zagox
Active Member
The more I think about it, the more this strategy makes sense to me, given that it is a smaller project by a large developer. The arguments for a sales centre are:
1) pre-sales help underwrite the project financing,
2) pre-sales increase the total pool of potential buyers because you are selling to people that want to buy before construction is done, especially speculators that hope to flip their contract before closing.
For Anthem, they are doing projects 20x this size elsewhere. They don't need pre-sales to prove to their lenders that they know what they are doing or to make their cash flow work. Since there are only 93 units, putting them on the market all at once isn't material to the Calgary condo market as a whole. They will have to compete with Guardian, Verve, Park Point, Radius, and Avenue regardless of whether they are sold all at once or over time. Finally, market pessimism in Calgary means that pre-sale flippers are extremely rare right now - Battistella is trying to get Vancouver condo flippers interested in Nude but there's no sign of that strategy working.
Given this situation, pre-sales just cost money (sales centre rent, fit-out, staff salaries, etc...) that doesn't make a return.
