A Winnipeg real estate investor hopes an eight-year labour of love will soon start to pay big dividends.
That's how long Nestor Budyk, an accountant turned real estate investor/property manager, has been painstakingly redeveloping a century-old, five-storey commercial building at 448 Hargrave St. into a modernized, multi-use complex. There are five residential units -- one condo and four rental apartments -- on the top three floors, and three commercial units on the bottom two floors and the lower level.
With the renovations nearing completion, the apartments and the commercial space are being marketed. There have been no takers yet, but Budyk remains optimistic tenants.
During a recent tour of the 27,025-square-foot building, he wouldn't reveal how much he's spent on the project, which included stripping down the interior to the bare walls, putting up new walls and ceilings, pouring new concrete floors on each level, and installing heating, plumbing and electrical systems throughout. He also installed new windows and doors and new washrooms on each level, and added a second front entranceway, new elevator, new sprinkler system, new fire escape and a new eight-car garage.
"It ended up taking longer and costing much more than I originally planned," he admitted. "But, I'm still solvent."
Avison Young's Robert Antymniuk and Samantha Fast are the leasing agents for the commercial space. Antymniuk said the western edge of the Exchange District has seen a number of commercial building renovations and conversions in the last few years. Unlike Budyk's building, the conversions aren't always apparent to passersby, he added.
"There are a couple of buildings on Adelaide (Street) that are fully residential now, but you'd never know it because the exterior hasn't changed."
He said change has been slower in coming to that part of the Exchange District because it's not close to the Red River and doesn't have a lot of restaurants or retail shops close by.
Thanks to the city/provincial downtown-residential incentive program, that is changing, he said.
He predicted more buildings will be converted as owners put them up for sale and redevelopment-minded buyers take them over.
And thanks to the city/provincial downtown residential tax-incentive program, "residential makes the most sense at this point," he added.
Although Budyk owns a couple of other warehouses and "a few" small apartment blocks in Winnipeg, this was his first major redevelopment.
Despite the headaches, it likely won't be his last. "I ran into a few problems. I hired some of the wrong people and some things had to be done twice because they weren't done right the first time. But after learning what I've learned, I wouldn't mind doing it again."
When he purchased the building in 2001, part of it was leased to several commercial tenants. The plan was to continue leasing the bottom four floors as commercial space and convert the top floor into a 4,200-square-foot condo for him and his wife, Alexis Kochane.
When he found out all of the upgrades required to bring the building up to residential standards, he figured he may as well convert the third and fourth floors into residential units.
That was in 2006 or 2007, when the redevelopment project began in earnest.
Antymniuk said he and Fast have been marketing the commercial units for more than a year, even though the renovations were ongoing. They noticed prospective tenants found it tough to visualize the renovated space, which discouraged them from leasing the units.
He hopes that won't be a problem now that the interior shell has been completed and is ready to be finished in whatever style the tenant chooses.
He and Budyk think the commercial space is suited for professional offices. Budyk noted there are already quite a few architect and design firms in the Exchange. He said the first floor and the lower level could even be leased together as a combination live/work space.
Monopoly Realty's Dawn-Marie Brunel is the leasing agent for the four rental apartments. Budyk said she's only just started marketing the units -- there are two on each floor -- so it's too early to gauge response.
Rent is $3,300 a month for the 2,000-square-foot, open-concept units.
Budyk admits that rate is going to make it tougher to find tenants, but he and Antymniuk said apartments of that size and quality are rare downtown.
The penthouse suite is also ready for occupancy. The open-concept unit is huge, with big banks of windows on two sides of the living room/dining room/kitchen area, with a corner balcony facing onto the front street.
"We're ready to move in as soon as we get the OK from the building inspector," Budyk said.
Know of any newsworthy or interesting developments in the local office, retail or industrial real estate sectors? Let Murray McNeill know at the email address below, or at 204-697-7254.