New Home (Condo) Owners

The rumours are true, we’ve gone and done it. We’re now the proud owners of a unit at the Bauer Lofts, specifically the "P" suite.

Although I spent five years at UW and have been working full-time in Waterloo for over 2 years, I still feel very much a visitor to the city. When I hear the word "home" I picture Bayview & Steeles, not Victoria & Park; the entry in my cell phonebook reads "Home Waterloo", not "Home". So it should come as no surprise that I approached this purchase more as an investment rather than the establishment of some kind of firm roots (probably much to Bonnie’s chagrin).

Denoting something as an investment purchase removes the emotion (at least in theory), and discounts the qualitative, intangible factors (e.g. "I must have this place regardless of price because it’s a good, stable place to settle down and raise a family").

In the past few years, I’ve learned (mostly the hard way) that one of the cardinal rules of good investing is to never make a move unless the odds have been tipped in your favour[1]. If you don’t have some kind of edge, don’t try to force it. Sit on your hands and wait; lost opportunity is easier to make up than a "real", material loss.

In the case of the Bauer Lofts, there are several possible catalysts for rapid price appreciation in the coming years. The local Waterloo and Kitchener governments are injecting so much money into the area that the "scales have definitely been tipped" in our favour (though at the expense of the other local taxpayers I suppose). Here are the more cognizant of the arguments we’ve either heard or come up with:

  1. Uptown Waterloo generally refers to the area on King St., between William & Bridgeport. Excepting Waterloo Town Square, the area is considered to be pretty happening. There are the fancy-pants restaurants like Charbries, Janet Lynn’s Bistro, and Solé. There’s the Princess Cinema, which tends to show limited release, critically acclaimed movies (e.g. Dogville, Control Room, March of the Penguins, etc.). Then there’s also Starlight, which has been hailed as "the best venue in Waterloo" though I wouldn’t know, I’ve never been there. The people at work seem to like it though.

    The catalyst we’re banking on is that for the past year the city has been working on revitalizing the atrocity that was Waterloo Town Square. They’ve completely demolished the south end of the mall (which used to be some ghetto liquidation center), and are replacing it with some swanky street front retail and a public park/square. The Bauer Lofts are about a block south of all this brouhaha, which is good because it’s easily within walking distance, but not subject to the noise on weekends.

  2. A portion of the Bauer lands are being dedicated to retail and commercial office space. This is good for keeping maintenance costs lower, but the catalyst is that one of confirmed retailers is Vincenzo’s, sort of like a Pusateri’s that focuses on Italian and Mediterranean food.

    A guy at work says the place feels kind of pretentious, "…everyone shopping there is always so well dressed." Pretentious is good, that means it’s full of rich (or wannabe rich) people, the very ones that will push up property values because they want to live near their favourite gourmet food store. There’s even a blog promising to chronicle the move step-by-step!

  3. I’ve mentioned this before here, but just to recap, about 2 km south on King from the Bauer Lofts, the University of Waterloo is opening a School of Pharmacy in September 2007. According to the expected demographics, that’s going to bring a wealth of educated students in their mid-to-late 20’s into the area. That brings with it more retail and more services aimed at this demographic, not to mention potential tenants and/or people looking to purchase property.

It’s not all sunshine and lollipops, we do have some reservations (though they’re mostly about the sale process). This being our first time purchasing property, it was also our first exposure to new home sales agents. I don’t know if this is common, but the ones at the Bauer Lofts consistently lie, telling you what you want to hear, or just to get you to go away (after you’ve signed the purchase agreement of course).

Originally we put a deposit down for an "O suite". It seemed like a good idea at the time, a huge 1 bedroom + den, facing southwest with an unobstructed view. After thinking about it for a few days, we weren’t too enthused about these two points:

  1. The developer is selling the lofts by the square foot, but upon resale buyers are usually more concerned with the number of bedrooms. Suddenly going for a smaller 2 bedroom instead of large 1+den seemed like a better investment.
  2. One bedroom units aren’t allowed to purchase an additional parking space. That’s problematic when both of us need to drive to work, despite assurances that we’d be allowed to park in the visitor/retail parking spots as well.

The annoying part is that I phoned asking about available "P suites" and was told that they were all taken, and all past the 10-day cooling off period. The very next day Bonnie goes into their sales office to ask other questions, and she’s told that the 10-days are up for all of the P’s at the end of day. Well that sounds kind of suspicious, so 2 days later I phone and what do you know, there’s a P available. <sigh>. If you’re going to lie, at least make it about something that can’t be verified until you’re long gone.

In terms of actual downsides not related to the sales process, the biggest one we have is the price. At $250/sq.ft., they’ve already priced in much of the catalysts listed up above. However, we think there’s more room to run if you consider a 5+ year timeframe, considering the massive redevelopment occurring in the area.

[1] This is one of the reasons I never really got sucked into the poker craze. Even if the odds aren’t in your favour the game forces you to make a move when the blinds come around the table to you.

4 Comments

  1. A soldier in the Can. Forces says:

    Hey congratulations man. Good for you.

  2. Alex says:

    My parent’s bought one too – and they live in Florida. Talk about bucking the trend for a retirement purchase.

  3. Tanya says:

    Hello,

    I’m writing an article for Grand Magazine on new loft owners in the Kitchener-Waterloo area. I’ve been looking for someone who has purchased a Bauer Loft, and see that you have. I would like to interview you for my article. Are you interested? (deadline’s looming, so the sooner, the better.)

    Thanks,

    Tanya

  4. anne ramer says:

    Looking to purchase (assignment) approx 1200 sq ft for clients!