Quote:
Originally Posted by Cyro
40-50% vacancy rate, accurate assessment.
Let's drill down for a moment and view the property that sold for close to $8M
https://www.google.com/maps/@49.8902.../data=!3m1!1e3
??? What do those in the development,architectural and city planning fields see that bothers them or would give them concern about the current project.
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Edited OP for inaccuracies.. |
Leaving aside the design and surface parking elements, I actually think this is about the best thing MBLL could have done. And that's not an absolute statement; there's no reason whatsoever the work that gets done at MBLL requires a ~$330/sq ft renovation/new build so a few governmental paper-pushers can luxuriate in the sort of opulence generally reserved for lawyers and hedge-funders. But I digress.
To my mind - and given the situation - they approached this the right way. They'll have an asset at a discount where hopefully their presence can bump the rents, and they'll be able to capitalize those rents over time which is something they'd otherwise not be able to do even as a long-term tenant (which they are). To me, it's better than paying $32 or $33 in annual rent (including additional rent) to somebody who's going to ask for a ton of subsidy anyway (ahem, Chipman).
The only thing I might say - and this is presumptuous - is that the Province is going to be forced to dump money into the Bay building at some point anyway. This could have been an opportunity to kill two birds with one stone even though we all know they didn't do that because they wouldn't be able to advertise the cost savings due to the move. Eh, I can live with it. BUT, don't be fooled. $23MM over 20 years is absolutely not $23MM. Using a 4% discount rate, it's closer to about $10MM and that's the number they should be using.
Does this deal save them $10MM today? I don't know.