Yonge and Finch - Invest in a Classic Winning NeighbourhoodBy CondoWong Wednesday February 13, 2019
Yonge and Finch, the northbound end of the Yonge subway line since 1974. Yonge and Finch is now the second most condo concentrated area in Toronto after downtown. History has shown us a classic winning neighbourhood in terms of lifestyle, convenience and real estate investments at Yonge and Finch. With a fully developed neighbourhood, it is very hard to find opportunities for new developments as most of the land, especially the ones that are close to the subway station, are occupied.
A Rare Opportunity
A rare opportunity occurs – an 8.6 acre site just north of Finch station, where Newtonbrook Plaza, Food Basics, and an 11-storey office building are, was bought for $201 million by a Chinese developer Aoyuan Property Group. This not only marks one of the largest real estate deals of 2017 in the city but also Aoyuan’s ambitious entry into Toronto with the M2M project, a master-planned community of 5 condo towers, 80,000 sq.ft. of market place, 100,000 sq.ft. of offices, daycare, park and community centre.
Aoyuan is bringing to Toronto more than 20 years of experiences in real estate developments in Australia, Vancouver and Hong Kong and obviously a very strong financial background. To add another level of confidence for Toronto investors, demolition activities have already started at the end of 2018. As you can see, the south half of the site is fenced off, with crews working on the tear-down. Interior demolition has also begun in the 11-storey office tower.
- The Finch Subway Station – The developer is actually releasing the tower that is closet to the subway station in an early phase! As you can see in the picture up at the top, it’s a straight 4-minute walk to the subway. If you feel like indoor, especially on extreme cold days, you can access the indoor direct path to subway through an office building that’s only 2-minute away.
- Fully Developed Neighbourhood – You do not need to wait for any infrastructure to be built. You do not need to wait for an old neighbourhood to be revitalized. You do not need a vision for the future potentials. You’re dropping a pin into a what you see what you get classic winning neighbourhood. The question is whether you’re ready to make a condo investment in Toronto. If so, and if your budget fits, then M2M is pretty much a no-brainer.
- Price – When most of the pre-construction projects in Toronto are starting above $1,000 per sq.ft., units at M2M will start at approximately $950 per sq.ft., which means that a 1-bedroom unit will start at approximately $450,000. Of course, this is not cheap compared to a few years ago, but this is the truth we have to face with ever-increasing construction costs and development charges imposed by the city. Projects priced below a certain price point may run the risk of project cancellations as seen in 2018.
An Overview of M2M
Here’s an overview of the M2M site, the leftmost tower is the south tower (now selling) that is closet to the Finch station. The 2 towers on the south end will be expecting occupancy starting in the spring of 2022.
Here are a few looks at the amenities:
Infinity Pool with Waterfall Feature
Co-Working Lounge with Boardroom, Large Format Printer and Scanner
The Gym - 2 Floors
Suite Interior – with 9’ Smooth Ceiling
An Income Generating Asset
Let’s take a look at the numbers for a $450,000 1-bedroom unit. You would need to have $90,000 available within a year to fulfill the 20% deposit requirement to the developer. You will then need to save up another $90,000 in the next 4 years to cover the final closing costs and extra down payment for the mortgage (this is not necessary, but it will bring down the monthly mortgage payment and make your property self-run).
The minimum projected rent for this unit would be $2,200 per month. With a 65% mortgage at a 4% rate (the current market rate is around 3.5%) and 25 years amortization, you would be looking at a monthly cash flow of $28.36.
You have invested $180,000 and the investment goes into self-run mode for 25 years. Once the mortgage is done, the investment becomes an income-generating asset feeding you an income of at least $2,200 per month.
The M2M Condos Package
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