Quote:
Originally Posted by Vin
Yes, as I would think that's the only logical or sane reason it is coming down.
|
I think profit is a more likely explanation. Right now they're getting around $5m a year in rent. It's not a big building - 130,000 sq. ft. with 162 units. They're old and tired, so not cheap to maintain. They were last refurbished in 2002. So after taxes and management etc. they're not getting a great return.
They'll incur costs getting to an approved scheme, but not massive amounts of money. Those will only be payable when they get to paying out the tenants, losing rent, and paying for the CAC and construction costs. If they can't sell enough of the 185 condos at the right prices, they can wait - they still have an income stream, and no difficulty finding new tenants (on demolition clause tenancies) until they're ready to develop.
When it's finished they have a brand new, higher value, energy efficient and more attractive rental building which could easily be mostly paid for by the profits earned from the condos. Those should have some good views, so might be a more attractive proposition than some of the other schemes we've seen.