Park Hyatt (1128 W Georgia) | 197m | 62 fl | Completed

[SFUVancouver]

Originally Posted by bb1510

I know the seller and it's not a scam. He was previously trying to find a 50/50 JV to take over half of the equity for 500k

He's a private equity* guy based in the UK and here and is really, really over leveraged on this property. Has units at the Shaw tower and Fairmont as well but not interested in selling those at the time

There are 4 mortgages registered on the property:

425k with TD at 2.4%
400k private mortgage at 14% - default since aug 2019, there's a pending litigation on this
25k private mortgage at 15%
80k private mortgage at 18.5%

monthly payments are 7792.36 plus strata fees; the private mortgages are all interest only payments

there's also a crown lien on the property

[whatnext]

Originally Posted by bb1510

I know the seller and it's not a scam. He was previously trying to find a 50/50 JV to take over half of the equity for 500k

He's a private equity* guy based in the UK and here and is really, really over leveraged on this property. Has units at the Shaw tower and Fairmont as well but not interested in selling those at the time

There are 4 mortgages registered on the property:

425k with TD at 2.4%
400k private mortgage at 14% - default since aug 2019, there's a pending litigation on this
25k private mortgage at 15%
80k private mortgage at 18.5%

monthly payments are 7792.36 plus strata fees; the private mortgages are all interest only payments

there's also a crown lien on the property

Yikes!

Certainly illustrates the dangers of overleveraging.

[SeymourDrake]

He will have no problem getting a buyer on that property for about half of what he is asking for. I bet there are investors making offers as we speak.

[bb1510]

Originally Posted by SeymourDrake

He will have no problem getting a buyer on that property for about half of what he is asking for. I bet there are investors making offers as we speak.

Except he’s not realistic with the price. A few months ago, he wasn’t even considering the low 800s as he said his unit is a higher floor even though that’s was the the market price back then (prior to announcing the replacement of IGUs)

[VancouverOfTheFuture]

Originally Posted by bb1510

There are 4 mortgages registered on the property:

425k with TD at 2.4%
400k private mortgage at 14% - default since aug 2019, there's a pending litigation on this
25k private mortgage at 15%
80k private mortgage at 18.5%

monthly payments are 7792.36 plus strata fees; the private mortgages are all interest only payments

there's also a crown lien on the property

eek. i wonder what the crown lien is about. but how can there be that much in mortgages on a 677sqft condo?

[Klazu]

All I can say is BU-HA-HAA! Can't feel one bit sorry for someone like that who is gambling on housing. I hope they all burn.

[bb1510]

Originally Posted by VancouverOfTheFuture

eek. i wonder what the crown lien is about. but how can there be that much in mortgages on a 677sqft condo?

Probs not paying property taxes.

I would assume he had really solid financials a few year back esp with venture capital and private equity money. Probably markets tanked especially for ipos and startups and probably has left him in a dark hole nowadays.

[bb1510]

Originally Posted by Klazu

All I can say is BU-HA-HAA! Can't feel one bit sorry for someone like that who is gambling on housing. I hope they all burn.

Not really, he's wasn't actively flipping or speculating property; bought this right from the start of presales for mid 300s. Even if he treats it as a throwaway property, the sort of leverage and opportunity cost over the years probably evens it out multiple folds. He's refinanced it over the years probably half a dozen different times with different financial institutions

It's also interesting the unit he lives in at the shaw tower (large 2000 sq ft; also has another larger 900 sq ft one bed there) as well as his fairmont unit (mid sized 2 bed) all have conventional mortgages that's not overleveraged like this

All the units have long terms tenants who've been there since the beginning of possession (and have great rental prices too)

[Mininari]

Wholly $#!tballs! Condo Glazing failure sounds to be the next round of "Wheel of Condo Misfortune." My brother got badly burned by the leaky condo crisis in the late 90's, and had to pay nearly $50,000 in special assessments. I moved in with him and his wife for a bit to start "life away from the parents" and more importantly, pay him a meager amount of rent to avoid bankruptcy. He and his wife were surviving on rice and tomato sauce back then.

Fortunately they made it through and rode the property wave to a good sale price in the end... but wow, I cannot imagine a special assessment of $250K!

As for Dr. Leverage, maybe he can get another private mortgage at 18-19% to cover his??? (equal wow).

