The response to last Friday’s post about Fashion House Condominium was overwhelming. And it was ironic to see that one of my readers commented that she had actually purchased a unit I was looking at, and then rescinded her offer.
I’ve also decided to pass on the project, but it has less to do with the project and more to do with the area…
Allow me to tell a story that will eventually relate back to this post…
When I was 18-years-old, I got a job at Shark City in upscale Yonge & Eglinton as a runner or “bar-back” as they were called.
Shark City was the hottest nightclub in the midtown area, and on Saturday nights during the summer, the lineups would rival that of anything in the downtown core as well. There was a restaurant on the main floor, and a thumping night-club downstairs. Both were packed to the brim on any given night.
It took me one night to see the amount of money that went in and out of that bar before I decided that I wanted to own a bar one day myself. But first, I would settle for working my way up to be a bartender. The other bar-backs said it would never happen – they said that they’d been working there for 2-3 years with dreams of also flipping bottles around like Tom Cruise in Cocktail one day, and that I would have to wait in line.
It took three months as a runner before I was a full-fledged bartender, and it was the greatest job I ever had.
But working at Shark City for two years was an eye-opening experience in terms of how quickly the limelight fades.
When I started at Shark City, the night-club would be almost filled on Thursday and Sunday nights, and on Fridays and Saturdays the lineups were 200-deep and extended around the block down Lillian Street.
But when I left two years later, not only had they closed down the night-club on Sunday nights, but there were Fridays and Saturdays when you could come by at midnight and walk right in….to a half-empty club.
Eventually, the club was sold for a pretty-penny, and the new owner had to sell after about a year for a fraction of what he paid. The club was re-branded as “Red” and eventually flopped.
Interestingly enough, an indie movie called “Shark City” was screened at the Toronto International Film Festival in 2009 and was about a club called “Shark City.” I find it somewhat coincidental that the movie starred Corey Haim, who I met one night at the club in 1999 and who bet me that he could take home the married bartender named Dee. He was eventually removed by the bouncers for being an arrogant ass…
So how does all this relate back to Fashion House?
A reader commented on my blog last Friday:
“Sales started at Fashion house over 2 years ago. Same with 650 King. Neither project has even broken ground. Feel bad for those original buyers waiting 5 years for their units. Who knows what king west will be 3 years from now. it’s already played out. the party has moved west to WQW and Ossington. Cities transition. Trends die.”
I took his comments to heart.
It’s something that we all know – trends die, cities transition, the parties move elsewhere, but sometimes we need to see it right in front of us to actually think long and hard about it.
King West has been growing for five years now. The prices have spiraled out of control to upwards of $650/sqft in some condos.
So either one of two things is going to happen in this area:
1) Prices will continue to rise as this area becomes the downtown Yorkville for the 25-35 year old crowd.
2) The area will get played out and prices will level off.
I don’t know what to expect.
But after thinking long and hard about it, I decided that I didn’t want to roll the dice on what essentially equates to the flip of a coin.
A blog-reader named “LC” commented a few times on Friday about her thought process in terms of buying or not buying at Fashion House, and her reasons differed from mine.
“…it was the lack of neighbourhood amenities/spirit that did it.”
“…I wouldn’t feel comfortable investing in an area I wouldn’t live in myself.”
I had never actually thought of whether or not I would live in the area, as I look at properties purely from the investment perspective. But the concept of “spirit” is something I’d never thought about before.
You can certainly claim that the St. Lawrence Market area has “spirit” since it’s always bustling with people, places, and events, and there is more history, character, and charm in the area than any other neighbourhood in the downtown core.
But does King West have “spirit?” Not really.
It has tons of pricey restaurants and bars, and tons of beautiful people who live there and/or frequent the area. But does it have spirit?
I began to wonder if the King West area was just a fad, a trend, or a craze.
Nightclubs and restaurants come and go, so does hot real estate fizzle out? I’m sure we can think of a ton of examples, but let’s talk about King West for a moment.
What is and has been driving the real estate prices in the last five years? Undoubtedly, it’s the 25-35 year olds whose parents give them a few hundred grand to do with as they see fit. But why that area? What’s special about it? I’ve partied at Brant House, West, and Cheval, and I don’t think they’re that different from all the rest. I’ve had dinner at Spice Route, Conviction, Buca, and Bier Market, and their food and ambience is no better than most. I’ve had drinks at Blowfish, Brassai, and KiWe, and I didn’t feel special just to be there.
Are these places all just a fad too?
Don’t forget – before Spice Route lit its infamous tiki torches outside the restaurant on King Street, there was a car dealership on that site. The establishment is owned by the same Liberty Entertainment Group that brought us clubs like Joker back in the day, which ironically was demolished and turned into a parking lot.
