SkyCity Centre Winnipeg | 45F | 575 Ft | 175.26 M | Cancelled

[JamieDavid Exchange]

Originally Posted by bmyers

Thank you!


Those that are interested in my latest report can download it here:

http://fortressrealdevelopments.com/news/the-market-manuscript-by-ben-myers-fall-2015/

I'll let people decide for themselves if they like my analysis and reporting.


More on SkyCity here: http://www.cjob.com/2015/09/15/84146/

and here: http://fortressrealdevelopments.com/news/skycity-downtown-winnipeg/

I believe a select few here on this forum will still have negative comments even if the building was 98% complete. They clearly have a void in there life that can only be filled with countless hours of blogging, causing drama and negativity.

[Riverman]

Originally Posted by JamieDavid Exchange

I believe a select few here on this forum will still have negative comments even if the building was 98% complete. They clearly have a void in there life that can only be filled with countless hours of blogging, causing drama and negativity.

Try reading.

http://forum.skyscraperpage.com/showthread.php?t=172482

[Simplicity]

Originally Posted by JamieDavid Exchange

I believe a select few here on this forum will still have negative comments even if the building was 98% complete. They clearly have a void in there life that can only be filled with countless hours of blogging, causing drama and negativity.

Good comment. There's far less negativity when 150 people are sitting on pre-construction units and trying to sell into the same market.

It's fine if you don't understand something. But it's better if you just say nothing.

[Cyro]

Originally Posted by Simplicity

Not without outing myself, no. I supply clients with analysis all the time. If any of them read here - and I have reason to believe some of them do - it would become pretty apparent. And I do provide some here and there on an ad-hoc basis in a pretty simplistic form so it can easily be understood. I believe if you go back to a couple months after I joined I had indicated on many occasions that the inflated number of starts in the multi-family (condo) market was not indicative of a vastly improving market. I had mentioned they were more likely to be added to inventory causing a significant spike in available units leading to material price decreases. And that's happening whether somebody wants to hide it in the form of incentives or upgrades or just straight up discounting the units. So I would say I did well enough on that call to have ensured a client or a poor shmuck hanging onto a pre-construction condo unit wasn't burned.

And that's really all that's necessary. We can look to decreasing immigration or a slower overall economy or myriad other economic data to make the finer points, but Occam's Razor generally prevails at a macroscopic level. You don't need my analysis for that. You can watch the MLS and CMHC data sets on a month to month basis and draw very similar conclusions.

I appreciate your candor and honesty in your response and understand your opinions on directing people away from this project at every opportunity made available to you. Your astute enough to realize why I posed the question? "accountability". You bring a wealth of knowledge to these discussions and with your background, Masters in Economics, I believe? you have much to share with posters.

One question? Would you like to see this project proceed or fail?

[Pegoise]

Hello all, I am a longtime lurker and only an occasional poster. Forgive the long post but reading through the comments today I think it might be important to cut through the negativity brought by Simplicity with some objective analysis because I know that there are many on here that just see his name on a post and close their eyes to what he has to say.
Here is a link to a CMHC report on the housing market (one that Ben Meyers also quotes in his report and one that I am sure Simplicity also reads):
https://www03.cmhc-schl.gc.ca/catalog/productDetail.cfm?lang=en&cat=63&itm=49&fr=1442428048023
In it CMHC continues to call for an elevated number of multi-family starts, some of which are certainly warranted by demographic demand, however, I will call your attention to one phrase in particular:
p. 3 - "Higher inventories, particularly for condominium apartments, will prompt developers to hold back on initiating some new projects moving forward. However, multi-family developers can sometimes be limited in their ability to quickly react to rising inventory levels, and there remain a number of planned projects nearing the construction stage. These projects are expected to be started over the forecast period, which will limit the potential for significant declines in production."

If you read between the lines, CMHC is not forecasting elevated multi-starts because they think they are needed - they are forecasting high starts because multi-builders have a hard time slowing down once they have a project in development. Multi-starts are still high this year, but a lot of the starts activity has shifted to rental – I suspect a lot of condo builders are getting nervous about the unsold inventory and rather than hold off on the project, they are just shifting the market, which will have some consequences by raising the vacancy rate in higher priced rental units down the line – just another kind of inventory.
I think any investor or end-user buyer should definitely do their homework before buying into this project and if Simplicity’s negativity means someone will do that, then good. I would like to see this project succeed but I think the timing is wrong and Winnipeg’s growth rate (while higher than in the past) is still relatively slow compared to other centres and there is a lot of risk of dumping a lot of units all at once into an already saturated marketplace.
Caveat Emptor

[cheswick]

