Canada's 10 Tallest U/C

[TorontoDrew]

The structure will not change.

source: urbantoronto.ca
Arrangements have been put in place to provide for the continuing construction and development of The One Project, and additional financing commitments have been secured from the Debtors’
existing senior secured lenders that will provide the Receiver with access to $315 million to fund ongoing construction and development costs, among other expenses.

Mizrahi Inc. is continuing in its capacity as the General Contractor of The One Project under the supervision of the Receiver. The Receiver will be engaging additional construction advisors, including a project manager, to assist with day-to-day operations and to oversee the ongoing construction of The One Project.

And like one urbantoronto forumer said "Just putting this out there but after watching documentaries on most large construction projects ie burj khalifa and multiple other super and mega talls most of them don't actually get finished by the developer that started them"

[suburbanite]

Originally Posted by WhipperSnapper

To clarify, the creditors plan to continue construction and a potential buyer will delay this for years.

speculating a big difference between the creditors and a potential buyer in height. A buyer will factor 90 storeys. The creditor may weigh their losses and cap it at 60 floors. Of course, that doesn't considered that there may not be any potential buyers interested.

I'd be very surprised (has that ever even happened on a project of any significant scale) to see the creditors carry through construction. I would imagine Alverez & Marsal is going to be operating under a prerogative of holding course and not letting any of the accretive value deteriorate while they try and find a buyer.

The lenders are deep-pocketed and can afford to not necessarily panic, but I also would be very surprised to see them just carry on as if nothing's changed except for them now being the equity holders.

[SFUVancouver]

Regarding The One, that's unfortunate news, if not, perhaps, entirely unsurprising. The economics of building a structurally complicated tower on an exceptionally tight site is inherently precarious. But throw in rising interest rates and challenging market conditions, plus severe increases in the cost of materials, and you've got the perfect storm for a prestige project like The One running into financial trouble.

[WhipperSnapper]

Originally Posted by suburbanite

I'd be very surprised (has that ever even happened on a project of any significant scale) to see the creditors carry through construction. I would imagine Alverez & Marsal is going to be operating under a prerogative of holding course and not letting any of the accretive value deteriorate while they try and find a buyer.

The lenders are deep-pocketed and can afford to not necessarily panic, but I also would be very surprised to see them just carry on as if nothing's changed except for them now being the equity holders.

I can only think of one project (don't recall which) completed by the creditors' reps at The One's construction stage that did result in a truncated height.

I'm aware of the debt tied up in The One. I wasn't aware of the creditors capabilities.

[Innsertnamehere]

Originally Posted by WhipperSnapper

To clarify, the creditors plan to continue construction and a potential buyer will delay this for years.

speculating a big difference between the creditors and a potential buyer in height. A buyer will factor 90 storeys. The creditor may weigh their losses and cap it at 60 floors. Of course, that doesn't considered that there may not be any potential buyers interested.

most of their sales contracts are in the residential floors - they will complete them to avoid losing that revenue.

I would be surprised if they drop the height increase too, as that allows for fresh sales contracts at today's prices to reduce losses.

The creditors will move in a way that they think will minimize losses. If they think stopping construction and finding a buyer will minimizes losses - they'll do that. As Identified in the court filings, they seem to think that continuing construction is most appropriate.

Ultimately the project is quite progressed at this stage making significant revisions challenging. The spaces that they may want to make revisions (simpler structural grid, the commercial and hotel spaces) are already built - and the profitable, residential levels with solid sales contracts - the parts they want the cash from - are what still need to be done.

[TorontoDrew]

According to the Ones Website they only have 13 units remaining in the top 30 floors now. Those include 3 penthouses located on the top six floors, with 12 3 and 2 bedroom units spread out over the 24 floors below them. One thing to keep in mind is that the floor plans that are available are still shown on the original model, not with the added six storeys.

[Innsertnamehere]

This happened in Chicago during the Great Recession - the Waterview tower was a planned supertall residential tower which filed bankruptcy midway through construction:





it was ultimately completed in 2015 to a substantially different, shorter design:



Notably however it was halted midway through construction, unlike here.

Similar things happened with a few buildings in Toronto coming of off Cresford's bankruptcy as well.. those were in earlier stages of construction, but ultimately went on hold for a few years before eventually proceeding with more or less the same design as before.

[WhipperSnapper]

What happens if another developer doesn't materialize? A lenders is not a developer. Parking another half billion to a billion on top of the billion already parked in The One project for another 2 to 4 years to complete a 90 storey tower may be the best resolution for The One development's success but, it may not be the best investment opportunity for the lenders.

