A new development of commercial condos is stirring investors interest but also questions. Jemima Codrington investigates whether the concept makes good business sense.
Video transcript below:
Jemima Codrington: Recently plans were announced for a development of condos in Toronto that would add exclusively for commercial use. So could this be the answer to Toronto’s glut of inventory? Hi, I’m Jemima Codrington and welcome to this week’s episode of Investor Insight on Crew TV.
Already in Vancouver, commercial condos have yet to take flight in Toronto. So should investors consider a condo instead of a traditional business space?
Cindy Wennerstrom, President, Oro Properties
Cindy Wennerstrom: If you are buying a condominium especially pre-construction, you don’t know when that development will be finished and if you need for a commercial space, you usually need it sooner rather than later. Things do change in business as they do in life. Also maintenance fees and the fact that you are buying a piece of air versus a piece of land, I think it’s not as beneficial as buying a building for your business.
Nick Karadza, Co-Founder, Rock Star Real Estate Inc.
Nick Karadza: It can be beneficial from an investment perspective. So when I mean beneficial I think it to be beneficial from the demand for people actually looking for that type of office space, because so many more entrepreneur small businesses are starting that type of office space and scenario is, can be good but from an investment perspective, commercial is a whole different world.
So you have to look at the difference in taxes and the difference in insurance and the differences in financing and mortgages and a lot of people don’t take those types of things into account, when they are just looking at the investment perspective, they will just look at the numbers without realising there is a lot of different challenges that you have to overcome with commercial investing as opposed to residential. So that would be the big red flag that I would mention to anyone. It could be great but just be aware of the entire picture.