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Eve Lewis (Courtesy of Marketvision)
“He who fails to plan, plans to fail.” Winston Churchill, or whichever ancient sage originally uttered this aphorism, may need to be reminded by Robert Burns that “the best laid plans of mice and men often go awry” without understanding the market data.
According to Eve Lewis, even in today’s active housing market, developers can make huge mistakes and lose millions if they don’t interpret market research accurately.
Lewis is as close as anyone in Toronto has come to being the sage of our condominium market. She is the founder of Urbanation, a research company that tracks GTA new and resale condo sales, future condo product launches, and condo rental pricing.
Urbanation began as Lewis’s thesis paper, written while earning her Master of Science in Planning from University of Toronto in 1981. At the time, Lewis counted five condominium projects in the entire GTA on the market.
“Condos made up .03 percent of the housing market,” she recalls.
In the fall of 1981 she started Urbanation. By 1987 she realized she was onto something big.
“Nobody had that much faith in condominiums, and I believed it was just going to grow and grow and grow. … I could have never imagined it was going to be what it is today.”
Condominiums had started moving downtown as well as into the suburbs. Lewis recognized their potential—housing options that occupied the space between renting and owning, creating an attractive steppingstone for young people.
You have to do your research, you have to know your market. You have to have a great team that’s going to get you to the finish line.
—Eve Lewis, Founder Marketvision
The birth of an idea
Regardless of the accuracy and scope of condo market data, determining a course of action based on the data can be challenging.
Recognizing that the information she was collecting at Urbanation was only as good as the readers’ ability to interpret it, Lewis founded Marketvision, a company that helps builders correctly use data to make sound decisions throughout the entire birthing process of a project.
In the first phase of a project’s gestation, Marketvision handles land sales. You would think that any place downtown is a great place to build a condo, but for a developer, determining the actual value of a piece of property depends on accurately determining what you can actually build there.
This goes beyond knowing what the city will allow you to build. By the time the project is complete, what type of unit will be in demand in a particular neighborhood, and how much will they actually sell for?
“We do very, very detailed analysis of what’s in the surrounding neighbourhood, both the resale and new sale projects,” Lewis explains. “We also look at demographics, where there’s movement, and also where businesses are moving.”
Without understanding how current data indicates market trends, developers might overpay for a location, or miss out on a great bargain.
To date, Marketvision has brokered more than $400 million in residential land transactions. You can see dozens of projects they have worked on along the waterfront and on Yonge St.
What we see decorating the horizon are the success stories. Failure can happen even at the height of the market.
Selling your vision
When developers buy property, they need to be clear about what will be built there—clear enough to be able to sell it to buyers with nothing more than hoarding, some renderings, and a sales centre.
The reason for this precarious practice? Banks will not approve financing until the project is 70 percent sold. This means that without effective marketing and a desirable product a building can simply not happen.
“Their risk is huge,” says Lewis. “They have to put up all their personal capital until the project goes under construction. If they don’t do their research and they don’t get the right product and they don’t design the right building, that’s a huge amount of [lost] money.”
According to Lewis, what we see decorating the horizon are the success stories. Failure can happen even at the height of the market.
When it all clicks
One of the consequences of a hot housing market is stiff competition. Projects must be creative and stand out among the over 300 projects currently in various phases of completion in the GTA.
“When you see a project, the way that it’s branded, you know that everything has been thought through in detail and somebody is building a beautiful community. It’s not just the building on the outside, it’s not just the suites on the inside,” says Lewis.
A project has been carefully planned if messages about exactly whom it is built for are crystal clear. To get a better idea of what that feels like, we can look at two very different projects Marketvision is currently working on–Monde, located at East Bayfront and ART, located on Queen West.
The Monde building, designed by none other than architect Moshe Safdie, is a part of Waterfront Toronto’s development of East Bayfront, plans for which have been in the works since 2001.
Monde developer Great Gulf was one of several that put forth a proposal for the coveted site that would integrate new waterfront public spaces and transit.
“We worked with [Great Gulf] to do the target market and divide up the suites within the building and build something really special. That building is designed for the owner/occupant market,” says Lewis.
Monde is clearly for the luxury downtown resident looking for a prominent residence. As the first private sector condominium on the East Bayfront, it is 40 stories and 500 units of dazzling architecture and prestige.
ART for artists
ART is everything Monde is not. Marketvision is working with a first-time builder. Both a businessman and also an artist, the developer has painstakingly kept the 11-story loft-style building as connected to the existing community as possible.
The ART website is full of … art. The suites are designed with artists in mind—each one is different. If you are in the business of creativity, ART is a perfect location for you. There is no giant pool; instead, amenities focus around additional office space. The selling point is live-work balance for the creative Queen St. denizen.
The intended resident for either project is clear when looking at the location, unit plans, pricing, and marketing materials. Buyers can see right away if a building is for them, which makes a decision to buy much easier.
Both projects are selling well, as expected, which is probably no surprise to Lewis.
“You have to do your research, you have to know your market. You have to have a great team that’s going to get you to the finish line.”
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