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livealto.ca

Building - Live Alto.

BUILDING DISCOVER ALTO Welcome to Alto, a boutique rental development located in the charming neighborhood of Queen Alexandra in Edmonton. Our building features 43modern homes in a variety of studio, one and two bedroom layouts, with ample underground parking and bike storage. We pride ourselves...
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You guys probably know much better than me but could this inspire others in the area to have more aggressive leasing strategies if this one works out?
 
A space sitting empty for years is not contributing to cash flow or paying any building expenses and as long as the area is seen as a bit of a risk, landlords will need to be flexible to try fill at least some of the empty space.
 
Kosy123 said:
You guys probably know much better than me but could this inspire others in the area to have more aggressive leasing strategies if this one works out?
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I never heard anything public about this but the owner of the old HSBC building right across the street from Energy Square did this exact same thing over the last few years. He bought it pretty cheap from Dream REIT about 5 or 6 years ago and has taken lower rates and even built a totally new space for a coffee shop. He did tell me that he had no debt on the building, which is pretty rare, and that allowed him an insane amount of flexibility in what he was able to do (No bank telling you what to do). As of last Christmas he had almost 90% occupancy in what really is a Class B building at best, but it is thriving and a pretty cool business hub n its own right.
 
FrankRizza said:
He bought it pretty cheap from Dream REIT about 5 or 6 years ago and has taken lower rates and even built a totally new space for a coffee shop.
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Perhaps it's not feasible, but it would be so nice if those 9 residential projects that received financial incentives from the city in 2021- most with CRUs - could do something similar as noted above and pass on some lower rates to help attract commercial tenants which in turn would support a more vibrant and livable street in each of those areas.
 
He, sorry I don't know his name, did it, so yes it is feasible. Maybe not in every situation, but in some. Yes I also agree it would be nice if those 9 projects could help contribute to improving things further and making more vibrant and livable streets in each of those areas. The first ones are harder, but improvement can become incremental and easier to build on as more spaces are occupied.
 
In theory it’s a great idea. The problem usually is with financing. The value of any commercial property is directly tied to the leases that generate the cash. So if you have a building that’s appraised, and likely financed, based on a certain lease rate (income generated), the minute that you accept a lower lease rate, the value of your property decreases for the term of that lease. It’s the reason that we don’t see empty CRU’s filled with tenants for years and years. Owners would rather hold out for higher lease rates than to take a lesser rate and ensure that the property is ultimately worth less. It’s the same theory that makes every commercial plaza chase after Tim Hortons, Subway, any Bank etc. those tenants are stable and pay the highest lease rates. If you are the owner, would you rather rent to Sam’s Donair shop or TD Bank? I’ll tell you what your banker would want.
 
FrankRizza said:
In theory it’s a great idea. The problem usually is with financing. The value of any commercial property is directly tied to the leases that generate the cash. So if you have a building that’s appraised, and likely financed, based on a certain lease rate (income generated), the minute that you accept a lower lease rate, the value of your property decreases for the term of that lease. It’s the reason that we don’t see empty CRU’s filled with tenants for years and years. Owners would rather hold out for higher lease rates than to take a lesser rate and ensure that the property is ultimately worth less. It’s the same theory that makes every commercial plaza chase after Tim Hortons, Subway, any Bank etc. those tenants are stable and pay the highest lease rates. If you are the owner, would you rather rent to Sam’s Donair shop or TD Bank? I’ll tell you what your banker would want.
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So they pretend those spaces that are sitting empty for years can theoretically generate a high lease rate, when it actuality the rate the market is paying for them is $NIL.

As for Sam's Donair, it could be a good stable tenant for years and I have seen Subways come and go. I think some of the assumptions these people operate with are flawed.

Now I don't really care how they manage or mismanage their businesses, but I do care about the impact a lot of empty space has on the area.
 
A few signs up on the new development on Gateway north of 34th ave
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Also the footings have been poured at the new development further north on the former hotel site across from Superstore.
 
FrankRizza said:
In theory it’s a great idea. The problem usually is with financing. The value of any commercial property is directly tied to the leases that generate the cash. So if you have a building that’s appraised, and likely financed, based on a certain lease rate (income generated), the minute that you accept a lower lease rate, the value of your property decreases for the term of that lease. It’s the reason that we don’t see empty CRU’s filled with tenants for years and years. Owners would rather hold out for higher lease rates than to take a lesser rate and ensure that the property is ultimately worth less. It’s the same theory that makes every commercial plaza chase after Tim Hortons, Subway, any Bank etc. those tenants are stable and pay the highest lease rates. If you are the owner, would you rather rent to Sam’s Donair shop or TD Bank? I’ll tell you what your banker would want.
Click to expand...
THIS! This problem is killing entrepreneurship in our country and needs to be addressed. The rental cost to open a business is too damn high so all we get are horrible chains. We have all these vacant CRUs across the city that sit empty but supply and demand is broken in how we finance/rent these spaces. IMO, a significant vacant space tax on CRUs to force landlords to rent out space cheaply so it can be used by the community would be one of the best things we could do to build vibrant communities, encourage entrepreneurship, and address social disorder.
 
SarcasticMarmot said:
THIS! This problem is killing entrepreneurship in our country and needs to be addressed. The rental cost to open a business is too damn high so all we get are horrible chains. We have all these vacant CRUs across the city that sit empty but supply and demand is broken in how we finance/rent these spaces. IMO, a significant vacant space tax on CRUs to force landlords to rent out space cheaply so it can be used by the community would be one of the best things we could do to build vibrant communities, encourage entrepreneurship, and address social disorder.
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And too regarding rent, I believe there should be an elimination of percentage rent.
 
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