If you read newspapers – online or in print, you’ve undoubtedly heard about the $28 Million condo that sold last week.
Having seen countless articles and media reports on the subject, I was going to pass on this as a topic. But I guess I thought that I couldn’t officially move on from this story until I had chimed in with my two cents…
If you have not heard about this, then you’re really not that in touch with Toronto.
I read about the now-infamous $28 Million condo in The Star, The Sun, The Globe & Mail, and The National Post.
I saw news reports on CTV and CBC.
I’ve heard it talked about on AM640, and even a mention or two on the morning radio shows.
But what else would you expect?
Twenty-eight MILLION dollars? That’s utterly insane.
Did we ever think we’d see a day when Toronto real estate would reach this level? I know we’re not talking about a typical house or condo, but rather something unique and one-of-a-kind.
The property in question is a pre-construction condominium at The Four Seasons in Yorkville.
The unit is a Penthouse, measuring 9,038 square feet. You would be hard-pressed to find more than a handful of condominium units in the city of Toronto that are over 9,000 square feet, but this is the only one in Yorkville, and the only one in the most luxurious (most expensive) building, known as “The Four Seasons.”
The master bedroom is 2,500 square feet, or approximately nine times the size of my entire condo.
The unit includes a “staff quarters” of 1,000 square feet where your hired-hands can toil in a unit that is the size of your bathroom.
The entire suite has 12-foot ceilings, which are higher than most of the lofts being developed these days; and the Four Seasons isn’t even a loft.
As for the features and finishes, let’s just assume that for $28 Million, you’re getting top of the line EVERYTHING.
But the intention of this post isn’t to talk about the unit itself, but rather the reaction to the price that was paid, and the reasons for paying it.
First, let’s look at some quotes from those in the know:
“This is a real vote of confidence in the city that Toronto and Canada are firmly on the radar for global buyers,” said Alan Menkes, president of the highrise residential division of Menkes Development, one of the partners in the Four Seasons project.”
Well, what else is he going to say? This is the developer commenting on the ridiculous price just paid for a unit in his project.
“That is a big price; there is nothing close to it in the rest of the country,” said Ben Myers, executive vice-president of condominium research firm Urbanation Inc. “There is really a very limited global market of people who can afford a $28 million property.”
I would agree. There truly is nothing else like this in the country, and the only thing similar was an 8,000 square foot unit that sold in Vancouver for $22.3 Million in early 2010.
But the most interesting comments come from Brad Lamb:
“It’s a stupid price. I could not conceive of anything in the city of Toronto worth $3,100 a square foot today,” said Brad Lamb, founder of Brad J. Lamb Realty Inc., and a well-known Toronto condo broker.
“That price, $3,100 a square foot, competes with the most expensive condominiums in the city of New York. It competes very well. I’m sorry, I love Toronto, I think it’s a great city, and I think the Four Seasons is amazing, I think it’s an amazing property, but someone paying $3,100 or over $3,000 a square foot in Toronto for a condo needs to get their head examined.”
Mr. Lamb was not surprised to hear that the purchaser was foreign to Canada, adding that they likely compared the price with similar properties in more expensive markets such as Hong Kong, New York or Paris.
“I think that a local, someone who had earned that money in Canada locally, would probably say thatls too much money. I think they’d be more aware of evaluations than foreign buyers.”
I have to agree with Mr. Lamb.
My feeling on the subject comes with an extreme about of cynicism, as usual.
I think that in order to buy a $28 Million condo, you’re probably worth many billions of dollars.
Can we all agree that this wasn’t a buyer in the market for a $20 Million condo who begged his lenders for a little more leeway?
Whoever bought this unit has “play money” to use, or more specifically, a term I like to use: “f*ck you money.”
There are people in this world of ours that are so rich, they have “f*ck you money.”
They can use this money for whatever they want, with no consequences. If they want to go to New York and buy chocolate cake with flakes of pure gold for $1500 a piece, they can take home a dozen pieces just in case they feel hungry later, and then throw them out with the week-old Chinese food.
I firmly believe that whoever bought this condo had no intentions of negotiating the price.
Think about it: negotiating the price might have made this person look less rich! Or perhaps like they don’t have as much f*ck you money as people had been led to believe.
