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Summary

Altus Group supported the owners in pre-sale due diligence, to understand the redevelopment potential and resale value of their Category B heritage property, Jarvis House, at 1067 Yonge St.

We completed a review of the applicable municipal planning and fiscal policies affecting the site, an analysis of the range of possible redevelopment options for the property, and finally, a highest and best use study to determine potential revenues an investor could see from redevelopment.

About the client:

The client was a family-owned and operated real estate investment firm.

Challenge

After owning the historical Jarvis House property for a halfcentury, Altus Group’s client needed to determine whether to sell or redevelop.
At the time, the property was being leased as a 12,500 square foot office space, but the client indicated it was not necessarily the highest and best use of the property. They needed an unbiased, experienced and professional view of the redevelopment potential of their unique site, and an understanding of the fair market value they could expect if they decided to sell to a potential investor.

  • Support pre-sale due diligence by gaining a complete perspective on the potential value of the property, based on the number of redevelopment opportunities available to a buyer.
  • Mitigate as much financial risk as possible by understanding current market conditions.
  • Inform decision-making when reviewing potential offers from prospective buyers.

Solution

After taking the time to understand the client’s situation, Altus Group recommended and delivered on the following:

  1. Planning and fiscal policy review:
    A review of what redevelopment limitations there were within the planning framework – including city zoning, building density, noise concerns, setback requirements, etc. Advisement on procedures, challenges and probabilities of success for attaining required development approvals. An analysis of likely costs related to applications, development charges, Section 37 levies, and other government-imposed costs related to redevelopment.
  2. Options & strategic analysis:
    Given the parameters outlined in the planning review (see #1), broadly explore the types of uses permitted for the site – including highly specialized ones that could thrive on such a unique site.
    Narrow down the uses and present strategic options weighing factors such as costs and timelines, challenges for approvals, potential strategic alliances with neighbouring property owners, etc.
  3. Highest & best use study:
    Based on the narrowed list (see #2) of strategic options, produce a highest and best use study, outlining potential net revenues from redevelopment, absorption time frames, phasing, interim uses, cost estimates for development and construction, etc.

Results

  • Market intelligence to support informed decision-making when fielding offers from potential investors.
  • A successful and fair market value sale of the property for $12.5M in December 2018, supported by Altus Group’s pre-sale due diligence

My family has owned this property for decades and when it came time for us to decide whether to sell or redevelop, we were referred to Altus Group. Their experience and market knowledge gave us the back-up we needed to ensure we got fair market value in our sale.

Property Owner

Jarvis House, prior to its sale in December 2018

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