Do you remember when we used to line up outside of nightclubs?
Those were the days!
Raise your hand if you visited any of: Joker, NV, Tonic, Money, G-Spot, Fez Batik, Society, System Soundbar, or Plastique?
I frequented these places before I had the knowledge, courage, or financial resources to just give the doorman $20 to get inside, but suffice it to say, we all did our fair share of lining up on the street in front of the club.
The irony is, as we all know with the benefit of hindsight, once you got inside the club, it was half-full!
But we were too excited (and maybe too drunk!) to care that we just lined up outside for absolutely no good reason.
Except, well, there was a good reason.
In the battle between our eyes and our brains, our eyes always guide us in the direction of something being valuable if other people want it! If there’s a lineup outside a club, it must be a great party inside! Not only that, there’s a level of exclusivity therein, and once we’re inside, we feel grateful. We feel important. We feel like we’ve won something.
Years later, when “bottle service” began, this concept was taken to a whole new level.
What’s better than selling $1 worth of alcohol and sugar-water for $5?
Selling a $30 bottle of alcohol and $10 worth of various sugar-waters and ice cubes for $300.
That’s what bottle service was!
It came with the “exclusivity” of a booth, usually perched a little bit higher off the ground than the rest of the nightclub, and this made people feel important and special enough to justify the absurd markup on the goods and services they were purchasing.
I’ve often wondered if the same folks who came up with nightclub gimmicks went into the world of pre-construction condominium sales in the 2000’s.
I wrote about this ad nauseam from 2007 through 2015, often posting photos or videos of the lineups outside of pre-construction condo sales centres, or regaling the TRB readers with stories of my experiences inside.
Purple wristbands.
Nothing says “I’m important” like being handed a purple wristband from a large man, wearing a yellow jacket with SECURITY on the back.
Get your purple wristband and get inside!
Now, instead of buying a $30 bottle of alcohol for $300, go buy a $400,000 condo for $600,000.
We all know how that ended…
Over the last couple of years, I’ve asked an important question of our future here in the Toronto real estate market:
How are pre-construction condominiums going to be sold when the condo market recovers?
Of course, I’m operating on the assumption that we simply can’t sell them the way we did before.
We can’t expect naive buyers to pay $600,000 for something today that is worth $400,000, with the hope that it will be worth $700,000 in five years when it’s done.
That can’t happen again. Right?
Pre-construction condominium launches have been few and far between over the last few years, and those that have actually been launched have failed.
April 8, 2024, I wrote: “TRB Pre-Construction Condominium Review: Freed Hotel & Residences”
I can’t believe it’s been two years since I wrote this.
But what I can believe is that nobody was stupid enough to pay over $2,000 per square foot for pre-construction condos in 2024, two years after the market peak in 2022.
Suffice it to say, this project did not get off the ground.
Like I said: we can’t really expect to sell condos in 2024, or 2026, or 2030 the way that we sold them back in 2008, right?
So how are developers selling condos today? I mean, the developers who are actually getting sales?
Believe it or not, developers are going back to the well. Sort of.
That feeling of “exclusivity” that had us line up in front of half-empty nightclubs, buy bottle service at 1,000% markups, or pay 40-50% premiums for pre-construction condos is being used once again. This time, however, there’s a bit of a different spin.
Check out this advertisement from a project called “ONE THELMA” in Forest Hill:
They nailed it.
“A residence, not a commodity.”
They seem to understand that the number-one problem with the way we planned, sold, and built pre-construction condos from 1998 – 2022 was that they were commodities, and not “homes.”
Regardless of how things started, by 2022, I would estimate that 95% of pre-construction condo buyers had absolutely no intention of occupying the property as a primary residence.
This advertisement shows us that at least one condo developer understands this, and the tagline in the advertisement reflects this.
Next up: the word bespoke.
Wikipedia tells us:
Bespoke is an adjective used to describe goods or services that are custom-made, commissioned to a specific specification, or tailored to the unique tastes and needs of an individual.
Bespoke is also one of the most overused words in advertising.
Raise your hand if you’ve been to Thailand?
I went to Bangkok in 2005, and every twenty feet there’s a “Bespoke Custom Tailor.”
Every shop had an American or Canadian standing in the middle, being measured from head-to-toe, smiling away, with the promise of tailored goods for pennies on the dollar.
Of course, any young gentleman who actually bought suits in these stores knows that they fall apart the moment you put them on.
But they are, by definition, “bespoke.”
Bespoke is like “artisan.”
How can Subway Sandwiches advertise their crappy subs as “artisan?” Why, because they’re custom-made in front of you? You can have tomatoes, onions, and lettuce, or tomatoes, onions, lettuce, and black olives?
