Real Estate Investing 101

Even as Ottawa’s new condo market slows, fat and heavy from a glut of new units, I am still solicited for advice and opinion from those looking at condos as an investment.

As a licensed professional I can only provide direct advice to clients, but my general thinking on real estate as an investment is best summed up by the time tested strategy of Warren Buffett, investor extraordinaire:

“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”

In fact, although Buffett is a value investor, I believe that most of his philosophy can be applied equally to real estate:

“The investor of today does not profit from yesterday’s growth.”

“Investors making purchased in an overheated market need to recognize that it may often take an extended period for the value of even an outstanding company [or condo] to catch up with the price they paid.”

“Most people get interested in stocks [or real estate] when everyone else is. The time to get interested is when no one else is. You can’t buy what is popular and do well.”

Small is the new Big? Get Real.

Real estate media of late has been extolling the joys of living in small spaces, convenient given that the bulk of its advertisers are builders fitting buyers into smaller and smaller spaces. However I respectfully disagree: size does matter.

You see, space equals luxury, not granite counters or stainless steel appliances. While 500sqft can be a perfectly liveable abode, notice how the truly rich and famous opt to live in large, expansive spaces, the more the better, even in cities like New York and Tokyo.

For those of us who don't have that option, urban living can still be comfortable, even in a small space, but serious consideration should be given to at least the following:


1. Useable space: never mind square footage, good design trumps numbers when evaluating small spaces. 635sqft may seem reasonable on paper, but not when 80sqft is taken up by a long, narrow corridor—

And beware some builders’ penchant for including the balcony as part of overall square footage. This may work in a sales centre, but for resale purposes your condo is only as big as your indoor space.)

Obviously, the definition of useable space depends on one’s lifestyle; if your idea of entertainment is making beef bourguignon for 3 friends then a decent sized kitchen and space to seat 4 will be a priority. Those of you who define cooking as making espresso can make do with a breakfast bar or kitchen island.

2. Storage space: Carrie Bradshaw isn’t the only one in need of decent closet space, particularly in the foyer (and let's not forget the foyer as some builders have been doing.) The vacuum, cleaning products, linens, extra towels, extra pillows, winter clothing, hiking boots and tennis rackets all need a place in your home. Yes, most condos offer a storage locker, but wandering around the bowels of your building is probably not going to inspire you to book a game of doubles.

3. The Bedroom: The dimensions in most newer construction are laughable if the idea is to fit a queen bed, dresser and 2 night tables so measure this area carefully. Irregular jogs in the layout (usually due to HVAC pipes) and insufficient clearance below the window may find you with the head of your bed up against a window, an awkward proposition for many—

4. The Den: What started out as a windowless room spacious enough to be a guest room or home office is becoming smaller with every new condo project. For those of you who use a laptop and have a flat screen TV, the den may just be an awkward waste of space that does nothing but inflate the overall square footage of your condo. If you can’t immediately think of 3 good uses for your den then take a pass, or see if it can’t be converted into additonal closet space, something you can't get enough of in most newer condos...

Possible Hintonburg mid-rise?

With the Cathedral Hill condos set to break ground in August, Windmill Developments (developer of The Currents atop the GCTC) is setting its sights back to Hintonburg, with informal discussions currently underway with regards to the Wally Becker car lot on Wellington Street at the corner of Irving Avenue:

Windmill has not yet purchased the lot, but has started community friendly discussions about a 6-storey, 50-unit building with retail at ground level—another green grocer such as Herb'n'Spice perhaps?

Richcraft heads to Little Italy

Richcraft Homes is set to join SOHO and Domicile in the development of Little Italy/Dow's Lake, as they negotiate the final details of the purchase of the Dow Honda dealership on Carling Avenue, just west of Preston Street:

Between the recent construction on Preston St and the anticipated expansion of the O-train track immediately to the west, Dow Honda feels the time is right to move.

So far no specifics details have been released about Richcraft's development plans, which is set to include a mix of residential, office and retail space in this most enviable location just steps from Dow's Lake Pavilion. Given the disappointing results seen at SOHO Parkway on Parkdale, I don't believe I'm alone in welcoming a new developer into this neighbourhood.