[bb1510]

Originally Posted by Mininari

Wholly $#!tballs! Condo Glazing failure sounds to be the next round of "Wheel of Condo Misfortune." My brother got badly burned by the leaky condo crisis in the late 90's, and had to pay nearly $50,000 in special assessments. I moved in with him and his wife for a bit to start "life away from the parents" and more importantly, pay him a meager amount of rent to survive. He and his then wife were eating rice and tomato sauce.

Fortunately they made it through and rode the property wave to a good sale price in the end... but wow, I cannot imagine a special assessment of $250K!

As for Dr. Leverage, maybe he can get another private mortgage at 18-19% to cover his??? (equal wow).

lol I'm sure he's probably more actively looking for additional capital injections or investments into his PE firm rather than someone to take over his 800k condo at this point

[Mininari]

Originally Posted by bb1510

lol I'm sure he's probably more actively looking for additional capital injections or investments into his PE firm rather than someone to take over his 800k condo at this point

Most likely. Wow, this story of his is likely a barometer for that realm, of which most of us middle-class 'folk' know nothing about. Throw some unexpected expensive maintenance issues on top along with some insurance industry upheaval, one has to wonder what kind of reckoning the Vancouver Condo market is in for. All of those buildings are going to need to have glass replaced one day, but having it fail after only 10 years?? The low rates are keeping things going (although nothing low about that guy's rates!) -- but if the private equity isn't there, and the property values aren't increasing anymore....

[whatnext]

Originally Posted by bb1510

Not really, he's wasn't actively flipping or speculating property; bought this right from the start of presales for mid 300s. Even if he treats it as a throwaway property, the sort of leverage and opportunity cost over the years probably evens it out multiple folds. He's refinanced it over the years probably half a dozen different times with different financial institutions

It's also interesting the unit he lives in at the shaw tower (large 2000 sq ft; also has another larger 900 sq ft one bed there) as well as his fairmont unit (mid sized 2 bed) all have conventional mortgages that's not overleveraged like this

All the units have long terms tenants who've been there since the beginning of possession (and have great rental prices too)

I'm just surprised he would bother to remortgage at such high rates rather than just sell one of the units.

[madog222]

Originally Posted by whatnext

I'm just surprised he would bother to remortgage at such high rates rather than just sell one of the units.

The great sunk cost fallacy.

[WarrenC12]

Does this building allow Airbnb?

[bb1510]

Originally Posted by WarrenC12

Does this building allow Airbnb?

Not nightly stays but minimum rental is 30 days so technically you can advertise on Airbnb

You can also use it as an office as long as there aren’t frequent walk in clients

[WarrenC12]

Originally Posted by bb1510

Not nightly stays but minimum rental is 30 days so technically you can advertise on Airbnb

You can also use it as an office as long as there aren’t frequent walk in clients

30 days might as well be long term only. I'm no longer interested in the unit.

[bb1510]

Originally Posted by WarrenC12

30 days might as well be long term only. I'm no longer interested in the unit.

Even if nightly stays are allowed, the hotel's superior rooms frequently go for $300 or lower a night during normal times let alone these times have have much higher end finishes than the residential units. Even at a 100% occupancy rate, you wouldn't be able to break even even if additional overheads were zero lol

[Mininari]

Originally Posted by bb1510

You can also use it as an office as long as there aren’t frequent walk in clients

Boy that rule must have pissed off a few buyers, expecting a cheap live-work 2-in-1 option without the added cost of leasing office space.

But glazing nightmares aside, it does sound like an attractive option in this new world of virtual meetings, and social distancing.

[bb1510]

Originally Posted by Mininari

Boy that rule must have pissed off a few buyers, expecting a cheap live-work 2-in-1 option without the added cost of leasing office space.

But glazing nightmares aside, it does sound like an attractive option in this new world of virtual meetings, and social distancing.

Just wondering but why would it have made people upset?

What I meant for "frequent walk in clients" is that you can't use the unit as a spa or clinic but things like an accountant, lawyer, or real estate office is okay

[bb1510]

Also, the SGM minutes talking about the glazing issues and replacement costs have been pulled from the AWM strata portal. They were pulled shortly after the publishing of the Vancouver Sun article.


It's definitely not good optics for AWM if owners/representatives who are slightly behind on their strata's information to have to find out such information via a third party, not to mention a news outlet.