Ryan Starr
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John Mehlenbacher, co-founder of The Condo Store, settles into a low-back mesh chair at his company’s Liberty Village head office and offers up a frank assessment of the state of Toronto’s real estate market: AARON HARRIS FOR THE TORONTO STAR

John Mehlenbacher, co-founder of The Condo Store, settles into a low-back mesh chair at his company’s Liberty Village head office and offers up a frank assessment of the state of Toronto’s real estate market:

“We’re 12 years into a seven-year cycle.”

Things have been so good for so long, he says, that his competitors in the condominium sales business have simply grown complacent.

“There are many brokers here who have sold for a long time and they’ve done well doing the same thing they did 20 years ago.

“We think the industry needs a shot in the arm.”

Mehlenbacher, who runs the Condo Store’s brokerage, is part of a trio that includes Mark Cohen, head of the company’s marketing side, and Simon Mass, who looks after the firm’s cash cow: bulk sales.

The three have years of experience working alongside many of Toronto’s top big-name developers on a variety of residential projects across the city.

With the Condo Store, they’ve created an all-purpose sales and marketing operation that they believe is well-positioned to dominate a new era in Toronto real estate.

“There’s a need for people who can think outside the box; who aren’t just doing the same tried, tested and true thing,” Mehlenbacher says.

Cohen concurs.

“I think there’s generally a lack of innovation when times are good,” he says. “Two years ago the world was different. People today don’t want to be sold, but they still like to buy.”

Prior to launching the Condo Store, Mehlenbacher worked as a sales manager for Concord Adex Developments, developer of CityPlace, Toronto’s largest master-planned community. The experience taught him valuable lessons, particularly about the importance of market intelligence.

“When you’ve worked for a corporation that spends a million dollars a year in research and development on land and land-tracking, you still have that mentality when you start your own business,” he says.

Accordingly, the Condo Store invests heavily in research, gathering pertinent information about the areas they’re targeting in order to create tailor-made sales and marketing strategies that will hit the mark.

“We have massive market intelligence,” Mehlenbacher says. “We know what everything is selling for in resale, what’s in the zoning application stage over the next five years, what’s coming, what’s going, what’s hot and what isn’t.”

“That’s our biggest leg up on everyone else,” he adds. “A lot of people say they know what’s happening in the market, but you sit and talk to them for a few minutes and realize they don’t know anything.”

3 companies under banner

Three companies operate under the Condo Store banner.

There is the brokerage, as well as a bulk sales division, run by Mass, which buys up blocks of condos and sells them at a discount to a large network of Canadian and international investors.

The Condo Store’s marketing arm is led by Cohen, a former executive with Bramalea Ltd., Menkes Developments, Concord Adex Developments and Tribute Communities.

The company traces its origins to 1997, when Mehlenbacher and Mass first crossed paths.

At the time Mehlenbacher was working for Concord on CityPlace.

Mass, who grew up in the UK, had moved to Toronto and was brokering bulk deals on pre-construction condos for a sizeable network of international investors, primarily from London and Dubai, cities where he had lived and worked.

While bulk sales were common practice in those markets, Mass says they weren’t in Canada.

“I shopped around and found there was no such thing. When I met John and suggested it for CityPlace, told them that I wanted to buy 50 or 60 units, they didn’t know what I was talking about.

“They figured maybe I wanted to get two units for myself at a better price and was just lying to see what kind of deal I could get.”

Mehlenbacher saw the wisdom of Mass’s ways and they joined forces.

“I knew a lot of the local developers, Simon had a lot of buyers, so it made sense for us to work together,” Mehlenbacher says.

The duo proved effective at racking up the sales, averaging as many as 1,200 condo deals a year.

But they found their operation lacked the resources to care for clients after the deals were done. They needed in-house property managers, leasing specialists and resale agents to help investors flip their properties. This led to the launch of the Condo Store’s boutique brokerage in 2006.

Bulk sales continue to be the company’s bread and butter, accounting for more than 1,000 deals a year (2009 numbers won’t be as good, though, they acknowledge).

“Our strength is that we have the ability to put together 50 to 70 deals in 10 days,” Mehlenbacher says.

Handles lowrise and highrise

As he and Mass built the company, they constantly heard from developers who were unhappy with the people handling their sales and marketing. Recognizing the opportunity, they recruited former colleague Mark Cohen (who also worked on CityPlace) to head up the new Condo Store Marketing Systems. Despite what its name suggests, the Condo Store does a fair amount of sales and marketing for lowrise residential developments, too.

Cohen’s team is working on a number of projects for Brookfield Homes across the GTA and beyond, including The Village (Niagara-on-the-Lake), Grand Valley Trails (Brantford), Grand Central (Bradford) and Hills of Harrowsmith (Oshawa). They are also handling the marketing strategy for Northglen, a 2,500-home project in Bowmanville.