SoHo shower design leaves owners all wet

My exact thoughts upon visiting units in the newly built SoHo Parkway, as paraphrased by a new owner:

"My only complaint is the shower. SoHo installed a single glass pane which covers 60% of the shower wall opening. It is designed after a bad European style and is not meant to have a shower curtain. Although it looked good when buying the condo, it is not functional.

When taking a shower, water spills onto the bathroom floor and onto the wood floor even when the door is closed. It also gets cold as the opening allows hot air to escape and cold air to enter. I have alleviated the problem by installing a temporary shower curtain but plan to entirely replace the glass pane with a glass sliding door.

When I visited the new SoHo Champagne showroom, I was disappointed to see that they are still using a single pane for the shower for their 4th building in Ottawa. In my humble opinion, this design is a failure and expensive to replace."

—Soho Parkway owner

Claridge joins in on Westboro's condo rush

Not content to leave the development riches of Westboro all to Ashcroft, it seems that Claridge has gained a toehold at the corner of Kirkwood and Richmond Rd, with a proposal currently in place to redevelop the existing commercial space into a mixed use project of 241 condos, ranging in height from 6 to 9 storeys.


As a local I'll come out and say that I don't feel good about this plan, having watched so many independent enterpreneurs relocate elsewhere as older commercial and light industrial spaces are re-developed, and leases skyrocket accordingly.

The irony is that it changes the fabric of a community significantly, and is a loss of the very diversity and mix that make these older neighbourhoods so much more appealing than life in suburban sub-divisions. Fingers crossed that urban life in Ottawa isn't destined to be the domain of Starbucks and Shoppers Drug Mart.

99 Parkdale set to double its height

Urbandale's zoning amendment application for 99 Parkdale is underway, with a request to increase the allowable height from 14 to 24 storeys over a first level podium, so in reality a total height of at least 27 storeys.

Unlike other nearby projects there is no pretense of this being a green building conveniently located by the Transitway: the development plan calls for 162 parking spots for 158 condos, most ranging in size from 700 to 1100sqft, with 6 units per floor.

It would seem that for a change of pace, Urbandale is working with Barry Hobin & Associates on this project, a name that is so often flaunted in Ottawa condo marketing.

An additional six (or seven) 2-storey townhouses fronting Parkdale are planned, and there is already blue sky talk of the adjacent apartment buildings to the south being razed for a twin tower:


Urbandale hopes to have approvals in place by the beginning of 2013 with a view to offering an occupancy date of 2014. So far there has been no word as to pricing, but the website's submit form would seem to suggest that those not ready to pay at least $350K for this address need not bother to pre-register.

Parkdale condo glut?

Tunney's Pasture workers and fans of Ontario microbrews will note with sadness the closing this month of The Cottage and a Kitchen on Parkdale Avenue after the owners received an offer too good to refuse.

The property—coincidentally a stone's throw from the new SOHO Parkway—has been purchased by Richcraft with the intention of building condos. Further north on the same stretch, Urbandale has secured a parcel of land with a view to more of the same. If the Urbandale development is even half as good as what they've done with Riverside Gate, then this space will be one to watch:


But with 8 condo buildings north of Scott St, it seems that this section of Parkdale is poised to become another condo alley (ghetto?) similar to Laurier Ave West.

Given the number of units in the neighbourhood there is very little turnover and with good reason. For the most part these 1980s buildings feature spacious, well built units in an excellent location that used to be under the radar. But most are more than 20 years old, and these are dog years when it comes to condos. It will be interesting to see how these established projects hold their value against the glamour and size of these upstarts.

Mid-week Mixed Bag

Some of the Google searches that have brought visitors to this blog since Labour Day:

"cathedral hill"

Mark your calendar, Windmill Developments' second Ottawa condo launches this evening at the Christ Church Cathedral Hall at 5pm. More details here.

"is soho better or tribeca?"

SOHO is, as of yet, an unproven quantity in the Ottawa condo market and near, but not quite in, Hintonburg/Wellington Village/The Arts District/whatever. That said the optics so far look good, very good in fact, perhaps not so much in terms of location, but very much so with regards to the quality of the construction and interior finishes.

By contrast, Tribeca is Claridge's latest magnum opus located in the heart of downtown. As Ottawa's most prolific condo developer, Claridge is either a sure bet or the devil you know, depending on who you talk to, and about which project.

