Density bonus near transit sweetens Edmonton apartment listing

Reckoning the time is right, a longtime Texan owner is ready the pull the trigger on the sale of his 125-unit Edmonton apartment building and development property.
The owner has held the Grandin Tower, on the edge of downtown, for more than a decade as part of his Canadian real-estate portfolio, according to Tony Manganiello, multi-residential sales representative for Cushman & Wakefield.
It’s a great time to sell. “The market has been on fire probably for the last 18 months,” said Manganiello. “I have one deal that’s actually closing on Friday. It was really surprising that it really went over and above market value. It was a cockroach-infested, bedbug-infested building in Scarborough, but it generated over 18 offers and sold well above asking.”
The Edmonton property, situated at 999 – 111th Street in the community of Oliver, was built in 1961 and features a new roof, boilers and elevators.
“It’s actually in very good shape,” said Manganiello. “It doesn’t have an underground parking garage which is a bonus because garages are really problematic, especially when they’re older. (Underground garages are) much more expensive to maintain, as well. Mechanically, it’s a very nice building.”
Doubles as a development site
It also features excess land on the site, which Manganiello says is suitable for a second, smaller tower, although the zoning requirements are still somewhat in a state of flux.
“It’s sort of up in the air right now because the City of Edmonton has been changing around their density models,” said Manganiello. “If it’s within 300 metres of an LRT stop (in this case Grandin Station), they’ve essentially scaled back the parking requirements considerably, whereas there used to be pretty hefty parking requirements for developments. So that will allow people to get more (parking) in and now they’re doing the same thing with the actual square footage densities, but they haven’t finalized it yet.”
”Suffice it to say, the land parcel is quite large. If you can dig down and provide enough parking for both towers because you will definitely have to park underground, you can theoretically put up a tower that’s almost the same size; 80 to 100 units might be doable there and probably about nine storeys (four storeys shorter than Grandin Tower).”
Manganiello says the property probably wouldn’t be suitable for an individual buyer. “It’s what I could call an institutional-grade property that would appeal to pension funds or a property corporation, things like that. It probably wouldn’t be for an individual buyer.

Rare property for Edmonton and Canada
“What makes it unique is that it’s well-located in a good part of Edmonton. Not a lot of properties of that size trade much across Canada. They’re getting very hard to find because they rarely come up for sale.” said Maganiello who anticipates that the building will sell for between $23 and $25 million.
Manganiello said the market isn’t expected to cool any time soon. “I think it will continue on until interest rates start to move. Bond rates being where they are, interest rates are going to stay low,” Manganiello said.
“If they (investors) can put their money in the bank at one or two per cent max and they can make five or six percent on a building, guess what, they’re going to rather take the building and apartments are the most secure, conservative investment in commercial real estate,” said Maganiello.
“The influx of international buyers has really thrown a wrench into it, too. They don’t actually even care about a yield or anything like that, they just want to keep their money safe.”
Immigration driving apartment market
The future looks rosy for owners of apartment buildings Manganiello said. “Everyone needs a place to live and we don’t build apartment buildings anymore. The last time we built apartment buildings in any meaningful numbers was in the 1970s because the (Canadian Mortgage and Housing Corporation) was offering huge incentives to build these rental buildings. Now it’s all condos.”
“And we still have 250,000 immigrants flooding into Canada every year and they have to live somewhere. They can’t all be out buying houses or condos.”



Ann launched RENX in 2001 as a part-time venture and has grown the publication to become a primary source of online news for the Canadian real estate industry. Prior to…

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Ann launched RENX in 2001 as a part-time venture and has grown the publication to become a primary source of online news for the Canadian real estate industry. Prior to…

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