With a $28 Million price tag, there’s something so empowering about walking in (or having your personal assistant fly to Canada to do it for you) and saying, “How much? Twenty-eight? Great. I’ll take it.”
I think that whoever bought this condo for $28 Million did so because it was $28 Million, and not because that represented a good price.
Do you think there’s any way that the owner is going to spend more than 3-4 weeks per year at the condo? I doubt it.
I’m sure it’s some middle-east oil baron, or a Chinese tycoon who will one day purchase a large chunk of The United States of America.
The buyer of this condo isn’t moving to Toronto, nor is he or she going to spend large periods of time here. The unit is simply “a place to crash” for when they happen to be in the biggest city in Canada.
And why should we expect anything different?
If I had $88 Billion to my name, I would actively look for stupid things to spend it on.
I’d probably buy a constellation for $58 Million, and have it named after myself.
I might buy an old sea turtle that is the last known species of its kind, and then turn it into boots or something.
And I’d probably pay $118 Million for “happiness” through a psychic. Just because.
As much as I love the City of Toronto, and as much as I have faith that our city is going to become a world-class city over the next decade, I don’t think that $3,100 per square foot for a condo at the Four Seasons is warranted.
It’s just the frivolous spending of an overly-rich jet-setter, and it should have no bearing on how well Toronto real estate is doing, or how soon ‘the crash’ is coming.
Just my two cents.
And two cents is a FAR cry from twenty-eight million bucks…
Graham
at 10:21 am
Yes! The post is here. Hope the weekend was awesome and felt long like a ZZ Top beard. Sure, why not.
Agreed. The person who bought this place will be in it for less than a month total per year. Probably short trips of a few days to oversee his or her empire.
Joe Q.
at 10:53 am
David — I saw your comments in the recent National Post article about bidding wars. As far as I can recall, none of those interviewed mentioned the lack of inventory (“product”) on the local market. My reading of the stats is that the number of GTA active listings these past few months is way down, 20-30% lower than normal for this time of year.
This has to be a major cause of bidding wars, as sales have been flat or declining for most of the past year (with the exception of May) Is there any talk in the RE community about the lack of inventory, or what the cause might be?
KirkB
at 11:05 am
I wouldnt say this is “f-you” money. I dont get the huge surprise. If you travel around the world, Toronto has always been a very underrated city. After growing up in Toronto, I very rarely go places where I am honestly blown away. I think Torontonians, in general, are absolutely clueless about how many wealthy people are in the world and how little a $28 million apartment means to a very wealthy multi-millionaire means. Afterall, there are plenty of people that we call millionaires who have very close to a billion $. To these people, 28 million is not a “f-you” or any kind of a statement – it is one of their many places which they own and could care less about. Do you think Lee-Chin would be scrambling/counting his pennies to buy a place like that? London, New York, San Francisco,Tokyo etc. all have plenty of apartments on that level. Objectively, are those cities much better?
Aside name-recognition, do those cities really offer that much more than Toronto?
Think about it…..
NYC – better than Toronto but they are alot of downsides – busy everywhere, old buildings, more crime overall, to get bottle service at a good club will be around 2K a night, despite the hype, true New York dwellers know the women suck
San Fransisco – great city but if you are not gay what are you going to do there – not very much
You only have handful of other decent walking cities in North America – maybe Chicago, Miami (South Beach), San Deigo, Boston – that about it.
Toronto’s self-deprecation is such an embarassing neurosis. Having spent several years in NYC, I am not going to pretend that 28 million condos are everywhere or on every corner but when Murdoch spent 44 million for his condo in New York, no one cared. They just said, “yeah, were the best so, of course, he wants to spend his dough here”.
Toronto is a safe clean walking city with gourgeous women, thriving industry, all the right economic indicators etc. In fact, a recent PWC study ranked Toronto #2 in the world based on all the key economic indicators.
So this is my advice : get used to it.
JG
at 2:47 pm
ahhh…my favourite phrase…”f*** you money!” –
sounds like the title of a rap song.
There is a level of weath in this world beyond the scope and/or beyond the ability to comprehend it, for the ‘average’ guy.
A level of wealth where these individuals truly occupy another world, of which we will never see.
They shop where you don’t.
