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How to Sell a Condo in King West for $1300 per square foot with Rizwan Malik

The Toronto condo market keeps on moving and breaking records. It was just a few years ago that $600 per square foot was considered high, and now, that’s considered incredibly cheap! A unit at Charlie condos just sold for $1300 per square foot – smashing all records for the King West market and this shows how mature the market is becoming. Rizwan Malik was the listing agent for this property and he is the podcast in this episode to talk about how it happened and where he sees the downtown market going from here.

RIZWAN MALIK INTERVIEW HIGHLIGHTS

3:59 What they paid for it when they bought it, versus what they sold it for today.
5:50 In your research looking around, $1,300 a square foot. Put that in perspective for us.
9:23 People are very much open to living in all different areas of the city.
12:59 What are you seeing in the resale market with the typical condo product?

Click Here for Interview Transcript

Andrew: Back in my day, we used to buy condos for $200 a square foot. Does that sound familiar? Do you know somebody who talks like that? We’ll talk about where the market is today, and the incredible prices that some people are achieving with the special case study on today’s episode.
Speaker 2: Welcome to the True Condos podcast, with Andrew la Fleur. The place to get the truth on the Toronto condo market and condo investing in Toronto.
Andrew: Hi, and welcome back to the show. As I mentioned, we’re going to be talking about the market today and the incredible prices that some people are achieving, specifically in the resale market. We’re going to do a little bit of a different format today. I’m bringing in Rizwan Malik, who’s an agent with Sotheby’s Realty. He recently listed and sold a condo at Charlie Condos, King and [Spedina 00:00:52], which is about a 3 or 4 year old building. The unit went for an incredible price. I’ll let him describe it to you and the price that was achieved.
Again, this podcast is for people who are still thinking that the days of $300, $400, $500 a square foot for a condo downtown are possible, and people who are thinking that $1000 a square foot is just absolutely an unattainable, unimaginable number. Again, I’m here to say that the days of $500, even $600 a square foot are well behind us now, and $1,000 a square foot is regularly being achieved across the downtown and many different areas. As you’ll hear on today’s episode, sometimes numbers that people are getting are far above $1,000 a square foot, a number that admittedly just a few years ago was considered New York City like pricing, pricing that we would probably never really see here, or at least that’s what some people thought.
Yet here we are today in 2016, and the market continues to move on. The market is always moving. If you don’t pay attention and if you’re not active, and if you’re not engaged in the market, you will keep missing out and the market will pass you by, especially when it’s moving as quickly as it is right now.
Without further ado, let’s get to the interview with Rizwan Malik. Okay, it’s my pleasure to welcome to the show Rizwan Malik. Rizwan is a sales representative with Sotheby’s real estate. I wanted to bring Rizwan on the show to talk about a recent sale that he was a part of, a condo downtown. Rizwan, welcome to the show.
Rizwan: Thank you so much for having me, Andrew. It’s a pleasure to be on your podcast. Yes, absolutely, 8 Charlotte, or Charlie Penthouse 2, the unit that you are discussing, or we’re discussing, was a tremendous success. We went on the market a few months ago and for downtown west, or King Street west, we were able to command just over $1,300 a square foot, which is quite astonishing compared to what my client originally bought it for just 3 years prior to that.
Andrew: Yeah, incredible. Just to fill everybody in, you sold this. It was your listing, this penthouse unit at Charlie Condos, which is a Great Golf homes built building. How old is the building?
Rizwan: The building is about 4 years old. The building was pretty well completed, and the 2 penthouse units on the top floor were the only 2 units available or remaining to be sold. We purchased it directly from Great Golf approximately 3 years ago.
Andrew: Great. I don’t know how many details you can reveal about in terms of what they paid for it, what they sold it for, and all this kind of thing. Yeah, if you could just give us all the details, like the size of the unit, the specs on the unit, if you can share what they paid for it when they bought it, versus what they sold it for today.
Rizwan: Sure. The unit is approximately 2,032 square feet. It had a very unique feature where it offers a private 1,800 square foot terrace, and there are actually plans to potentially put a pool on this terrace, a private pool for the new owner. That was something that my client personally oversaw, but just didn’t follow through on it because plans changed and he ended up moving on to a new property. As mentioned, originally we purchased it for approximately, I would say $1,000 a square foot, and then around that figure, and then just in 3 years we were able to sell it for just over $1,300 a square foot, which is a huge rate of return.
Just to emphasize on the growing trend in the market place, not only in freehold, which has experienced a tremendous growth in the past little bit. Condominium is starting to follow suit in the sense that the market place is, there’s only a certain number of properties available. There’s only a certain number of unique properties available as well, and as such, the entire market place is growing as a whole, and that growth isn’t only specific to the freehold market. The condo market is definitely following suit.
Andrew: Yeah, yeah exactly. Everybody’s been talking for years about how freehold home prices have been going up like crazy. We’ve seen in the stats year after year double digit growth. Now we’re really starting to see big growth numbers, especially over the last 6 to 12 months, in the downtown condo market.
