Edmonton Construction 11 (November 2011) - Page 392

240glt · #**7821** Posted **Jun 13, 2013, 7:22 PM**

Heard today that the majority backer for the KR redevelopment is not that keen on a hotel. We'll see how that pans out..

Daveography · #**7822** Posted **Jun 13, 2013, 7:33 PM**

^ Suburban hotels that seem to be popping up all over the outskirts are probably eating into any demand...

Hallsy's Toupee · #**7823** Posted **Jun 13, 2013, 7:37 PM**

Quote:

Originally Posted by 240glt

Heard today that the majority backer for the KR redevelopment is not that keen on a hotel. We'll see how that pans out..

Maybe said backer needs to be reminded of that wee lil arena that's going to be built in by 2016 or 17! And with the conversion of Edmonton House to apartments, the downtown core will need more hotel rooms.

240glt · #**7824** Posted **Jun 13, 2013, 7:41 PM**

^ I'm sure they're much more aware of the market than you are

Hotel margins are generally terrible to begin with. Return on that GLA will be a lot higher with office tenants than a hotelier leasing it I'd bet.

But who knows.. this is just something that came up in a conversation.

Vercingetorix · #**7825** Posted **Jun 13, 2013, 9:36 PM**

That's exactly it. Hotels in a CBD these days require luxury condos to go with them, and as you said office lease returns are far better and less hassle than a hotel. Calgary is facing the same issue. There are three hotels going up in the Beltline, and none in the CBD. The city centre development has a deal with Fairmont for a 5 star hotel, but from what I've heard it's tied to high end condos, and there in lies the situation.

Quote:

Originally Posted by 240glt

^ I'm sure they're much more aware of the market than you are

Hotel margins are generally terrible to begin with. Return on that GLA will be a lot higher with office tenants than a hotelier leasing it I'd bet.

But who knows.. this is just something that came up in a conversation.

s211 · #**7826** Posted **Jun 13, 2013, 9:43 PM**

Quote:

Originally Posted by 240glt

Heard today that the majority backer for the KR redevelopment is not that keen on a hotel. We'll see how that pans out..

I've heard that comment also. If Mr. Day lowered his price expectations for the hotel development rights, then the returns would certainly improve.

kcantor · #**7827** Posted **Jun 13, 2013, 10:07 PM**

Quote:

Originally Posted by s211

I've heard that comment also. If Mr. Day lowered his price expectations for the hotel development rights, then the returns would certainly improve.

and what do you think "lowering his price expectations for the hotel development rights" would do to John's returns??? or do you somehow think there's no connection between those two things?? or perhaps you think developers should be the only parties involved that shouldn't need returns on their investments? maybe we should just do everything and give it away until we're broke... and then who would deliver those hotel rights and office spaces and condos?

EdmTrekker · #**7828** Posted **Jun 13, 2013, 11:54 PM**

Quote:

Originally Posted by Vercingetorix

That's exactly it. Hotels in a CBD these days require luxury condos to go with them, and as you said office lease returns are far better and less hassle than a hotel. Calgary is facing the same issue. There are three hotels going up in the Beltline, and none in the CBD. The city centre development has a deal with Fairmont for a 5 star hotel, but from what I've heard it's tied to high end condos, and there in lies the situation.

"The city centre development has a deal with Fairmont for a 5 star hotel" are you referring to Edmonton? If not please don't mention Calgary in context as it is irrelvant and adds confusion - hence my question.

Black Star · #**7829** Posted **Jun 14, 2013, 5:13 AM**

^Concur......Don't confuse 🞵🞵🞵🞵 when there is no need.

SHOFEAR · #**7830** Posted **Jun 14, 2013, 1:10 PM**

Quote:

Originally Posted by 240glt

Heard today that the majority backer for the KR redevelopment is not that keen on a hotel. We'll see how that pans out..

I've been hearing the same thing for over a week now. didn't want to speculate....but i've heard it from different people involved in very different aspects of the project.

