70 replies to this topic

[johnk]

Just a hunch. Prime site, brand new revenue generator, genteel clientele, easily managed? I dunno really.

[Mike K.]

And low vacancy rate, low risk, long term stable investment. Rental buildings are a hot commodity in Victoria.

[Victoria Contractor]

did anyone read the prospectus...its offered based on an ROI of 3.5%

[MarkoJ]

did anyone read the prospectus...its offered based on an ROI of 3.5%

 

My RRSPs portfolio pays a dividend of about that much

[attica]

did anyone read the prospectus...its offered based on an ROI of 3.5%

 

3.5 is the Cap rate, in this case it would only = the ROI if the purchaser paid cash/did not use any financing.

 

otherwords the ROI would need to take into account financing

 

[johnk]

What are the odds there is a cash buyer out there?

[UDeMan]

Price reduced to $8 million 

 

or about $470,000 per unit

Edited by UDeMan, 11 February 2016 - 08:01 PM.

[Sparky]

With the lower asking price, the return now on a cash investment annually would return 3.74%. = $300,000 / year on this building.

 

If this property was treated as a true long term investment, let's say a pension fund that didn't need to spend the income on groceries every month, The capital investment would show a return of the monthly rental income AND the annual appreciation of the asset. In this case historically rental properties over the last 30 years in Canada has been an average of 5%.

 

OK kids lets have some fun with the math. Let's have a look and see what a 15 year gamble of $8M looks like on this building.

 

Annual net return @ 3.74 % = $30K deposited at the corner bank monthly at 2.15% over 15 years would show a gross earnings of $5.3M

 

The original asset of $8M would increase in value of 5% / year or double in 15 years to $16M

 

So the original investment of $8M has now become $21.3M in 15 years. A return of over 10 % per anum and we didn't even account for a rental increase of 2 or 3 % a year as my head is starting to hurt.

 

Have you noticed lately that a lot of apartment buildings in Victoria have been purchased by companies that have the word REIT in their names. This ain't a mom and pop business anymore.

 

I'm going back to bed.

[lanforod]

With the lower asking price, the return now on a cash investment annually would return 3.74%. = $300,000 / year on this building.

 

If this property was treated as a true long term investment, let's say a pension fund that didn't need to spend the income on groceries every month, The capital investment would show a return of the monthly rental income AND the annual appreciation of the asset. In this case historically rental properties over the last 30 years in Canada has been an average of 5%.

 

OK kids lets have some fun with the math. Let's have a look and see what a 15 year gamble of $8M looks like on this building.

 

Annual net return @ 3.74 % = $30K deposited at the corner bank monthly at 2.15% over 15 years would show a gross earnings of $5.3M

 

The original asset of $8M would increase in value of 5% / year or double in 15 years to $16M

 

So the original investment of $8M has now become $21.3M in 15 years. A return of over 10 % per anum and we didn't even account for a rental increase of 2 or 3 % a year as my head is starting to hurt.

 

Have you noticed lately that a lot of apartment buildings in Victoria have been purchased by companies that have the word REIT in their names. This ain't a mom and pop business anymore.

 

I'm going back to bed.

 

REIT = you can invest in it.

[attica]

With the lower asking price, the return now on a cash investment annually would return 3.74%. = $300,000 / year on this building.

 

If this property was treated as a true long term investment, let's say a pension fund that didn't need to spend the income on groceries every month, The capital investment would show a return of the monthly rental income AND the annual appreciation of the asset. In this case historically rental properties over the last 30 years in Canada has been an average of 5%.

 

OK kids lets have some fun with the math. Let's have a look and see what a 15 year gamble of $8M looks like on this building.

 

Annual net return @ 3.74 % = $30K deposited at the corner bank monthly at 2.15% over 15 years would show a gross earnings of $5.3M

 

The original asset of $8M would increase in value of 5% / year or double in 15 years to $16M

 

So the original investment of $8M has now become $21.3M in 15 years. A return of over 10 % per anum and we didn't even account for a rental increase of 2 or 3 % a year as my head is starting to hurt.

 

Have you noticed lately that a lot of apartment buildings in Victoria have been purchased by companies that have the word REIT in their names. This ain't a mom and pop business anymore.

 

I'm going back to bed.

 

minus Cap Ex, i doubt they have a structural reserve above the line. They would want the NOI to look as favourable as possible in sales situation.

[Szeven]

I noticed this is off the web now. Does anyone know what it sold for?