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IS YOUR LAND RIPE FOR REDEVELOPMENT?


What is your raw land worth?

The short answer is: "what the market is willing to pay?"

The long answer is what the market sees as the highest and best possible use to give the greatest return on the investment. Location is certainly a key feature but zoning is just as important. You can have a tremendous location in a good neighbourhood with great drive by traffic but if the zoning does not permit multi-residential or restricts the commercial development to a maximum size, then the maximum size permitted dictates the value of the raw land.

Often raw land has been part of the family for generations and there are strong emotional attachments by family members. As a Commercial Real Estate Advisor, it is often difficult to sit down with family members and discuss the market value of their land. Family members often state they are not prepared to spend any money in the process, all they want to do is sell the property at the price they feel it is worth. This is one option but it often results in no sale and offers that are well below expectations. 

Another option is to have a development study done on the raw land to show potential purchasers what can be done with the land under the present zoning and what avenues are open to having the zoning changed or the possibility of a Planned Unit Development with the land. This expertise allows for an objective summary of market value. There are many Architects and others who can provide this study at a reasonable cost.

Raw land often comes with environmental concerns, whether that be from previous uses or uses in the immediate area like service stations and older storage facilities to name a few, which have the potential to pollute the property. Purchasers will usually require an Environmental Assessment of the property if  they are seeking to finance the purchase through a lending institution. Land owners can be proactive and have a Phase 1 Assessment completed and added to marketing package. Again there are many firms who provide this service at a reasonable fee.

If your land is worth, "what the market is willing pay", is it not money well spent to have expert opinion on the highest and best possible uses permitted and the various options to change and expand these uses. This will provide an objective valuation for potential purchasers and often will garner more interest from developers.

 


Paul Pettipas is a Lawyer and Commercial Advisor with KW Commercial Advisors. Pettipas was a former residential developer of land in Fall River as well as Lawrencetown. He was the CEO of the Nova Scotia Home Builders Association from 1999 to 2015. In 1998, he was honoured as NSHBA "Builder of the Year".

KW Commercial Advisors Website
Tom Gerard, SIOR, CCIM
Commercial Real Estate Advisor 

6080 Young Street, Suite 308 | Halifax, NS B3K 5L2
902-830-1318 Cell | 902-407-2489 Office
Email:      tomgerard@KWcommercial.com
Website:  www.KWcommercialhalifax.com