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  #81  
Old Posted Dec 1, 2014, 8:06 PM
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See, that is one of the most constructive things I have ever seen you write Simplicity. I can appreciate that response. You seem to have a lot of knowledge on the subject of development but only pick a part the viability of every project that appears on here.
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  #82  
Old Posted Dec 1, 2014, 8:13 PM
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We do almost exclusively private developments, and to echo Biff's statement - BECAUSE the architects we work with already spec higher end things (like and especially like - windows) the designs we already do just about cut the mustard. The most major area of increase is for foundation insulation.

When we hear people on this forum proudly proclaiming $50 to $100 per square foot costs for construction - you can damn well be sure this isn't building a Taj Mahal. It is definitely bargain basement. That's fine. People are free to do what they do to make a buck. Same as people are free to willingly purchase or rent the end product.

People building bargain stuff is what makes up half of our fees over a year. They always use the same consultants, and the lawyers for the other side pay plenty of fees for us to come in and try to clean up their mess.
Nobody is building at $50-$100 square foot in today's market. It's not happening. About the lowest build cost you can achieve without being the prime consultant yourself and managing your own development and construction is about $115-$120 without warranty or bonding and staying within Part 9.

If you're willing to demonstrate a Part 3 building that you've worked on that's been a success (large caveat there) that utilizes above code architecture and engineering, I'm happy to see it. We'd be talking somewhere on the order of $165-$170 hard cost plus another approximately $40 in soft costs. That's almost a $210/ft build cost and that's about where the Rothesay apartments are coming in. And that's Edison building that thing, a family that doesn't need financing and whose owner put a 10,000 square foot house atop at her own expense. That building will only pay for itself in about the 20th year because it's financed by the cash flows of free and clear properties.

And I know how the dollars and cents work because it's my job. I know exactly what it takes to make a project work and at what figures. These numbers don't work when the bank won't let you project more than $1.80 per foot on the back end...
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  #83  
Old Posted Dec 1, 2014, 8:26 PM
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Originally Posted by Simplicity View Post
Nobody is building at $50-$100 square foot in today's market. It's not happening. About the lowest build cost you can achieve without being the prime consultant yourself and managing your own development and construction is about $115-$120 without warranty or bonding and staying within Part 9.

If you're willing to demonstrate a Part 3 building that you've worked on that's been a success (large caveat there) that utilizes above code architecture and engineering, I'm happy to see it. We'd be talking somewhere on the order of $165-$170 hard cost plus another approximately $40 in soft costs. That's almost a $210/ft build cost and that's about where the Rothesay apartments are coming in. And that's Edison building that thing, a family that doesn't need financing and whose owner put a 10,000 square foot house atop at her own expense. That building will only pay for itself in about the 20th year because it's financed by the cash flows of free and clear properties.

And I know how the dollars and cents work because it's my job. I know exactly what it takes to make a project work and at what figures. These numbers don't work when the bank won't let you project more than $1.80 per foot on the back end...
$150 per square foot construction costs is about as cheap as you can go for multi-unit residential.

I realize those prices ($50 to $100) aren't feasible for today, but they were hardly feasible for the years they were quoted in as well.
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  #84  
Old Posted Dec 1, 2014, 8:28 PM
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See, that is one of the most constructive things I have ever seen you write Simplicity. I can appreciate that response. You seem to have a lot of knowledge on the subject of development but only pick a part the viability of every project that appears on here.
I try not to pick apart the viability of everything, but nobody ever dedicates a thread to some 18 unit development in East Kildonan!

I've been in this game a long time. I've worked with bonafide developers all the way on down to the guy with too much money who's interested in a game his money allows him entry into, so I've seen a lot of different scenarios. And I've had probably 50 projects financed, so I also know where the rubber meets the road because I've worked on literally hundreds. On this board we're always talking feasibility within a few different paradigms: planning, construction, perceived growth of the city, etc. But the truth is that everybody's good intentions often grind to a halt once it's time to get the thing out of the ground. So if I'm skeptical, it's because I know certain things don't work and that's usually from experience.

It's pretty rare that the bank is of a more liberal mind than I am.
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  #85  
Old Posted Dec 1, 2014, 8:37 PM
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Originally Posted by drew View Post
$150 per square foot construction costs is about as cheap as you can go for multi-unit residential.

I realize those prices ($50 to $100) aren't feasible for today, but they were hardly feasible for the years they were quoted in as well.
This is about the bottom end for Part 3. So, 4 storeys to stay combustible, but this is also really only achievable on a larger piece of land where you can really stuff a lot of units to achieve that scale you need. The second you're into indoor parking, you're closer to about $165/sq ft.