In your research and looking around, $1,300 a square foot. Put that in perspective for us. Some people it might just be a number, but it really is a ground breaking sort of a number. Every once in a while, there’s sort of a sale, I find, in the market that sets a new bar that sort of resets the market, and everything else kind of falls in line. This is really a precedent setting sale. What’s the previous high that you’ve seen in your research in the area for anything similar?
Rizwan: Just the unit directly below, one of the sub-penthouses which is approximately 1,500 square feet. That’s still sold for approximately $1,000 a square foot. Having said that, in just the year prior. When you actually think about $300 extra per square foot, and you are able to multiply that by 2,000 square feet, that’s almost a $600,000 increment. It’s not just an extra $300 per square foot. It really adds up.
It’s a very significant number in that regard, and you’re right. It does set a precedent setting sale, in the sense that other properties that are going to now sell mot only in the building or in the neighborhood, [inaudible 00:07:11] square foot, but they will be closer to that figure versus the lower figures [inaudible 00:07:18] in the previous years.
Originally, the building was selling for about $700, $750 a square foot, some of which, this unit as I mentioned, was purchased around $1000 a square foot because it was a larger unit. It had some incredible features, such as the terrace, the ceiling height. It had about half the top floor. It was commanding more than the rest of the building, which was justifiable. Now as such, it was sold for what it was sold for.
As a matter of fact, the market is still incredibly active, not only the freehold market but especially the condo market as well. Currently, since this article has come out and since the sale has gone firm a few months ago, I’ve had multiple agents call me and ask me for any reason if the deal was to fall through, to notify them immediately, that they had buyers who were ready with their checkbook, that they had buyers who are willing to pay more than what my client actually sold for. It’s very telling to where the market is headed over the next little bit.
Andrew: Wow, interesting yeah. It used to be too that $1,000 a square foot was considered, just a few years ago, $1,000 a square foot was unheard of except for maybe in a couple of buildings here and there in Yorkville were achieving numbers like that. Three, 4 years ago you could buy in the Ritz Carlton for, say, $700 a square foot, even less. Now just a few years later, Charlie is a great building but it’s not a 5 star building or anything. Thirteen hundred dollars a square foot at King and Spedina, again, really unheard of a few years ago. What does it tell you about the higher end of the market as well, not being isolated to Yorkville anymore?
Rizwan: I think that’s a very good point. I think people are very much open to living in all different areas of the city. It’s not, if I have a certain amount of money to spend, I’m going to basically pigeon hole myself in one particular location. People are more fluid. People want to be wherever they want to be. For example, King and Spedina is the entertainment capital of the city. Everyone flocks there for maybe the different theater performances, the Roy Thompson Hall. Whatever it may be. Whatever they want to do, it’s a great neighborhood. People don’t shy away from spending multiple millions of dollars in an area like that because it’s not Yorkville, or it’s not [Loanville 00:10:06] or whatever, Forest Hill, whatever were the big neighborhoods that existed prior to this. I think people are more open to all different areas of the city. I think this will follow suit.
In terms of the building, again, the building is a great building, but as you said, it is not one of those typical 5 star building which offer valet parking or a top of the line full service spa where you can go in and spend the day, and that sort of thing. Nothing to take away from the building, it’s a great building, but again, it commands about $1,000 a square foot for the building of this magnitude.
I will give a lot of credit to my client as well, who did a tremendous job in customizing it and making it his own. A lot of it is his vision as well. It’s very dramatic to walk into a penthouse today and have everything black. Every single wall, every single ceiling, every thing, the kitchen. It was a high lacquered black gloss kitchen. As far as, well, he even mentioned it to me when we purchased the property, I thought, okay, it’s either going to go extremely well, or it’s going to go very poorly. I’m very, very happy for him that it has gone in a positive direction.
Andrew: It’s worked out well. It worked out very well for him.
Rizwan: He’s not complaining. To benchmark from his own success, even the new home that he’s purchased, he just had to have it painted black. I think he might be on to a bit of a trend here.
Andrew: Right, yeah. Obviously yeah. I’ll include a link in the show notes, obviously, to the pictures and everything of the listing. It was a very dramatic, specific style. You’re right. It’s not typically something that as real estate agents we would advise our clients to do if they’re looking to get top dollar for it. There’s a lot of buyers out there, I think, looking for something unique, and something, especially larger units with unique features like that terrace. Just the size of the unit.
Like you said, it worked out very well. Sometimes you get sales like this that are just a fluke. Obviously you’ve had multiple offers on it. You’ve had essentially a verbal offers to buy it after the fact as well. It’s not like it was just one lucky seller grabbing one lucky buyer kind of thing. I think it’s a sign that there is demand for this type of product out there.
What would you say, in terms of going back to the street, so to speak and getting out of the penthouse. What are you seeing in your work in the resale market with the typical condo product that’s out there? What kind of demand are you seeing? Where are you seeing prices going? How far off are we from maybe $1,000 a square foot as being for just average, normal condos? What are you seeing out there?