A potato chip can’t really be “artisan.”
Worse yet is “artisan-inspired.”
This advertisement for One Thelma lost me at “bespoke,” and from there, it’s just more fluff.
It’s “not being positioned as a conventional condominium offering.” Well, of course not. It’s different. And all of the subsequent advertising tells you how!
“The pricing strategy reflects a different philosophy.”
Right. It’s expensive.
That’s the “strategy,” and it benefits the developer by allowing them to make money, as well as, apparently, the buyer, who gets to pay lots of money…
“Quality.”
“Discretion.”
I love it!
It’s the real estate equivalent of bottle service in a “premium booth” at a nightclub.
The next section doubles down:
It’s not about volume. Fair point.
There are only sixteen units in the building. Er, I mean, bespoke units, so it’s clearly not about volume.
It’s also an “experience” and not just a home or a residence.
There’s an “exacting eye for craft,” which sounds like it means something; we just don’t know what.
It’s “shaped by long-term thinking,” which to be fair, is very accurate. People aren’t buying units in this buidling to flip in five or six years.
“Long-term quality and discretion over rapid absorption” is a good line. It means they’re telling you that this building is going to take a while to sell. They’re getting way out ahead of it.
And why is it going to take a while to sell?
Because “pricing reflects the expectations of a more selective buyer.”
Who is that buyer?
Well, we find out in a subsequent ad:
The “more selective buyer” is a “very specific buyer.”
No commodities here. No rapid absorption. This isn’t a “broad-market” offering.
Then we’re given the “experience” line again.
A “refined ownership experience.”
It’s not just about owning a house. I mean, I own my house, and it’s a really nice house, if I can be totally honest. But do I simply own this house? Or do I have an “experience” on my hands?
I’m not sure. But even if I do benefit from the “experience” here, I don’t know if it’s “refined.”
The next ad really doubles or triples down on the “specific buyer.” The next ad tells us that there has to be a “fit” between the buyer and the project:
Ah, yes. The “fit.”
Those who live in a $5,000,000 shack and need to upgrade.
I’m rather surprised, however, that they called out “Rosedale and Forest Hill.” What about Moore Park? What about Lawrence Park? Can the peasants in Teddington Park benefit from the “refined experience” here?
Here’s a line worth discussing:
International buyers with meaningful Canadian ties.
We have a federal foreign buyer ban. This means that international/foreign residents cannot buy Canadian real estate.
We also have a Non-Resident Speculation Tax at both the municipal and provincial levels, which adds up to 35%.
So, who is this ad targeting when they say “International buyers with meaningful Canadian ties?”
We can only speculate. So please, go ahead…
I’d be remiss if I didn’t mention the phrase “right-sizing” as well. The marketing folks at One Thelma didn’t coin the phrase, since it’s been used in real estate circles for the last five or six years, but it certainly implies that some folks in a $6,000,000 house should realize that their home isn’t “right,” and that they should move to a $6,000,000 condo.
Here’s another ad:
Well, I haven’t seen any ads across select media.
Perhaps my Instagram algorithm can understand and acknowledge the cynical roller-coaster that my brain rides in my head every single day of my life.
But I have been bombarded with email campaigns from the One Thelma project, which I appreciate, since it gave us something to explore in today’s blog post.
This ad tells us, once again, that this condo project is “different.”
Different plays into the “exclusivity” that was so successful, for so many years, with nightclubs and pre-construction condos.
The next couple of lines play more and more to that exclusivity:
“No broad public release of floor plans.”
Brilliant.
Make people jump through hoops to get the floor plans – like making them line up outside a half-empty nightclub.
“No public price list circulation.”
This makes the building even more exclusive. It’s private. It’s “discreet,” which is a word used in previous ads above.
Check out the last line:
“The sales process is being handled more deliberately – through direct conversations, private briefings, and a more selective broker strategy.”
Every single part of this marketing campaign is screaming to the buyer, “EXCLUSIVITY.”
So, do we think it will work?
To be fair, this is a very, very different segment of the market than micro-condo garbage being sold at $2,000 per square foot.
And to be more fair, if anything is going to be pre-sold in 2026, it’s a project like this, which is geared toward the wealthiest segment of the buyer pool, who really, truly do value privacy and exclusivity.
I just wonder if this marketing strategy will be extended to garbage micro-condos in the future.
Cynicism aside, if the strategy works for luxury condos, can it be applied to 65-storey towers downtown?
Will the naive, entry-level investor pool be lured in by this marketing campaign in 2029?
Crazy to think.
But then again, we all paid $300 for that $30 bottle of Smirnoff at one point, didn’t we?