Joker was one of the hottest clubs in the Adelaide & Richmond area when I was in my clubbing phase back in 1998 – 1999, and there were lineups down the block much like there are at Brant House now. The name “Joker” needed no explanation and it was the unofficial number-one destination. Anything else was second-rate. But eventually the newer and better clubs took over, and Joker was unsuccessfully rebranded before being torn down.
So what if all these bars and restaurants on King West fade into the night? Is that possible? We’re not talking about ONE establishment like Shark City or Joker – we’re talking about an entire area.
I believe that it’s the nightlife and social scene that has propped up real estate prices in the King West area, and I fear that IF, and only if the party moved elsewhere, the real estate prices would drop.
If we’re truly in the midst of a “recession,” then where do all these 26-year-old kids find the money for bottle service at nightclubs for $250 a pop? It makes me wonder how much MORE they’ll spend once the economy improves!
But in the meantime, I’m going to try and stay ahead of the curve.
King West is hot, no doubt. But do I want to wager that it will continue to increase in value at this frenetic pace? Do I want to gamble that the ridiculous $600/sqft prices go up to $700?
No thanks.
I hear they’re practically giving real estate away in Detroit. Maybe I’m in the market for a few abandoned 4-bedroom houses…
Gerrit
at 1:41 pm
I see what you mean, but that area has always been kicking well before Brant House & Spice Route. I’ve worked at King & Spadina for nearly 10 years and it has always been one of my favourite areas of the city – and I hate Brant House,Spice Route and most of the other clubs.
The old factories mixed with new condo buildings has always had its charm and it’s proximity to the rest of downtown and to Queen west has always been great. I purchased a place nearby last year (not on King, but still) because for the last ten years I’ve always found myself and my friends frequenting the area. As much as I love areas like the Distillery and St. Lawrence market, they’re too far away from anything social. Ossington etc. is also a great area that is becoming the new hot spot (I do prefer those bars) but it’s too far from a good TTC line to be a practical place to live. If you work uptown and live at Queen & Ossington, you’re looking at an hour minimum commute. You may as well live in Oakville.
Every new hot spot will have it’s peak (which may be right now for King west) but I doubt you’ll ever see a serious decline.
Nikki
at 12:23 am
Agreed.
jake
at 5:47 pm
I brought a unit at fashion house under $400per sf. I really dont mind the delay of the project since they wont allow for assignment anyway. Is really that hot? I should’ve brought more
Katelyn
at 7:26 pm
Ha! You worked at Shark City? I used to go there all the time when I lived on Redpath. NYE of the millenium! What a throwback, thanks for a good laugh!
Louisa Martin
at 8:54 pm
I see your point re: fashionhouse vs fashion victim . Still, were the likes of Peter Freed and Brad Lamb (and also Minto) buying up the Shark City area like there’s no tomorrow? FWIW, I think because there is so much vested interest in this area becoming the new Yorkville, that barring any “end of the world” financial implosion (which remains a slight possibility), this is an area that should continue to impress even itself?
LC
at 3:18 pm
I see it as marketing people pushing a self-fulfilling prophecy on us all – if we say it will become the new Yorkville long and hard enough, people might eventually believe it. Cast your eyes to King and Queen EAST and they are also making grand proclamations ….and now with River City and developing the Don Lands, there will be no shortage of sales centres claiming their project will help in the transformation of an area into a land of riches.
Is that enough to make me slap down $50K to be held in trust for who knows how many years? Nope, not unless I already like the area as it is. To each their own.
Chimmy
at 2:26 pm
People rambled like crazy about night clubs and how it isn’t for you and blah, blah, blah.
Yonge and Eglinton was used in a portion of the post. But lets think about this. What does Yonge and Eglinton lack? Good Highway access, a number of supporting communities to make a club/bar thrive. Check out the demographic. People who live in this area aren’t out for clubbing, They are older, with families and everything closed at around 11pm. It would be difficult to survive for anyone once its get old. There isn’t enough support for something other than Alley Cats and Spacco. Mind you Spacco is a restaurant as well.
One project was referred to and comments went on about the type of people, hype and how there is nothing really special there. Ok I get it, its not for you and that’s fine.
The post should of been balanced with:
1. Proximity to the core and transit access. Many people are employed by big institutions and firms. it takes me a 8 min street car ride to get to work. Not bad I’d say. For me, there is value in saving my time and not communizing longer distances.
if you work in marketing there are a number of firm positioned in the King West area. So why wouldn’t you want to live close to work.
2. Highway access – You can get to the Gardiner in minutes
3. Amenities – Anyone can get to Queen W. for shopping to the North, Liberty Village to the West and the core (as mention before) in a few minutes walking. Also it is a short cab to other areas like Little Italy, Kensington Mkt and the Waterfront which are all in walking on a nice day.