They travel where you don’t.
They eat where you don’t.
They sleep where you don’t.
And they sleep with women you only dream about.
Solely from there unimaginable wealth, they live in a world that would make Fiction writers blush.
For these individuals, buying a $28million condo is akin to you and I buying lunch – it does not matter if they don’t eat the entire meal. It’s “F*** you money” anyways.
McBloggert
at 3:01 pm
@KirkB
While I agree the first part of your response, your analysis of competitor cities is ridiculous.
“San Fransisco – great city but if you are not gay what are you going to do there – not very much” – that comment is along the same lines as an American asking a Canadian if we all live in igloos – both ignorant statements.
Plus your comments seam to focus on “gorgeous women” – pretty sure, when you are 8 or nine plus figures deep in your net worth, finding hot women is a) ridiculously easy anywhere and 2) probably not one of the deciding factors in buying a $28M pad…
As for getting used to $28M condos – well, I don’t think we have enough established wealth in Canada, let alone Toronto to support many residences worth that much. I think there is a limited market of high net worth individuals that want an occasional residence in Toronto especially those in excess of $20M+ but I would be happy to be proven wrong!
jeff316
at 9:21 am
I do think that people who grew up in and around Toronto tend to under-rate its diversity, its opportunities and even its size.
I’m not a huge world traveler, and of course TO will never be a NY, Paris, London or Rome, but after having grown up in the GTA and lived in Toronto, when I do travel almost everywhere else seems small and underwhelming by comparison…leading to thoughts of “that’s it?”
I was reading a book last summer about urban Toronto. It mentioned that many a US or UK city would kill to have their main downtown nexus to be as busy as a place like Yonge and St. Clair; and that in the Toronto context, Yonge and St. Clair isn’t notable in the least.
KirkB
at 1:25 pm
@ McBloggert
I have lived in New York City and have travelled extensively to San Francisco. I have also lived in a handful of major US cities.
You may challenge my assessment of alternate cities but let me explain a few things to you because I am very familiar with the scene in many North American cities.
My point is this: comparitively speaking Toronto is by all measures a top 5 city in North America. As far as NY and San Fransisco, Id argue Toronto is quite close to these cities if you look objectively. My point is if you are in the market to purchase in San Francisco or New York or Chicago where $28M+ condo are more pervasive, I see no reason why Toronto would not also be on that list. Frankly, what I find an anomoly is why Toronto does not have moe $28M condos given the other cities I have been in North AMerica.
Just think about it: In North America, you have handful of large cities which are walking international cities with some industry (i.e. generally the home to the highest cost real estate/cost of living cities because the demand is higher to live in a city with great anemeities that isnt a sprawling suburb). Let’s narrow them down:
Boston
Toronto
Chicago
South Beach (Miami)
New York ($1020 per square foot)
Montreal
San Francisco
This is not a long list. You could argue that Seattle or Minnesota/St.Paul, Las Vegas could be added but let’s face it: these places are not known for being big cities with crazy amenities. Their populations do not crack the top ten.
Miami (South Beach) shouldnt even be on there because there is no serious North American industry. Few major multi-national companies are headquartered there, if any. It is mostly a tourist/retirement trap and the economy is pretty much fueled with ex-patriates from Latin America/Carribean countries. In addition, the homocide/crime rates are very high.
If you look at the per sqaure footage cost of the remaining cities by looking at their wealthiest nieghborhoods like Yorkville, Toronto is way at the bottom price-wise (aside Montreal). (For instance, I know Manhattan’s square footage average comes in around $1000-per-sqaure-foot for a co-op. This average includes Manhattan’s cheapest areas like the Lower East Side).
This is not even considering that these cities are old and when you compare the actual condos to ones in Toronto, Canada, you would be shocked at how old the buildings are and how bad the amenities are. Your standards would have to change. New buildings cost a very high premium in cities like New York and San Francisco.
In addition, New York is not reflecting condo prices – they reflect co-op prices in Manhattan. Condo prices are generally even higher.
Boston and San Francisco are also small cities (I know San Francisco is encircled by a huge area but the inner-core is low in population compared to Toronto – there are just less high structures).