The Condo Store is also involved with several Toronto highrise developments set to launch in the next year: one in the Beach, one near the Art Gallery of Ontario and another in the entertainment district. (Cohen declined to be specific, given that the projects haven’t been officially launched.)

Ideally, Cohen says, his marketing team can help guide the design of projects from the get-go, working with architects to decide on the type of building, size of units and how much they should sell for.

“If we can get involved in the design development, it allows us to sell the community properly and to put our thumbprint on things,” he says. “We get to influence what the product should be and hence what the game plan to sell it will be.”

But his team can also carry out what he calls “SWAT” missions, rescuing a project that’s struggling.

“If we can jump into something that might not have been launched the right way, that really turns our crank,” Cohen says.

Having a host of additional real estate services under one roof can often create lucrative synergies for the Condo Store. Say a worried developer wants to quickly sell off a big chunk of inventory, for example – the company has the resources at hand to make it happen.

“If a developer is getting ready to do a big launch and they get nervous, thinking maybe they didn’t price it properly, we have the ability to say, `If you want we’ll sell 30 per cent of it in the next 10 days,'” Mehlenbacher says.

Condo Store partner Simon Mass specializes in the bulk sales of condos, encouraging clients from around the world to invest in Toronto real estate.

What’s TO’s appeal to international buyers?

“I think the magic word is ‘safe,'” Mass says. “After the global meltdown people are looking for safety.”

“There aren’t a lot of developers in Canada who had unusual or skeptical programs in play like in other countries and the banking was always strict.”

Mass notes that Toronto bucked global trends with home resale values that have actually increased during the recession.

“Toronto’s pricing right now is higher than it was last year at this time,” Mass says.

Unfortunately, other Canadian cities didn’t fare as well.

“If you’d been a pre-construction condo investor and you’d bought in Calgary or Edmonton, you’d have gotten hurt quite badly.”

Does the flood of international investment into Toronto mean it’s become the global city it fancies itself?

“Of course,” Mass says. “I think (Torontonians) have a gem here but they just don’t know it.

“They need to add some sizzle; they need to make it a bit sexy and they’re not. They’re very conservative.”

© Copyright Toronto Star Newspapers Ltd.

How both can avoid nightmare rentals

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Michelle Hopkins
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In 1999, Robbie Steward fell in love and bought an East Vancouver heritage home brimming with original character and charm.

“The house was built in 1946… it is a unique, beautifully restored historic home with a great floor plan,” says Steward. “As a bonus it also sits on a great sized lot.”

Over the last few years, the 53-year-old and his partner Rodney Tolhuysen started to contemplate retirement.

“After raising three teens and now being empty nesters we started to consider selling,” he adds. “But then we both decided we love the neighbourhood too much to leave. We also like the fact that we are only 15 minutes from downtown, Kitsilano, the airport and the entrance to the highway.”

So rather than sell and move into a condominium, they opted to have a laneway home built behind the main house.

They hired Smallworks, a developer with extensive experience in building this type of home.

“We went from a large family home to a 640 square feet, two-level laneway house,” he says.

It’s been a year and a half now and they couldn’t be happier. They found numerous ways to maximize the space with multi-purpose components and custom-designed built-ins.

“Underneath the stairs we built pull-out drawers to store some of our kitchen items such as pots, woks and frying pans,” says Steward. This was the best answer to the lack of cupboard space in the tiny kitchen.

Upstairs, in the loft area, a bed was custom built with cabinetry underneath as well as on the sides. The nightstand doubles as a four-drawer dresser and the stacking washer and dryer are tucked in behind a wall.

“Our tiny bathroom is in a closet,” he says. “Then, you come around the corner and a bookshelf becomes a computer desk with a hidden, motorized lift that pops up a 55-inch TV from the back of the desk.”

The loft serves as the couple’s reading and television room, as well as bedroom, bathroom and laundry room – all on less than 320 square feet of space.

Steward says privacy is not an issue. The main house, the basement suite and the laneway home all have their own private patios and gardens. Better still, the rent from the main house and suite covers the expenses on all three.

“This is the best retirement plan we could conceive of, and best of all, everyone gets along really well,” says Steward.

What is a laneway house?

A laneway home is a small house or cottage-like structure built on an existing property, usually in the back yard and opening onto the back lane. The average size is about 500  square feet, with a large proportion of them being one-bedroom units.

This type of housing is becoming increasingly popular, especially in Metro Vancouver. The introduction of laneway homes was driven by former Vancouver Mayor Sam Sullivan, in order to address urban density in pre-existing neighbourhoods while preserving the single-family feel of neighbourhoods.

City of Vancouver leads the way in laneway housing

Since the City of Vancouver approved laneway homes in 2009, 972 permits have been issued and more than 500 laneway houses have been built.

