Quote:
Originally Posted by mcj
Is there any reason at this location to not max out the FSR though? Seems like there's plenty of demand for the Brentwood area, wouldn't opting for a lower FSR just be going against the developers best interests?
|
I'm not a property developer, just an observer of what gets developed. As I understand it, development is a complex calculation between risk and reward. To achieve the maximum FAR means a developer has to be willing, and able, to take on a significant chunk of either commercial or non-market rental, (or both). Up to now, we know there has been a strong market in Brentwood for condos, and for market rental. The office market is less clear. Appia obviously think there's potential, as they added more office to SoLo 4, (but they haven't actually built it yet). They did put a 230,000 office component under tower 2, but only 0.8 FAR under the tower currently being built. Shape haven't built their office tower, and there aren't any other new office buildings under development, suggesting the market isn't terribly strong. To quote Avison Young on the Burnaby office market: "With just 113,478 sf of new space set for delivery in 2022 (38% preleased), there is virtually no more new supply scheduled to be delivered until mid-2024." When they first inquired about developing here in 2019 Bosa indicated an office/hotel tower as part of the project - but that's not the case any more.
The new policy pretty much guarantees the residential 8.3 FAR, but some of that has to be rental, and some has to have rents set to 20% below CMHC market median rents. To add the other 6 FAR at least half must be commercial (so 3 FAR) and the other half can be rental, not condo.
The bigger the building, the longer it takes to develop, the more the borrowing costs are, and the greater the risk that there's only a limited market for what gets built (rental office, or rental housing). The condos are effectively pre-sold to cover their costs, but the parts the developer is still responsible for carry greater risk, and so far nobody has actually maxed out the permitted density, although it's 2 years since the policy was adopted.
Having said that Bosa, with a dedicated rental business, and a commercial leasing arm, might well be the developer to try, but they'd also have to persuade the bank covering their construction costs it makes sense. Overall, at 14.3 FAR, this would be over 2 million sq. ft. of construction, which would cost over $1 billion to construct (although obviously it's likely to be phased)
With this site they would have to be willing to build 450,000 sq. ft. of commercial and even more residential rental space, some of it at below-market rents. Building at around 12 FAR would reduce some of the risk, cut down on some of the commercial and market and below-market rental units. It'll be interesting to see how it develops.
Prev
Linear Mode
