Winnipeg |390 on the river (d Condo) | ~81M | 24F | U/C

[Rudiger]

The Sandhu Developments twitter account just posted two pictures from the D Condo site (in the past few hours). That seems odd. Do they still have access to the building?

In cases of receivership like this, do the original developers still get to claim the building as their project? For example, the Sandhu Developments website has the project and sales information prominently displayed. Or will this get worked out by PWC?

[Wolf13]

Originally Posted by blueasajewel

They are inept. This isn't the first project they've had issues with. It's just the largest - so from that perspective, yes they bite off more than they could chew.

Just blows my mind that the construction budge ballooned to $47M from $33.5m...

I don't know much about Sandhu, so while he may be inept, I can speak to the budget...

It's completely expected, and I don't fault them for that. I only fault them for not getting this thing going quicker.

What 25 storey tower can you build TODAY for 33.5M? Zero. For 47M? Still unlikely, still very low price. Bear in mind this tower is similar in height to TNS and while that scale is larger, it's 8x the price. EIGHT. Minimum.

Artis' tower isn't twice the size but it will be 140M despite already having a foundation.

Yes, there are other factors, but the point remains. 47.5M is a LOW number.

The other problem, and I actually feel bad for him as you can't prepare for this, is that he initiated this project well before our construction industry saw MASSIVE price increases (2012-14). I would not be surprised if that increased budget is due to material and labour increases ALONE, which aren't the developer's fault.

I'm pissed at this too, because it was hard enough to get development going in this city and suddenly a few major suppliers, followed by the new national energy code, followed by Trudea and doubled drywall costs, allllll decided they can get more money. It has greatly hampered our city's current momentum, which would be greater still if escalations were managed more reasonably.

What Sandhu COULD have done, however, is secure the funds, the sales and START. All the various contractor bids are only valid so long, so when Sandhu finally took a step forward, the prices came back higher. In fairness to him, he couldn't have seen THESE escalations coming. Nobody did. But the way to manage that is to MOVE YOUR ASS and get the project financially sounds and bound, and the construction started.

Originally Posted by Rudiger

The Sandhu Developments twitter account just posted two pictures from the D Condo site (in the past few hours). That seems odd. Do they still have access to the building?

In cases of receivership like this, do the original developers still get to claim the building as their project? For example, the Sandhu Developments website has the project and sales information prominently displayed. Or will this get worked out by PWC?

To save face.

[bomberjet]

I wouldn't say dCondo can be directly compared to either TNS or 300 Main. 300 main is twice the height and floor plate. TNS square has the huge underground portion and the buildings are larger height and floor plate area.

But yeah, especially if dCondo is supposed to be luxury. $30M seems quite low. Maybe 5-10 years ago that was accurate, not today.

[Spocket]

So how will this be completed if at all?

[Wolf13]

Originally Posted by bomberjet

I wouldn't say dCondo can be directly compared to either TNS or 300 Main. 300 main is twice the height and floor plate. TNS square has the huge underground portion and the buildings are larger height and floor plate area.

But yeah, especially if dCondo is supposed to be luxury. $30M seems quite low. Maybe 5-10 years ago that was accurate, not today.

Oh of course, it's not directly comparable, just some marketplace context. 47M is not a lot.

Doesn't mean that Sandhu didn't derp this deal up,

[blueasajewel]

Originally Posted by Wolf13

I don't know much about Sandhu, so while he may be inept, I can speak to the budget...

It's completely expected, and I don't fault them for that. I only fault them for not getting this thing going quicker.

What 25 storey tower can you build TODAY for 33.5M? Zero. For 47M? Still unlikely, still very low price. Bear in mind this tower is similar in height to TNS and while that scale is larger, it's 8x the price. EIGHT. Minimum.

Artis' tower isn't twice the size but it will be 140M despite already having a foundation.

Yes, there are other factors, but the point remains. 47.5M is a LOW number.

The other problem, and I actually feel bad for him as you can't prepare for this, is that he initiated this project well before our construction industry saw MASSIVE price increases (2012-14). I would not be surprised if that increased budget is due to material and labour increases ALONE, which aren't the developer's fault.

I'm pissed at this too, because it was hard enough to get development going in this city and suddenly a few major suppliers, followed by the new national energy code, followed by Trudea and doubled drywall costs, allllll decided they can get more money. It has greatly hampered our city's current momentum, which would be greater still if escalations were managed more reasonably.

What Sandhu COULD have done, however, is secure the funds, the sales and START. All the various contractor bids are only valid so long, so when Sandhu finally took a step forward, the prices came back higher. In fairness to him, he couldn't have seen THESE escalations coming. Nobody did. But the way to manage that is to MOVE YOUR ASS and get the project financially sounds and bound, and the construction started.

Have to respectfully disagree with you here. Glasshouse which started construction within a +/-month of D-Condo had a construction budget of approx. $34.5M. GH number did not include their parking because it was part of the CentrePoint deal. If one factors this in, the GH budget is about $39M ($232 psf)

Note GH is approx 60% larger than D. Neither project was affected by the energy code as they both got in before its implementation.

No experienced hi-rise developer goes in without knowing their numbers cold. A 33% jump in construction cost (from $300 psf to $425 psf) is a sure sign of their inexperience as a building of this size and caliber is a whole different game.

D was being done in a piecemeal fashion (stop/start construction likely due to a lack of proper financing, no active sales program for months etc.)

Sandhu was way over their heads and flying by the seat of their pants from day one - which is really unfortunate as no one wants to see this happen to anyone.

[buzzg]

As much as I think it's great Sandhu is "investing in Winnipeg" [aka being a business, making money] and taking some chances, I have to say their final products are for the most part abhorrent.

This looks absolutely awful, it should not even be allowed. It was clear they cheaped out as much as possible.