“We knew there was a demand for this type of housing but we were surprised by just how popular they have been,” says Jane Pickering, City of Vancouver’s deputy director of planning. “I think it’s because laneway homes provide diversity in existing neighbourhoods and provide housing outside of the main house.”

Since laneway homes fit into existing and established neighbourhoods, the tenants can take advantage of existing amenities. And the city saves money on new infrastructure costs.

“It’s a win-win-win situation,” she adds. “We aren’t creating new pipes in the ground, homeowners keep family close-by or create an income for themselves, and we increase our rental pool.”

The only complaints from neighbours that the city has received have concerned the height of laneway homes and issues surrounding privacy – very little has come up regarding parking and congestion matters.

“We’ve worked hard to alleviate neighbours’ concerns and we encourage homeowners to build one-storey homes rather than the loft type,” Pickering says. “We review every permit as they come in and we don’t say no to two-storey loft homes, we just look at each request on an individual basis.”

A laneway house permit takes between six weeks and two months to process.

Building laneway homes

Jake Fry, of Smallworks, has been inundated with requests for this type of housing – many from people who want their extended family to live nearby. Security is another motivation. Baby boomers, who yearn to travel, feel more secure knowing someone is living on the property.

And, he says, “The city also wants to provide more affordable living solutions for new residents as the density increases in Vancouver.”

He got interested in building laneway homes back in Toronto, where coach houses were a big thing. It turned out to be a great business decision.

“This year, we will have built 50 homes, the smallest being 320 square feet and the largest about 500 square feet.”

While Vancouver takes the lead, other cities are seeing the possibilities as well. “Surrey allows smaller homes or flats above a garage to be built in new developments,” says Fry. “North Vancouver has a coach house program, which are slightly bigger than laneway homes, while West Vancouver and Coquitlam are looking into smaller homes programs similar to Vancouver.”

“I also receive a number of calls from American developers who want to emulate what Vancouver has achieved with laneway homes,” he says.

The cost to build a laneway house is quite attractive for many home owners.

“Typically, a laneway home costs under $200,000,” he adds. “The real charm is that because of their size, laneway homes are well-thought out and well laid out.”

Laneway homes also reduce our carbon footprint, but more importantly, “they’re a way for families to live together – just not under the same roof.”

© 2013 Real Estate Weekly

Dunbar group opposes six-storey building; Mixed-use building proposed for stong’s market site

Naoibh O’Connor
Van. Courier

The Dunbar Residents’ Association is troubled by a rezoning application for a six-storey mixed-use building on the Stong’s Market site.

The rezoning proposal provides space for the popular grocery store to move back in after the project is completed, but the building height being sought is contrary to the community vision, which prescribes four-storey limits in the area. Overall, the redevelopment site includes properties from 4508 to 4560 on Dunbar Street and 3581 West 30th Avenue – the current locations for Stong’s, McDermott’s Body Shop and two parking lots.

The proposal envisions two smaller commercial spaces alongside Stong’s on the first level, while levels two to six would feature 72 residential units. On the West 30th avenue parking lot, the proposal is for 11 three-storey townhouses. A public plaza would be located on the northeast corner of Dunbar and West 30th, 234 parking spaces are proposed, three loading and 111 bicycle spaces.

Henriquez Partners Architects filed the rezoning application with the city in June on behalf of the landowner Harwood Group. Jonathan Weisman, president of the Dunbar Residents’ Association, said residents want Stong’s included in the new development, but the proposed building height is a problem.

“We’re distressed about the idea of going over four storeys again. We just dealt with that on the block and frankly it’s not Broadway. It’s not a street of the width and type that can accommodate six to eight storeys,” Weisman said. “It just feels overpowering even from street level, so we’re a bit concerned about the idea that it’s going to be that tall.”

He wonders if alternatives were considered such as sinking the grocery store partially below ground to allow for contemporary supermarket height while keeping the building at four storeys or so.

Brian Jackson, the city’s manager of planning and development, said the rezoning application is in its early stages and under assessment by city staff. An open house will be held but is yet to be scheduled.

In early March, the city rejected a rezoning application by Pacific Arbour Communities to build a six-storey senior’s facility just south of Stong’s based on concerns about affordability.

But Jackson said the two sites are different.

“The seniors centre site to the south is in an area that’s zoned single-family residential, so when they came in with a six-storey building in an area that’s currently single-family, it was a marked departure from existing policy, as well as the vision for the area,” Jackson said. “In the case of Stong’s, it’s already zoned and designated for commercial development, so really the issue is [that] the vision allows for a four-storey building. They’re proposing a six-storey building and the applicant has indicated they need the extra density to accommodate the footprint of the Stong’s store and make it financially viable for Stong’s to remain in the neighbourhood.”

Jackson acknowledged concerns about the proposed height, but noted staff hasn’t formulated a position on the application yet.

