround pre-construction real estate.
Believe what you want to believe.
BUT DON’T BELIEVE THE HYPE!Back To Top Back To Comments