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  #121  
Old Posted Oct 2, 2015, 3:55 AM
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Originally Posted by Simplicity View Post
Downtown Winnipeg has ~8.5MM square feet of office space. Of the 8 major centres in Canada, it has the lowest average rents (lower than Halifax!). As of Q2 of this year net absorption was negative ~33k square feet and that the ~81k square feet of Centrepoint that hit the market this year. Vacancy is at 11% and climbing.

Naturally, we move the market by ~6% and add 500K of subsidized office square footage.
As excited as I am to imagine this new complex once it is complete, it does give me the same feeling I get when I put down my credit card to make a pricy and irresponsible purchase. There is really no justifying it.

So which buildings will get hit hardest by the construction of TNS? I'm assuming there will be some inflow from the suburbs, but I'm sure some will be coming from likely class B downtown buildings?
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  #122  
Old Posted Oct 2, 2015, 4:46 AM
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As excited as I am to imagine this new complex once it is complete, it does give me the same feeling I get when I put down my credit card to make a pricy and irresponsible purchase. There is really no justifying it.

So which buildings will get hit hardest by the construction of TNS? I'm assuming there will be some inflow from the suburbs, but I'm sure some will be coming from likely class B downtown buildings?
You've gotta start with those already comfortable paying the high rents and those are the Class A tenants. I doubt we'll see any major tenants coming from the suburbs 'cause they're there for a reason. And if this thing is truly going to be 27 storeys high, you're going to need more than a couple small suburban firms moving to make it work - you need the whales. Even a large tenant like Stantec is a middling tenant in a building like this.

First thing you'd be looking at are the large law firms. Aikins, TDS, Pitblado - those guys need the high end space to justify their billings. I don't doubt at least one of them is already in talks. But then you have CN, BMO Nesbitt Burns, CRA, Deloitte, Ernst & Young - Those types of operations. They want the address and they're used to paying ~$35-$40/ft (including additional rents). And both 201 Portage and 360 Main do quite well given they're about the only Class A office space in the city aside from maybe Hydro (which we really shouldn't count), so that tenancy exists and at low vacancy rates. But that's the thing about Class A space - it's both a quantitative and qualitative assessment. Those are both just barely Class A buildings by any other city's standards, but because they're both new(ish) and tall, they're Class A here. Anything else more grandiose would immediately replace them. Which is fine. Provided that that space isn't subsidized by both the municipal taxpayer and the provincial one. Government offices don't require Class A space.

I just don't see Class B tenants - or enough, anyway - deciding that their businesses benefit to the point where rents would literally double for them. If this thing gets built, it's taking the existing Class A tenants, and that's it. Notwithstanding, of course, that it would be beneficial to move Birchwood Cushman, Stevenson, Nova-Con, etc. into the building (which would leave other vacancies behind), but even those companies would take a floor at the most and probably only half.

I think Cory made the point that MPI or somebody could move, but their building is perfectly fine.
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  #123  
Old Posted Oct 2, 2015, 4:47 AM
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As a comment of balance, I generally very much appreciate Simplicity's contributions. There is an obvious group of posters that drive intelligent content and discourse on this site, making it a wonderful place to visit and glean insight into the development world in Winnipeg. Simplicity is certainly one of them. Thanks for your inputs relating to development, finance and economics. It's some of my favourite reading.
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  #124  
Old Posted Oct 2, 2015, 8:07 AM
lilwayne lilwayne is offline
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like I says chipman and company gots connections naw wat I mean

they wouldn't propose such an ambitious project unless they had some companies interested in the space

now I know yall just saying that their going to find tenants from old buildings move into these new digs but I'm pretty sure they can bring in some new businesses into da peg... the hotel and condo building is pretty much a done deal... now the other tall building which they project will be close to da size of say the td building will need a big major anchor tenant and they aint have that yet they does however have one for the 9 story tower which will probably be da height of a 18 story residential tower still pre big... but the 21 story tower depending on commercial space leased out I'm not to sure who they in contact with but mll should of chose chipman project...
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  #125  
Old Posted Oct 2, 2015, 12:02 PM
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Originally Posted by lilwayne View Post
like I says chipman and company gots connections naw wat I mean

they wouldn't propose such an ambitious project unless they had some companies interested in the space

