If I learned anything from filming this video it’s how great the camera on an iPhone is, not to mention when you connect to ear buds. The technology has come a long way since my 2011 videos shot on a flip-cam…
Nevertheless, the roar of the cars and trucks that made for less-than-perfect audio at this exceptionally-busy intersection merely underscores the obvious question you have to ask upon the conclusion of this video: why in the world would anybody want a house on that corner?
A contrarian might suggest, “That house is now the only house in the block! All those silly condos overhead, and somebody has a red-brick dwelling down below! It must be worth a fortune!”
Only, that’s not how this works.
I’ve worked on land assemblies before, and at times, it’s like you’re playing with house money. My job is to knock on the door of somebody who owns a $2,000,000 property and offer them $5,000,000. It’s like shooting fish in a barrel sometimes.
There are an infinite number of reasons why land assemblies fall apart, and I won’t get into that today. But suffice it to say, there are times when certain property owners don’t want to sell, and that can either kill a project, or simply make it unique – like the one above.
So let’s assume, just for argument’s sake, that a house like the one in the video above was worth $2,000,000 four or five years ago when a block like that might have been assembled, and then let’s just assume, for argument’s sake, that an owner of a property like the one above was offered $6,000,000 to be part of that assembly.
What would the owner get today?
Not $6,000,000, that’s for sure.
Believe it or not, some people aren’t motivated by money, or at least not money alone.
But when it comes to land assemblies, they often move forward whether all the owners of a block are on board, or not.
Sometimes, owners are left out.
Sometimes, owners opt-out.
And for passer-byers like me and you, we can only make assumptions about what happened and why.
The next time you’re on Parliament Street, south of Richmond, look on the west side:
See those row-houses in front of that giant condo?
Did those owners opt out? Or were they left out?
And when the auto-body shop on the corner becomes a condo one day, will those rowhouse owners be left out?
For sixteen years, my office was at 290 Merton Street, and every time I passed by the auto-body shop on the north side of the street, I wondered: “Did that guy hold out of a land assembly?” Merton Street was commercial/industrial for decades before condos at 35 Merton, 119 & 139 Merton, 195 Merton, and 225 Merton were built. Then next to that is an auto body shop that looks exceptionally out-of-place.
Toronto is full of little properties next to tall buildings, and until now, perhaps you never wondered why
But from now on, keep an eye out in your travels. Before long, you’ll be a land-assembly know-it-all…
Francesca
at 8:00 am
I had a friend in the late 90s who lived in the brown building on the south east corner that you show in your video that is fenced in to be torn down. I’m surprised it took this long to buy that property. I remember how small and hot the unit was with no AC in the summer but I think he paid a good low rent there.
As for the red brick house left out in your video, wouldn’t this guy’s property value Immediately decrease? Who would want to buy in such close proximity to such a huge tower hovering over your house and now that the land assembly has happened it’s not like that house could suddenly become part of the existing condo. I understand that people may not want to give up their house on principal but when developers offer you so much more money than market value for your house surely you can’t use the excuse of not being able to afford to buy back in to the area. I’m sure lots of people would be more than happy with the windfall a land assembly would present them!
Steve
at 5:14 pm
It’s not just that nobody would want to live there, but you have also usually made the lot useless to future developers for decades to come.
Sirgruper
at 8:34 am
Could be the Broadchurch reason but I hope not. Overplaying ones hand and simply unwilling to sell is high up there but also consider other possibilities; historic designation, house is in Neighbourhoods zoning and more costly and difficult rezoning issues, foreign or untraceable decision maker; bullying and unreasonable developer. Anyway you slice it you are stuck with what you had without the upside. There is an example on Ridelle where the Marlee apartments were built in the early 70’s and one bungalow owner wouldn’t sell and it’s still there 50 years later, exactly the same but a bad decision clearly. Love you hear a post of a few of your actual assembly tries; successful and unsuccessful both. Thanks
Appraiser
at 9:27 am
“But suffice it to say, there are times when certain property owners don’t want to sell, and that can either kill a project, or simply make it unique – like the one above.”
True. Lots of examples in the hinterlands of Mississauga and Brampton where you will see a 1950’s bungalow, or a small group of similarly older homes, surrounded by a newer subdivision.
Most of the original homeowners at one time used to live out in the country abutting farmland or wooded areas.
Still happening in north Brampton. Sprawl-baby-sprawl.
Appraiser
at 9:40 am
Interesting analysis of Evan Siddall’s long-awaited departure from CMHC by https://www.ratespy.com/rbc-boosts-fixed-rates-030317937
“…Unfortunately, Siddall also failed in important ways, like building consensus in the market and upholding CMHC’s obligation to enhance lender competition. The housing and mortgage industries never felt like they were on the same team as him. His sometimes insulting, argumentative and very-public statements about real estate and lending professionals, while occasionally grounded in truth, hurt CMHC’s reputation…”
Kyle
at 9:52 am
Good riddance. If i recall, he was supposed to change the name and rebrand CMHC before his departure, if so he failed at that too. The name change and rebrand would be in order to distance the corporation from the stench of his tenure. I hope Romie Bowers carries through with it, as that will help the corporation gain back much of the respect that has been lost.
