Red-Hot Pre-Construction………..In Kitchener? – Toronto Realty Blog


Do you want to play a game?

Sounds ominous, I know. But seriously, it’s a great way to introduce today’s topic.

Let’s play a classic from our childhood years. Let’s think back to Sesame Street and play, “One of these things just doesn’t belong.”

Whether it’s Grover, Telly, or Cookie Monster, I’m pretty sure everybody (including your less-than-bright cousin who watched Sesame Street with you and was always a step behind…) can find the right answer here.

Ready?

One of these things just doesn’t belong:

a) New York City
b) Paris
c) Tokyo
d) Kitchener

Bert, Ernie, any ideas here?

I had a pretty good response to Wednesday’s blog, and while there weren’t a ton of comments on TRB, I did receive a lot of emails from readers.

Five people sent me pricing for new construction projects, but one in particular really, really stood out. It’s that one that I’d like to review today.

And listen folks, you have nothing against Kitchener. Er, Kitchener/Waterloo. “Kay-dubya,” as I knew it growing up.

I have family in Kay-dubya. Thanksgiving, Christmas, Easter, and a summer soiree all required what felt like a four-hour car ride as a child, but I would learn later in life that it’s not actually all that far.

I went to McMaster University in Hamilton, but my first girlfriend went to Laurier in Waterloo, so I spent a lot of time there from 2002 through 2004.

I could regale you all with tales of street parties on Ezra Avenue, late nights at Turret or reef, or a time in ancient history when Tim Horton’s only served coffee, donuts, and turkey sandwiches. I mean, geez, times have changed! Imagine note being able to get a kale smoothie and a bowl of Pad Thai at your local Timmy’s?

Suffice it to say, I’ve got a long history with Kay-dubya.

But more the “dubya” than the “kay,” and when I was growing up, I was led to believe, correctly or otherwise, that Waterloo was a whole lot nicer than Kitchener!

Is it still that way?

Apparently noteif you read the marketing material for a new condominium development that basically explains how Kitchener is the next Manhattan, and how Kitchener real estate is as bright as a 17th-century tulip bulb…

TEK Tower Kitcheneras it’s known, has a very flashy website that makes me question whether I was really downloading MP3’s on Napster in 1998, from my 14.4 kb dial-up modem, while chatting on ICQ, and working off 1.44 mb floppy disks.

They might not have the tech-savvy to roll with just one logo, however.

I can’t decide if I like this one the most:

Or this one:

Or this one:

But beyond the logos you’ll find on the Internet are dozen of websites by real estate agents, feigning to work with or for the developer, all in the hopes of capturing your contact information so they can sell you these pre-con “opportunities.”

This is actually very, very common in the pre-construction world.

A project will be approved and before it’s ever launched, real estate agents cyber-squat on web domains that sound like they could be run by the actual developer.

Let’s say that ABC Developments Corp. is rumored to be building a condo called “The Trotz.”

Within days, every URL with that word and a combination of other real estate words will be bought.

www.thetrotz.com
www.trotzcondo.com
www.trotzvip.com
www.trotzpresale.com
www.trotztorontocondo.com

And so on, and so on, with all of these sites eventually containing information about the project even though that info did note come from the developer, but rather from a real estate agent who is hoping that random Internet surfers, looking for the actual developer’s website, will stumble into their contact-info trap.

The crazy thing is: as much as this bothers developers, they realize that these agents are actually going to sell a lot of their units, so they have to work with them.

And with “TEK” in Kitchener, there are a lot of these sites.

My favorite email, however, was from a couple of agents who are “specialists” in their chosen field of investing, and provide this sage advice:

Hints To Get A Suite:

This is a high in demand project and there is far more demand than supply. In order to have the best chance at getting a suite follow these hints below:

– Be as flexible as possible. Provide as many different unit choices and levels. The more options you provide, the better your chances of getting a suite

– Be as detailed as possible. If we know exactly what you want and do not want, it will help us in getting you a suite you prefer (ie you do not want the 13th floor, you do not want anything south facing, etc)

-Be open to the floor options as demand is very high for this project

I mean, the standard of care here is second-to-none, right?

“Provide as many different units choices and levels.”

The punctuation and grammar are also next level; somewhat on par with Tim Horton’s new mac-n-cheese…

Does this sound like we’re over-selling a little bit? Maybe. Although maybe, just maybe, people will line up to pay more for a pre-construction condo in Kitchener than they would for something in Downtown Toronto.

You think I’m kidding?

Exaggerating, maybe?

Nope.

Here’s the price list, folks. This is real, and it’s spectacular:

Have some fun with that, folks.

But I’m going to have fun with CTRL-B in a moment.

Because that first condo you see on the list, the one priced at $752,000 for 352 square feet is….

….wait for it…

….$2,136/sqft.

Wow, that sounds like Yorkville pricing to me!

And the last time I checked, Yorkville was in downtown Toronto, not Kitchener.

In a related story, I just found this map of downtown Toronto which I think could be helpful at this juncture:

So what do you get for $752,000?

This:

Look at the living “room” there, folks. It’s 6’6″.

I just measured the wall in my office where I have a couch facing a TV and it’s 8’9″.

So either I’m blessed with having a huge office, or this floor plan is ridiculous.

My couch is 36-inches deep and the TV, on the mount, is 5-inches.

So let’s say that you sit on the couch; your eye is 23 inches from the back of the couch. Add in those 5 inches that the TV is away from the wall, and your eye is 50 inches from the TV.

I mean, my eye is currently only 30 inches from my computer monitor!

Sitting in this “living room” and watching TV is just a wee bit better than watching an in-flight movie on the back of the headrest on the seat in front of you on a flight to Mexico…

Even if these floor plans didn’t suck, I still can’t get over the price.

I just asked an agent in my office, “How much do you think pre-construction condos are selling for in Kitchener?”

She said, “I don’t know, maybe $700/sqft? $800/sqft?”

“If you don’t know, now you know…”

Thanks, Biggie.

Launching a pre-construction project in Kitchener at $2,000/sqft takes balls.

The builder put together an “Investor Report” which you can find HERE on their Google Drive.

Despite their list of universities and big businesses that exist in Kitchener, some really neat bullet points, and a cool map of the city center, there’s no real “investor report” within the investor report, in my opinion. Nothing explains why condos are worth $2,000/sqft in pre-construction, and their only reference to real estate prices cites data that goes up to January 2022. Nothing has changed since then, right?

I’ve been in real estate for almost two decades and I don’t know if I’ve ever been this shocked before.

Try as I might to convince myself that this all makes sense, I keep coming up short. It’s just………insane.

We’ve got a special team lunch planned for Friday afternoon, and I would give up my sweet potato fries spirit the garlic chipotle aioli to know just how many units have been sold in this development.

But I think I’d also give up my second glass of iced tea just to find out who the heck is actually buying these.

Surely there are some very interesting days ahead in the pre-construction condo world.

Not just in Toronto, it seems…




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