240glt · #**7831** Posted **Jun 14, 2013, 2:29 PM**

^ yeah... my source is one of the top REM guys in Edmonton.. still just heresay of course but I think it has some meat to it...

s211 · #**7832** Posted **Jun 14, 2013, 2:35 PM**

Quote:

Originally Posted by cdnklc

and what do you think "lowering his price expectations for the hotel development rights" would do to John's returns??? or do you somehow think there's no connection between those two things?? or perhaps you think developers should be the only parties involved that shouldn't need returns on their investments? maybe we should just do everything and give it away until we're broke... and then who would deliver those hotel rights and office spaces and condos?

I've been in the industry for 25 years, so I'm pretty sure I have a handle on commercial real estate and the concept of valuation. A few years less than you, perhaps, but I'm no greenhorn here.

Simply put, my sources tell me John's ascribing too much lift (pure profit) on what he wants for the hotel development rights, and if John's hearing that from more than one prospective purchaser, then hopefully he will get religion.

Don't worry, he will still make out like a very rich bandit when he locks a buyer down.

kcantor · #**7833** Posted **Jun 14, 2013, 3:29 PM**

Quote:

Originally Posted by s211

I've been in the industry for 25 years, so I'm pretty sure I have a handle on commercial real estate and the concept of valuation. A few years less than you, perhaps, but I'm no greenhorn here.

Simply put, my sources tell me John's ascribing too much lift (pure profit) on what he wants for the hotel development rights, and if John's hearing that from more than one prospective purchaser, then hopefully he will get religion.

Don't worry, he will still make out like a very rich bandit when he locks a buyer down.

unless those prospective purchasers are intimately aware of john's development and delivery costs, i'm not sure how they can accurately ascribe too much lift (pure profit) on what john wants for the hotel development rights.

john's expectations might well be too expensive for them to meet their own return expectations in which case they need to adjust their expectations or reduce their costs in order to obtain them or pass on the deal.

like you i am a "bystander" here but, if anything, from what i have heard john's returns may well be stretched pretty thin already... which tells me that if the hotel component can't carry its own weight it may make more sense to consider a residential component or more office instead of treating them like a loss leader and trying to make it up elsewhere on a project that doesn't have a lot of elsewhere...

ps. i am not meaning to come across as "short" here or in my first reply for that matter. it's just frustrating to continually hear how developers "should" build this here and "should" build that there and "should" include this and "should not" include that when all of those things are something someone who doesn't have to pay for them simple "expects" to see.

SHOFEAR · #**7834** Posted **Jun 14, 2013, 6:39 PM**

City Market has reported 45,000 walked through the market last weekend. Big thanks to the Pride Parade for all the extra exposure.

CMD UW · #**7835** Posted **Jun 14, 2013, 8:35 PM**

Great numbers

ue · #**7836** Posted **Jun 14, 2013, 11:16 PM**

That's awesome. It was pretty busy, so I'm not terribly surprised. Actually, this year I've found the City Market in general markedly busier than in previous years. I wonder what traffic volume is at the Old Strathcona, St. Albert, and Mill Woods markets (the traditionally regional markets).

Black Star · #**7837** Posted **Jun 14, 2013, 11:23 PM**

I like the downtown market so much of a buzz going on there. Old Strathcona market I have been going to for years and still enjoy...but find some merchants rude and hurry up and buy my product and move along!!! Not to many thank yous or I appreciate the business.

s4.audios · #**7838** Posted **Jun 15, 2013, 1:31 PM**

I wonder how Symphony has done so far in sales. Anyone know if they have even stated an anticipated start date on construction?

RicoLance21 · #**7839** Posted **Jun 15, 2013, 4:12 PM**

Quote:

Originally Posted by SHOFEAR

City Market has reported 45,000 walked through the market last weekend. Big thanks to the Pride Parade for all the extra exposure.

Imagine what the numbers would be when the Arena District is developed. Keep in mind that the downtown arena is not just for Oilers games.

CMD UW · #**7840** Posted **Jun 15, 2013, 4:59 PM**

Quote:

Originally Posted by s4.audios

I wonder how Symphony has done so far in sales. Anyone know if they have even stated an anticipated start date on construction?

Not sure. I've previously stated that I think their marketing signage is lame and looks poorly put together. Is the show suite in the existing house? If so, the signage on site isn't really clear.