Not to mention the ACC and Rogers Centre are not very far either.
4. Restaurants: A few that may be a bit pretentious. But You have excluded so many places that are affordable. You don’t like the King and Portland restaurants? Walk 2 minutes North to Queen – probably some of the best finds in the city.
5. Product – as a owner of many units in the C1 district I can tell you first hand Freed has probably some of the best product out there in terms of quality. Ever been into that Concord City Place garbage? Those units are just waiting to fall apart. I cant comment on the likes of Brad Lam’s developments but Freed is pretty good. The spaces are well thought out and fore the most part the finishes are of quality with respect to other projects in and around the C1 district. If a loft or condo isn’t for you. You will have to find a fix’r upper.
These are all good reasons to invest or buy in this area. I cold go on.
A comment was made: “what if all these bars and restaurants on King West fade into the night? Is that possible? We’re not talking about ONE establishment like Shark City or Joker – we’re talking about an entire area.”
How likely is this? This is now a community – not the club district riddled with crime and no community. Before its was “king west,” it was “Parkdale”. No one wanted to live or hangout there. I remember way back I purchased a unit in DNA. People thought I was nuts. Ewww you bought in Parkdale?? Now its Liberty Village. What everyone is just going to pick up and leave? The area you are referring to is in the Club District and has a completely different make up and demographic. The clubbing district and King West have very little in common. King West isnt riddled with thugs and people looking to Brawl when they get to Burrito Boys. This is an area that is still in transition and your car garage example is proof. But the commentary and arguments should be made via an Apples to apples comparison please.
If they fade into the night as you say, they will simply be replaced by the next highest and best use. There are some REITS and other real estate investors with some capital looking to acquire buildings for their portfolios. There is opportunities via another misfortunes. King West is not a clubbing distinct. It’s developing into a liveable community. Notice the variety of uses and businesses. If King West implodes and its one of the hottest areas, what do you think is going to happen elsewhere? Ossington Strip is definitely the hottest area right now but there isn’t exactly a lot of product on the market in that area. If the hottest area goes down, what makes you think any other will be insulated from this?
Another comment I would like to pick out:
“If we’re truly in the midst of a “recession,” then where do all these 26-year-old kids find the money for bottle service at nightclubs for $250 a pop? It makes me wonder how much MORE they’ll spend once the economy improves!” Bottle service includes a booth that usually holds 4 people. At $300 (including tip say $50) that’s $75 bucks. Not that out of this world.
Some comments have basically generalized an entire community and so what if a parent buys there child a condo? Check out the Kids in Yorkville buying $1000 hand bags and $400 jeans. People are always buying crazy expensive things. What you don’t think people in St. Lawrence Market, Yorkville etc… aren’t buying over priced martini’s, steaks, pastas and sushi?
“King West is hot, no doubt. But do I want to wager that it will continue to increase in value at this frenetic pace? Do I want to gamble that the ridiculous $600/sqft prices go up to $700?”
Ever head of this thing called supply and demand pressures? There is presently more demand than there is supply. For the most part the C1 district has been relatively unscaved by the global economic crisis. Back in 2003 people we telling me “don’t buy, its too expensive. Wait!”. People have been saying this for eons and yes there will be a time when what goes up, will come down. Here is some food for thought though. In Aug 09 Freed was fire selling units for one is developments at +/-$450-$500 psf. A few months later the market shot back up to well over $600. Anyone who would of purchase a unit would of made a small fortune. Everything is relative. I sold that DNA unit in 2008 and doubled my money and more. It all depends on what is right for the buyer and what they want.
In comparison to other metropolitan centres globally, our real estate is very affordable. Try and buy a condo in Melbourne or Brisbane. I am not defending the market, i am just shedding some light.
Does King West have “spirit?” Not really. – That’s an opinion, not fact. It still needs some time.
These restaurants mentioned are all relatively newer – like anywhere else some will come and go. Personally, College Street and Queen West are amazing neighbourhoods and where I spend most of my time. I am a 3 min walk away from Queen and 5 min cab from College. These areas didn’t just pop up and have character instantaneously. The spirit was cultivated over many years. King West is new and its going to sort itself out.KW is a relatively new area and it needs time.
I can tell you this. Almost all the people that I know live in the area – Love it.
I am not reply because I think King West is better than anywhere else. I don’t believe that. There are many amazing places in the city that are all pricey. Ever looked at the Distillery projects? Sure its charming and unlike anything else in the City but they aren’t cheap either. Aside from the charm there is a lack of access to anything and really nothing going on aside from the businesses and restaurants contained in that project.
Nikki
at 12:31 am
Well….It’s now 2022 and I’d say it’s booming.
Just bought on King west and love it!!
Nikki
at 12:32 am
Sorry…2021