Anyone who is familiar with Toronto knows it to be a world class city, compared with the top urban centres around the world. Any such person would also know that the Bloor and Yonge intersection, (although not truly the downtown as per the original Toronto municipality) is the epicentre of activity. Mainly because the only two subway lines intersect underground at this point and this happens on the world’s longest street, our very own Yonge Street.
So when the Bazis International’s hotel and retail development project was unveiled at 1 Bloor Street, it was touted to be the most prestigious address to be at, rivalling the Donald Trump’s project a few blocks away. Boasting of its five star lifestyle and luxurious residences, it promised stunning architecture, which now may never become a reality.
Gary Berman, whose consortium lent money for the 1 Bloor project stated that “The loan has been in an almost constant state of default since December 2008”. On Monday, the lenders are going to ask a court to put the Kazakhstan backed project into receivership and sell the now vacant land.
This may not be the only project in this situation. The obvious answer is the world economy, sub-prime loans, bank troubles, etc. etc. However, there is more to the story than what’s obvious.
Anyone who followed the project when it was released knows that buyers paid students by the hour to stand in line for days and nights as place holders, so that when the sales office opened, they could be the first to buy their dream unit in the building. This despite the fact that the per square foot price of the units in this building were significantly high to begin with. Some families even moved into hotels next door to take turns in the line. These were not just ordinary buyers but also savvy investors and REALTORS® alike.
Can this kind of over inflated buying frenzy be justified? No sane decision can come from such over-pressured situation. People who have units in this and other buildings are now been told that their deposits may be returned.
Even if the property is being bought to live in, there is always an investment component. At the end a buyer should always consider how the purchase would fit into their lifestyle and their financial portfolio. With that being said, one needs to remove the pressure from the situation and analyse the project and the corresponding decision in a calm rationale manner. Does this mean that we should pass up on these high profile projects? Absolutely not. The answer is to involve a professional. Who better to come to your rescue than your trusted REALTOR®? Not only, a REALTOR® knows better from experience, he or she is also emotionally removed from the decision and hence can serve to be the voice of reason. REALTORS® who themselves are the buyers should consult with fellow professionals. Personally, I can think of six other ideas were the deposit money could have been better off rather than being tied in a low interest or worse yet, no interest situation.