“We’re looking at it from the perspective of the broader city policies that we’re trying to achieve, as well as seeing if there’s anything that’s changed since the original vision came in, which would allow for the consideration of a slightly higher building.”

When asked if the application achieves Vancouver’s broader city policies, Jackson said it’s important to keep a grocery store in the neighbourhood and to ensure the neighbourhood has all the facilities and amenities it needs to be a healthy community.

“We’re not looking at it through the lens of affordable housing or anything like that. We’re looking at it from the point of view of complete communities,” he said.

Norman Huth, a senior architect with Henriquez Partners Architects, confirmed financial viability is a key reason for the six-storeys.

He noted there is a one level grade difference between the north and south end of the site, so the north end will be built a half level below grade. Huth said things have been done to the massing to make the building appear more like four storeys such as setting back the two upper floors. There’s also significant terracing on the east side of the building so that it better relates to the single family homes.

Weisman said residents aren’t convinced by the financial viability argument because they haven’t seen figures to substantiate it.

The proposed design for the Dunbar Street site includes two smaller commercial spaces alongside Stong’s on the first level with 72 residential units on levels two to six. The scheme for the West 30th Avenue parking lot is for 11 three-storey townhouses.;

© Copyright 2013

60 Minutes
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60 Minutes news broadcast on Zhang Xin: China’s real estate mogul.

How did Zhang Xin go from working in a sweatshop to being a billionaire real estate developer? Lesley Stahl reports.
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The sun smiled on Fraser Valley home sellers in July, after a year of diminishing sales at 10-year-low levels. There were more real estate sales on the MLS® than the previous July, but more surprisingly, there were 10 per cent more sales than in June. That is anything but typical market behaviour, as Fraser Valley Real Estate Board president-elect Ray Werger points out.

“Buoyancy during the summer is rare at the best of times and yet I’ve just experienced the busiest July in my 20 plus years as a REALTOR®. To jump from the worst June in 10 years to a slightly below average July may not sound unusual or unexpected, but it was.”

Year-over-year comparisons are also remarkable. Realtors in other parts of the country are scratching their heads at double-digit increases. Toronto home sales were up 10 per cent over July 2012, Calgary saw 17 per cent more sales, Edmonton had 25 per cent more and Greater Vancouver sales jumped by an amazing 40.4 per cent.

The Fraser Valley’s year-over-year property* sales increase of 5 per cent may be modest in comparison, but it’s still encouraging. A year after Ottawa tightened borrowing rules and made it harder for first-time buyers to get into the market, “slightly below average” doesn’t look so bad.

Sales and Listings

In the Fraser Valley last month, 774 detached houses changed hands, along with 280 townhouses and 239 condominiums – in all cases, higher sales than June. Sellers must have sensed this renewed energy in the market, because new listings rose as well. New listings of detached houses went up by 6.2 per cent to 1,209. Townhouse listings rose by  3.5 per cent to 451, and 443 condos hit the market, a rise of 13.1 per cent.

However, active listings remained about the same because of the increased sales. The sales-to-active-listings ratio indicates the rate at which properties are selling. For residential properties it’s at a healthy 16.8 per cent, with detached houses at 18 per cent. This is considered a sign of a balanced market.

See detailed Fraser Valley Real Estate Board statistics, broken down by community.

MLS® Benchmark Prices

With supply and demand in balance, prices aren’t moving much.

Benchmark prices are based on the price of a typical home for its neighbourhood. The MLS benchmark price was designed to be less volatile than average prices. It ignores sales of extremely high-priced or low-priced properties and concentrates instead on what the majority of buyers are looking for in a given area. Thus, benchmark prices and average prices can be wildly different. For example, in South Surrey White Rock, July’s benchmark price for a detached house was $849,500 while the average price was $1,033,291.

However, in a new “Talking Points” report from BMO Capital Markets, Chief Economist Douglas Porter observed that benchmark prices don’t give us much of an idea of where the market is going. For that, he looks to average prices, which he says lead benchmark prices by three to five months.

This chart shows Canadian benchmark prices from both the MLS and Teranet National. The dotted line is average prices from five months ago. They’ve been advanced for easy comparison. They’re more extreme, but look how closely they match the trend.

It appears that the movement of average prices can predict the price trend of the residential market.

With that in mind, let’s take a look at the future. Here’s a chart of the average price for all property types combined. The yellow line is three to five months ago. Looks like the stability in price will continue.

Ray Werger sums it up: “Year over year, prices are stable or down slightly, however the six-month trend is showing one to two per cent increases for all property types; again underlying the return to an average or typical housing market.”

* FVREB’s overall sales numbers include all types of property including commercial, agricultural and industrial. The statistics given in the tables above are strictly residential.

© 2013 Real Estate Weekly

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Resort-style retirement community

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