But if you can stay in Part 9, you can be in at around $120. And a lot of the reason for this is that you don't need an architect at 8% on the relatively nominal square footage, you don't need M & E, and you don't need to sprinkler your building. You can have a tech draft your building with a structural to stamp the foundation, and none of the new energy code applies.
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  #86  
Old Posted Dec 1, 2014, 10:48 PM
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How many square feet are we looking at?
about 70k, plus a 40 car parkade.

its really tough to pin down the exact impact.
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  #87  
Old Posted Dec 1, 2014, 10:52 PM
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about 70k, plus a 40 car parkade.

its really tough to pin down the exact impact.
Is the $12MM straight hard cost, or inclusive of land and all soft costs (consultants, legal, etc...)?

And is this combustible?
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  #88  
Old Posted Dec 1, 2014, 10:54 PM
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Originally Posted by drew View Post
We do almost exclusively private developments, and to echo Biff's statement - BECAUSE the architects we work with already spec higher end things (like and especially like - windows) the designs we already do just about cut the mustard. The most major area of increase is for foundation insulation.
.
I'm curious, what's the wall construction to achieve the effective R values? What's the cladding? What holds the insulation on?

If someone says they spec nice windows so they meet the code already, they are not understanding the impact of the term 'effective R value'.

There seems to be this attitude out there that this is just bringing up the bottom feeder buildings....that its forcing people who were negligent previously and building 'cheap crap'....it is far from that....I am working on a high end lab building and it will have significant impact.
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  #89  
Old Posted Dec 1, 2014, 10:55 PM
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Is the $12MM straight hard cost, or inclusive of land and all soft costs (consultants, legal, etc...)?

And is this combustible?
construction only, non combustible. 7 storey.
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  #90  
Old Posted Dec 1, 2014, 11:10 PM
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construction only, non combustible. 7 storey.
Condo?

That's probably $220/sq ft total cost.
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  #91  
Old Posted Dec 1, 2014, 11:54 PM
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And not only is electricity twice as much, it's much cheaper up front to install electric appliances and heating systems than it is gas. Consequently, when it comes to housing, the people who can least afford it are stuck paying ridiculous electrical bills because Hydro can't manage themselves without continual increases and no developer will pay for a gas-hookup. Gas - even with it cheaper to run - is still considered a luxury.

And since nobody in the province has any hope for hydro, most of us would never even consider electric to do anything but keep the lights on and the fridge running.
I own 100 apartments ranging from 800 - 1100 Square feet all electric and in the winter some tenants bills are $40.00 (Hydro Read Meter Bill) They call me and tell me they cannot believe it. Good Construction methods lead to energy savings. Also depends on the trades you hire as well.

I designed and built these buildings and made sure the building envelope was R20/R40.

Nat gas codes are changing all the time and are getting more stringent.

Electric is not twice the cost of electric.

Maintenance on electric is negligible compared to gas.

And if anybody cares, each apartment is not charged 8% PST on their bill, only 1.4% because the building is all electric. That is all passed along to the tenants.

Electric is a winner for multi-family.
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  #92  
Old Posted Dec 2, 2014, 12:07 AM
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I own 100 apartments ranging from 800 - 1100 Square feet all electric and in the winter some tenants bills are $40.00 (Hydro Read Meter Bill) They call me and tell me they cannot believe it. Good Construction methods lead to energy savings. Also depends on the trades you hire as well.

I designed and built these buildings and made sure the building envelope was R20/R40.

Nat gas codes are changing all the time and are getting more stringent.

Electric is not twice the cost of electric.

Maintenance on electric is negligible compared to gas.

And if anybody cares, each apartment is not charged 8% PST on their bill, only 1.4% because the building is all electric. That is all passed along to the tenants.

Electric is a winner for multi-family.
I agree, but mostly because it isn't my cost at the end of the day, it's the tenants. Manitoba Hydro is a socialized mess run by and for political means. If you're ignoring the nearly interminable rate increases coming down the pike, you're doing so to your own detriment...
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  #93  
Old Posted Dec 2, 2014, 12:07 AM
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We do almost exclusively private developments, and to echo Biff's statement - BECAUSE the architects we work with already spec higher end things (like and especially like - windows) the designs we already do just about cut the mustard. The most major area of increase is for foundation insulation.

When we hear people on this forum proudly proclaiming $50 to $100 per square foot costs for construction - you can damn well be sure this isn't building a Taj Mahal. It is definitely bargain basement. That's fine. People are free to do what they do to make a buck. Same as people are free to willingly purchase or rent the end product.

People building bargain stuff is what makes up half of our fees over a year. They always use the same consultants, and the lawyers for the other side pay plenty of fees for us to come in and try to clean up their mess.

I made $1M on that 3000 SQF building I did for $50 a foot in 1995. That was 15 years of rent, a billboard ($5000 a year) and profit on the sale of $350K profit.

I would like to know how much money 511 River lost. Ask your boss.

I know every square inch of that building. I know Ben Haber personally.

Kid, you should not knock people who have actually built. Maybe you built a birdhouse so congrats are in order.