That is even worse than this mess over on Adelaide.

And while this one actually looks alright, it's pretty brutal that there is only one CRU when the whole street-facing side should have had them, rather than private entrances. Although maybe you can blame the city for allowing that.

[Urban recluse]

I have to agree with you. Windows play a huge role in the appearance of a building, and the windows in those two retrofits suck--they SUCK! What adds to the depressing appearance is the crumbling curbs, sidewalks and streets. If those were all new, and more decorative, including some charming street lights, the building would actually look better.

[Jeff]

I'm actually quite fine with how the exchange buildings turned out. they didn't do any all-out, irreparable changes to the main warehouse elements of the buildings so if someone new comes along and wants to up-market them in the future it is still possible. those buildings are also in a somewhat tenuous fringe area of the exchange bordering one of the most poverty-stricken areas in the entire country (centennial) so the fact that people ARE actually renting them out is amazing.

[esquire]

Originally Posted by Jeff

I'm actually quite fine with how the exchange buildings turned out. they didn't do any all-out, irreparable changes to the main warehouse elements of the buildings so if someone new comes along and wants to up-market them in the future it is still possible. those buildings are also in a somewhat tenuous fringe area of the exchange bordering one of the most poverty-stricken areas in the entire country (centennial) so the fact that people ARE actually renting them out is amazing.

I agree. 20 years ago I think most people would have expected those buildings to fall to arson as opposed to being redeveloped into desirable places to live. Sandhu deserves props for making that happen.

[NK59]

Originally Posted by blueasajewel

Sandhu was way over their heads and flying by the seat of their pants from day one - which is really unfortunate as no one wants to see this happen to anyone.

While this is unfortunate for the unsuspecting buyers, I disagree with this being unfortunate for Sandhu. They ABSOLUTELY DESERVE every single one of their failures. You would quickly lose any sympathy you have if you ever had to deal with them personally.

[Cyro]

Originally Posted by Jeff

...fringe area of the exchange bordering one of the most poverty-stricken areas in the entire country (centennial) so the fact that people ARE actually renting them out is amazing.

Very true. Some may not be famililar with this area and the problems that it faces to this day.

[Wolf13]

Originally Posted by blueasajewel

Have to respectfully disagree with you here. Glasshouse which started construction within a +/-month of D-Condo had a construction budget of approx. $34.5M. GH number did not include their parking because it was part of the CentrePoint deal. If one factors this in, the GH budget is about $39M ($232 psf)

Note GH is approx 60% larger than D. Neither project was affected by the energy code as they both got in before its implementation.

No experienced hi-rise developer goes in without knowing their numbers cold. A 33% jump in construction cost (from $300 psf to $425 psf) is a sure sign of their inexperience as a building of this size and caliber is a whole different game.

D was being done in a piecemeal fashion (stop/start construction likely due to a lack of proper financing, no active sales program for months etc.)

Sandhu was way over their heads and flying by the seat of their pants from day one - which is really unfortunate as no one wants to see this happen to anyone.

What you're saying doesn't really contradict what I'm saying (or what I intended to say, if I came across wrong). Nobody is excusing Sandhu's inability to get this project going, and proceeding prematurely.

What I DID say was that Sandhu screwed up by not locking in his costs and investors. If Glasshouse had a sound budget, but didn't lock in tender pricing, they too would have seen similar escalations in pricing.

Consider also that D Condo was more upmarket, included parking, and likely was on more expensive land (plus demo costs of previous structures). Although there may be more gaps, those are considerable factors in the cost differences between the towers

However, if Glasshouse was budgeted as per identical spec TODAY, it would be more expensive.

THAT was the point I was making. In the time that Sandhu stopped and started, tender bids were void by time, thus re-priced. It is absolute fact that Winnipeg construction prices jumped big time during this time period. A lot of builders make many mistakes and ommissions in budget pricing, but in this case it's possible that material/labour costs ALONE may have jumped high enough to make up the difference between 35M and 47M.

All I was saying is that this was unexpected and unforseen.

A seasoned builder would have protected themselves from this risk. However, one can reasonably say that these price escalations were very unexpected.

Like my original post said, I don't know how much Sandhu does or does not know. Having seen how much material and labour costs have increased over the last 5 years, I'm saying that was the biggest culprit to the increased cost.

[NK59]

Originally Posted by Wolf13

Like my original post said, I don't know how much Sandhu does or does not know. Having seen how much material and labour costs have increased over the last 5 years, I'm saying that was the biggest culprit to the increased cost.

Knowing how little they know, I doubt your theory on construction cost inflation is the primary culprit.

[Jeff]

Winnipeg is growing.. the market ave building, 300 main and all the stuff going on regarding Osborne village is gonna happen. You cant deny that the city grew 70k people over the last census. these projects are gonna succeed just based on the fact they have to.

[Flatland Metropolis]

Posted today

[Wolf13]

Originally Posted by NK59

Knowing how little they know, I doubt your theory on construction cost inflation is the primary culprit.

Just a theory, and not unreasonable.

Sandhu might be a moron, but short of working with him I'm not sure many here can substantiate that too much further beyond rumours and articles. On the other hand, I know a lot about construction cost inflation.

[wags_in_the_peg]

the Receiver had an ad in the FreeP this weekend looking for a new owner to finish off the building. I wonder if one of the REIT will swoop in and buy it for a bargain.

Separately, i noticed a few floors of windows are in on the East side already!

[esquire]

Originally Posted by wags_in_the_peg

Separately, i noticed a few floors of windows are in on the East side already!

All of the business-related issues aside, the building is turning out to be a massive breath of fresh air for the extremely stale looking neighbourhood of Bro-Ass. With the nice glass cladding going up, it's really adding something new to the very 1970s streetscape.

[Urban recluse]

Totally.