now I know yall just saying that their going to find tenants from old buildings move into these new digs but I'm pretty sure they can bring in some new businesses into da peg... the hotel and condo building is pretty much a done deal... now the other tall building which they project will be close to da size of say the td building will need a big major anchor tenant and they aint have that yet they does however have one for the 9 story tower which will probably be da height of a 18 story residential tower still pre big... but the 21 story tower depending on commercial space leased out I'm not to sure who they in contact with but mll should of chose chipman project...
No offence but learn how to use complete words, a hell of a lot easier for the rest of us to read....
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  #126  
Old Posted Oct 2, 2015, 1:34 PM
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Originally Posted by esquire View Post
As excited as I am to imagine this new complex once it is complete, it does give me the same feeling I get when I put down my credit card to make a pricy and irresponsible purchase.
Can we have some examples, just for interest sake?
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  #127  
Old Posted Oct 2, 2015, 1:36 PM
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And both 201 Portage and 360 Main do quite well given they're about the only Class A office space in the city
Isn't the Richardson building class A?
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  #128  
Old Posted Oct 2, 2015, 1:52 PM
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Isn't the Richardson building class A?
Yeah, definitely. But it's not considered equitable space to 201 Portage or 360 Main. It has some great tenants - KPMG, PWC, Power Corp, etc... but it doesn't have the cachet or the rents of either of the above. From what I understand they've been or are planning a larger scale renovation in an effort to bring the building "into the future", but the building is now 46 years old. That's pushing it for Class A space. This is why 360 is getting the update even though its about ten years newer.
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  #129  
Old Posted Oct 2, 2015, 2:02 PM
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Can we have some examples, just for interest sake?
Ah hah hah, best not to remind myself of past errors in judgment. Rapidly depreciating assets is probably the most accurate way of putting it

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Originally Posted by Riverman View Post
Isn't the Richardson building class A?
I recall that at one point 400 St. Mary Ave. was included in that list, although it is getting a bit dated now and probably not a viable alternative for the tenants occupying Class A P&M space.

Interesting rundown BTW Simplicity. I can't imagine that any of the big law or accounting firms would be easily swayed to move to TNS. ... in recent years the only ones I can think of which did move into class A space were MNP which is almost a once in a generation growth story, and D'arcy & Deacon... even they lost a couple of partners over that move.
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  #130  
Old Posted Oct 2, 2015, 2:24 PM
Simplicity Simplicity is offline
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Ah hah hah, best not to remind myself of past errors in judgment. Rapidly depreciating assets is probably the most accurate way of putting it



I recall that at one point 400 St. Mary Ave. was included in that list, although it is getting a bit dated now and probably not a viable alternative for the tenants occupying Class A P&M space.

Interesting rundown BTW Simplicity. I can't imagine that any of the big law or accounting firms would be easily swayed to move to TNS. ... in recent years the only ones I can think of which did move into class A space were MNP which is almost a once in a generation growth story, and D'arcy & Deacon... even they lost a couple of partners over that move.
Yeah, and D'arcy & Deacon only went to the Richardson Building! I'd be upset about the move too if I were a partner, but those sorts of firms don't act in the same way that the "Big 3" here do. If you have largely corporate clientele, the firms demand the high end space. And MNP's move had to do with them going national if I recall. In other words, if you want to play with the big boys, you've gotta act like them. Can't be in Class B space in St. James if you want national clientele.

But I actually think the huge firm model is dying given the obscene billing rates those firms expect. It's costing them good lawyers and they know that, but I don't think it'll stop the ego at the top from getting their status symbols. For some lawyers it just doesn't matter that they need 40-45 billable hours a week - they want their partnership at the big firm and they don't care that the rent is cutting into their paycheque. In other words, there will always be enough of them even if the dropoff after the partners is pretty pronounced.

A firm like TDS would be my guess right off the hop. Their space hasn't been touched since it was put in in the early 90s and they have a mandate to be the premier firm in this city. Two or three floors in a brand new building would do that for them in their mind.
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  #131  
Old Posted Oct 2, 2015, 3:05 PM
The Unknown Poster The Unknown Poster is offline
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Good comment. I get that it's a little beyond you, but be sure to stick around for when the conversation turns to pouring drinks or where you'd prefer the next Wendy's location. We'll need your insight.
I know you think you're the smartest guy in here but you're just the rudest. And your biases are glaring. You dont realise that you defeat much of your own arguments with your condescending nature.

You're one of those guys that talks tough on the internet but probably would keep his head down in public. Only cowards act like bullies on the internet.

And the shameful thing is, you often have insights. But they too often get lost in your very poor attitude.

But hey, this is taking me away from my paralyzer and Baconator.
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  #132  
Old Posted Oct 2, 2015, 3:07 PM
The Unknown Poster The Unknown Poster is offline
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Originally Posted by lilwayne View Post
like I says chipman and company gots connections naw wat I mean

they wouldn't propose such an ambitious project unless they had some companies interested in the space

now I know yall just saying that their going to find tenants from old buildings move into these new digs but I'm pretty sure they can bring in some new businesses into da peg... the hotel and condo building is pretty much a done deal... now the other tall building which they project will be close to da size of say the td building will need a big major anchor tenant and they aint have that yet they does however have one for the 9 story tower which will probably be da height of a 18 story residential tower still pre big... but the 21 story tower depending on commercial space leased out I'm not to sure who they in contact with but mll should of chose chipman project...
Here is some advice for you. Simple doesnt like Chipman. So you wont be allowed to post any pro-chipman remarks here without getting his nonesense in return. Its not worth it. Many of us just skip over his posts. There are many people here who are both smarter and nicer than he.
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  #133  
Old Posted Oct 2, 2015, 3:12 PM
Pinus Pinus is offline
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I know you think you're the smartest guy in here but you're just the rudest. And your biases are glaring. You dont realise that you defeat much of your own arguments with your condescending nature.

