COVER

And for $2 million

Developers plunge into the luxury condo market

BARBARA WICKENS April 27 1998
COVER

And for $2 million

Developers plunge into the luxury condo market

BARBARA WICKENS April 27 1998

And for $2 million

COVER

Developers plunge into the luxury condo market

BARBARA WICKENS

Property developer Harry Stinson was indulging one of his passions—attending trade shows—when he found the very thing he was looking for. Tucked under the escalator at a show in Dallas was a sales representative from Spain, displaying samples of granite. One was the exact golden color Stinson sought for his latest dream, a luxury condominium development in Toronto’s downtown core. There is no North American distributor for the granite, so Stinson is flying to Spain next month to personally ensure the quarry can provide enough of the stone to clad his proposed 46-storey building, known by its address, 5 King West. “I’m obsessed,” acknowledges Stinson. Then again, it is that sort of attention to detail that condo buyers paying up to $2 million for a oneto three-bedroom residence have come to expect.

Luxury is back in all its got-it, flaunt-it glory. Although they remain a small fraction of the overall market, buyers looking for the ultimate in amenities and location have returned to the upscale niche in the greatest numbers since the heady days of the late 1980s. The boom in luxury condos is most pronounced in Vancouver and Toronto. Bob Rennie, a partner in Ulinder Rennie Project Marketing, one of Vancouver’s leading condominium promoters, says sales of high-end condos are as much as 10 per cent more than last year, even though the market in expensive houses has gone soft. At the Bayshore, for instance, a condo project that will overlook Stanley Park, 60 of the 99 suites have been sold even before groundbreaking, says Rennie. Average price: $1 million. In Toronto, more than a dozen projects with tony names like The Cheddington and One Post Road are in various stages of development. Units start at $400,000—and head due north. The resale market is also active, with some well-maintained buildings increasing in value, says condo specialist Brad Lamb, president of Brad J. Lamb Realty Inc. For instance, units in the Rosedale Glen that sold for $200,000 when it was built in the early 1980s now go for $375,000.

But the late 1990s are not merely a replay of the greed decade.

Buyers, and buying habits, have changed. Asian investors are no longer snapping up three or four units sight unseen. For the most part, any foreign buyers now plan to live in their purchases, and they want the same things as local customers. Typical local buyers are the so-called empty nesters, wealthy couples in their 50s or older whose children have left home. With no need for a five-bedroom house and no interest in gardening or shovelling snow, they are looking for a tasteful development in their own neighborhood.

With the demand in place, the luxury condos are competing to offer the ultimate in amenities. “One developer put in Sub-Zero appliances, another put in granite counter tops, and then another put in 12-foot ceilings,” says Rennie. “Now, to attract the high-end buyer, who has seen each feature one at a time, you have to have it all.” That “all” usually starts with a larger-than-average space, in excess of 145 square metres. Two-car parking and balconies or terraces are de rigueur. Most units are pre-wired for all the latest in high-tech gadgetry, including Internet access, video teleconferencing and video on demand, as well as security and sound systems. Top-quality natural finishes rule the day, from marble and granite for countertops to slate or hardwoods, such as maple, for floors.

Of course, there is high end—and then there is ultra high end. At the wafer-thin 5 King West development, to be wedged between existing buildings just steps from Toronto’s bank towers, the show-stoppers among the variously sized units will be nine $2-million suites, each taking up an entire floor. The apartments will feature floor-to-ceiling windows, three fireplaces, and balconies with glass enclosures that slide up out of sight. The $100,000 kitchens will boast 12 appliances—including woks, halogen broilers, silent dishwashers and cooled wine cellars—in a choice of stainless steel or brushed chrome. Security will be tight, with valet parking, a concierge and voice-activated elevators that open directly into the apartment, not a shared foyer. One thing Stinson promises there will not be: the clatter of garbage tumbling down a chute. Instead, residents will place their refuse in the utility corridor on each floor, to be collected regularly by staff using a service elevator.

The project, however, is still little more than a figment of a developer’s imagination. Stinson needs commitments from 30 buyers before he can approach the banks for about $45 million in total financing. To naysayers in the real estate community who say the project will never be built, Stinson insists the money is out there. While admitting he is relying more on his gut instinct than on demographics, he asserts: “We are turning into a classist society.” He means it approvingly.