"ecocite ottawa financial"

It hurts to even guess at this project's financial state of affairs. And with the dog's breakfast that has become Bank Street, I'd hazard to guess that things will be getting worse before they get better. My two cents, and your mileage may vary.

Central Phase III... come "Hideaway" with me!

I'm invited to a fair number of project launches, but this is the first time I've seen a developer advertise the pick of the crop exclusively for brokers:

Intriguing to say the least, particularly as a project's development team is usually the first to cherry pick through the units. A tempting invite nonetheless, if only to see exactly which "prime units" have been reserved.

Wellington @ Island Park occupancy delayed

Progress continues on The Wellington at Island Park: although this month's original occupancy schedule has been pushed back to March 2012, purchasers have been receiving appointments to pick out interior finishes (along with the usual sticker shock that comes with any requests for upgrades or changes).

As expected, buyers have been taking an increased interest as construction proceeds, and delayed occupancy has already seen some units re-assigned from the original purchasers, as well as the sale of a unit the developer had held back for rental. I imagine a good number will further come up for sale in the spring.

Lastly, there is the question of the two remaining penthouse units, equaling 2790sqft in unsold space. Logic would dictate that the builder rework these floorplans into smaller units: what actually happens remains to be seen, but one would hope that Theberge avoids the penthouse fiasco up the road at 150 Caroline.

Ottawa's first SOHO condo almost ready

Construction proceeds apace at Soho Parkway, Ottawa's Soho debut at 201 Parkdale Ave, with an occupancy date of October 2011 for the lower floors.

Despite the usual hysteria about this being yet another fastest-selling-ever-condo-project, a few units remain and at very attractive prices given the location and finishes being touted, including the euro-styled cabinetry and concealed appliances being installed by Normac Kitchens this week:

An application to the City this past month has requested a reduction in the number of visitor parking spots from 18 to 8, presumably in an effort to free up more spots for purchasers. That said, with this Soho being a mere block from the Transitway, this would certainly be a luxury rather than a necessity.

Cathedral Hill set for September launch

Windmill Developments, the folks who brought us The Currents at the corner of Wellington & Holland (home of the GCTC), are having a go at their second condo at Queen & Bronson on land sold off by the Christ Church Cathedral, hence the name Cathedral Hill:

Having consulted extensively with both the City and the Centretown Citizen's Community Association has made the approval process relatively painless, not to mention the fact that the project's narrow footprint will have little impact on the views of the neighbouring Gardens condos across the street. As of last report all approvals are a go and sales will be launched in mid-September.

The preliminary list of features includes the usual suspects as well as a few novelties in the Ottawa condo market: wine storage, space to tune your skis and bike, yoga studio (or is Domicile already doing that?), a dog wash room and a charge station "should you contemplate an electric car in the future". Once again guest suites are being featured which already makes me wonder just how small these units will be.

Based on what I've seen at The Currents, I'd like to suggest a few more items for Windmill's checklist: higher quality finishes in the units themselves, specifically cabinetry and flooring, a well appointed lobby that reflects the overall price per square foot, and absoutely, definitely, please: a front door intercom that allows residents to buzz visitors into the building, rather than having to take the elevator downstairs and open the door themselves.

360 Lofts set for early 2012 occupancy

Construction on 360 Lofts—yet more boutique condos self-promoted as Ottawa's fastest selling project—seems to be well underway, albeit well behind schedule for the original occupancy date of Fall 2010 despite selling 70% of units in just 48 hours as far back as June 2009.

Those of you haven't heard about this latest project in The Market needn't feel bad as advertising was supposedly done entirely by word of mouth (although I'm certain coverage by The Ottawa Citizen didn't hurt in selling the other 30%).

Aside from this press coverage, the developer has actually been very tight lipped about the entire project, so much so that I was given the third degree by a sales rep just for asking about the latest occupancy date, currently projected for early 2012 but with nothing yet set in stone.

Shoppers Drug Mart arrives at Westboro Station

No doubt buoyed by the success of their first condo location in The Mondrian at Bank and Laurier, Shoppers Drug Mart has just opened in the ground floor of Westboro Station Phase III on Richmond Road.

Following the same formula as The Mondrian location, this outlet devotes a full third of its retail space to cosmetics and another third to groceries, including frozen and refrigerated items:

With this latest addition to its retail roster, Westboro Station would seem to be living up to the "shop" part of its Live-Shop-Work tagline with a healthy line up of commercial tenants including Bridgehead, Magpie Jewellery, Westboro Station Dental and the Clocktower Pub to name a few.