I dont personally believe that Toronto is at the level of San Fransisco and New York in terms of greatness but when you do a cost-benefit ratio and actually live in those places, I think you would be very surprised about how expensive those cities are for what you actually get.
Toronto has great theatre, many major sports teams/entertainment venues, great festivals,a great walking city, lets not mention women because this obviously irks you, but the point is: Toronto has the all of the pieces which makes a city high-demand and scarce in North America. In addition, …….most of all, the city is safe – Toronto crime is ridiculously low especially when compared to Chicago – another expensive city. I am not sure you realize how rare this combination is in North America and how much people will pay for it. Safety alone determines the real estate value throughout Manhattan/Chicago. Neighborhood prices fluctuate depending on crime/homocide rates and distance from the cities most attractive areas.
I am not trying to stereotype San Francisco as “gay only” or sound homophobic in the slightest but it’s very obvious when you are in the city that it is roughly 70% gay. In fact, I was told this by a gay resident and agree or disagree that is a very widely held belief, that few disagree with. Of course, you do not have to be gay to enjoy San Francisco but generally speaking, if you interact randomly with men – In my experience, around 80% of them were openly gay. This is coming from myself who has spent 8+ years in Manhattan, New York which is maybe 30-50% gay. This is not to say, it’s a bad place or people shouldnt move there or people always do not move there becuase of this factor but guess what? if you think this is not part of the dialogue of your average Wall St. banker, you should think twice. Right or wrong, that’s the reputation. Just as likely, a wealthy gay person may choose Toronto because it is more gay-friendly. My point is simply this: it crossed off the list by a certain segment of peple often because of its reputation for being a city mostly catered for the gay lifestyle. As far as Toronto, there are no igloos. But San Francisco I can garuntee you has a decent sizable gay population.
Mila
at 2:50 pm
Money laundering.
McBloggert
at 4:12 pm
First of all I don’t disagree with you that Toronto is an amazing city, one of the best, one I am happy to represent when I travel abroad and one I am proud to call home.
However, your initial post suggested that Toronto was amongst the global elite city centres (e.g. London, Tokyo, NY etc.). Obviously Toronto can compare to these cities based on a number of factors, industry, commerce culture etc. But the scale of Toronto, versus these behemoths makes any comparison purely theoretical.
These densely packed super cities command high real estate prices because of legitimate market conditions. There is the industry, the populations and other intrinsic factors (history, culture etc.) which result in regular $20M+ apartment sales. Consider the collective net worth of these city regions, think of the clusters of individuals with net worths exceeding nine figures Toronto, Canada just isn’t there.
A quick google shows that PWC has done some work on estimating cities worth by GDP (https://www.ukmediacentre.pwc.com/imagelibrary/downloadMedia.ashx?MediaDetailsID=1562) you can see that Toronto ranks 22nd, just ahead of Detroit and behind every other North American city you mentioned.
Now your argument gets muddled when you begin to change the focus from these international elite cities, to walking cities in North America. I am not sure why we would want to narrow the focus of what cities can support $20M+ apartments to North America. You need the density and wealth to support these stratospheric apartment prices, not many North American cities have that combination again we are talking about condos/apartments/co-ops, not houses.
Had we heard about a $20M+ mansion being sold in Rosedale or Forest Hill, I don’t think it would have been all the shocking. That is where money lives in Toronto. Why spend $20M for a condo, when I can spend $20M on a mansion in the city? When inventory for mansions in Toronto cease to exist or they reach prices over $30M then I would go along with the idea of Toronto being able to support $20M+ condos. At the moment, we are not there yet, nor are many other North American cities outside of New York. Just take a look at this older Forbes list of the top 10 most expensive apartments for sale in the US, all but one are in NY. http://blogs.forbes.com/kymmcnicholas/2010/08/30/ten-most-expensive-apartments-for-sale/
The only city to have a listing amongst the top-10 was San Francisco, which is a unique beast. San Fran has a tiny metro area (way smaller than Toronto) surround by a huge population (dwarfing the GTA) and is further supported by the immense wealth of the US tech sector (i.e. Silicon Valley).
It comes down to this. You can”t bucket up all of Toronto’s nice features (culture, sports teams, shops, commerce, women, greenery etc.) without putting it into context. In context, Toronto is an amazing world class city, a comer on the global stage, but when compared the big boys, we’re not at their level yet. That is why the $28M condo doesn’t make sense, because it is out of context for Toronto; the fundamentals don’t support it.