Originally Posted by Pegoise

Hello all, I am a longtime lurker and only an occasional poster. Forgive the long post but reading through the comments today I think it might be important to cut through the negativity brought by Simplicity with some objective analysis because I know that there are many on here that just see his name on a post and close their eyes to what he has to say.
Here is a link to a CMHC report on the housing market (one that Ben Meyers also quotes in his report and one that I am sure Simplicity also reads):
https://www03.cmhc-schl.gc.ca/catalog/productDetail.cfm?lang=en&cat=63&itm=49&fr=1442428048023
In it CMHC continues to call for an elevated number of multi-family starts, some of which are certainly warranted by demographic demand, however, I will call your attention to one phrase in particular:
p. 3 - "Higher inventories, particularly for condominium apartments, will prompt developers to hold back on initiating some new projects moving forward. However, multi-family developers can sometimes be limited in their ability to quickly react to rising inventory levels, and there remain a number of planned projects nearing the construction stage. These projects are expected to be started over the forecast period, which will limit the potential for significant declines in production."

If you read between the lines, CMHC is not forecasting elevated multi-starts because they think they are needed - they are forecasting high starts because multi-builders have a hard time slowing down once they have a project in development. Multi-starts are still high this year, but a lot of the starts activity has shifted to rental – I suspect a lot of condo builders are getting nervous about the unsold inventory and rather than hold off on the project, they are just shifting the market, which will have some consequences by raising the vacancy rate in higher priced rental units down the line – just another kind of inventory.
I think any investor or end-user buyer should definitely do their homework before buying into this project and if Simplicity’s negativity means someone will do that, then good. I would like to see this project succeed but I think the timing is wrong and Winnipeg’s growth rate (while higher than in the past) is still relatively slow compared to other centres and there is a lot of risk of dumping a lot of units all at once into an already saturated marketplace.
Caveat Emptor

Not sure that the number of condos coming onto the market place in the next several months or even a year has much to do with this project. It would be several years away. Looking two years back and CMHC was saying "Population growth supports multi-family housing" in terms of the Winnipeg market. In two or 3 years time when this building is complete (yeah I know its far from a guarantee) who knows what the market in Winnipeg will be like.

[Simplicity]

Originally Posted by Pegoise

Hello all, I am a longtime lurker and only an occasional poster. Forgive the long post but reading through the comments today I think it might be important to cut through the negativity brought by Simplicity with some objective analysis because I know that there are many on here that just see his name on a post and close their eyes to what he has to say.
Here is a link to a CMHC report on the housing market (one that Ben Meyers also quotes in his report and one that I am sure Simplicity also reads):
https://www03.cmhc-schl.gc.ca/catalog/productDetail.cfm?lang=en&cat=63&itm=49&fr=1442428048023
In it CMHC continues to call for an elevated number of multi-family starts, some of which are certainly warranted by demographic demand, however, I will call your attention to one phrase in particular:
p. 3 - "Higher inventories, particularly for condominium apartments, will prompt developers to hold back on initiating some new projects moving forward. However, multi-family developers can sometimes be limited in their ability to quickly react to rising inventory levels, and there remain a number of planned projects nearing the construction stage. These projects are expected to be started over the forecast period, which will limit the potential for significant declines in production."

If you read between the lines, CMHC is not forecasting elevated multi-starts because they think they are needed - they are forecasting high starts because multi-builders have a hard time slowing down once they have a project in development. Multi-starts are still high this year, but a lot of the starts activity has shifted to rental – I suspect a lot of condo builders are getting nervous about the unsold inventory and rather than hold off on the project, they are just shifting the market, which will have some consequences by raising the vacancy rate in higher priced rental units down the line – just another kind of inventory.
I think any investor or end-user buyer should definitely do their homework before buying into this project and if Simplicity’s negativity means someone will do that, then good. I would like to see this project succeed but I think the timing is wrong and Winnipeg’s growth rate (while higher than in the past) is still relatively slow compared to other centres and there is a lot of risk of dumping a lot of units all at once into an already saturated marketplace.
Caveat Emptor

Thanks.

Without going too much further into this, I made the point repeatedly that starts are a lagging indicator of market health. They indicate somebody's opinion of a market years before they actually come to it. The only thing starts are good for measuring is the health of the construction market at that moment in time. If starts are up, then people are working. Otherwise, they don't tell you much except what inventory levels might look like, something that doesn't tell you much about the market two years down the line.

The issue with the point that Cheswick is making is that projects don't have infinite timelines unless they're financed with cash. Fortress can't string people out for 5 years on a project they claim will take three because they will default on their obligations. Today's condo market matters because they're pre-selling right now. They don't have time to wait around for the market to swing back around.

Glasshouse has sold 121 of 190 units in ~4 years and the building is actually coming up. If you want a condo downtown, go put your $25k w/ a project that is actually going to come up.

[Twoscents]

Originally Posted by Simplicity

Thanks.

Glasshouse has sold 121 of 190 units in ~4 years and the building is actually coming up.

This shows that there is at least some demand for downtown condos.

