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DNA 3 condos @ King and Shaw

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Today, DNA3 condos came into my office to present an Urbanation report on the condo market in downtown west, a market overview. They are located at King St. W and Shaw St.

They compared the downtown west market to the downtown core and east downtown markets. They compared resale values, appreciation rates, rental rates between the different areas as well as comparable projects in the same timeline.

 

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The downtown west district has consistently been the top selling submarket in the Toronto area.

  • Total sales in the submarket continue to trend upward. Sales since 2005: Downtown West – 16%, Downtown Core – 10%, and downtown East – 6%.
  • The downtown west increased its market share within each of the past two full years from 12% in 2007, to 14% in 2008, to 22% in 2009, and 18% of sales in 2010.
  • Downtown west accounts for 15% of the unsold inventory in the market, less than the 18% market share of sales à this means that demand is stronger than supply in downtown west in 2005-2007 and 2009-2010
  • Condo supply in the downtown west is trending downward as there is diminishing supply of land/high land prices will result in future price inflation.
  • Downtown west condo price appreciation has been higher on an annual basis than the downtown core and the overall Toronto market.

 

YearYearYearYearYearYearAppreciationAppreciation
Area200520062007200820092010OverallAnnual
Downtown West$333$373$424$448$462$48245%7.9%
Downtown Core$358$379$446$474$488$51644%7.8%
Toronto Average$320$345$384$414$435$46244%7.7%

We know that the area is doing well, so we’ll look into the specific buildings in the area that were launched in the similar time period. We can see that DNA 1 and 2 condos have increased in value greater than several of the projects nearby.

ProjectOpening QuarterStarting $PSF 2010 Resale $PSFAppreciation Overall Appreciation Annual
DNAQ2-2003$274$51187%12%
533 RichmondQ3-2003$325$56975%11%
Battery Park 1Q2-2003$276$47271%10%
One Six NineQ2-2003$330$55167%10%
HudsonQ3-2002$341$56867%9%
ZedQ1-2003$320$50859%8%
EuropaQ4-2003$360$55454%8%

  • In 2009/2010, index Rent at DNA 1 and 2 are among the best achieved by projects 6-8 year old buildings in downtown west. (Approx. $1531/month, $2.64/psf)
  • Index rents at DNA are higher than several newer projects in the downtown west and the downtown core market

 

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There is a promotion with a VIP sales event this Saturday at DNA3: They have 9 suites left that are 564 SF, 1+den selling for $320,000 ($567/SF). No parking (Parking is $35,000), but the units are fully Furnished. To participate, you need to put 20% down on this unit throughout 1 year (Approx. $65,000).

  • On average a 1Bedroom furnished suite commands $200 more per month than non-furnished units and 1+den commands a $230 premium.
  • They also have new town lofts for sale for $520/SF. 769 SF 1+den for $400,000.

 

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In conclusion, looking at the trend of DNA’s success and using their 12% annual appreciation, your $320,000 unit will appreciate approximately $38,000/year. If you want to assign it (sell it before occupancy), you can leverage your $65,000 down payment for almost $120,000. If you want to buy and hold, with it being fully furnished, you can generate positive cash flow in rent.

So if you’re interested, I’m taking a client down this Saturday around noon to take a closer look at the numbers as well as the floor plans and prices. Let me know if you want to come as well.

Feel free to forward this to anyone who may be of interest.