I haven't noticed any activity in those 3 newer leased bays yet.

Wonder if rental market is softening a bit or just a bit of a 'price war' in this little area. Mercury is now offering 2 months free on a 13 month lease (any unit) and Citizen is offering 2 months free on 15 month lease.
 
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Great example of build more housing, even if it’s “new luxury apartments”, and it impacts pricing.

There’s a bunch of older $1300 apartments that are now going to have to drop to $1100 in the area to have a chance competing with this new project.
DEC5FAF1-B9AB-4763-BF65-7C0D43486F87.jpeg
 
Not sure that is great news.

Construction prices continue to increase, so if rent rates are not keeping pace, you are going to see a lot more fancy renderings that never get built because a bank will not take the risk to finance until the revenue provides a safe margin...or you might see a lot of value engineering to obtain that financing.
 
strata said:
Not sure that is great news.

Construction prices continue to increase, so if rent rates are not keeping pace, you are going to see a lot more fancy renderings that never get built because a bank will not take the risk to finance until the revenue provides a safe margin...or you might see a lot of value engineering to obtain that financing.
Click to expand...
I’d take value engineering over continuous rent increases
 
thommyjo said:
Great example of build more housing, even if it’s “new luxury apartments”, and it impacts pricing.

There’s a bunch of older $1300 apartments that are now going to have to drop to $1100 in the area to have a chance competing with this new project.
Click to expand...
I'm not so sure it will have that much of an effect on the surrounding buildings. The Mercury units are TINY in comparison to the older apartments around it. Some people want the new build and amenities but many others will choose more sqft, I know I would choose the older building with more room. I think this will likely just bring the Mercury in line with the market around it.
 
strata said:
Not sure that is great news.

Construction prices continue to increase, so if rent rates are not keeping pace, you are going to see a lot more fancy renderings that never get built because a bank will not take the risk to finance until the revenue provides a safe margin...or you might see a lot of value engineering to obtain that financing.
Click to expand...
Agreed, this isn’t great for seeing new developments and all of that.

But from a pure housing affordability standpoint, I think it’s interesting to see all the promotions and incentives and literal rent decreases in this area, shortly after 6 new projects finished with 1000+ units added to the market. It keeps older, lower quality places from being able to Jack prices up and allows students and others better access to housing still.
 
Yup, fair enough.

And the previous posts could also be correct that the initial pricing was above market, and this is just an adjacent that should just take it where it should be (assuming it still works with their proforma).

I think this is why you are seeing for calls from the private sector to see municipal investments to spur residential development downtown (like we have seen in Calgary with their investment to subsidize office conversions). If the way to attract the market downtown is through more favorable lease rates, and the construction costs are the way they are, there needs to be some way to fill the delta so these projects are financeable.
 
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