Claridge Hintonburg Developer Cancels Planned Highrise

The 30-story Claridge Hintonburg was to be built at 1040 Somerset Street West, a short walk from the Bayview O-Train station.
It had to have an unobstructed view of the surrounding area, including the Ottawa River.  The building would combine “luxurious, sophisticated design with convenience in the heart of one of Ottawa’s trendiest spots,” its website said.
But developer Claridge is canceling the project, a victim of high interest rates, inflation and rising construction costs.
“The finances are not working for the project after a year and a half of trying to sell it,” Claridge’s CFO Neil Malhotra told CTV News.  “The interest rates have made the cost too high for us to be able to sell the remaining units, which is the bulk of the building.”
About 20 percent of the building’s 262 units have been sold since the project opened in June 2021.

Claridge Hintonburg, a 30-storey tower planned for Somerset Street West, has been cancelled. (Claridge) “With rising inflationary pressures and interest rates, it’s at a point where you can’t reasonably make the project work,” Malhotra said. Claridge is the developer behind the Icon at Carling Avenue and Preston Street — Ottawa’s tallest building at 45 storeys — as well as the upcoming Claridge Moon downtown and Claridge Royale in the ByWard Market. Malhotra said this is the first time the company has canceled such a project. “For us, it’s quite unprecedented. I don’t remember having this situation. Not in my 20 years in the business,” he said. “We are proud of our track record of completing projects. That’s been a big part of our success.”

Less demand for downtown living

Malhotra cited other issues related to the lack of demand, including less desire to live downtown because of people’s ability to work from home.
“The reality is in current hybrid work models, there’s less attraction for people to pay a premium to live downtown,” he said.  Although new home sales are up sharply, condominium sales have fallen since the pandemic began, he said.
“We used to sell 500 to 1,000 in a good year.  During the two and a half years of COVID restrictions, we sold an average of about 300 apartments per year.  This is happening at a time when the overall housing market is bullish.”
Malhotra emphasized that this is not a situation where a project is canceled only to be resurrected with higher prices.  Late last year, a Richmond Hill-based developer canceled deals with about 70 apartment buyers in Barrie, Ont.  unless they pay $100,000 more.
  “It’s not us going back to people and asking for more money,” he said.  “It’s not going to come out as a condominium.  If we can find something else to do with it, we will.”
Malhotra said there was no immediate plan for what could be done on the site, a prime piece of property just west of the city center that Claridge bought in 2014.
  “We have to go back to the drawing board a little bit.  Maybe it will work as a different kind of project later.  I’m not sure yet, to be honest,” he said.  “We have to find a way that is feasible that the market accepts.”
He also expressed concern about rising costs—such as a new park bylaw that raises the park dedication developer fee to 25 percent of the land value for high-rises, instead of 10 percent.
The Council approved that bylaw on Wednesday.  Malhotra said it’s an example of the city not creating proper incentives for transit-oriented development.
“I fear for the future of the city when we’re already struggling enough to build things, and there are new fees after new fees,” he said.
“We need to figure out … how we can actually deliver affordable units and not just see development as the solution to every infrastructure cost that the city can’t afford.”

title: “Claridge Hintonburg Developer Cancels Planned Highrise Klmat” ShowToc: true date: “2022-12-13” author: “Lawrence Erhardt”

The 30-story Claridge Hintonburg was to be built at 1040 Somerset Street West, a short walk from the Bayview O-Train station.
It had to have an unobstructed view of the surrounding area, including the Ottawa River.  The building would combine “luxurious, sophisticated design with convenience in the heart of one of Ottawa’s trendiest spots,” its website said.
But developer Claridge is canceling the project, a victim of high interest rates, inflation and rising construction costs.
“The finances are not working for the project after a year and a half of trying to sell it,” Claridge’s CFO Neil Malhotra told CTV News.  “The interest rates have made the cost too high for us to be able to sell the remaining units, which is the bulk of the building.”
About 20 percent of the building’s 262 units have been sold since the project opened in June 2021.

