Quote:
Originally Posted by bomberjet
So seems like unless everyone at Fortress is completely lying, this project has a good chance of going ahead. Why would they lie to have these details be brought out by the public (ie: folks on SSP, which we know the media and others watch)? Unless the condo sales are zero and no office or retail are sold, then okay, cancel it. But just seems like they're putting a lot of effort into this and constantly saying how it WILL go ahead. We know the past of some of the Fortress people, but would they really tarnish their rep just to look cool?
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I dont want to be the negative nelly because i would love for this project to go ahead, of course. I really hope I am wrong.
I just am very sceptical of the process so far. About 6 months ago i finished a feasibility study for almost this exact project and I can tell you the numbers do not work...or they barely work.....in Winnipeg the construction cost rental/sale prices simply have too much gap for most developers.
I give this about a 1% chance of being built as it is being shown....the margins are so tight here that things like a 15 storey roof canopy simply will not fly....why do you think glasshouse looks like it does?....the economics are razor thin in our market.
There is a very long list of developers from out of province that come here thinking they can build 100,000 s.f. of office space....they find out quickly it is impossible...i have been through that so many times it makes me laugh.....the margins for that is even tighter....the chipmans got lucky to land stantec....there are precious few of those out there....why do you think sopo is treading on such thin ice....if they dont land the two government agencies looking for office space it simply will not happen....the cost of building new cannot match the rental rates of existing properties....not even close...construction costs are simply too high.
I also think 70,000 sf of retail is unrealistic....look at the empty storefronts on waterfont, the parkade on princess....the way portage place and city place struggle....where are the retailers coming from?
even things as simple as the 400 stall enclosed parkade is a stretch....why do you think we had to pay millions to the chipmans to support theirs?...or why the one in the exchange is so slow to happen?....and these are open air parkades....internal ones are exponentially more expensive because they have to be mechanically vented....our parking rates are simply way too low to support the cost...the payback isn't there...and condo buyers don't want to spend the $40-50k per stall it costs to construct....
the whole thing smells to me....you don't hire an architect at the end of your two year long process...they are the first person you hire....especially for developers new to the market....it is a long and detailed economic exercise and things like construction costs, zoning, codes, are critical to that....
in my experience by the time you can roll out a rendering you are very far along the road....units are planned, financials are worked out....if these guys have even bought the site it was no more than 2 days before this announcement....it was not sold then.
you don't sell 150 units to investment companies without even knowing your price points...i call BS on that whole thing....preliminary discussions at best....rental rates are too low to cover the investment...this isnt toronto.
it seems they are using the tactic, promise the world to see what sticks and then build that....generally its learn what is reasonable and propose that.....there is a reason the aspers are so secretive....or why we didn't hear about centre-point until it was practically under construction....look how careful they are being with the residential component....if there were investment groups out there waiting to snap up 150 units they would have been found earlier.
of course they are showing optimism, they are trying to sell something....they are not lying, they are selling....they will build whatever they sell and i cant see them selling what they have sketched.
if you look closely, they actually have not put all that much effort and investment into it....a glossy rendering and a couple of press conferences.....i have worked on projects like this that have gotten way farther down the line, with much more money spent, that simply vanished before ever seeing the light of day.
i hope i am completely wrong and winnipeg steps up and buys everything and we get a great building...i am just warning everyone to be sceptical of what you see....this drawing they unveiled is not based on the economics of our market...it will drastically change....i have been through it and know how tight the economics are....i'm talking about things like having full curtain wall is a stretch for a condo.....never mind a massive ornamental roof.
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