Last edited by Winnipeg Architect; Dec 2, 2014 at 12:24 AM.
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  #94  
Old Posted Dec 2, 2014, 12:27 AM
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I agree, but mostly because it isn't my cost at the end of the day, it's the tenants. Manitoba Hydro is a socialized mess run by and for political means. If you're ignoring the nearly interminable rate increases coming down the pike, you're doing so to your own detriment...
OK.

The buildings have been appraised 2X what the cost with land so I doubled my equity once I received the occupancy permit.

I do not care. I am done. They are almost all paid for anyways.
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  #95  
Old Posted Dec 2, 2014, 2:17 AM
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I would like to know how much money 511 River lost. Ask your boss.

I know every square inch of that building. I know Ben Haber personally.
I am not positive how much money that project made, but it was profitable.

It's a great development. Successfully converting a church into condos, doing what the previous owner could not make work.
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  #96  
Old Posted Dec 2, 2014, 5:41 AM
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I am not positive how much money that project made, but it was profitable.

It's a great development. Successfully converting a church into condos, doing what the previous owner could not make work.
We're getting into a very specific realm here, now. KNH may finally turn a profit on that project when the City finally cuts the DRGP cheque, but it isn't yet. Same goes for James Ave. These projects aren't 'successful' by the market's definition. Both of them are many years in and they aren't sold. If the city wasn't handing over grant money, they would never exist. And that's because they aren't feasible. And they weren't feasible even with Sawatzky acting as prime consultant, developer, and construction manager.

The city isn't going to make a developer whole on a mid-rise apartment in St. Boniface or St. James. And yet, that development will face the same market constraints as 511 River or 128 James and now has larger barriers to code conformity.
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  #97  
Old Posted Dec 2, 2014, 3:18 PM
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We're getting into a very specific realm here, now. KNH may finally turn a profit on that project when the City finally cuts the DRGP cheque, but it isn't yet. Same goes for James Ave. These projects aren't 'successful' by the market's definition. Both of them are many years in and they aren't sold. If the city wasn't handing over grant money, they would never exist. And that's because they aren't feasible. And they weren't feasible even with Sawatzky acting as prime consultant, developer, and construction manager.

The city isn't going to make a developer whole on a mid-rise apartment in St. Boniface or St. James. And yet, that development will face the same market constraints as 511 River or 128 James and now has larger barriers to code conformity.
While James hasn't been entirely successful as condos (not abnormal by any means), the building is full (of renters) and the owner leases the commercial on the main floor for his own business, as well as a separate sublease. The building is full, so I am not sure it couldn't be considered a success at this point.

511 River was fully paid out long ago, so any remaining units are pure profit as they sell.
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  #98  
Old Posted Dec 2, 2014, 4:33 PM
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While James hasn't been entirely successful as condos (not abnormal by any means), the building is full (of renters) and the owner leases the commercial on the main floor for his own business, as well as a separate sublease. The building is full, so I am not sure it couldn't be considered a success at this point.

511 River was fully paid out long ago, so any remaining units are pure profit as they sell.
You're getting bad info. The city still owes the money. The funds have been borrowed using the city's promissory note as collateral. In any case, it doesn't matter.

And James Street is not a success. It was built as condos on a bad market decision and then was tried-and-failed as a rent-to-own. The fact that it's now a rental building means that - without the city's money - the project would likely be insolvent if it was financed. And if there wasn't the owner's company to move into the space as a last resort, that entire floor would likely be vacant. The District Condos next door is probably informative in this respect.

And I really don't care. I'm not here to persuade you of anything because the market is the market. Somebody failing at a project twice only to bail themselves out by moving their operations there isn't the sort of thing the market prices into a development project. I'm not sure why you'd even argue that sort of thing.

This whole conversation started with the facts that increased regulations that don't increase 'value' in the consumer's eye are detrimental to projects. That's still true. Using your bosses two unusual projects as proof of concept when both are underwritten by the taxpayer and of dubious 'success' doesn't really make the case...
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  #99  
Old Posted Dec 2, 2014, 4:38 PM
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And if there wasn't the owner's company to move into the space as a last resort, that entire floor would likely be vacant.
Moving the office was the plan all along - it was the reason for the project to begin with.

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only to bail themselves out by moving their operations there
If that is what you understand - then I am afraid you are getting bad information.

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Using your bosses two unusual projects as proof of concept when both are underwritten by the taxpayer and of dubious 'success' doesn't really make the case...
We were discussing 511 River, you were the only one that brought up James Ave.

Last edited by drew; Dec 2, 2014 at 5:01 PM.
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  #100  
Old Posted Dec 2, 2014, 5:11 PM
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Moving the office was the plan all along - it was the reason for the project to begin with.



If that is what you understand - then I am afraid you are getting bad information.


We were discussing 511 River, you were the only one that brought up James Ave.
The point stands; it's not relevant to a discussion on Winnipeg's development market vis-a-vis construction regulations.

There are a few NHLers in this city earning $5MM annually. But we aren't going to sell Winnipeg to India and the Phillipines as the sort of place where you can come and make $5MM/year because those are outlier cases that have almost nothing to do with the larger economy.
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