Until now, con­do­mini­ums in Toronto have been mar­keted like cars or cig­a­rettes, full of glitz and tits. Meet the new gen­er­a­tion of web-savvy mar­keters, entre­pre­neurs and real estate agents who are cut­ting through the hype and chang­ing the way we buy

By David Sax – Eye Weekly

On Jan. 10, just before noon, more than 100 real estate bro­kers descended on the cor­ner of The Esplanade and Scott Street. They queued on a snow-and-ice crusted red car­pet, shrug­ging their shoul­ders against the stiff breeze, chat­ting in Can­tonese, Man­darin, Farsi, Ara­bic, Korean and even, occa­sion­ally, English.

These bro­kers were so-called VIPs, and each held a spe­cially num­bered card sent out by the devel­oper Cityzen (and its part­ners Fern­brook Homes and Castle­point Realty Part­ners) to enter the Liv­ing Room Condo Store, a new, high-tech sales cen­tre for Back­stage con­do­mini­ums. Back­stage is a mod­ern, D-shaped tower that will one day rise 36 storeys into the sky­line atop an awk­ward 20,000 square-foot par­cel of land, right where Yonge Street meets the GO train bridge.

Once cleared by secu­rity, the bro­kers split into two groups: half of them headed to a small buf­fet in the back room, where, to the sound­track of ele­va­tor jazz, they quickly demol­ished the immac­u­lately arranged cru­dités and espresso glasses of but­ter­nut squash soup. The other half lined up along the futuristic-looking white walls, where a row of touch-screen dis­plays allowed them to explore var­i­ous aspects of the Back­stage project by swip­ing through vir­tual floor plans, pan­ning around suite ren­der­ings and test­ing 360-degree views from var­i­ous floors.

At pre­cisely 12:30pm, the bro­ker Hunter Mil­borne, whose com­pany Mil­borne Real Estate is rep­re­sent­ing the devel­op­ers, took to the micro­phone in a double-breasted pin­striped navy suit, which wasn’t supris­ing, given his impres­sive mane of white hair and the Anglo creed of his name. His remarks were swift and to the point: Back­stage would be built by April 2013, and it would fea­ture 284 suites, mostly one– and two-bedrooms. “Most build­ings have nine-foot ceil­ings and gran­ite coun­ter­tops,” he said, “but this has a dif­fer­ence: loca­tion, loca­tion, loca­tion.” That, and it would even­tu­ally fea­ture direct access to the under­ground PATH system.

Within min­utes of Mil­borne wrap­ping up, the crowd cleared out (floor plans and pric­ing in hand), the buf­fet was replen­ished, and a lone clean­ing lady with a mop made an effort to wipe grey slush off the once gleam­ing white floors. She didn’t have much of an impact. The next round of agents arrived sec­onds later, track­ing in snow, and start­ing the process all over again.

Some 18,000 new con­do­minium units were com­pleted in the Greater Toronto Area last year, accord­ing to the mar­ket research firm Urba­na­tion. Another 17,000 will pop up this year, and 20,000 will rise next year—meaning Toronto will have more condo units for sale than any other city on the con­ti­nent. Despite slug­gish employ­ment in the province and the threat of ris­ing inter­est rates, condo sales are hit­ting a near-record pace, up 20% in 2010 from 2009.

From my win­dow at Queen and Dover­court, I can count four cranes, five newly or nearly com­pleted tow­ers, two sales cen­tres and two bill­boards. In the month it took me to write this arti­cle, two build­ings were demol­ished within two blocks of me, and even more cranes went up. If I were to walk 10 min­utes in either direc­tion, those num­bers would quadru­ple, expand­ing infi­nitely if I were to drive around the city, where pock­ets of con­dos sprout like green glass-and-steel forests.

A few of these build­ings are archi­tec­tural gems (One 12 at 112 St. Clair West), some are eye­sores (The Bohemian Embassy, aka the Bohemian Embar­rass­ment, at Queen and North­cote), while most fade into a back­ground of inof­fen­sive medi­oc­rity. What these con­do­minium projects all share is the need to sell—largely before they are built.