Closing question: do you really believe that 70% of San Francisco is gay? And that between 30-50% of New York is too? I am not even going to try to explain how that is so monumentally absurd that is.
KirkB
at 11:41 pm
@ McBloggert
Have you ever actually lived in New York or San Fransisco or London or just visited? I am not arguing that these cities are worse or the same. Just that if a few millionaires/billionaires are willing to pay Manhattan-like prices to live in Toronto, what’s the big deal? Why is this so unexpected or insane? I feel New York is a better city overall, yes – but San Fransisco? Its beautiful but personally, too small for me. Its not exciting or vibrant to me. But alot of these cities are better, in general, when visiting but living there is not as fabulous, once you get past the hype.
If you have never lived there, its hard to truly explain but not everyone is going to call NYC a total paradise. It is a hustle-and-bustle place. The place is dirty, for instance. And yes, I have lived in the Upper East. My point is: They are great things about New York but there are also pitfalls like any other city. Have you ever been to some of the hot spots in NYC? Some are fabulous like the Gaansvoort, the W, Ceilo, Bungaow 8etc. but some mainstays are completly over-rated like Websters Hall, Rays pizza etc. Same with plenty of restos etc. Plenty is overrated there. Toronto, Id argue, is under-rated.
How do you think Toronto compares with Geneva, Zurich etc.? These are also very expensive cities.
Are you aware that PWC with Atlantic Monthly also just ranked Toronto second in the world for business, opportunities etc. overall? New York was the only world city ranked higher. See this:
http://ca.news.yahoo.com/blogs/good-news/city-opportunity-toronto-ranks-2-world-183856718.html
Think about that, we beat out Tokyo, Hong Kong – clearly more expensive cities.
I have lived in New York City after leaving Toronto, I can tell you personally I used to believe New York was the greatest place on earth based on visits before actually moving there. Frankly, I was not that impressed when I actually lived there. I’d much rather live in Toronto where I have since relocated again. Why? Its much safer than New York. I love never having to look over my shoulder nor seeing people with their guards up. (I dont care how low they claim the NY crime rate is now, it is completely different than walking around a low-crime city at night). My girlfriend can walk home by herself at 1am and that is not considered crazy here. The buildings are newer and cleaner. It is more laid back in Toronto. Toronto does not have weird racial tension like New York (If you have never lived in New York, you will have no idea what I am talking about). But Toronto still has New York’s good qualities. You have the 3rd largest theatre district in the world, great diversity, good restos, clubs, bars etc. To me, in North America, its probably my favorite city. Apparently, Mr./Ms. $28M might feel the same way. I dont understand why Canadians undercut their cities. The condo purchase is an anomoly but I would expect there would be a few of these in Toroto, whats the big deal? If New York has tons, it would make sense, that we would have a few. I am more surprised by how low value and cheap Toronto is.
Also, you seem to suggest Yorkville is not as upscale as Rosedale etc. I dont get it. To me, Yorkville is more upscale or on the same level as those areas in my perception. I thought Yorkville averaged the highest square footage prices in Toronto for real estate? (I could be wrong). I think it is preference. I personally think Yorkville is over-rated but I could never live somewhere like Rosedale. I dont like neighborhoods like that.
As for gay populations, yes. Look – Lets just agree to disagree. I dont view it as absurd at all. I have lived in New York a long time and none of my many friends born and raised there would disagree with me. I actually found it hard to find heterosexual friends in NYC (not that I care either way). I am speaking specifically about Manhattan and those people who live in Manhattan – not commuters from Long Island, New Jersey, the other boroughs etc. (New York on any given day is filled with visitors or cummuters). I would say about 30-50% of males living in Manahattan are gay. Yes, maybe higher. (BTW, in New York, gays do not fit the stereotypes. Some look just like gang-members or Hell’s Angels bikers). San Francisco – I have not lived there so I cant say Im a total expert. But almost everyone I have met there in the core of city was openly gay. After realizing this, I was told by a gay resident that it was around 70% gay. (Once again, I am not talking about commuters, I am talking about people living in the city). I have just known it like that ever since. All the most popular clubs I visited were gay-oriented. I say Toronto is around 15% for comparison. I know the gay presence in both cities is definantly much much higher than Toronto. Call me absurd if you want. You are the first person I have ever heard object to any of this and I know plenty of Americans with experience in the city. Most folks when they think San Fransisco, they think the same way they do about Church St. Its considered a gay city.
