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Why Calgary developers face a long haul to dig out stalled office projects

Discussion in 'Real Estate Discussion' started by Rickson9, Apr 20, 2017.

  1. Rickson9
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    Rickson9 Well-Known Member Registered

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  2. ThomasBeyer
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    ThomasBeyer Well-Known Member REIN Member

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    How many REIN members own office towers ?

    Clearly, office is a risky business and that is why most REIN folks stick with residential, be it single, multi-family or mobile home parks.

    In all of our Alberta based apartment buildings vacancies are now DOWN compared to 2016 and rents have stopped falling. We are now CLEARLY past the bottom in residential. Time to start buying, preparing to buy or looking to buy .. as prices will be higher in 2019 or 2020 once NDP is booted from office and oil $10 or so higher ..
     
  3. CorySperle
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    CorySperle Active Member REIN Member

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    Sounds like a good time to pick up some commercial office in Calgary
     
  4. ThomasBeyer
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    ThomasBeyer Well-Known Member REIN Member

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    If you got the guts for it. Long LONG time of high vacancies is guaranteed. Buy a commercial office REIT like D.un instead ! Aroudn $20 with a $1.50 or 7.5% annual yield, paid monthly. No headaches. Liquid.
     
  5. CorySperle
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    CorySperle Active Member REIN Member

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    I actually own a few office units in the mixed commercial/res in the Beaumont complex, and it has opened my eyes to other forms of commercial, mostly industrial and retail, but I have a lot of homework to do there. Someone else has already claimed mobile home parks.
     
  6. CorySperle
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    CorySperle Active Member REIN Member

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  7. adriano
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    adriano Active Member REIN Member

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    I have been looking for mobile home parks but hard to find . I have been looking for at least 2 years for them but anything I have found were in towns that didn't really interest me and that I had little faith in. I find office space to be a risky buy as if the economy goes sideways then they become vacant and stay vacant for very long periods as Thomas says. I really like multifamily as people always need to live somewhere so I feel it is a better investment overall.
     
  8. ThomasBeyer
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    ThomasBeyer Well-Known Member REIN Member

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    Plenty of options but each are priced for the risk of location, vacancies and appreciation potential. Many mobile home parks (MHPs) are overpriced but some are not. MHP in big cities either do not exist anymore or are priced as future development land so they are usually in smaller towns. MHPs can be great investments as we have proven. One package is being acquired by us right now in central AB which is further described on our website.

    In my learned opinion they can be a far better investment than multi-family even.


    Mobile Home Parks provide a number of advantages including:

    – Low vacancies
    – Reliable cash flow
    – Resilience to economic shocks
    – Reliable value increase
    – Cheap mortgage terms
    – Higher CAP rates
    – Low repair and maintenance bills as the mobile homes are owned by the pad renters
    – Far better cash flow for the MHP owner
     
    Last edited: Apr 22, 2017
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  9. adriano
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    adriano Active Member REIN Member

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    I realize that they have a lot of advantages, but it seems that the ones I seem to find are in some very small towns. Which I don't feel very comfortable with. I find it more difficult to find these sort of investments as they do not come up very often. Just my experience with this kind of asset. I will keep looking to see if I can find 1 that I think will work for me.
     
  10. ThomasBeyer
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    ThomasBeyer Well-Known Member REIN Member

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    Small towns are ok as long as they have a bigger city within say 50 km for hospitals, groceries, banks, movie theaters etc

    Some small towns will slowly die but many do not !!
     

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