With lead times for a future multi family project possibly approaching two years from land deal to shovel in the ground in the Calgary inner city, we always need to make sure we have our next parcel ready to go. On this issue we have certainly failed miserably, given that we are currently almost idle with our project complete, and we lack a new project to begin this spring.
With the major downturn in the economy now into its second year, we predicted that by late winter, good deals could be had on land, either in the form of distressed inventory from builders that over reached during the boom, or motivated individuals looking to dispose of dilapidated houses.
Instead, we have found, now that late winter has come and spring is around the corner, that most of the good land was bought but stubborn builders who haven't yet felt a motivation to sell. They are still holding out for a 2013 land value, or $20k more than what they paid whenever they bought it. The lack of logic in the multi family land space is quite puzzling, but in part it is a function of the inability to rezone land within neighbourhoods into multi family zoning from R2 zoning. R2 zoned land is in a glut at the moment due to overhanging inventory, however, it is also overpriced relative to what finished homes are actually selling for.
We are making use of a quieter period to catch up on research and networking as we both look for new land opportunities and try and expand our construction knowledge and contact base. We have been considering a larger townhouse project with a partly underground parking structure. This would increase our unit count, but could also result in costly and time consuming overbuilding of fire barriers, sprinklers, and other difficult site challenges that could render a great looking project a construction budget nightmare.
Stay tuned on this blog site as we will announce any land deal immediately.
A step by step account of Integer Homes Inc's inner city construction projects in Calgary.