McBloggert
at 10:45 am
Again it is not my assertion that Toronto isn’t as good as NY or any other city – I am a big supporter. What I am saying is that the fundamental market conditions do not exist in Toronto to support prices of that nature. There is no comparator, no other previous sales that come even remotely close – it is an outlier, an anomaly, one that cannot be explained through rational analysis.
You can make the argument that Toronto is a great place to live and do business – I whole heatedly agree by the way. The PWC study you referred to does just that. After a cursory glace of their key findings they suggest that Toronto, along with the other top five cities, aside from NY, represent “livability and balance”. One of the reasons Toronto ranks highly is because of its lower cost of living compared to the “economic powerhouses” London, Tokyo, Paris and NY. So, just because Toronto compares well across a number of “desirability” indicators, does not mean it translates into real estate parity. Again, the numbers and fundamentals show otherwise.
Similar to your belief that real estate prices should reflect your perception of a city (subjective analysis) compared to others – you apply a similar logic to their “gayness” – (i.e I talked to a couple gay people in San Fran, so everyone must be gay). Again your estimates were 70% gay in San Fran and 30%-50% in Manhattan. Let’s consult some data now…
According to a 2006 study by the Williams Institute of the UCLA School of Law on the demographics of sexual orientation, San Fran ranked number one amongst US cities with the highest per capita gay population…at 15.4%…NY didn’t even crack the top 10, coming in at 6%. I would say your estimates are just a bit off.
thecondofitz
at 3:57 pm
I’d much rather buy this “real penthouse” in New York for the same price.
PROPERTY OVERVIEW â?? 60 WARREN STREET, TriBeCa, NEW YORK CITY 10013
– Listing price: $28 Million USD
– 5-storeys, 10,911 square feet (1,014 square meters)
– 7 Bedrooms, 4 Bathrooms, 3 Half Bathrooms
– 3 large terraces
– 1 Roof Garden
– Full floor master suite
– 1,000 bottle wine cellar
– Rooftop gym
– Private elevator to connect floors
– Library
– Media room/Home theatre
– Jacuzzi room
http://twistedsifter.com/2010/04/townhouse-in-the-sky/
KirkB
at 11:04 pm
@ McBloggert
On the fundamentals, I think we agree. My arguement is that a few examples of pricey real estate in Toronto does not shock me. If there were 50-80 examples that would be shocking to me. A single or a couple purchases for $28M condo especially of a 9000 sqr-ft penthouse at the Four Seasons hotel – a very elite hotel – in Yorkville does not sound very outrageous to me for a city with what Toronto offers. The place is very exclusive and one-of-a-kind – this is what wealthy elites pay for. You can go to H&M and buy shoes which are modeled precisely like the top Italian designers for 50$ or you can go to Davids and buy a higher-end luxury shoe for $300 or you can go to louis vuitton and buy a pair for $700 or you get some custom made shoes designed by a big designer for $8000. These are the high premiums that certain ultra-rich people gravitate towards. The “devils is in the details” when it comes to high end purchases and people will pay a premium for minut differences/very slight sophisticated discrepancies like better stitching, more scarce colors of leather etc. As the wealth grows, these differences become smaller and smaller but the price tag makes big jumps because of the exclusivity. I just think Toronto is simply not used these kinds of purchases and Toronto residents tend to under-rate their city because of lack of self-confidence/self-deprecation. I think we agree – travelling the world, it is obvious that Toronto is right up there with the top world cities.
Your means of analysis using statistics is interesting and of course, not to be dismissed. But it is only one piece of the puzzle. You berate me for using my perceptions or subjective opinions but ultimately, real estate choices like all consumerism is governed by perceptions/subjectivity to some extent. Statistics can be manipulated and Individuality can never truly adequately understood or quantified by reviewing the behavior of the masses as a group. Statistics lean towards highlighting averages and downplaying outliers. A person who can afford a 28M+ condo is not normal or average people. He/she is not reflected well in the statistics. Neither is a 9000 sq ft apartment in Yorkville at the Four Seasons. The wealthy elite are often not what you expect – they are anomolies. I expect a few $28m condos In Toronto. There are enough rich folks in the world and enough positives in Toronto for this to happen – this is my core point.
