Yorkville and Not So Magical “TWO”

Another call, another “something around TWO”. This is one numeric code uttered from every caller that I can decipher and answer without further cerebral activity, “sorry...there is nothing” is my response, cringing with guilt each time I am forced to repeat the answer. Then I hear their upping the ante to a brave “two and a half” followed by a reluctant whisper of “three...maybe”.

This has become my frequent dialogue with the countless number of Yorkville property investment hopefuls. Yorkville is right in my own backyard and what has happened to this Yonge, Bloor, Avenue, and Davenport quadrant in recent years is simply jaw dropping. Wealthy property investors have long favoured Yorkville as one of the city’s most desirable places to sprinkle their money. But it has transformed and leaped beyond the heights of even the most optimistic investors’ imagination in the last decade; an outrageous number of new ultra luxury condominium developments has allowed a rejuvenated lifestyle Mecca for those affluent and liberated empty nesters and international value seekers alike.

I remember a few years ago passionately dissuading a client of mine to opt out of a Yorkville property deal for its lack of supporting economics and fundamentals. As a preaching financial management advisor and a conscientious realtor, I felt this property referred as a “trophy” simply failed to meet the prudent investment criteria, nor did it possess any aesthetic appeal. Furthermore the expression trophy property was simply too foofoo for a seriously number savvy professional like me. As a result, my loyal and faithful client had reluctantly foregone the opportunity against her gut feeling. I was rather dismayed to discover recently that the property has been sold 120 percent higher, sans improvements, than the inflated price of a million my client would have paid 4 years ago. Ouch, I shrieked! I must ponder how I can relay this revelation without the danger of a nuclear explosion...

We use a common property valuation term “capitalization rate” or simply a “cap rate” in sizing up the value and investment worthiness of an income property. Finding the cap rate involves nothing more than a simple mathematical formula, and yet it can be the most complex concept. Achieving the commonly desired cap rate of 8% has become ever so elusive in the recent years, it has turned into a bit of mythical number in the world of downtown commercial property investment. If anyone is interested in securing a piece of this neighbourhood soil, I forewarn the contestants that God is not in the cap rate (a good topic for my next blog).

I digressed, but the point is this: The TWO million, which was once the magic number exchanged to win a decent piece of Yorkville geography, has simply ceased to be one. Most standing structures possessing any income potential at all have long left the two million dollar wagon, but boarded a THREE million dollar train. So the next time when I am speaking with you, I will no longer apologize for my inability to carve up a piece of Yorkville in the TWOs, I will simply be saying THREE++, without a hint of guilt.

The Role of Fine Art in Real Estate I

I have always loved art; even admitting that I don’t always understand what I’m looking at has been a positive experience over the years as doing this forces me to use my eyes in different ways, ask different questions about the work and ultimately spark new avenues of thought and topics for conversation. I’m lucky that Yorkville is such a centre of creativity and innovation when it comes to meeting new people, making new connections and having conversations that broaden the sensibilities.

When I transitioned from design towards real estate and investing in 2000, the standard practice was to take clients to dinner for a celebratory meal once a deal closed. In the last few years I have searched for something slightly more meaningful to help clients and friends remember the happy event of finding spaces that suit their needs. It’s fun for me, and more than a little auspicious under the ancient Asian sciences…

I find a small piece of art to commemorate the event. I’ve been told that it’s very difficult to buy art for other people as collecting is such a personal and subjective ritual; as true as that is, I have realised from experience that the act of seeking out, finding and picking something that the recipient hopefully likes is a valuable exercise in empathy and a fruitful business practice. Once you have worked with a client, sometimes for years, it becomes apparent what his or her style is. I would probably buy and present a small but bold abstract work for a corporate client or law firm for whom I have found space. On the other hand, I like to pick soothing and calming landscapes, still life or antiquarian botanical or architectural prints to celebrate residential sales. Sometimes I’ve been known to “borrow” art from clients which required extreme attention and reframe it to suit the new interior (the vestiges of the designer past!). Either way, it’s proven more than fruitful.

One of the first people with whom I discussed this possibility was client turned colleague Antonio Arch; over a dinner at la Fieramosca to celebrate his move to a new showroom on Yorkville, he subtly tried to dissuade me from the practice of trying to find art to suit people’s personalities, then present it as the potential to offend outweighed the intention. He has since become my advocate in finding appropriate art for settings, people, careers, rooms and the occasion and between his work and that of print expert Elisabeth Legge and her framer/conservator husband on Hazelton Avenue, I think that my attempts have been appreciated. The images accompanying this text are the sole property of their original artists and used with the permission of Arch & Company Fine Arts (www.archart.ca).

View from Marina Grande

South Florida Real Estate

Recent articles in the Globe and Mail and the Toronto Star both reported that Canadians are buying up more Florida real estate than ever before.

For maybe the first time ever, Canadian Snowbirds are buying vacation properties not only for themselves, but it would seem, also for their kids and grandchildren as well.

So many ask, how is the housing market down there? Is it really bleeding badly? Can I pick one up for, say, 1/2 the price as they were a year or so ago. Quite possibly yes, however it really depends on the area - yes, the good old real estate mantra location, location, location.

I recently had the pleasure of cruising along the Fort Lauderdale Intracoastal Waterway on a 80' power yacht (not mine to get used to... I suffer from a mild case of "the Canadian middle-class syndrome" but happy to maintain my modest sensibilities ; a yacht that size or bigger is too sinfully indulgent, environmentally insensitive, and a colossal amount of scrubbing!) . Miles and miles of extravagant mansions, pools and jumbo yachts got me confused - where is the recession? I can't say I saw one... Definitely not bleeding, a small cut perhaps.

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