View Full Version : Condo projects proceeding despite signs of instability

Feb 8, 2008, 1:40 PM
From the Herald: http://thechronicleherald.ca/Business/1036801.html

Condo projects proceeding despite signs of instability

By ROGER TAYLOR Business Columnist
Fri. Feb 8 - 6:22 AM

Despite delays caused by a shortage of skilled tradespeople, which among other things has helped to increase construction costs, the metro condo and apartment market seems to be going full steam ahead.

The continued building boom has some people wondering if there is economic justification for the construction or if it may be part of some kind of building frenzy in the metro area.

Canada Mortgage and Housing Corp., the agency that tracks these things, told a conference earlier this week that it expects about 900 condo units will be built within the urban part of Halifax Regional Municipality over the next two years — 200 units on the Halifax peninsula, 400 on the Halifax mainland, 200 in Dartmouth and 100 in Lower Sackville.

Wunderkind developer Joe Metlege of Halifax says he has changed his mind about trying to sell his $15-million, seven-storey, 97-unit Palace Royale project in Clayton Park as condos and has instead decided to rent the units out as "condo-quality" apartments beginning in September.

"The condo market is not too stable right now, so we’re going to finish it like a condo with granite countertops, six appliances, large spacious rooms, key card access for the units," the 25-year-old told me in a recent phone conversation.

According to CMHC, in addition to the condos that will be built in metro, there are also a healthy number of apartments about to come on the market in the next couple of years.

It is projecting there will be an additional 1,250 apartment units available in metro by 2010.

About 225 apartment units will be built on the Halifax peninsula, 525 on the mainland, 450 in Dartmouth and 50 in the Bedford/Sackville area, according to analysts at CMHC.

As almost everyone knows, location is the key to the success of any real estate transaction and the market for apartments and condos is no exception.

Metlege is president of Jono Developments Ltd. and is also the president of the Investment Property Owners Association of Nova Scotia. In addition to the Palace Royale project, he has embarked on an even more ambitious project on the periphery of Halifax’s downtown.

He recently acquired the property that’s home to Trinity Anglican Church at the corner of Brunswick and Cogswell streets. That’s where he plans to construct a $50-million, mixed-use, 19-storey building.

Work on that project could begin as early as this fall, he says. The church called for proposals for the site last year and Metlege says the package he offered won the bid.

In exchange for the church and the land downtown, Metlege is building a new church in the Clayton Park area near his Palace Royale project.

There was a cash payment to the church as well.

There is no heritage claim on the existing downtown structure and there are no height restrictions in that part of the city either, so Jono Developments can proceed with its plans without having to go through the costly and time-consuming appeals process faced by many downtown development proposals in recent years.

He says the site is strategically located and should become even more valuable once the city proceeds with plans to tear down the often-criticized Cogswell interchange to allow for even more development.

Metlege says plans for the building have not been finalized but one idea is to set aside part of the building as a four- or five-star hotel. The top floors would be apartments. Plan B for the site would eliminate the hotel component and replace it with about 150,000 square feet of office space.

In addition to having to have vision about what type of construction project will become a successful investment, under today’s conditions, developers also have to have a lot of guts.

( rtaylor@herald.ca)