Thanks to Canada’s con­ser­v­a­tive bank poli­cies, devel­op­ers can­not receive con­struc­tion loans until 70% to 80% of units are already spo­ken for with deposits. The indus­try lives and dies on pre-construction sales. This means that devel­op­ers are sell­ing noth­ing more than the promise of a build­ing, based on a few computer-generated ren­der­ings, floor plans and a whole lot of hype. Con­dos are mar­keted like cars or cig­a­rettes, full of glitz and tits, which seems like a stu­pid way to sell a home. But so far it has worked, and devel­op­ers, being a gen­er­ally cau­tious bunch, have been loath to try any­thing new. Buy­ers’ mass commitment—sight vir­tu­ally unseen—has left the city with many poorly designed build­ings and dis­sat­is­fied owners.

Now, that’s poised to change. A new gen­er­a­tion of web-savvy mar­keters, entre­pre­neurs and real estate agents is cut­ting past the hype and reshap­ing the way con­do­mini­ums are sold in this city. They are work­ing to democ­ra­tize the sales process and make it more trans­par­ent, giv­ing the pub­lic more of a say in how con­dos are designed, devel­oped and mar­keted, and help­ing aver­age buy­ers access the pre­mium pric­ing reserved for so-called VIPs months before any­one else can even look at a floor plan. Until now, the devel­op­ers have had all the con­trol, but thanks to the power of social media, some of it is being wres­tled back into the public’s hands. Back­stage is a cau­tious but early exper­i­ment in how this future could play out.

Sam Crig­nano, pres­i­dent of Cityzen, fondly remem­bers sell­ing dur­ing Toronto’s last big condo boom in the ’80s. Devel­op­ers would take out ads in local papers and blan­ket neigh­bour­hoods with fly­ers, adver­tis­ing the launch of a sales cen­tre. “On open­ing day, usu­ally a Sat­ur­day, you’d cor­ral poten­tial buy­ers into an office,” says Crig­nano, the 51-year-old son of an immi­grant car­pen­ter from Italy. “We had a speaker built into the wall that would belt out ‘Unit #3 Sold!’ or ‘Unit #20 Sold!’” The devel­op­ers would then shut­tle buy­ers into a sec­ond room he called “the bullpen,” where agents would close the deal. “It was quite the rush,” says Crig­nano, who is now one of the larger high-rise devel­op­ers in the city, and one of the most open to tak­ing risks. Cityzen is build­ing the Absolute tow­ers in Mis­sis­sauga, which are arguably the most archi­tec­turally bold apart­ments built in Canada since Habi­tat 67, and Crig­nano picked the win­ning design, by a small Bei­jing firm, through a pub­lic competition.

Today, the process unfolds in many stages, and with much more noise. Once a devel­oper acquires a site, it usu­ally goes to a hand­ful of local archi­tec­ture and mar­ket­ing firms, who cre­ate a design and a brand­ing cam­paign based on what has pre­vi­ously sold nearby. That’s how you get cookie-cutter tow­ers around cer­tain neigh­bor­hoods, with sim­i­lar, toss-away names like Cal­i­for­nia Con­dos and Beyond the Sea. A hand­ful of real estate ad agen­cies, most notably LA Inc. and Mon­tana Steele, whip up mar­ket­ing cam­paigns that hit all major media, built around slo­gans promis­ing some­thing vague (“Your Unique Lifestyle” or “Where You Belong”), pack­aged with iden­ti­cal stock pho­tog­ra­phy (a young cou­ple on a Vespa, an old cou­ple at a din­ing room table), with an esti­mated price attached (“From the 300s” or “From 1.4 mil­lion”), implor­ing buy­ers to “Reg­is­ter Now!” for exclu­sive access.

“I found the Toronto mar­ket­ing mate­ri­als to be very for­mu­laic and frankly insult­ing,” says David Alli­son, head of the Vancouver-based real estate mar­ket­ing firm Brau­nAl­li­son, which has clients around the world. “I saw two to three projects that all had some ver­sion of ‘Lux­ury has a New Address’ or ‘Lux­ury Rede­fined,’ with an ele­gantly dressed woman pout­ing at the bot­tom of a stair­case. You could have taken the brand name, the slo­gan, the photo and shuf­fled them all around with­out any difference.”