[suburbanite]

Logically your mid-level to top-level floors have the highest marginal profitability. As in every additional dollar spent ultimately earns way more revenue on closing. Building the 61st, 62nd, 70th, etc. floor is trivial in comparison to the expenses already incurred to get there, but the lost revenue you would forego from pulling the plug at that point is huge.

In isolation it should always make sense to keep going once you've passed the money pit stage and are building revenue-generating floors in a stable fashion. Of course the full picture involves execution risk, opportunity cost of further invested capital, etc.

[craner]

[rbt]

Originally Posted by suburbanite

Logically your mid-level to top-level floors have the highest marginal profitability. As in every additional dollar spent ultimately earns way more revenue on closing. Building the 61st, 62nd, 70th, etc. floor is trivial in comparison to the expenses already incurred to get there, but the lost revenue you would forego from pulling the plug at that point is huge.

That's true from a cost of construction standpoint.

However, every floor you add delays occupancy and building registration by a little bit too. The other cost incurred by the 70th floor in addition to construction is ~1 weeks financing of the 69 floors below it. The gross margin on those upper floors needs to be pretty strong.

[WhipperSnapper]

And like one urbantoronto forumer said "Just putting this out there but after watching documentaries on most large construction projects ie burj khalifa and multiple other super and mega talls most of them don't actually get finished by the developer that started them

That's not true. Supertalls and Megatalls have a high rate of failure given the speculative nature in Asia. The majority that fail remain in stumpy purgatory including a topped out megatall in Tianjin. The majority do not get completed by other developers.

Of course, this is unrelated to real estate development in Toronto. That widespread bravado to building ended with the bursting of the early 1990s real estate bubble. the One has a much higher chance of being completed than going on hold forever

P.S. I recall Emaar being there at the Burg Khalifa inception. I don't recall them taking over the project. Can anyone confirm?

[Maldive]

Pinnacle One Yonge - SkyTower | 344.58m | 105s | Pinnacle | Hariri Pontarini l u/c

Massive concrete pour here soon. And first curtainwall being installed on the 2nd level.


mburrrrr

mburrrrr

achender

Phase 1 is left of centre below (beside CIBC Square). SkyTower will rise just to the left of Phase 1 from this angle.


mburrrrr

mburrrrr


The One | 328.4m | 91s | Mizrahi Developments | Foster + Partners l u/c

Lots of workers didn’t get a memo to stay home today… maybe just enjoying the summery weather ;-).


BloorMan

Good choice for the new project manager: Knightsbridge who project managed one of largest developments in history “The Well”.


Ico

BloorMan


CIBC SQUARE | 241.39m | 50s | Hines | WilkinsonEyre l Phase 2 u/c

The core gettin' tall.


innsertnamehere

Rascacielo


TD Terrace | 239.87m | 46s | Cadillac Fairview | AS + GG l u/c


evandyk

tstormers

[yaletown_fella]

Originally Posted by WhipperSnapper

To clarify, the creditors plan to continue construction and a potential buyer will delay this for years.

speculating a big difference between the creditors and a potential buyer in height. A buyer will factor 90 storeys. The creditor may weigh their losses and cap it at 60 floors. Of course, that doesn't considered that there may not be any potential buyers interested.

Another possibility is the unsold generously sized units in the higher floor being chopped up into hundreds of tiny studio/bachelor efficiency or hotel suite for investors to rent on AirBNB. Chopping up the unsold floorplates into 1 King West style suite units would not only be an easier sell but generate a higher return psf for the developer. Of course, this would lower the perceived exclusivity of the building, so theres that.

[WhipperSnapper]

Sounds like potential head ache in regards to the aforementioned exclusivity, zoning approval (although probably any easy sell in the current climate of more housing at all costs )and higher construction costs with the development mired in debt

Mizrahi is now out. Yeah, it did seem odd when news broke he would continue in the role that lead to receivership. It's just a new project manager.

[Innsertnamehere]

some incredible shots of The One over at UT:






https://urbantoronto.ca/forum/threads/to...lopments-foster-partners.18167/page-1071

[WhipperSnapper]

Yep. amazing shots. Reminds me how long it has been since I went on a helicopter tour. Charles was very different. It looks like a Megacity One scape in these photos. It's better from the ground. 55 was a hole in the ground at the time last time I walked down the street. The 1950s hotel is proposed to be replaced. Probably others on Charles and, no doubt, the form of intensification will shift to Isabella.

[TorontoDrew]

I didn't realize it would be so much thinner then One Bloor East. It should make it look even taller when complete. I'm happy to see Knightbridge has taken over. I'm also encouraged that they chose the render with the added floors on it to make the annoucement. Still it will be a wait and see if the increase actually stays as they restructure the management side of things.

[WhipperSnapper]

IIRC, it's narrower than 432 Park.

[TorontoDrew]

What is IIRC? I know I'm going to feel like a fool when you tell me.