Claridge Hintonburg, a 30-storey tower planned for Somerset Street West, has been cancelled. (Claridge) “With rising inflationary pressures and interest rates, it’s at a point where you can’t reasonably make the project work,” Malhotra said. Claridge is the developer behind the Icon at Carling Avenue and Preston Street — Ottawa’s tallest building at 45 storeys — as well as the upcoming Claridge Moon downtown and Claridge Royale in the ByWard Market. Malhotra said this is the first time the company has canceled such a project. “For us, it’s quite unprecedented. I don’t remember having this situation. Not in my 20 years in the business,” he said. “We are proud of our track record of completing projects. That’s been a big part of our success.”

Less demand for downtown living

Malhotra cited other issues related to the lack of demand, including less desire to live downtown because of people’s ability to work from home.
“The reality is in current hybrid work models, there’s less attraction for people to pay a premium to live downtown,” he said.  Although new home sales are up sharply, condominium sales have fallen since the pandemic began, he said.
“We used to sell 500 to 1,000 in a good year.  During the two and a half years of COVID restrictions, we sold an average of about 300 apartments per year.  This is happening at a time when the overall housing market is bullish.”
Malhotra emphasized that this is not a situation where a project is canceled only to be resurrected with higher prices.  Late last year, a Richmond Hill-based developer canceled deals with about 70 apartment buyers in Barrie, Ont.  unless they pay $100,000 more.
  “It’s not us going back to people and asking for more money,” he said.  “It’s not going to come out as a condominium.  If we can find something else to do with it, we will.”
Malhotra said there was no immediate plan for what could be done on the site, a prime piece of property just west of the city center that Claridge bought in 2014.
  “We have to go back to the drawing board a little bit.  Maybe it will work as a different kind of project later.  I’m not sure yet, to be honest,” he said.  “We have to find a way that is feasible that the market accepts.”
He also expressed concern about rising costs—such as a new park bylaw that raises the park dedication developer fee to 25 percent of the land value for high-rises, instead of 10 percent.
The Council approved that bylaw on Wednesday.  Malhotra said it’s an example of the city not creating proper incentives for transit-oriented development.
“I fear for the future of the city when we’re already struggling enough to build things, and there are new fees after new fees,” he said.
“We need to figure out … how we can actually deliver affordable units and not just see development as the solution to every infrastructure cost that the city can’t afford.”

title: “Claridge Hintonburg Developer Cancels Planned Highrise Klmat” ShowToc: true date: “2022-12-18” author: “Ethel Mann”

The 30-story Claridge Hintonburg was to be built at 1040 Somerset Street West, a short walk from the Bayview O-Train station.
It had to have an unobstructed view of the surrounding area, including the Ottawa River.  The building would combine “luxurious, sophisticated design with convenience in the heart of one of Ottawa’s trendiest spots,” its website said.
But developer Claridge is canceling the project, a victim of high interest rates, inflation and rising construction costs.
“The finances are not working for the project after a year and a half of trying to sell it,” Claridge’s CFO Neil Malhotra told CTV News.  “The interest rates have made the cost too high for us to be able to sell the remaining units, which is the bulk of the building.”
About 20 percent of the building’s 262 units have been sold since the project opened in June 2021.

Claridge Hintonburg, a 30-storey tower planned for Somerset Street West, has been cancelled. (Claridge) “With rising inflationary pressures and interest rates, it’s at a point where you can’t reasonably make the project work,” Malhotra said. Claridge is the developer behind the Icon at Carling Avenue and Preston Street — Ottawa’s tallest building at 45 storeys — as well as the upcoming Claridge Moon downtown and Claridge Royale in the ByWard Market. Malhotra said this is the first time the company has canceled such a project. “For us, it’s quite unprecedented. I don’t remember having this situation. Not in my 20 years in the business,” he said. “We are proud of our track record of completing projects. That’s been a big part of our success.”