The cam­paigns can be as super­fi­cial as any liquor or cos­metic adver­tise­ment. Case in point is Bisha, a hotel/condominium devel­oped by the night­club impre­sario Charles Khabouth and Life­time Devel­op­ments, pack­aged with a glossy Mon­tana Steele cam­paign: the bill­board fea­tures the face of a beau­ti­ful woman with black lip­stick, blind­folded with a silk scarf, her mouth open in antic­i­pa­tion as she awaits what­ever per­ver­sions Mas­ter has in store for her. The slo­gan below says, “Ready or Not.” Bisha’s web­site is filled with float­ing nouns (Style, Free­dom, Pres­ence) and a trailer resem­bling a fra­grance ad, fea­tur­ing a boy-meets-celebrity love story that cul­mi­nates on Bisha’s rooftop lounge. Buy here, it all says in no uncer­tain terms, and beau­ti­ful crea­tures will fuck you in ways you can­not imag­ine. The project has sold incred­i­bly well.

With Back­stage, Cityzen has decided to go in a dif­fer­ent direc­tion, hir­ing an upstart 12-person ad firm called Black­jet to sell the project. “Most of the real estate mar­ket­ing out there is shlock,” says Robert Gal­letta, the 35-year-old head of Black­jet, from his small, airy office on Eglin­ton West. An ad man since he was still in high school, the slen­der, fast-talking Gal­letta is try­ing to rede­fine how real estate is sold in the city. In a blog post on the company’s web­site last spring, Gal­letta told real estate mar­keters that the “jig is up,” because their meth­ods had become “white noise,” and even released a viral video mock­ing the cur­rent process. It was a shot across the industry’s bow, but it caught the atten­tion of developers.

For Black­jet, social media is an oppor­tu­nity to give poten­tial buy­ers a real sense of own­er­ship in a project. For Cityzen, Gal­letta engi­neered a “Name Our Condo” con­test over the sum­mer for what would even­tu­ally become Back­stage. With a grand prize of $5,000, and runner-up prizes of iPads, gift cer­tifi­cates and other entice­ments, the con­test drew 140,000 vis­i­tors to the site, 50,000 Face­book posts, 12,000 tweets, and 3,300 name sug­ges­tions (includ­ing Union House, Pop Can Tow­ers, Nakatomi Tow­ers and, inevitably, Stephen Col­bert Tow­ers). Every per­son who entered reg­is­tered their per­sonal infor­ma­tion with Cityzen, and bro­kers will con­tact all of them when pub­lic sales begin shortly.

With tens of mil­lions of dol­lars on the line, a developer’s objec­tive is to sell as many units as pos­si­ble, in as lit­tle time as pos­si­ble. The way that’s typ­i­cally done is by sell­ing off build­ings in tiers, with the price increas­ing at each tier. First come the Super VIP or Plat­inum bro­kers, who have access to for­eign and local investors look­ing to park their cash in what amounts to a share in a build­ing. About a dozen of these bro­kers were each given a floor of Back­stage to sell back in the fall, months before the sales cen­tre was even designed. Next come the VIP bro­kers (described at the begin­ning of this story), who have sold units with the devel­oper before, and can often bring in one or two buy­ers each. They sub­mit requests for units on behalf of buy­ers a few days fol­low­ing the event, and receive their answers via a lottery.

A few weeks later come the gen­eral bro­kers, a larger crowd, typ­i­cally newer and younger and slightly lower down the lad­der, with less access to investor cap­i­tal. Then, when those sales peter out after a month or two, the devel­oper con­tacts those who reg­is­tered, includ­ing the thou­sands who entered the Name Our Condo con­test. Finally, when those sales slow down, the sales cen­tre opens to the gen­eral pub­lic. At each step, as units sell, prices rise, and by the time most of us aver­age Joes get a chance to buy—or even see—these places, they’ve been picked over by every VIP and their mother. It’s a sys­tem that favours a small cir­cle of bro­kers and those with con­nec­tions, and is not one built for peo­ple who actu­ally care about these places as a “home.”

