A Saskatoon-based developer is banking on demand for new rental units in the city’s core to continue growing as more people seek to avoid the costs and hassle of owning houses or condominiums.
While multiplehigh-endcondo developments are underway in Nutana and nearby Varsity View, Baydo Development Corp. believes its money is best spent on a new 10-storey apartment tower on Broadway Avenue.
“You look at a comparable condo, you’re paying property taxes, you’re paying condo fees. Add mortgage interest into that and you’re in the same spot where you are with rent,” said Chris Luczka, Baydo’s vice-president of finance.
“Add that to the fact that the (Canada Mortgage and Housing Corp.) is tightening up how you can qualify for a mortgage, the banks are getting harder to get money from, and it makes a lot more sense to rent.”
Baydo’s plan to build on the site of the former RBC building emerged in a City of Saskatoon report last fall. On Tuesday, the company unveiled more detailed plans and said construction could begin as soon as this month.
Based on a 24-month construction timeline, that means the building — which is expected to contain units ranging in size from 460-square-foot one-bedrooms to 970-square-foot two-bedrooms — would be ready for leasing in the summer of 2021.
Luczka said the company already has a waiting list of people interested in paying rental rates currently estimated at between $1,200 and $2,200 per month for the units, as well as unnamed commercial tenants lined up for the building’s first two floors.
While those are higher than the city’s average rental rates — $870 per month for a one-bedroom and $1,040 for a two-bedroom, according to PadMapper — Luczka noted 880 Broadway will be the first new apartment tower in the area since the 1970s.
“It’s not even comparable,” he said, adding that everything from construction materials to finishings have improved dramatically since the last large apartment buildings went up in Nutana 40-odd years ago.
And because the property is already zoned to allow apartment buildings, Baydo can expect to avoid the lengthy and often contentious public consultation process that has frustrated some of the city’s most prominent infill developers.
He declined to say how much building the tower is expected to cost.
Luczka on Tuesday again declined to comment on a proposal, outlined in a separate city report, to build a pair of apartment towers containing a total of 364 rental units on a parking lot at the corner of Fifth Avenue and 25th Street East.
Baydo bought the property for $4 million last year. The towers, each of which is envisioned to rise 23 stories above City Park, would likely become the city’s single largest residential development project.