Posted in Investing

Three Lessons Learned from Owning a Bridle Path Home

Posted on by NormaWalton
Owning a Bridle Path Home 2

The Bridle Path or “Millionaire’s Row” seems the pinnacle of Canadian home ownership.  Celebrities such as Celine Dion, Drake, Prince, Mick Jagger and Gordon Lightfoot have all called this neighbourhood home.  Living in the Bridle Path is considered “making it” by many ordinary Canadians. 

My husband and I lived there with our four young children between 2012 and 2014 and there were definite pluses, the biggest being the park-like back yard.  But I would not go back even if I could.

The three lessons I learned from owning a Bridle Path home are as follows:

Lesson One: If you need a mortgage to afford a home in the Bridle Path, this neighbourhood is not for you. 

I was told this by one of our lenders at the time and thought it a strange comment, but in hindsight he was absolutely right.  This is a neighbourhood for extremely wealthy people – celebrities, titans of industry and old money.  If you require a mortgage to join them, you should move somewhere else.

Lesson Two: This is not a neighbourhood in the real sense of the word. 

You will not have any neighbours within view when you exit your home; your children will not have any playmates on the street; no one will have eyes on your house when you are not there; almost every house has large fences or walls around it; and you won’t meet any of your neighbours.  There is no street activity like ball hockey, raking leaves, playing hoops in your driveway, sitting on the porch, or walking and jogging like on a normal street.  This is an exclusive, estate-lot type setting, where everyone keeps to themselves and everyone expects privacy.

Lesson Three: Buying a home in the Bridle Path is not an investment but an expense. 

Even without a mortgage you will likely have property taxes of $10,000 per month, utility bills of $10,000 per month, and maintenance fees of $5,000 per month.  That tallies $300,000 per year in home expenses even without a mortgage.  Hence this type of home requires that the owner have a robust ongoing income from other sources to cover the $25,000 monthly bills. Even if the home increases in value over time, the ongoing expenses will likely eat up any capital gain.

Drake is a perfect resident of the Bridle Path.  Normal folk not so much.

Drake - Canadian Musician

Posted in Uncategorized

Improving Ontario’s COVID Vaccine Rollout

Posted on by NormaWalton

Canada is 40th in the world in vaccination rollout and Ontario is in our third lockdown since the pandemic began. Clearly we are punching way below our weight in the fight against COVID.

Closing restaurants, health clubs, hair salons and small retailers is clearly not going to stem the increase in COVID infections. That decision is merely going to put those businesses closer and closer to the precipice of bankruptcy. Closing the entire province when the problem is in Toronto and Peel is also asinine. This punishes the entire province when the COVID problem is concentrated in two main regions.

We have protected our elderly and most vulnerable living in congregate settings through mass vaccinations where they live. Let’s now focus on the sources of the current COVID problem: the mass outbreaks in essential service workplaces in the hot zones of Toronto and Peel. Let’s immediately vaccinate all essential workers regardless of age, at their workplaces. This would include the Amazon warehouse workers, the Canada Post workers, the teachers and the meat packer workers. Let’s also focus our current vaccines on Toronto and Peel because that is Ground Zero in Ontario. You solve the problem there, it reduces or eliminates the spread everywhere else.

I cannot fathom how frustrating a province wide shutdown must feel like in Sault Ste. Marie or Sarnia. Doesn’t common sense dictate that we focus on the problem. My dad had an analogy. If Ford Motor Company had a problem in one factory, they would solve the problem in that factory. They would not close all the other factories until they figured out the solution for the one problem in the one factory.

Rather than close businesses that have nothing to do with increasing COVID outbreaks; rather than shut down a province where infection rates are low in most regions; rather than damage certain segments of the economy already teetering on the edge, why don’t we just focus on the problem. First, immediately vaccinate all essential workers regardless of their age. Second, focus the vaccines available to vaccinate those living in Peel’s and Toronto’s highest risk neighbourhoods regardless of age. And re-open the province, for goodness’ sake.

Those moves might at least demonstrate that we are still in the ring trying to knock out the foe using a modicum of common sense and a glimmer of intelligence. Imagine.

Improving Ontario’s Vaccine Rollout

Posted in Uncategorized

Norma Walton Talks: Retail Real Estate Predictions

Posted on by NormaWalton

Over the past two years, I have watched with interest and some consternation as more major retailers than I have fingers and toes have gone into receivership or bankruptcy.  COVID has accelerated trends that were already happening in the marketplace.  Four of those trends bear highlighting.

Apparel retailers are in trouble.  Any apparel retailer with significant debt will fail in the next two years.  COVID has caused those stores to be completely closed for the past three months.  Now that they are permitted to re-open, the restrictions being placed upon them coupled with the general anxiety amongst a large portion of the population about venturing outside of their homes will work together to significantly reduce their sales.  This reduction in revenue will leave them unable to cover their debts.  That means receivership or bankruptcy.

Even those apparel retailers who don’t have a lot of debt will be forced to dramatically reduce their real estate footprint and significantly increase their online sales and web presence.  That trend is unstoppable.  Stores will be smaller and more reliant upon online sales in the future.  They will have to push their brand online and ensure their websites can accommodate and promote online sales.

That rolls into my third prediction, which is that warehousing space will become more expensive and warehouse fulfillment centres will boom over the next two years.  Any landlords who have warehouse space available will be able to ask more per square foot because as retailers reduce their real estate footprint, they will need a place to receive, store and ship out their clothing.   Warehouse fulfillment and distribution centres will be in demand given the shift to online shopping.

Real Estate Prediction

The final prediction concerns malls.  Malls will have to diversify their sources of income and their revenues to survive going forward.  They will not be able to rely solely upon retailers.  This trend has already started.  The Shops of Don Mills has ringed the mall with residential towers, providing built-in shoppers.  The retailers there still struggle but the restaurants, movie theatres, grocery stores and drug stores are thriving.  Bayview Village and Yorkdale malls are trying to replicate that trend, adding significant residential density to the mall and adding more restaurants and entertainment centres to service the residents they propose to move in.  Malls in Canada will need to move in that direction to survive.

Those are my four retail real estate predictions for Canada for the next two years.  I will continue to watch with interest to see what comes to pass.