Because of this sys­tem, devel­op­ers are noto­ri­ously stingy when it comes to releas­ing infor­ma­tion about floor plans, prices and other essen­tial facts until every last oppor­tu­nity to sell to select buy­ers has run out. Buy­ers are forced to request them, and gen­er­ally they’ll only receive answers once sales cen­tres finally open to the public.

But that’s changed with the recent pro­lif­er­a­tion of real estate web­sites. Sud­denly, buy­ers are armed with more infor­ma­tion than ever before. Floor plans for Back­stage were uploaded to Urban​Toronto​.ca (a dis­cus­sion forum for real estate in the city), back in Octo­ber, months before the pub­lic was sup­posed to see them. In the past, if buy­ers wanted to find out about new con­do­mini­ums, they had to scan the news­pa­per for ads or drive around the city, look­ing for sand­wich boards and sales cen­tres. Now, they’ll go straight to sites like BuzzBuz​zHome​.com.

BuzzBuz­zHome was the first site to aggre­gate all infor­ma­tion about new real estate for sale in the city (and in other Cana­dian mar­kets), and put it in an eas­ily nav­i­ga­ble map, bro­ken down by price, neigh­bour­hood, devel­oper. Buy­ers can com­pare floor plans, main­te­nance prices, ceil­ing heights and neigh­bour­hood ameni­ties, as well as read devel­op­ment news, or dis­cuss a project and a developer’s rep­u­ta­tion on the site’s open forums.

“If you’re spend­ing $300,000 for a condo, you need to do your due dili­gence,” says co-founder Matthew Slut­sky. Launched two years ago, BuzzBuz­zHome now draws over 65,000 vis­i­tors a month. “Peo­ple feel enti­tled to infor­ma­tion. If they see an ad for a condo, the first thing they’re going to do is Google it.”

A new gen­er­a­tion of bro­kers is blog­ging about projects they like, devel­op­ers they don’t, and their analy­ses of projects for poten­tial buy­ers. Agent Mark Savel, who posts at Savel​Blogs​.com, tries to enlighten buy­ers to the fun­da­men­tals of a project. “You need to look at it as if there were no mar­ket­ing,” says the 25-year-old Savel (he’s been an agent since he was 20). Savel is close with fel­low bro­ker Roy Bhan­dari, a slickly dressed 26-year-old British immi­grant of Indian descent, who recently launched the site Talk​Condo​.com with his brother Amit, to help investors cut through devel­op­ers’ bullshit.

Up to 70% of pre-construction sales in Toronto go to investors, and more often than not, Bhandari’s clients are buy­ing units with­out even set­ting foot in a sales cen­tre. “I don’t care if they’re liv­ing in it even­tu­ally or not,” said Bhan­dari, “but any­one who buys pre-construction is an investor.” They want to know how much the price is per square foot, what the developer’s rep­u­ta­tion is, and what are the prospects for growth. Amit and Roy put all of that infor­ma­tion on Talk​Condo​.com. On their page for Back­stage, they break down the building’s costs (approx­i­ately $600/sq. ft.) and poten­tial monthly rents ($3/sq. ft.) com­pared to oth­ers in the neigh­bour­hood, and rec­om­mend it as a solid, longer-term invest­ment, with a higher cost of entry than oth­ers, but one that’s less prone to flip­ping and volatility.

Stand­ing above them all, yelling as loud as he can, is David Flem­ing, the take-no-prisoners voice behind Toron​to​Re​al​ty​Blog​.com. A bro­ker with Bosley, Flem­ing is a fear­less, tire­less thorn in the side of many condo devel­op­ers. He calls it like he sees it, sar­cas­ti­cally doc­u­ment­ing, in hilar­i­ous videos and blog posts, his dis­dain for sex-driven mar­ket­ing: (“I don’t con­cern myself with things like ‘return on invest­ment’ when smooth legs and boobs are thrust in my face!” he wrote); murky pur­chase agree­ments (“You may have thought you were get­ting a sleek glass tower, but they’re going to build it out of mud and sticks instead”); shoddy con­struc­tion (“This devel­op­ment is an embar­rass­ment to builders every­where”); and poor plan­ning, as evi­denced by peren­nial whip­ping boy City­Place (“It’s so loud, it’s so awful. There’s the Gar­diner, there’s the lakeshore, and there’s noth­ing but condo after condo”).

