Toronto Condo and Real Estate Blog

A small condo building’s appeal is that you’re not a number

By Lisa Van de Ven - National Post

First there was the boutique hotel, designed to offer an intimate experience in a smaller space, usually with interesting architecture and a discerning group of guests who want something a little different than what’s on offer at the Best Western.

Now condo dwellers are hopping aboard the boutique bandwagon. In a crowded marketplace, the boutique condominium project sets itself apart with an intimate environment, fewer suites and, often, more innovative architecture and design features.

“The word ’boutique’ has a lot of hidden meanings in it,” says Les Mallins, president of Streetcar Developments, which has just introduced the 12-unit Riverside Lofts site on Queen Street East.

“I think deciding how many cohabitants you have in a certain building is only one aspect of living in a boutique building.”

Without the downtown billboards and massive marketing campaigns that offer momentum to larger sites, Toronto’s boutique loft buildings may make few waves in the Toronto real estate market.

But they can still cause a stir amidst a certain niche of buyers — purchasers who are looking to live in an atmosphere where they can get to know their neighbours. Also, these projects are frequently the first to find their way into a hot new neighbourhood.

“The appeal of them is that you’re not a number. You actually feel like you’re part of something,” says real-estate broker Brad Lamb, who represents several boutique projects, including Eastside Lofts by KC Development Group and The Schoolhouse Lofts by Empire Communities and Fovere Development Services.

“They tend to be architecturally a little cooler… they have exposed brick or higher ceilings. They’re just cozier, smaller, more intimate buildings.”

From a developer’s perspective, boutique lofts or condos aren’t always appealing. Without the economies of scale that come with larger sites and hundreds of units, small buildings aren’t likely to generate the same kind of profit as bigger sites.

But they also don’t take as much money to build, which means that in most cases, says Mr. Lamb, there’s less risk. And with only a few units to sell, developers can often test out new neighbourhoods, like King Street West a few years ago and King Street East today.

“They are the canary in the coal mine all over the city,” Mr. Lamb says. “The little guy slides in there, does 50 units, does it easily — proves to the world that people want to live there at these prices — and the [larger] developers go, ‘OK, I can do my 400 units.’”

For the small developers that take on the boutique loft projects, there can be plenty of challenges. Even in established neighbourhoods there’s a reason certain properties haven’t been snatched up by the bigger players. Largely, it’s because the sites are too small and awkward to house anything of magnitude.

That’s often where the innovation comes in. At Zen Lofts, a 36-unit infill project by Harhay Construction Management at Richmond and Spadina, the 80×90-foot piece of property wasn’t even large enough to include a traditional underground parking garage. Harhay installed a stacked parking system that moves one car below ground so that a second car can park above.

“It eliminates the need to do below-grade parking, which on small sites you often just physically can’t do,” says Chris Harhay, Harhay’s vice-president. “That’s a good example of dealing with the kinds of constraints you have with a small site.”

Such innovation often requires a knowledge not only of the property, but of the construction techniques available to circumvent its constraints. Unlike most large-scale developments — where developers will partner with a separate builder to bring a project to fruition — boutique condo buildings are usually done by companies that take on both the developing and construction tasks themselves, Mr. Harhay says.

Not only does that maximize their profits, but it means they’re closely tied to both the property itself and the construction techniques that might be necessary. “You have to look very carefully at all your costs and how you’re going to design this building to make it work,” the developer says.

With limited means, marketing a boutique loft site can also be a concern, especially when that site is in an out-of-the way spot that doesn’t get a lot of street traffic. Unlike the developers of larger projects who can afford to invest in billboards and full-page newspaper ads, the companies behind smaller sites don’t always have that luxury.

“It’s hard to make people aware of them,” says Mr. Lamb. “They’re hard to sell until they become easy to sell. What happens is, once you are able to penetrate the marketplace, then all of a sudden everyone seems to be aware of it.”

Once prospective buyers are drawn to a boutique building, it’s the relationship they can build with the site’s developer that will often keep them loyal to these smaller projects. That’s a relationship you’re not going to get in a larger building, says Michelle Everest, who lives with her husband, Paul, and two children at Mr. Mallins’s 12-suite Beach House Lofts building in the Beach.

“We had been involved with Les from the early onset of the project. He was really great with working with us to customize [our suite] to our needs,” says Ms. Everest. “He got to know us, and that would have never happened with a large project.”

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Reduced affordability and weaker employment growth mean that resale home prices in the Toronto area are forecast to appreciate by only 1.8% in 2007, a leading economist says.That would be the lowest figure in a decade, and below the 2% target rate for inflation set by the Bank of Canada.