I was speaking with Jordan Sodomsky of Riverside Consulting the other day and he really thinks this project will be a success, I understand he really knows the market in Winnipeg.

[Simplicity]

Originally Posted by Twoscents

This shows that there is at least some demand for downtown condos.

I was speaking with Jordan Sodomsky of Riverside Consulting the other day and he really thinks this project will be a success, I understand he really knows the market in Winnipeg.

I'm sure there are a number of people who think a project 50% complete will be a success...

[lilwayne]

like I says

failure here would ruin this company this is a major project possibly their biggest and the way they touted and hyped it and put their names and reputations on the line if this one fall through theres going to be lots of investors out for their heads and they wont ever be able to recover.. Noone will trust this company with their money again.. this project is way to public way to hyped receiving way to much attention for them to try and pull any kind of scam.. they put lots of money into advertising and sales office etc already

[robertocarlos]

Originally Posted by OakbluffMB

Thanks for posting the plans Cyro

I'm a big fan of the Broadway model, I think it looks south? Big balcony.

The Broadway is my favourite lay-out.

Edit: The bedroom door in the living room might not be so great.

[buzzg]

Originally Posted by lilwayne

like I says

failure here would ruin this company this is a major project possibly their biggest and the way they touted and hyped it and put their names and reputations on the line if this one fall through theres going to be lots of investors out for their heads and they wont ever be able to recover.. Noone will trust this company with their money again.. this project is way to public way to hyped receiving way to much attention for them to try and pull any kind of scam.. they put lots of money into advertising and sales office etc already

Well they've failed (or have completely stalled) with many other projects and seem to be moving along with more so in no way will this "ruin" them if that happens. And like I said before, people in the know know about their shadiness, but the average person does not.

[Bluenote]

Originally Posted by Simplicity

Thanks.



Glasshouse has sold 121 of 190 units in ~4 years and the building is actually coming up. If you want a condo downtown, go put your $25k w/ a project that is actually going to come up.

So with your last comment. I am guessing this answers another poster direct question to you.
You would like to see the project fail correct ?

If so. Why not just NOT comment on it ? I fail to see the need to for years now keep running this project down. You have been removed from this discussion a few times now and you still come back and complain.

Are you this negative in person ? I hope not.

[urbandreamer]

So why would you spend $10 million to develop a large scale building in a weak market when you could spend the money in a city where projects move more quickly?

Maybe it's just a marketing scheme to broaden the clientele base?

Re: the design: I'd rather they remove the silly tin foil hat and spend the money on a better architect.

[rkspec]

apparently its suppose to light up red when the jets score

Originally Posted by Biff

I absolutely love the crown lighting and the ability to change colours.

[bomberjet]

Fortress really hasn't spent any of their own money. That is the point that Simplicity drives home. They take in cash from various bond offerings, investors, whatever they've done. They skim fees off the top, and spend the rest on the development of all this stuff. Then it fails and they slither away from everyone.

I'll be clear, I'd LOVE this project to go ahead, and am a glass half full kind of guy. If I was in the market for a condo, this one would be high on my list. But I'd be VERY reluctant to put my own money down until absolute certain this is going ahead. As in the building is well under construction. Unless i win the lottery tomorrow, I'll buy the penthouse!

[esquire]

You have to admit Fortress has an ingenious business model. I'd like to see it applied to other types of businesses as well. Could you imagine?

"Pizza Hotline proudly offers you the 3 pizzas for $20 special! However, before anyone gets their pizza, we need to sell $1 million worth! And then we hold back one pizza to account for fees and other charges! And one more pizza gets held back to account for unexpected cost overruns!"

So in a year's time Pizza Hotline ends up selling you a pizza for $20 while they fill their pockets. BRILLIANT.

[Cyro]

Originally Posted by rkspec

apparently its suppose to light up red when the jets score

Yeah, a couple years ago when they announced thier initial concept. It would happen during the play-offs I believe. Could create much havoc on air traffic...lol but it's still a cool concept as Biff was alluding to earlier.

[esquire]

A giant goal light at the top of a skyscraper is going too far even for Winnipeg IMO.

[Simplicity]

Originally Posted by esquire

You have to admit Fortress has an ingenious business model. I'd like to see it applied to other types of businesses as well. Could you imagine?

"Pizza Hotline proudly offers you the 3 pizzas for $20 special! However, before anyone gets their pizza, we need to sell $1 million worth! And then we hold back one pizza to account for fees and other charges! And one more pizza gets held back to account for unexpected cost overruns!"

So in a year's time Pizza Hotline ends up selling you a pizza for $20 while they fill their pockets. BRILLIANT.

*Disclaimer: Possession of Pizza may never occur. Circumstances change and events do not occur as anticipated. There is no assurance that any future projection of the receipt of Pizza will occur as stated, and [numbered company] does not warrant, guarantee, or otherwise accept liability for decisions rendered or third party promises made on the basis of an expectation of pizza in the future.