This article originally appeared in the May 2012 issue of Condo Business magazine.
A condominium high-rise suite’s equity is directly tied to how the common elements are managed and maintained. Lobbies, corridors, amenity spaces and exterior ground all influence the real-estate value of a suite. So, it is important to invest in each of these areas in order to maintain the equity of the suite. With ever increasing competition from an abundance of new builds, maintaining ‘curb appeal’ is paramount.
Real estate agents know the importance of ‘curb appeal’. Invariably, their first suggestions, before listing a house, focus on the front entrance—moving plants, repainting, fixing steps—and inside the doorway, ensuring the space is inviting. That first impression is just as important in a condominium high-rise. For high-rise suite owners, their suite door is the secondary entrance; the lobby is where guests and potential purchasers will form their first impression.
If tiles aren’t cracked, or wall coverings aren’t damaged, sometimes updating a lobby is not at the top of the priority list for a Board of Directors. But over time, the once welcoming entrance, now stale and outdated, becomes nothing more than flow through space that says “we’re too busy to worry about this now”.
This was the case at YRCC 591 (5 Weldrick Road, Richmond Hill). The lobby had gone well beyond its ‘best before’ date. Though the lobby was still fully functional, the furniture still in good shape and the colours weren’t offensive, there was a tiredness about the space. Everyone just walked through the space, there was no sense of community, no lift to spirits or to selling prices.
With potential buyers in mind, owners hope that their lobby is inviting, chock full of the ‘wow’ factor to keep a buyer’s interest peaked even before seeing the suite. Owners want to impress and garner compliments rather than explain away dreary colours and fading fashions. If the lobby isn’t presenting an inviting first impression, then it might be time to rethink the look.
When the Board of Directors at YRCC 591 brought in Trevor Kruse, from Hudson Kruse Design, to present a new look, they knew the time had come. Owners and residents alike agreed a change was needed. Trevor knew they were demanding something dramatic and unique.
Everyone may want a new image, but how easy is it to renovate a lobby while residents continue to move through the space? New builds have an easier time implementing complex design features without the extra concerns of public access. For a short time residents may feel like they are living in a construction zone, but addressing an older building’s features to update amenities and attract potential investment means owners, residents, and management must accommodate these inconveniences. When asked how difficult it was to get residents and owners on side for the project, Trevor Kruse happily reflected on his experience at YRCC 591, “There wasn’t any resistance.” Kruse noted that the lobby had become so outdated the community was eager to update it. “When a refurbishment is started so long after it should have been, it is easy to make improvements.”
But design is not a stand-alone issue when contemplating major changes; an important question on manager’s and owner’s minds, “What is the rate of return on investment?”
As talk of a “condo bubble” heats up and as the condominium inventory in Toronto continues to rise, older buildings need to stay current to better situate themselves in the event of a bubble burst. As CMHC statistics for April were announced—housing starts are up 14 percent—concerns that the market is headed toward a major correction are running rampant throughout the industry. The impact could well be felt most acutely in the older condominium market as builders lower prices on the abundance of new units and overall real estate values drop.
When shopping for a new condominium, buyers take appearance into account. It’s human nature. Older buildings in themselves attract many buyers due to the unit size as they are on average larger in square footage however; the hallways are typically dated and tired causing many buyers to rethink where they wanted to live. In Toronto, the largest condominium market in North America, competition is fierce. Older buildings are at a disadvantage, having to compete against new buildings that have more modern amenities and utilize modern technologies. A newly refurbished building will have more appeal than an older building and puts the updated building in the same category as new builds.
In October 2011, CPL condominium design interiors completed a major residential corridor/common elements refurbishment project at PCC 110 (1535 Lakeshore Road East, Mississauga). Shelley Porritt, a real estate agent in Toronto with over 15 years experience in the condominium market, remarks, “By refurbishing the building, typically we see an increase in sales, and renovated units sell quicker when the building reflects the updates and renovations of the interior unit.” Directly after the renovation project, owners selling their suites saw an immediate 3% value increase, even before the active ‘spring’ season.
Good design ensures that the corporation receives the best advice on what to do and how to do it. Partnered with good design is strong execution. If the design is not implemented properly, its return on investment will be compromised. Good design creates demand and demand translates into increased property values and the more values increase the more equity created.
When a Board of Directors is planning for a refurbishment project, it is important to remember that it isn’t all about the new design trends or the hip colours, though they play an important role. Good design should incorporate long term maintenance concerns, energy conservation and material utilization (sustainability), along with new technologies that can save the corporation on maintenance and overhead expenditures immediately and into the future.
Too often design is compromised without understanding how it impacts the return on investment. Investing in new technologies, which will remain with the corporation for the next 12-15 years, if not longer, will have a direct impact on how the building is perceived within the real-estate community. Smart corporations can now market their community to perspective buyers as not only new but progressive, ultimately affecting demand for suites and increasing their selling price.
A re-design and refurbishment not only refreshes the architectural finishes within the building but also is an investment into the community which has very real and measurable returns!
Cathy Doherty is a member of CPL condominium design interiors: a refurbishment and painting firm based in Oakville, serving the GTA and Golden Horseshoe condominium marketplace for over 20 years. For more information and to view a showcase of projects, visit www.cpldesigninteriors.com.
Read this article as it originally appeared in Condo Business magazine: Situated to Survive the Bubble