As far as the gay issue. I’ll accept your gay statistics. You win. Frankly, i question the validity and It surprises me but ill accept the study from the experts. But if you remember the original arguement, it was about perception. Many view San Fran as a gay city, right or wrong. Its just a perception that hangs over it and these perceptions affect buyers. Ive had many discussions where San Francisco is struck down as a place to move because of its percperion as being gay. Let me give an example: My friends have all had bachelor parties in LA, New York, Vegas, Montreal, Ibiza but if someone suggested San Fransisco – it would be totally struck down by my heterosexual friends. You might say “you are just being subjective based on your friends” but I do not veiw this as isolated. If someone said to me that they were having their bachelor party in San Fransisco, I would think that they were gay. Real estate decisions are made based on such perceptions, right or wrong. My general point was San Francisco’s perception as a gay city makes certain segments reluctant about living there. Perception/subjectivity rules plenty. For instance, to me, Harlem is a beautiful place – i love the energy. The crime rate is much lower than most people think but guess what? it can’t shake the “ghetto” image regardless of the statistics, thus,because of it’s negative perception, their real estate prices suffer. I dont agree but if you ask your average New Yorker, anything north of 120th st. is viewed as lower-class. Its subjective but these are just what I know from experience in life – that perception is out there. Just like here in Toronto, we tend to look at Scarborough as more crime-ridden or lower-end than Mississauga, even though their is evidence the crime rates are not fundamentally very different between the two areas.
McBloggert
at 9:23 am
@KirkB
I think we have found our middle ground. While I still might feel as though the $28M price is out of synch with some of the metrics that help guide pricing/value – I can’t argue with the fact that someone did pay that price and in so many words the market spoke.
The price is a tremendous coup for both the Four Seasons – it certainly helps demonstrate the value of their brand in present and future properties – and for the city of Toronto. I bet this story got a lot of coverage in various news outlets and speaks to the strength and confidence people have in the Canadian market.
Will we see another $20M+ sale – I wouldn’t bet against it and with the progress of time, I am sure it will become a reality (growing city, growing economy, increased densification, rising real estate prices and other inflationary factors). However, until we see a good churn of $10M+ and a handful $20M+ places, it will stand out as an anomaly.
I do agree with you that pricing in real estate is impossible to gauge using straight up statistical analysis – there are too many human factors and as you pointed out, the outliers can really make a splash. However, it does create a foundation, based on fundamentals for a conversation about the market and helps establish a good range of values that you could reasonably expect to see.
The perception of a city is a powerful thing. I agree that if I were planning a bachelor party, I would probably pick a location that is more aligned with a bachelor party theme, something a bit more debaucherous than good old liberal San Francisco. Although Brian Wilson is doing his part to change that! However, I would be a little taken aback if someone thought San Francisco was too gay to visit or live in for a straight guy. It is a brilliant city – and I have never been struck by its overt gayness.
My biggest issue is when perception is taken or presented as fact. I am trained to be critical and look at evidence to form an opinion. When I read definitive statements, I tend to scrutinize them a bit more closely. It wasn’t meant to be a personal attack – just a force of habit!
KirkB
at 9:45 am
@ McBloggert
Yeah. Looks like we found the middle ground. To me, this is one to also watch: The Shangri-La’s penthouse is allegedly going for 19M+ but with a much lower square footage than the Four Seasons penthouse. Im interested to see if they can sell it at that price because Shangri-La is located closer to King West or Bay’s Financial district rather than Yorkville:
http://www.torontolife.com/daily/informer/gimme-shelter/2011/02/03/home-of-the-week-18-9-million-for-a-two-storey-penthouse-condo-at-university-and-adelaide/
xxx
at 8:33 pm
guys get a room
Howdy
at 4:05 pm
These harlem shake vids are great… A company in our industry just put one out and then it’s like everyone in the field followed. Have to get on the band wagon 🙂