Rizwan: Great question. I think we’re definitely headed towards that trend. When it will happen, I think we’re not exactly there yet. In terms of the demand for condominiums, I’ll give you a small example. Just last month I had a listing at 740 Edwardson Street West, which is near [inaudible 00:13:40]. It’s an old coop building that was converted into condominiums a few years ago. The property went up, and within a week it was sold.
Now, with that seller there, we’re currently out in the place looking to purchase a property, and we’re on the pulse of the market. We’re checking it every single day. We’re basically being as proactive as we can. We’re finding it is so difficult that before we even schedule a showing, before we are even able to go and view it and my client has an hour or 2 hours, 3 hours to even consider the property, or what it has to offer, the properties are either sold conditionally or sold firm in multiple offers.
The whole multiple offer scenario that people sort of thought, okay, it’s very much a part of the freehold market. Condominiums are not as quote unquote desirable, or will not sell as quickly. It’s no longer the case. I think in today’s market place, what we’re buying and selling is square footage. At the end of the day, whether it may be in a condominium, in a town home, or in freehold, they’re buying square footage to live in. People are noticing that the freehold market may be at a point where it’s not even attainable. It’s very hard to grasp just slightly over a million dollars for an average home that is a fixer upper, a condo is a good alternative. As such, more and more people are seeing that and realizing that. This is why there has been this tremendous growth in both the condominium world.
Actually, a few years ago, there was this consideration that we were possibly overbuilding in the city. A lot of the developers, and I’ve worked for a very prominent developer, as you know. A lot of developers scaled back slightly and started building slightly less. Not launching 4 or 5 building a year, just launching maybe 2 or 3. A couple years ago I remember speaking to another agent friend of mine, and he had mentioned to me, and he said, “Look, I’m predicting in the next 3 to 5 years that there will be a shortage in condominiums.” We both laughed about it, but I actually think that he was on to something. I think because we are building less and demand is going up, just basic laws of economics or whatever you want to follow would suggest that his theory may actually end up panning out. We may be under building to the point where there will be a shortage in condominiums.
I think it’s a great time to buy and invest, because the market is indicating that it is no longer about the individual property that you’re buying. It’s no longer about where it’s the condominium or the town home or a freehold, or whatever it may be, it’s now just about square footage. It’s about a location. It’s about tightening that commute to work. It’s about tightening back commute to things that you enjoy to do, like entertainment, living life, friends, family. I think that’s setting a huge precedent to people’s lives, as opposed to maybe living in the suburbs and driving in, or doing that sort of, the reverse of it.
Andrew: No. Yeah, well said, well said. Yeah. That’s a good point you make. It’s all about the square footage. Yeah, people are, yeah go ahead.
Rizwan: That is why we’re seeing this increased in condominium square footage prices. In fact, you even shared earlier, staring out when you purchased your first condo at $245 a square foot. I think parking spots are selling for more than that now.
Andrew: Yeah. Yeah, yeah. I was sharing in a Facebook post, my first condo at $245 a square foot. Only 10 years ago, and now here you are selling at $1,300 a square foot in a non-5 star building. Now mind you, it is a 5 star unit, but it is a regular building. It’s not a …
Rizwan: A condominium building but with an extremely unique feature, very unique penthouse in the sense that the various features that it has an incredibly [inaudible 00:18:08]. I think just back to your point earlier as well, it’s not that this was just a fluke of a sale. We had tremendous interest, even to sell a property at $2.7 million in 4 days being on the market. That in itself is quite astonishing. Typically units at this price point take a certain number of weeks, if not over a month, maybe a couple months to move. To have multiple people interested in the home, so much so that one gentleman who visited, visited the penthouse twice in one day because it wanted to see it both during the day and at night because he didn’t think that it would last. Unfortunately he wasn’t the one who ended up succeeding in purchasing the unit, but he was able to identify how much this unit would resonate with anyone and everyone who would walk through it. It was very much a special unit.
As you said since then, we’ve had multiple people who’ve been interested in it. It just goes to show that this wasn’t necessarily a fluke. Will everything sell for $1,300 now per square foot? Probably not, but I don’t think we’re very far off from closing in, or at least tightening the gap between the condominium and the freehold market.
Andrew: Yeah, well said. Well said. Rizwan, thank you so much for being on the podcast today. If people want to find you, get ahold of you online or otherwise, what’s the best way for people to reach you?
Rizwan: They can reach me by email, rmalik@sothebysrealty.ca. If you have a chat link up.
Andrew: Great. Thanks Rizwan, appreciate it.
Rizwan: Andrew, you have a wonderful day.
Speaker 2: Thanks for listening to the True Condos Podcast. Remember, your positive reviews make a big difference to the show. To learn more about condo investing, become a True Condo subscriber, by visiting truecondos.com.

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