Kyle
at 9:43 am
I remember a comment from a long, long time ago on this blog by someone who was trying to sell her house on a busy street, i think it might have been on Bathurst and was asking David about how to maximize the value. At that time houses on busy streets were selling for a big discount compared to houses on residential side streets.
David, i’m curious to know whether houses on busy main streets are still selling at a discount or whether they’re now selling at a premium vs houses on side streets? My observation is that the commercial value or development potential has driven these values way way above the price of houses on residential streets over the years, but not sure if that is location/zoning dependent.
Julia
at 2:30 pm
What a great blog idea!
T
at 11:44 am
There are also stories of businesses that decide to hold out.
https://www.toronto.com/news-story/8349061-restaurant-owner-refuses-to-leave-queen-st-w-neighbourhood/
https://www.cbc.ca/news/canada/toronto/alternative-thinking-store-stands-in-middle-of-mirvish-village-redevelopment-1.4539228
Guess we will see whether they made the right choice or not. Could also depend on how the developer incorporates the new and the old.
Don't Trust In The Process
at 2:44 pm
It looks like both of them cited non-financial factors as the reason for holding out, so they did make the right choice. But if they do change their mind afterwards and want to cash out, they certainly won’t get the price they were originally offered.
Appraiser
at 1:57 pm
Wow! February sets all-time dollar volume record for TRREB, according to Scott Ingram, CPA CA.
“Overlooked: February was a record for most GTA residential dollar volume sold on the MLS. For any month ever: $11,468,007,390…And as a reader pointed out, February is the shortest month. There were only 19 business days in February.”
https://twitter.com/areacode416?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor
Kyle
at 9:11 am
Another good one from Scott Ingram: https://twitter.com/areacode416/status/1367592652292595718
Study from Ryerson, shows projections for new household formation will be accelerating. Some people ignorantly assume increases in RE demand can only be attributed to immigration and Speculators, and they forget about the enormous number of Millennials saving up to move out of their parents’ homes.
Appraiser
at 10:43 am
Behold the emerging onslaught of the baby-boomlet.
daniel
at 4:26 pm
they’re called ‘nail houses’ because the owners are as hard as nails. i’ve offered $3M on an $800k property and been turned down. I’ve also offered $2M for a $1M property, been told i needed to come up to $3M, and just worked around it, only to have the owner come back just as i’m starting construction to tell me they’re willing to take the $2M. When i told them i’m not interested in buying for any number they got quite angry with me and did a lot of yelling. I wish i could have enjoyed it, however, the reality is that they lost a million dollars and my project was more expensive to build because of their obstinance, so everyone lost out…
needless to say, doing land assembly gets you into a lot of interesting conversations with people…
Sirgruper
at 7:05 pm
Just the swing and tie-back agreement and payments there under or using different excavation systems or cranes. Some people don’t deal well with reality when facing it. Also guess I’m the only one who saw season 1 of Broadchurch. Pity.
Ashley
at 1:05 am
Quick question for you. We are being asked to be a part of a land assembly on Yonge st. Houses in our area sell for 1.7 and upwards. What do you consider is a ridiculous price ask from a seller?
Condodweller
at 8:37 pm
https://www.youtube.com/watch?v=h5MD2ptO998
with all these “top xx” videos on youtube, you can find anything, including people who refused to sell. I saw this one a while ago. Interestingly there is a semi in Toronto on the list where the owner of one half didn’t want to sell and they actually tore down the other half. It has a bunch of them in China where developers/governments don’t screw around and cut utilities or even dig a mote around you. I recall seeing a video of a high rise in Japan where the raised highway actually goes through the middle of the building. In that case, they built the building around the highway.
Appraiser
at 12:38 pm
What’s up with Brampton?
Just appraised a brand new construction 2,800 SqFt detached two-storey home on a 38′ x 89′ lot in Northwest Brampton (Paradise Homes).
Subject sold from the builder in late October 2019, for $1.039M, and is due to close at the end of this month.
Property appraised at $1.44M.
Bal
at 7:14 am
Browntown aka Brampton is gone totally crazy…people are just throwing money on the houses like they will never be able to buy house again…i don’t know if i should laugh or cry at the situation.::.by the way i am brown woman living in browntown just observing my surrounding…lol (hope not offending to anyone)
Bal
at 7:33 am
I live close to Mayfield and McVean rd…one of my friend bought brand new house from starlane builder for 1 million four years ago and just sold for 2.5 millon…what a easy way to get rich…..i think i am some what little jealous too….LOL….
Heywood
at 6:01 pm
Ya I wish it were as simple as you say. I have had a developer offer to buy a commercial property I own. Basically, after I paid the taxes (commercial property) I couldnt buy anywhere near the same type and size property in the area. “why would I do this?” is what I kept telling them.
They showed us the financials for the project. They were all going to buy Ferarri’s when it was done, we would end up in a worse position.
I laugh about it know because with the latest property boom they would have made 10’s of millions more, at least, and all they had to do is give us a fair shake
SamSam
at 9:52 am
Can you give a real $ value example?
Yiu might buy at 10% or 20% premium for four houses and 80% for house in the middle who is left to last.