Two developers are going back to the future to help make it easier for some Winnipeggers to buy a downtown condominium.
The developers behind the heritage-building conversions at 111 Princess St. (the former Penthouse Furniture Building) and 128 James Ave. both plan to offer a rent-to-own option when they begin marketing condos within the next few months.
In the case of 128 James, James Avenue Holdings Ltd. plans to give prospective buyers the option of signing one-, two-, or three-year leases. A portion of each month's rent, which will be set higher than they would normally pay, will be put into a special account for use as a down payment on the purchase of the unit when the lease expires.
Taurean Global Properties, which is converting the Penthouse building into 60 condos, hasn't worked out the details yet for its rent-to-own package, which will be administered by an outside party.
Both James Avenue Holdings president Kurtis Sawatzky and Taurean Global spokesman Alf Kaech said the idea is to give people who can't afford a condo right away an opportunity to save up money and purchase one a few years down the road. "It definitely gives them some options," Kaech said. "We're excited to be able to offer it."
"We're just trying to be a little innovative in what we do," Sawatzky said. "It's just another wrinkle in our marketing approach."
Bill Thiessen, the Re/Max Professional Realty agent who expects to begin marketing the James condos within the next few weeks, said rent-to-own isn't new. He remembers hearing about it when he started selling homes in the 1980s.
But it hasn't been used much in recent years, he said, adding he isn't aware of any other local downtown developers offering the option.
Thiessen, one of the most active agents in the downtown condo market, said he expects some tenants to jump at the chance to rent for a few years before buying.
"It's basically a forced savings program, which can help you make the transition from renting to owning," he said. "Sure your rents are going to be higher, but very quickly you're going to create this pool of equity."
Thiessen said the lease can also stipulate what the purchase price will be at the end of the lease, "so it takes away all of the unpredictable parts of it."
Sawatzky said he plans to sell three of the 10 condos in the James building and to rent out the rest. He's also willing to rent out some of the units month-to-month in case prospective buyers want to see if they like living downtown before committing to buy. The only catch is if the unit is sold, they will have to move.
He said rent-to-own is best suited to people who are already committed to living downtown because they won't get their money back if they change their mind.
That's because his company will be holding the unit for them and will be paying the property taxes and other costs during the leasing period.
Sawatzky said most of the rental units will have two bedrooms and range from 976 square feet to 1,138 sq. ft. The basic monthly rent will be $1,450 to $1,695, depending on the unit. They haven't decided yet what the additional premium will be for the rent-to-own program.
Kaech said Taurean Global will likely set aside 10 to 12 units for its rent-to-own program. The rest will be sold.
The James project is one of two condo developments Sawatzky is involved in. Another company he partly owns -- Stonebridge Development Corp. Ltd. -- is converting the former First Church of Christ, Scientist Church at 511 River Ave. into 46 one-bedroom condos.
The company has spent the last two years preparing the building for redevelopment, but has now started construction with a goal of having the condos ready for occupancy a year from now, he said.
Stonebridge had originally hoped to have that project completed before the end of 2009, but Sawatzky said it took longer than expected to obtain city permits and to complete the design and financing.
But that's all done now, the interior has been gutted, and they're starting to pour concrete footings in the basement for the new support beams that will hold up the four new interior floors.
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A look at three condo developments in Winnipeg:
The Penthouse Condos, 111 Princess St.
The $10.5-million conversion of the former Penthouse Furniture building into a 60-unit, residential/retail complex is about 85 per cent complete.
The condos will range from 800 to 1,100 square feet and are priced at $170,000 to $400,000.
Twenty-eight units have been pre-sold and the main floor of the six-storey building has been leased to a higher-end furniture store -- Interior Illusions. It will be moving into the building early in the new year, and residents are expected to begin moving in March.
About 10 or 12 condos will be set aside for a rent-to-own program. 120 and 128 James Ave.
A two-phase development, with Phase I well underway. It involves converting the top two floors and half of the basement in the three-storey Ingaldson Building at 128 James into 10 condos, and the main floor and other half of the basement into office space for the developer and another firm owned by James Avenue Holdings president Kurtis Sawatzky.
Three condos, ranging from 1,000 to 1,200 square feet, will be sold for $300,000 to $350,000. The other seven will either be rented month-to-month until they are sold, or set aside for a rent-to-own program.
Phase II, which won't begin for a couple of years, will see the building at 120 James demolished to make way for an eight-storey, 40-unit residential complex that will include both condos and apartments. First Church of Christ, Scientist Church, 511 River Ave.
Involves the conversion of the 101-year-old church into a four-storey, 46-unit condo complex.
Planning, building repairs and site-preparation work is underway for two years, with the project now entering the construction phase, with completion in 10 or 11 months.
Condos will be one-bedroom units ranging from 512 to 960 square feet, with most in the 600- to 800-square-foot range. Will also include six 749-square-foot, loft-style condos on the top two levels.
Loft-style condos are priced at $239,900. The rest range from $149,900 to $249,900. About half of the units have been pre-sold.
A groundbreaking agreement with the city also will see three of the 23 parking stalls set aside for a car-sharing program for tenants.