Big Green Eat Little Green

After an anemic start and a relaunch with new floorplans and new pricing, Domicile's One Three One project in Wellington Village is finally more than 50% sold.

Groundbreaking took place last week, and the irony isn't lost on some of us in the neighbourhood that the home of a local florist and the former site of The Healthiest Home (purveyors of sustainable building supplies) have been razed to make way for eco-friendly condos.

But my real concern with this project is Domicile's intention to include a no-smoking provision in the condo declaration that extends to the individual units. According to Domicile, sitting on the condo boards of their other projects has brought to their attention secondhand smoking complaints, and they feel that non-smoking buyers will appreciate this initiative.

While I myself applaud Domicile for addressing the concerns of secondhand smoke, even as a non-smoker I nonetheless find the scope of such a by-law just too intrusive for my own comfort, and wonder why this issue isn't being addressed through the building's mechanical and physical infrastructure. Will spicy cooking be targeted next?

My legal counsel agrees, but warns that after 30 plus years of practicing real estate law he is seeing this issue crop up more frequently and contends that the current mood of the courts would be to uphold such a declaration as being "reasonable".

Keeping in mind that such a regulation will not only apply to those buying into the project new, but those looking to buy a unit on the resale market, two words apply here: buyer beware.

Central condos set to revitalize Ottawa's Mid-Town

The first phase of the Central project at the corner of Bank and Gladstone is shaping up nicely and if last night's ground breaking party for Phase 2 is any indication, the Central condos are set to breathe life into a rather sterile section of Ottawa that I refer to as 'Mid-Town'.

With The Glebe under the siege of construction for the next two years, those moving into the neighbourhood will be looking northwards on Bank St for shops and services. While there is already a good selection including Rama Lotus, Whalesbone, Bramasole Diner, Staples, the White Monkey and Spaceman Music, I look forward to the influx of new business that will set up shop to take advantage of the 500 plus new residents settling into the neighbourhood over the coming 2-3 years.

1-bedroom "pocket listings"

With the completion of both Lebreton Flats II and Claridge Plaza II, the downtown inventory of 1-bedroom condos will be swelling shortly, and giving first time buyers a healthier choice over the next few months. However Claridge doesn't allow owners to assign their units or sell on MLS before the condominiums are registered so don't look for listings to show up online before June.

That said, those of us in the know have access to "pocket listings" and interested buyers would be well advised to start working with an agent now before the cream of the new condo crop is spoken for.

Out with the old, in with the new…

The former site of the Main Garage on the corner of Gladstone and Kent St has been demolished to make way for the Centropolis condo project:


Being a former gas station, excavation will require the removal of all contaminated soil and an environmental bill of health from the province before construction can start. At 4 storeys tall, this will be wood frame construction and add 121 condos to mid-town Ottawa, in my opinion a neighbourhood to watch.

An interesting side note: Claridge sought to develop this site in 2002, applying to the City for a variance which would permit 11-storeys, on a site zoned for five. The ensuing outcry saw the project cancelled and Claridge moved north a few blocks to build The Strand on the corner of Somerset and Kent, perhaps their most popular condo to date.

Sandy Hill Condo Boom

Being one of the city's most popular neighbourhoods, it comes as little surprise to see the northwest corner of Sandy Hill undergo a condo boom. In fact, one could ask what took so long to develop this nook given that The Lanesborough, just off King Edward Ave, is probably Domicile's most sought after building on the resale market.

Directly across the street, construction is underway for Richcraft's Galleria II after a 5-month delay. This is the second phase of a premium project that has gotten off to a great start with quality construction and finishes in Phase I, and boasts an excellent location convenient to both the Market and the University:


To the north of The Galleria, Claridge has fenced off the National Bank and started demolition on the adjacent lots. With Claridge Plaza II nearing completion, construction on Claridge Plaza 3 is slated to start next month, a project that will add another 226 condos to the neighbourhood:


Last and least, the proposed site for Daly Square on the corner King Edward Ave remains devoid of any activity. The signage claims that 90% of its 47 units are sold, but there is no word as to when construction will begin despite the estimated occupancy date of August 2011: