Hello, City? Give Bryan a call

De­sign con­sul­tant per­son­i­fies new in­ner-city buyer

Calgary Herald - Calgary Herald New Condos - - Front Page - KATHY MCCORMICK

As the City of Cal­gary rolls out im­ple­men­ta­tion of Plan-It, its doc­u­ment to en­cour­age in­ten­si­fi­ca­tion of the down­town core, it may want to call Bryan Masse. He loves liv­ing in the in­ner city. “I was tired of be­ing so far away from ev­ery­thing,” says the 23-year-old de­sign con­sul­tant who bought a con­do­minium unit in Qualex-Land­mark’s third devel­op­ment — Luna. He al­ready is liv­ing in Stella, the first condo in Cal­gary by the B.C.-based de­vel­oper.

“My of­fice is in Deer­foot Mead­ows, so I didn’t buy to be closer to work, but be­ing in the cen­tre of the city is an equal dis­tance from any­where else so it’s re­ally fast to get around to any part of the city,” says Masse.

Add on the char­ac­ter of the homes and build­ings in the in­ner city, the area’s cul­tural venues, sports fa­cil­i­ties and en­ter­tain­ment spots, and it’s ideal, he says.

“I am not the stereo­typ­i­cal buyer look­ing for the picket fence and three­bed­room house in sub­ur­bia,” says Masse. “I went to uni­ver­sity over­seas and a lot of peo­ple I met there grew up in a condo. I would even con­sider rais­ing a fam­ily here. My new condo is large enough for a fam­ily with one or two kids, and the area is re­ally nice with Con­naught School which is a her­itage build­ing. There’s also a nice park.”

Masse bought a home on the 22nd floor of Luna. “The views of the moun­tains are phe­nom­e­nal.”

The ameni­ties within the build­ing, which in­clude a gym and out­door court­yard with a fire­place, are added bonuses, he says.

Luna is one of the Belt­line’s biggest suc­cesses in a time when the num­ber of condo units that are com­plete but not oc­cu­pied is high, the num­ber of re­sale units is ris­ing, and many of the projects that had been an­nounced or even started have now been stalled or taken off the books al­to­gether.

“In­ner-city devel­op­ment is much slower to re­act to changes in mar­ket de­mand than the sub­ur­ban mar­ket,” says Calvin Buss, pres­i­dent of Buss Mar­ket­ing, which has just re­leased its lat­est midyear in­ner city mar­ket re­port.

“As a re­sult, there is a back­log of in­ven­tory with new prod­uct still be­ing de­liv­ered,” says Buss.

The Cal­gary Real Es­tate Board had an in­ven­tory of 571 high­rise units in the Belt­line area in April and the Buss re­port found 1,836 un­sold new units in 10 high­rise apart­ment build­ings in the area bounded by the El­bow River on the east, 14th Street S.W. on the west, the Bow River north and 25th Av­enue S.W. south.

In June, 51 un­ab­sorbed units were in the Belt­line and Lower Mount Royal area that in­cludes the com­mu­ni­ties of Vic­to­ria Park, Lower Mount Royal and Con­naught, ac­cord­ing to Canada Mort­gage and Hous­ing Corp.

A to­tal of 1,388 units were un­der con­struc­tion.

“Apart­ment in­ven­to­ries in the Belt­line area are ex­pected to in­crease as units un­der con­struc­tion are com­pleted,” says Richard Cho, se­nior mar­ket an­a­lyst for the Cal­gary branch of CMHC.

“New condo units will ex­pe­ri­ence com­pe­ti­tion from the re­sale mar­ket as condo list­ings are ac­ti­vated.”

The num­bers rep­re­sent ap­prox­i­mately 18 to 20 months of in­ven­tory on the mar­ket, ac­cord­ing to Buss.

Of the sales so far, though, many have come from two par­tic­u­lar de­vel­op­ments: Luna and Mid­town, he says.

“Luna has had de­cent sales but then at $390 per square foot they have some of the best prices, too.

“Mid­town has had good sales but the vol­umes were driven mainly through the sales of small units priced in the low $200,000s; now that this in­ven­tory is mostly used up their sales have fallen off dra­mat­i­cally.”

The key, he says, is value and af­ford­abil­ity.

“De­vel­op­ers will need to find cre­ative ways to of­fer value first and life­style sec­ond.”

That is just what QualexLand­mark has to of­fer, says the vice-pres­i­dent of sales and mar­ket­ing for QualexLand­mark.

“If it is built well and priced well it will sell,” says Chris Col­beck. “Last month, we wrote 10 deals — and most peo­ple are as­sum­ing those are one-bed­room units. Seventy per cent of our units are two bed­rooms.”

In ad­di­tion, sales are not in­vestors.

“Seventy per cent of those sold are to end users.”

The low in­ter­est rates have been a fac­tor, he says. The com­pany of­fers one per cent off the posted rates at clos­ing of the sale when the devel­op­ment is ready for oc­cu­pancy in ap­prox­i­mately two years.

“We’re in the sweet spot for pric­ing, we have se­cure in­ter­est rates and we’re a trusted de­vel­oper with high-end specs,” says Col­beck.

Peo­ple are mak­ing longterm de­ci­sions, he says.

“It is by no means an easy sell, but it is nor­mal, which is healthy,” adds Col­beck.

While Buss points to 15 high­rise build­ings on hold af­ter launch­ing and an­other 15 in devel­op­ment but not yet launched, he is still op­ti­mistic.

More high­rise con­dos will be needed for the area and since they take two years or more to build, there will be a short­age un­less new ones are started soon.

“The mar­ket will con­tinue to rein­vent ways to down­load its ex­ist­ing in­ven­tory. The main prob­lem de­vel­op­ers face is the squeeze be­tween need­ing to ad­just sell­ing prices to the re­al­i­ties of the cur­rent eco­nomic en­vi­ron­ment and the con­straints of locked-in costs.

“So, in many ways, there will be two mar­kets: one where ex­ist­ing sell­ers wres­tle with sales ve­loc­ity and pric­ing; and one where de­vel­op­ers find new and bet­ter ways to pro­vide prod­uct that doesn’t nec­es­sar­ily com­pete with ex­ist­ing in­ven­tory, whether that is through pric­ing, prod­uct mix, life­style is­sues, or other ad­van­tages.”

Qualex-Land­mark is so con­fi­dent in the mar­ket that it has an­other site in the city — the Al­berta Boot land — and has just se­cured an­other par­cel for a mid-rise across from Lougheed House in the Belt- line.

“Cal­gary is one of the hot spots in Canada. Net mi­gra­tion is still up, build­ing ap­pli­ca­tions in the down­town core are at an all-time low, the de­mo­graph­ics show the age, in­come and em­ploy­ment rates are good, and the ur­ban core has a low va­cancy rate for condo rentals,” Col­beck says.

“And in two years, the time it takes to build, there will be a hole in the mar­ket.”

Buss, too, notes that de­vel­op­ers have once again been com­ing to the city to look for land.

“The last two months we’ve been flooded with out-of-town in­ter­est,” he says, not­ing that many have bought land for fu­ture devel­op­ment.

Bryan Masse has bought his sec­ond condo by Qualex-Land­mark in the Belt­line. He stands next to the model of the Luna build­ing in the com­pany’s sales cen­tre.

The Luna project by Qualex-Land­mark, in the Belt­line, is due to be com­pleted in 2012. NAME: AGE: BACK­GROUND:

Calvin Buss

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