multi-family properties on busy Edmonton streets?

[margaretcowan]

I`ve always avoided buying properties on major traffic streets. I think the noise for suites facing four lanes of traffic would discourage tenants from renting them, especially when there`s a good choice of suites to choose from.

What about suites in Edmonton facing major traffic streets? Do they experience more vacancies than ones on quieter streets or more turnover? What are your experiences?

Or is it just me, the light sleeper, who wouldn`t live in a suite on a busy street?

Thanks!

 

[Thomas Beyer]

QUOTE (margaretcowan @ Nov 5 2010, 11:18 AM) .. What are your experiences?

..
most apartment buildings are on busier streets .. with single family or lower street the next street over !

The quieter side facing the rear / back alley / parking lot has the uglier view usually .. as the busy street often has trees .. so on balance we have NOT heard this to be an issue !!

 

[margaretcowan]

What if a new Edmonton LRT line is under construction right on the four lane street where the apartment building faces?

Has LRT construction in various Edmonton neighbourhoods caused extra noise or extra inconvenience that discouraged tenants from renting suites, especially suites facing the LRT construction?

Thanks!

QUOTE (ThomasBeyer @ Nov 5 2010, 02:12 PM) most apartment buildings are on busier streets .. with single family or lower street the next street over !

The quieter side (facing the rear / back alley / parking lot" has the uglier view usually .. as the busy street often has trees .. so on balance we have NOT heard this to be an issue !!

 

[Thomas Beyer]

QUOTE (margaretcowan @ Nov 10 2010, 12:00 AM) What if a new Edmonton LRT line is under construction right on the four lane street where the apartment building faces?

Has LRT construction in various Edmonton neighbourhoods caused extra noise or extra inconvenience that discouraged tenants from renting suites, especially suites facing the LRT construction?
yes it would .. during construction .. but you will have a more valuable building down the road .. so the trick is to survive the short term pain for a long term gain ! Thus budget 10-20% lower rents and 10-20% vacancies and if you can hold until the construction is over you`ll look like a genius !

 

[margaretcowan]

I really appreciate your valuable insights, Thomas. One more question.

I`ve contacted the Edmonton LRT office but they`re slow in replying. Roughly how long has past LRT construction caused disruption in front of individual buildings?

Of course, a complete LRT line takes a few years to build. I want to plan for how long the LRT construction would disrupt my operations in front of my one building before construction moved on to the next neighbourhood.

I did a spreadsheet with 20% lower rents and 20% vacancy for one year. Is that enough time to budget for or would the disruption in front of my one building last longer? Would you know what building owners have experienced in other neighbourhoods like along 111 Street?

Thanks so much,
Margaret

QUOTE (ThomasBeyer @ Nov 11 2010, 07:51 PM) yes it would .. during construction .. but you will have a more valuable building down the road .. so the trick is to survive the short term pain for a long term gain ! Thus budget 10-20% lower rents and 10-20% vacancies and if you can hold until the construction is over you`ll look like a genius !

 

[brentdavies]

Based on the past construction on the downtown, UofA and then the south leg, expect 2 years disruption, and if there is a station within a block or two, expect 3 years.

We had property across from LRT station at Government center, which built in the 1990`s and the underground station closed one the street for nearly 2 years. Visitor parking was terrible in the area, even before the construction. A local drycleaner and deli further up the street suffered big time.

If you have lots of parking in the rear, then you can survive. Plan on lots of internet advertising.

The new line planned for west end has no street parking on 156 st, north of 95 ave. Stony Plain Road is all pawn shops and 2nd hand appliance stores, with street parking at off peak hours.

149 st has no street parking and is a very busy road. But the Multi family works.

 

[margaretcowan]

Thank you Brent!

If I assume 3 years of LRT construction disruption, how much should I budget each year for vacancies and rent rebates?

Since you`re in the PM business, would you know how much landlords along any of the downtown or south LRT lines suffered during construction? What vacancies did they have? How much did revenue go down?

Cheers
Margaret

QUOTE (brentdavies @ Nov 26 2010, 01:58 PM) Based on the past construction on the downtown, UofA and then the south leg, expect 2 years disruption, and if there is a station within a block or two, expect 3 years.

We had property across from LRT station at Government center, which built in the 1990`s and the underground station closed one the street for nearly 2 years. Visitor parking was terrible in the area, even before the construction. A local drycleaner and deli further up the street suffered big time.

If you have lots of parking in the rear, then you can survive. Plan on lots of internet advertising.

The new line planned for west end has no street parking on 156 st, north of 95 ave. Stony Plain Road is all pawn shops and 2nd hand appliance stores, with street parking at off peak hours.

149 st has no street parking and is a very busy road. But the Multi family works.

 

[brentdavies]

It the walking traffic that disappears, as well as drive by traffic.

The area I was referring to was mostly condos so vacancies were not an issue. Access and parking were issues.

You will need a strong internet marketing program, as your walk by and drive by traffic will be reduced.

So increase your vacancy allowance by a percentage point and increase your marketing budget by another $100 per month.

Depending on where your property is and your tenant profile, other advertising may have to be used. In one blue collar building, we found the residents had only had 3 computers in a building of 22 suites. The Edmonton Sun works better with this profile than Kijiji. Good site signage work very well in Multi Family, especially in better neighborhoods. Boyle Street is an area where signs don`t work due to the poor tenant profile.

 

[margaretcowan]

If the LRT construction takes up to four years, how long would I budget 10-20% lower rents and vacancies? Hopefully not four years!

I`m getting a rather wide range of opinions on this LRT disruption question.

Thanks
Margaret

QUOTE (ThomasBeyer @ Nov 11 2010, 07:51 PM) yes it would .. during construction .. but you will have a more valuable building down the road .. so the trick is to survive the short term pain for a long term gain ! Thus budget 10-20% lower rents and 10-20% vacancies and if you can hold until the construction is over you`ll look like a genius !

 

[Thomas Beyer]

QUOTE (margaretcowan @ Nov 29 2010, 06:20 PM) If the LRT construction takes up to four years, how long would I budget 10-20% lower rents and vacancies? Hopefully not four years!

I`m getting a rather wide range of opinions on this LRT disruption question.

Thanks
Margaret
That`s because there are no "formal"statistics and a wide array of parameters such as: noise, weather, distance to construction, width of street, detours, ..

If you lower rents, say 15-20% you can always get tenants with "normal" vacancies. So budget perhaps 20% lower overall rent collected as a rule (and unscientific) rule of thumb !

 

[margaretcowan]

So if I read your post right, I should budget a 20% decrease in rent revenue for each of the four years of LRT construction? Holy doodle!

Margaret

QUOTE (ThomasBeyer @ Nov 30 2010, 06:07 PM) That`s because there are no "formal"statistics and a wide array of parameters such as: noise, weather, distance to construction, width of street, detours, ..

If you lower rents, say 15-20% you can always get tenants with "normal" vacancies. So budget perhaps 20% lower overall rent collected as a rule (and unscientific) rule of thumb !

 

[Thomas Beyer]

QUOTE (margaretcowan @ Dec 2 2010, 12:17 AM) So if I read your post right, I should budget a 20% decrease in rent revenue for each of the four years of LRT construction? Holy doodle!

Margaret
adjust offer price accordingly .. is this for the 15 suiter on 156 street ?