In the meantime, Toronto has become known for having more high-rises under development than any other city in North America. The construction boom is taking place even as condo sales slow. The number of new units sold last year, 13,797, was down 22 per cent from the year before, and is far below a 10-year average of 17,727 sales a year, according to Urbanation Inc.
Some investors have decided to bow out of the market. “We’ve taken a hiatus on condos in Toronto since the beginning of 2012,” says Martin Zieff, who runs Alcion Ventures, a Boston-based real estate fund that invested in CentreCourt’s first two projects.
Profit margins on condos in Toronto “are thinner than you’d find elsewhere in North America,” say Mr. Zieff, who started investing in Toronto condos in 1995. “I decided to stop investing in Toronto condos in 2011 because we saw the market getting sloppy and said, ‘Why bother?,’ ” he says. “Why take that risk?”
Armies of consultants are involved in designing a building: interior decorators, architects, mechanical engineers, structural engineers, electrical engineers. There are separate consultants for parking, garbage and even elevators.
At the start of November, Mr. Hoffman tells the team at Cecconi Simone, a Toronto interior design firm, that he wants the majority of the 220 suites in the planned building to be one bedroom units or one-bedroom-plus-dens under 600 square feet. His goal is to complete the final suite plans by Dec. 2, finish terrace design by Dec. 16 and leak renderings of the planned building to blogs by the second week of January to create buzz.
The developers and the designers hash out topics ranging from closet size to whether a balcony can be moved. They debate details of exhaust systems, coils, ducts and bulkheads.
A consultant says they can get away with two elevators, but the developers decide that buyers will demand the convenience and speed an extra elevator will provide, so they add a third anyway – at a cost of roughly half a million dollars, plus a big chunk of floor space that could otherwise have been sold on each floor.
They save money by maintaining the same kitchen and bathroom dimensions throughout the building, enabling them to buy in bulk. They make room for 24-inch built-in dishwashers, rather than 18-inch ones, because the larger ones are cheaper.
Toronto’s condo boom has made buyers more demanding, especially the crucial market of young, single professionals. To distinguish one 600-sq.-ft. box from another a couple of blocks away, developers compete to tempt buyers with shared amenities, ranging from juice bars and yoga studios to pools and theatres. Among other things, the luxury features are designed to make units more easily rentable – a key consideration, since Mr. Hoffman estimates that about 60 per cent of buyers in his previous projects plan to rent out their units.
On Nov. 28, the team from Cecconi Simone present their vision for the building’s shared facilities – including a gym, bean bag chairs, a café area with free coffee, a tiered sofa, and an outdoor fire pit.
“You nailed it, this is exactly the feel we were going for,” Mr. Virani says.
“The only thing I worry about is the photo booth,” Mr. Hoffman says. Mr. Virani notes that it’s a popular item at a new club downtown. “I just worry about saddling the building with something that could break,” Mr. Hoffman says.
“The only question I have is the pool table,” Mr. Virani says. “I never really see people playing pool.”
“I think it’s a great way for people to socialize,” Mr. Hoffman counters.
They decide the building will have both a photo booth and a pool table.
The building is ultimately about 20 per cent studios and 25 per cent two-bedrooms, with the remainder in Mr. Hoffman’s “sweet spot”: one bedrooms or one-bedroom-plus-dens.
The smallest units are about 390 square feet, not much bigger than the master bedroom in many suburban homes. There is one of those on each floor, designed to appeal to cost-conscious buyers. Such “micro’ units are one reason the average size of a new Toronto condo has shrunk by 8 per cent over the past decade.
“There have been a lot of examples recently of this micro concept,” Mr. Virani says. “We don’t push those to unnecessary extremes; we think of it from a livability standpoint.”
A condo’s name is vital to its appeal. “We always start with the question, ‘Will people say they live in that name?’” Mr. Virani says. “If they get in a cab, are they going to say, ‘Take me to 1,500 such-and-such street, or to Tip Top Lofts?’” – the name of a condo project near Toronto’s waterfront.