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.
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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.
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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.
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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.
 
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.
 
strata said:
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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Oh there are always industries looking for a handout and given the close relationship between municipal politicians and this group that tends to be major donors, this is not surprising.

I am all for more housing downtown and I am ok with subsidizing particularly so lower income people can afford it, but I would prefer new builds rather than old office space that needs a lot changes and still may not work well.

Edmonton isn't a city that has overbuilt office space like some other places, our problem is more over the last several decades the city has not made enough effort to attract companies downtown to fill these spaces.
 
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