The 1.8% figure is far below the stellar gains made by homeowners over the last several years, and would mean housing prices would actually fall in real terms (after subtracting inflation) if inflation stayed at the Bank of Canada target rate.

In comparison, the average house price in the Toronto area rose by 34% over the period from 2001 to 2005, an increase of 7.5% a year.

“Interest rate increases that have occurred over the past year combined with higher house prices have resulted in reduced affordability,” said Dunning in his report.

The slower price growth will drag on into 2008 and 2009, when resale home prices will increase by only 1.7% and 1.9%, according to the forecast.

Dunning’s numbers differ sharply from ReMax Ontario Atlantic Canada, the country’s largest residential realty firm. ReMax released a far more optimistic report last month forecasting that the resale market will appreciate next year by 5%.

Toronto’s more mature housing market, which has had the heftiest increases over the past decade, is not expected to appreciate as quickly as some other areas in the province.

A Canada Mortgage and Housing Corp. forecast released yesterday for Ontario estimates that home prices will rise by 3.1% in 2007, compared to 5.9% in 2006.

“Ontario economic growth and job creation will continue to lag behind Canadian averages thanks to high energy prices, a high dollar and slower economic growth in the U.S.”

Dunning, an independent analyst and a former Canada Mortgage and Housing Corp. economist, estimates that the average price of a Toronto area home will hit $351,734 by the end of this year and $358,081 by the end of 2007. ReMax is forecasting that home prices will be $371,000 by the end of 2007.

Dunning also warned about a possible correction in the condominium market.

“It is clear to me that investors are inflating demand. Condo completions are now rising, and there will be a sustained high level of deliveries for the next three years,” he said. “I expect that condo rents will start to fall late this year with the possibility of price weakness to follow.”

Dunning said sales of homes are still healthy and about 15% higher than what historical patterns would suggest.

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Conversion close to completion
Two one-bedroom units still available

Excerpt from an article by Patti Winsa - Toronto Star

Les Mallins, the former accountant is now a developer - turning an early 20th-century building that once housed a bowling alley into stylish urban lofts.

Academy Lane Lofts, at 1850-1852 Queen Street East, just west of Woodbine Ave., is the 30-year-old Mallins, first development project.

After driving by the building everyday on his way to work, Mallins finally approached architect Bill Hurst (who lived across the street) with an idea to convert it to residential lofts.Originally built in 1913, the structure at 1852 Queen Street East was once part of the East Ford sales and service station. Owner William Humphries Moore turned it into a bowling alley and dance academy in 1923.

Moore had emigrated from Ireland with his 10 children and originally lived in the west end of the city. The stonemason, who worked on Toronto’s Old City Hall, moved to the Beaches in 1906.

The bowling alley and dance academy lasted until 1927, says Joan Rasmussen, Moore’s granddaughter, who stumbled on the information when she and her sister Shirley Eglite were researching their family’s history.

“We spent a huge amount of time just reinforcing the structure of the building,” says Mallins. The four outside walls and the second floor were preserved. A small two-storey building at 1850 Queen Street East was torn down so the main building could be extended.

The 12 lofts will have design-conscious touches, such as exposed sprinkler systems, sleek, oversized glass patio doors and triple-glazed, floor-to-ceiling windows in some units. Options include gas fireplaces with exposed steel vent pipes.

The living and dining area of the two-storey lofts facing Queen St. have 17-foot ceilings, constructed of cedar planking with crossbeams of Paralamb strand lumber. Paralamb is wood that has been shredded, glued and then compressed, giving it a grain that looks like it has texture.

In the largest loft, two sets of oversized double doors in the living and dining area open to the outside and have glass railings. When closed, the doors can be tipped in for airflow.

The two-storey lofts at the back of the building, which face north, have been altered - with a nod to the committee of adjustments and the neighbours.

The lofts have sand-blasted glass railings on balconies so the views of neighbours’ backyards are obscured and the two storey wall of windows has been replaced with a single-storey and sloped second-floor ceilings with skylights.

Many of the lofts have rooftop terraces and, as Mallins points out, there’s “a lot of outdoor space for a loft in the beach.”

There are two one-bedroom lofts still available. Each comes with stainless steel appliances and a roof-top terrace. They cost $299,900 each, but could also be combined into one larger unit.

It was a buyer in the glass trade who suggested the simple over-sized double patio doors. Mallins has altered unit designs, in consultation with buyers. In one of the upper lofts, he suggested creating a bath with a view - an elevated Jacuzzi tub that looks out a small set of double doors that frame downtown Toronto. The doors open on to steps that lead to a rooftop patio.

Read the whole article

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