With Back­stage, Black­jet has moved the goal­post a lit­tle, hint­ing at future ways that con­do­mini­ums could be sold in Toronto. The cor­ner­stone of their mar­ket­ing strat­egy was the “Vir­tual Bro­ker” pro­gram, where users com­pete to get their friends to reg­is­ter with Back­stage. “Bro­kers” win prizes as they hit bench­marks for reg­is­trants (iPads, gift cer­tifi­cates, etc.), and if a refer­ral actu­ally buys a condo in Back­stage, you nab a $2,500 com­mis­sion. Vir­tual Bro­ker, like the Name Your Condo con­test, was meant to build a data­base of poten­tial buy­ers for Back­stage. Galetta envi­sioned the Vir­tual Bro­ker sys­tem as a way of lev­el­ling the play­ing field, cut­ting past the bro­kers, the events with the engi­neered crowds, and the flam­ing hoops and diver­sions to put inter­ested buy­ers directly in touch with the devel­oper. But in the end, insid­ers still got first dibs, and it proved to be more lip­stick on a pig than a game changer.

“All this talk of ‘VIP Pric­ing,’ ‘Reg­is­ter Now!,’ ‘Last Chance Pre-Construction pric­ing!,’ this is the kind of shit you see now,” says Gal­letta, in frus­tra­tion. “Peo­ple go and reg­is­ter for the VIP events, and the devel­oper will sell every last fuck­ing unit to a bro­ker, before a shmuck like you or I ever get hold of a floor plan.”

Still, Gal­letta knows this is the way things will even­tu­ally turn. He is already sell­ing devel­op­ers on a more col­lab­o­ra­tive process, where devel­op­ers pur­chase land, then facil­i­tate a con­ver­sa­tion with poten­tial buy­ers about archi­tec­ture, design and ameni­ties online. Think of it as a sort of crowd-sourced WikiDe­vel­op­ment, where future res­i­dents shape their home’s look and feel, and then buy into it. You wouldn’t need ren­der­ings of pool orgies or million-dollar sales centres—buildings would sell on their fun­da­men­tals, and would be bet­ter fits for their com­mu­ni­ties. That’s the goal, anyway.

The night after the VIP bro­ker mob scene, a more exclu­sive cast of play­ers gath­ers at the Back­stage sales office for Friends and Fam­ily night. The muzak sound­track has been replaced by a live jazz duo, and the food, by caterer Toben Food by Design, is stratos­pheres above the snacks served the day before: ahi tuna tacos, lamb burger slid­ers, panko-crusted chicken lol­lipops. The crowd is decid­edly well-heeled in rich leather, sup­ple cash­mere and real fur, and sales agents are back at the touch­screens, explain­ing the views to one family.

Over at a cor­ner table, Sam Crig­nano and Hunter Mil­borne hud­dle together, dis­cussing the pace of sales activ­ity. Over their shoul­der, a young Chi­nese woman and her mother sit with a bro­ker, fill­ing out paper­work as her father, giant gold Rolex dan­gling, Louis Vuit­ton fanny pack wrapped around an impres­sive gut, cal­cu­lates the cost on his iPhone. Hunter Milborne’s second-in-command, a large man with slicked hair, broad shoul­ders and a Blue­tooth ear­piece comes over, leans in, and sotto voce tells Mil­borne and Crig­nano, “our num­bers are look­ing really good.”

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Con­tact the Jef­frey Team for more infor­ma­tion – 416−388−1960

Lau­rin & Natalie Jef­frey are Toronto Real­tors with Cen­tury 21 Regal Realty.
They did not write these arti­cles, they just repro­duce them here for peo­ple
who are inter­ested in Toronto real estate. They do not work for any builders.
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castle­point realty part­ners alfredo romano

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