Mayfair hotels turns into low cost rentals?

[kir]

I believe I ran into an article about the conversion of the old Mayfair hotel into a rental units , over 15 floors (200+ doors)
It`s suppose to be affordable rental units as well. So assuming if this is true, then we have construction of new apartment units.

I always thought the cost to build was prohibitively high, relative to rent levels.

So I know this is a bit of a broad questions, but how are the new developers able to make it work?

Your thoughts?


Kir.

 

[brentdavies]

With lots of government money and luck

 

[JimWhitelaw]

Do you mean the Mayfair in Edmonton? Isn`t it being torn down right now?

 

[kir]

Yes, Downtown edmonton. It`s being torned down now for apartments, as suggested by media.
Of course it`s just news at the moment and I`m sure if this is a subsidized building.

However, in general, it is interesting to see who is developing new multifamily and, if possible, how they are able to do it.
Isn`t it true that the the cost to build is almost 2X the cost to buy existing buildings (roughly speaking)?
It`s owned and managed by the big Procura Real Estate group. I`m thinking, without further research, that such a large group
might own a few construction companies and could make things profitable.

Here are some links:
http://www.cbc.ca/canada/edmonton/story/20...demolished.html
http://www.canada.com/edmontonjournal/news...c943&k=3857

 

[Nir]

QUOTE (kir @ May 20 2010, 10:27 AM) it is interesting to see who is developing new multifamily and, if possible, how they are able to do it.
Isn`t it true that the the cost to build is almost 2X the cost to buy existing buildings (roughly speaking)?

Thank you kir, a very interesting topic/question!

In a way developing is like flipping business. the 2 things in common are:
- shorter term project as oppose to rental business and
- you expect total cost (=for flipper purchase price plus renovation, for builder land price plus building) < selling price.

Regards, N.