TSXV:LRT.UN - Post by User
Comment by
baudelaireon Dec 26, 2005 10:22pm
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Post# 10080179
RE: 175 units in Ft. McMurray @ $323K each
RE: 175 units in Ft. McMurray @ $323K each"A quick look at MLS for a new townhouse comes up with $355k. The property LRT already has in McMurray shows 99% occupancy. These new properties are adjacent to existing. I don't imagine apartments are cheap either. "
Sure they paid about the going rate.
The average monthly rent January 2005 for CAP REIT's luxury portfolio is $ 968. (Largely GTA real estate. Recently bought 10K units at $93K per with approx cap rate of 6.75%)
The average monthly interest that Lanesborough's Ft. McMurray units will have to cover is $ 989. ( $323K using 70% leverage, interest only mortgage at 5.25%) Don't forget to add amortization of principal, operating costs (IIRC, Arni's Shelter takes 4% or so off the top), realty taxes and utilities.
The monthly interest expense alone is more than the cost of renting a luxury apartment in downtown Toronto. How long will Lanesborough be able to fill its buildings at $3K to $4K monthly rents in a location described by The Economist: "...,Fort McMurray is a drab little settlement in the middle of nowhere that is Alberta's north." (December 3rd-9th, 2005)