General Urban Kitchener Updates and Rumours

[danbrotherston]

This is like saying that the "free gift you get with your purchase" is a free gift...

No...it's just part of the purchase. If these were allocated to the condo corporation by the developer, it would simply increase the value of the properties. And the developer would be motivated to do this because it would transfer risk to the condo corporation (for example, the risk that they would be unable to lease these units).

"It would simply increase the value of the properties" sounds a lot like the efficient market hypothesis, which I'm really skeptical of in the residential real estate market. People are terrible at accounting for the costs of their purchases. People can't even account for the cost of gas, nevermind the cost of their time, from purchasing homes at the far edges of suburbia. They're not going to account for the value of a commercial unit's rent to offset their condo fees.

Selling the commercial unit(s) as a separate unit would almost certainly have far better returns for the developer than hoping that the promise of a condo fee offset in the future would adequately raise the sale price of all the residential units.

So yes, forgoing the higher return of selling the commercial unit as it's own condo unit, and instead taking the lower return of bundling it in for the residential purchasers, would absolutely be a huge gift to the residential purchasers.

Most condo developers do not want to retain ownership of the units and lease them out as they are not in the real estate leasing business.

I agree, and I never suggested they would. It's almost certainly just another unit of the condo, which was sold to a commercial landlord.

If the condo corporation owned the unit, the projected income of the unit would count as income for the condo corporation. It would directly impact the condo fees charged. This isn't some hidden number, or some hypothetical future number, it's a real (as in realised) savings today.

Selling the units as a separate unit, I have no idea how or even if this works under the legislative framework for condo corporations in Ontario.