Quote:
Originally Posted by AlessioSBT
This is what i was referring to:
To go back to the original topic, what i'm trying to say is that right now there's no way to build something from zero. The average re-sale cost for Vancouver and Toronto is around 1000/sqft and it cost at least 1500 to start now and build a residential building.
So what i'm saying is that all these new proposals we see will not actually happen for a very long time.
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This thread is about a rental building, so re-sale costs are irrelevent. There are at least 100 sites already acquired by developers, and proposed for rental development in the Broadway Corridor, so those site purchases are 'sunk costs' - it costs those developers nothing more to develop them.
As has been discussed on the Broadway Corridor thread, sites are being acquired even today at under $200 psf buildable. The
construction costs for a typical concrete highrise in the Broadway Corridor are currently around $500-$520 psf.
There are additional soft costs, (design legal, permits etc), but concrete rental towers should cost under $1,000 psf to deliver to market (site, construction, soft costs, tenant relocation etc etc). One reason for rental towers not being built could be the availability of construction finance, but for some projects there are both provincial (BC Builds) and federal (CMHC) funds to provide construction loans for rental buildings.
Another reason would be if there is insufficient demand to reach reasonable occupancy levels for new rental buildings. Rental vacancy rates are still low, so that's not really a factor yet, but how well buildings like this rent out should give a good indication of demand.
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