You're one of those guys that talks tough on the internet but probably would keep his head down in public. Only cowards act like bullies on the internet.

And the shameful thing is, you often have insights. But they too often get lost in your very poor attitude.

But hey, this is taking me away from my paralyzer and Baconator.
I also feel he has some insight, but his ego is so bloody inflated that anyone who dares stand up to him gets belittled because, you know, how dare anyone stand up to Simplicity. He is the all-knowing, all-important poster on these boards and the rest of us are well below his self-imposed stature. Once that happens, the claws and fangs come out with vengeance.

If he would just lose that condescending attitude then there would be zero issues whatsoever. But we all know that won't happen.

Last edited by Pinus; Oct 2, 2015 at 3:25 PM.
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  #134  
Old Posted Oct 2, 2015, 3:20 PM
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I have a very strong hunch that it will be a Le Germain hotel. Heard from the inside that the alt has surpassed expectations and the family was thrilled in working with longboat and in Winnipeg in general. Apparently 25% capacity is very good for the first 6 months a hotel is open, and alt was averaging 35% after 3 months.
I would be surprised if Le Germain is not on the final short list for the TNS hotel. Basically you have someone willing to build a hotel and you just need to put your name on it and take a cut for the management side as you run the operations. I think the SPG group of brands is also going to be in the final short list due to the NHL's preference for having visiting teams stay there. If True North can swing a deal that has every visiting NHL and AHL team booking room nights in their affiliated property that is a lot of secondary dollars coming into their pockets instead of a competitor's.

In terms of the big accounting firms, I think part of the MNP relocation was that they added in a smaller, local IT consulting company as part of the move. They needed a space to put all their employees in a single location and it might not have been possible at their old location. Along those same lines though if you are a law firm or an accounting firm and the Chipman companies are one of your bigger accounts and they come calling on you to move into their fancy new office complex to be closer to their other operations I think it would be given some pretty serious consideration. The unspoken part of that request would of course be that if the law/accounting firm was not willing to relocate as "requested" that those accounts would be shopping for a new representative that was willing to make the move.
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  #135  
Old Posted Oct 2, 2015, 3:29 PM
Simplicity Simplicity is offline
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You're one of those guys that talks tough on the internet but probably would keep his head down in public.
I always love this insight from people who can't put words to their feelings. "You wouldn't say that to my face! I used to bounce the door!"

I don't respond to your posts because they're mostly inane. I'm self-selecting out of being in conversations with people who can't critically think and have nothing of value to add. If you're so offended, nobody is forcing you to respond to me either. Put me on ignore and move on.
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  #136  
Old Posted Oct 2, 2015, 7:20 PM
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I also feel he has some insight, but his ego is so bloody inflated that anyone who dares stand up to him gets belittled because, you know, how dare anyone stand up to Simplicity. He is the all-knowing, all-important poster on these boards and the rest of us are well below his self-imposed stature. Once that happens, the claws and fangs come out with vengeance.

If he would just lose that condescending attitude then there would be zero issues whatsoever. But we all know that won't happen.
I do often wonder why Simp has so much time to spend talking down to people on these boards, if I was in his shoes I would too busy adventuring and spending the hundreds of millions of dollars I've amassed by knowing more about real estate investment and development than anyone else in the country...
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  #137  
Old Posted Oct 2, 2015, 8:14 PM
Simplicity Simplicity is offline
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I do often wonder why Simp has so much time to spend talking down to people on these boards, if I was in his shoes I would too busy adventuring and spending the hundreds of millions of dollars I've amassed by knowing more about real estate investment and development than anyone else in the country...
That's a very work-a-day perspective. I tend to love what I do, so I don't think about getting away from my 'job'. I also don't have a boss who demands I be in a chair between certain hours, so if I can come around here to talk shop with others who are equally interested, then that's great for me. Frankly, I have the freedom to do what I want. I spend my days researching and doing analysis because that's what I like to do - not because if i didn't I would go hungry. It's not like I have to shut down the production line or wait for my coffee break to come and respond.
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  #138  
Old Posted Oct 2, 2015, 8:20 PM
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but the building is now 46 years old.
Here's a little history quiz. What was torn down to make way for the Richardson building?

Hint: Not a building
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  #139  
Old Posted Oct 2, 2015, 8:25 PM
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  #140  
Old Posted Oct 2, 2015, 8:28 PM
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Cory B, while I understand what your saying, how many of the Law or Accounting companies that are in the existing class A buildings are are there because of their business relationships with other tenants there?

If they move to be in a Chipman building could that mean the end of probably large accounts with the other companies.
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