Less demand for downtown living

Malhotra cited other issues related to the lack of demand, including less desire to live downtown because of people’s ability to work from home.
“The reality is in current hybrid work models, there’s less attraction for people to pay a premium to live downtown,” he said.  Although new home sales are up sharply, condominium sales have fallen since the pandemic began, he said.
“We used to sell 500 to 1,000 in a good year.  During the two and a half years of COVID restrictions, we sold an average of about 300 apartments per year.  This is happening at a time when the overall housing market is bullish.”
Malhotra emphasized that this is not a situation where a project is canceled only to be resurrected with higher prices.  Late last year, a Richmond Hill-based developer canceled deals with about 70 apartment buyers in Barrie, Ont.  unless they pay $100,000 more.
  “It’s not us going back to people and asking for more money,” he said.  “It’s not going to come out as a condominium.  If we can find something else to do with it, we will.”
Malhotra said there was no immediate plan for what could be done on the site, a prime piece of property just west of the city center that Claridge bought in 2014.
  “We have to go back to the drawing board a little bit.  Maybe it will work as a different kind of project later.  I’m not sure yet, to be honest,” he said.  “We have to find a way that is feasible that the market accepts.”
He also expressed concern about rising costs—such as a new park bylaw that raises the park dedication developer fee to 25 percent of the land value for high-rises, instead of 10 percent.
The Council approved that bylaw on Wednesday.  Malhotra said it’s an example of the city not creating proper incentives for transit-oriented development.
“I fear for the future of the city when we’re already struggling enough to build things, and there are new fees after new fees,” he said.
“We need to figure out … how we can actually deliver affordable units and not just see development as the solution to every infrastructure cost that the city can’t afford.”

title: “Claridge Hintonburg Developer Cancels Planned Highrise Klmat” ShowToc: true date: “2022-10-27” author: “Orville Abbate”

The 30-story Claridge Hintonburg was to be built at 1040 Somerset Street West, a short walk from the Bayview O-Train station.
It had to have an unobstructed view of the surrounding area, including the Ottawa River.  The building would combine “luxurious, sophisticated design with convenience in the heart of one of Ottawa’s trendiest spots,” its website said.
But developer Claridge is canceling the project, a victim of high interest rates, inflation and rising construction costs.
“The finances are not working for the project after a year and a half of trying to sell it,” Claridge’s CFO Neil Malhotra told CTV News.  “The interest rates have made the cost too high for us to be able to sell the remaining units, which is the bulk of the building.”
About 20 percent of the building’s 262 units have been sold since the project opened in June 2021.

Claridge Hintonburg, a 30-storey tower planned for Somerset Street West, has been cancelled. (Claridge) “With rising inflationary pressures and interest rates, it’s at a point where you can’t reasonably make the project work,” Malhotra said. Claridge is the developer behind the Icon at Carling Avenue and Preston Street — Ottawa’s tallest building at 45 storeys — as well as the upcoming Claridge Moon downtown and Claridge Royale in the ByWard Market. Malhotra said this is the first time the company has canceled such a project. “For us, it’s quite unprecedented. I don’t remember having this situation. Not in my 20 years in the business,” he said. “We are proud of our track record of completing projects. That’s been a big part of our success.”

Less demand for downtown living

Malhotra cited other issues related to the lack of demand, including less desire to live downtown because of people’s ability to work from home.
“The reality is in current hybrid work models, there’s less attraction for people to pay a premium to live downtown,” he said.  Although new home sales are up sharply, condominium sales have fallen since the pandemic began, he said.
“We used to sell 500 to 1,000 in a good year.  During the two and a half years of COVID restrictions, we sold an average of about 300 apartments per year.  This is happening at a time when the overall housing market is bullish.”
Malhotra emphasized that this is not a situation where a project is canceled only to be resurrected with higher prices.  Late last year, a Richmond Hill-based developer canceled deals with about 70 apartment buyers in Barrie, Ont.  unless they pay $100,000 more.
  “It’s not us going back to people and asking for more money,” he said.  “It’s not going to come out as a condominium.  If we can find something else to do with it, we will.”
Malhotra said there was no immediate plan for what could be done on the site, a prime piece of property just west of the city center that Claridge bought in 2014.
  “We have to go back to the drawing board a little bit.  Maybe it will work as a different kind of project later.  I’m not sure yet, to be honest,” he said.  “We have to find a way that is feasible that the market accepts.”
He also expressed concern about rising costs—such as a new park bylaw that raises the park dedication developer fee to 25 percent of the land value for high-rises, instead of 10 percent.
The Council approved that bylaw on Wednesday.  Malhotra said it’s an example of the city not creating proper incentives for transit-oriented development.
“I fear for the future of the city when we’re already struggling enough to build things, and there are new fees after new fees,” he said.
“We need to figure out … how we can actually deliver affordable units and not just see development as the solution to every infrastructure cost that the city can’t afford.”