So, you want to buy a condo, Mike Babcock?
Options aplenty for Leafs coach
• Mike Babcock will be collecting US$50 million from the Toronto Maple Leafs over the next eight years, but the sky may not be the limit for the team’s coach, if he’s looking to the city’s condominium market.
At a news conference to announce his signing, the 52-year-old talked about being an empty-nester and downsizing, a familiar pattern for boomers. “When the kids left home, my wife and I were going to move someplace and live downtown and look for a condo,” said Babcock, recalling a conversation he had with a friend a few years back.
There’s plenty that the coach can afford in Toronto, based on his pay raise, but even he will face limits when it comes to the upper end of Toronto’s pricey downtown market, where some condominiums can easily fetch close to $1,800 for square foot.
Toronto Developer Brad Lamb said there are 30 to 60 highrise apartments selling for $10 million or more in the city, but he wouldn’t recommend that type of investment for Babcock.
“The top floor of the Shangri-La, the top floor of The Trump, the top floor of the Ritz-Carlton will all be out of his range,” Lamb said. The penthouse of the Trump Tower, a 13,846-square-foot sprawling apartment, is currently on the market for $33 million.
Babcock’s contract averages US$6.25 million per year but on an after-tax basis he will be closer to $3 million and Lamb suggests a much more conservatively priced apartment in the $2.5 million to $3 million range. “Sure he can afford a $10-million apartment if he put $2 million down. It would cost him something like $400,000 a year for his mortgage and then condo fees and taxes on top of that,” the developer says. “I don’t think someone wants to spend that type of money on housing. He could do it and I’m sure a lot of professional athletes do.”
Lamb’s advice? It just so happens he has a nice subpenthouse in his project called Theatre Park, a 3,000-squarefoot apartment in the lower west end on King Street West.
If Babcock wants bang for his buck, he’ll stay away from trendy Yorkville, which has the city’s priciest high-rises. For $3 million, he’d have to slum it in Yorkville and settle for 2,000 square feet.
He could go hang out with the fans at Maple Leaf Square. The lower floors have condos that start around $800 per square foot. But head up to penthouse units and you’ ll find a listing for $1.695 million. “It’s not considered a high-end building and penthouses there are not spectacularly better than the units below, just bigger,” Lamb says.
And then he’d have to hang out with disgruntled fans in the party room after the Leafs are eliminated from the playoffs. Can you put a price on that?
Alex Wilson, a sales representative of Re/Max Condo Plus, suggests he look for a three-bedroom apartment but says 2,000-square-foot condominium apartments are hard to come by today. “Builders have not been catering to that market,” said Wilson, adding they tend to build smaller units for investors. “It’s a niche market but we do see more people coming to Toronto looking for those larger options.”
Babcock seems to want to live downtown, but if he’s willing to get away from the core and face the commute from Mississauga every day, he could find a 4,500-square-foot apartment for $3 million.
He could also go to one of those buildings with amenities like pools, squash courts, party rooms, rock climbing and gyms, but what he’ll find is a party atmosphere filled with renters and young owners.
Given the precariousness of the coaching position in Toronto, he might just want to rent. A penthouse apartment on the waterfront is currently leasing for $10,000 per month but properties like that are hard to find.
“Very few investors buy a penthouse and then go and rent it. It’s just not a wise cash flow investment. You spend $2 million for a penthouse and get $8,000 to $9,000,” Lamb says. “The rents just don’t cover your costs.”
He can afford a $10-million apartment if he put $2 million down