Today I attended a Realtor review (certainly it is no “preview”) of the Millennium Water development. It’s the first time I got to go into the suites and actually see what it was that our $1B+ bought.

The day started off with light refreshments and about 1000 Realtors. By light refreshments I mean bottled water, coffee, fruit, and donuts. Yes, it sure looks like the heady days of satay skewers, turkey lunches, and cold beer/wine are over. Then again, how does one go to the developer and say “I need $5000 to cater to realtors” when your project has been in financial turmoil since the early days? Let me be clear, here, that i am not complaining. The star attraction is the village and I could care less about any refreshments.

As we munched Mr. Bob Rennie, the King of All Condos, spoke to the crowd. Those who expected a rousing and uplifting speech would be shocked by what he said. It was far more somber, realistic, and tempered with hope rather than wishes. Mr. Rennie knows his stuff, knows the challenge he faces, and knows that this product and this market may not see eye to eye.

In his own words, they sold 36 units over the weekend and that doubled his expectations. He doesn’t see a sell out for another two years. This will be trumpeted by the bears in this town as proof that the project is a failure. It is not. I was there on Saturday and it was a “carnival”. No, that’s not the right word. It was a celebration! For the first time the general public would be welcomed to see the village, to step inside its walls and see inside some of the units. Each of these units decorated by some of the best internationally known local designers. There was music and food, displays by local groups and Olympic merchandise. You could even see the medals there and not have to wait 6 hours in line like it was during the games. There were also Athletes and major speakers such as Rick Hansen and John Furlong. The blue jacket volunteers were thanked with gift certificates for $25 from London Drugs. The Vancouver Fire Department Band played music in the background (which makes perfect sense since the “Hometown Heroes Lottery” charity has one of the suites as a prizehome and were selling tickets there). Line ups to see suites were over an hour long. There were over 12,000 people there. Now can anyone not say that selling 36 units with an average price over $1m (estimated) is not a rousing success? How could anyone concentrate on making such a decision in all that organized chaos (also while protesters broke through a fence to demand social housing)?

Mr. Rennie then went on to discuss the history of the village and how proud he was of the accomplishment. It was built through all the turmoil of 2008 and sales would be tough. He knew that. At the same time he reminded the crowd of just how great an accomplishment it was to not only build the over 1 million square feet in just two years time but to get it done to LEED Platinum status. It truly is a remarkable accomplishment.

After the speech we went in groups of twenty to visit the showhomes. I’m not going to break it down home by home but I will say this; you have a group of realtors, people who sell for a living, people who know their product, and the reactions you get from them will pretty much determine the results.

We started in the lowest priced home which was $595k for just about 600 square feet. No view. Reaction? Astonishment at the price.

We moved on to another and another. Prices being bandied about were up to 1.X million. Reaction? Astonishment at the gall.

We moved into a 2.1m unit and at over $1400/sq.ft. the reaction became muted. It was an impressive suite.

We get into the Erickson designed buildings and the prices were $2.Xm and just under $4m, I think. the reaction was much more appreciative. The suites were large and well designed. The views were fantastic and the prices were reflective of the quality and the location.

And there is the problem. This Olympic Village, Millennium Water, whatever you want to call it, is completely unaffordable. The greatest suites (including the top priced $10million unit) are unbelieveable and fantastic. They almost seem worth it and you can see that there will be an attraction to the well pocketed. Unfortunately the bulk of suites are smaller, with little to no view, and at $1000/sq.ft. (lowest I saw on a price list was over $700/sq.ft.) are just plain expensive.

Let me just clarify that word “expensive”. Expensive does not mean a high price tag. It means a high “cost” where the value is hard to justify. You can have $10million but if you don’t see value in a $700,000 condo you will call it expensive (even though you have the cash). I have a hard time seeing what buyers won’t see most of these suites as “expensive”.

Mr. Rennie, I believe, knows this very well. The question then becomes what prices these units will actually sell for. Rennie is not the developer; Millenium is. Rennie is not the financier; the City of Vancouver (you the tax payers) mostly are. Ultimately, though, he will work with his vendor, Millennium Developments and the City of Vancouver, to get these units moved. In this changing market I wonder how long the Vendor will stick to the high prices.

In a perfect world they would sell these units for more than what other local new developments are asking (Exchange, Foundry, James, Maynards) as they are better and already completed. They would get them moved and get those commercial retail spaces leased out. My greatest fear is that it will become a ghost town as what buyers are out there opt for a resale condo downtown (where the price may be more flexible and there is no HST).

This will be Mr. Rennie’s greatest challenge and I wish him luck. I will be rooting for him and the project. I love it. Everyone does. And as has been said, no one denies they are beautiful and fantastic. It’s just a matter of the cost.

No related posts.