METROTOWN DEVELOPMENT PLAN: THE CALM BEFORE THE STORM By Brandon Harding, NAI Commercial Multifamily and Land Development Division
Over the last couple of years, the real estate pot has been bubbling in the Metrotown area as the new Official Community Plan edges closer to fruition. We know many landowners are anxiously waiting to find out if their property falls under a new zoning policy that may significantly increase the value of their land. Due to this reason, many investment owners in the area are reluctant to put their property up for sale until the new value of their land is known, which can only be calculated when the density for their specific property is released. Once the City of Burnaby releases the community plan, there may be a frenzy of activity in the area, similar to what is happening in Marpole. My recent article, â&#x20AC;&#x2DC;Land Assembly Logicâ&#x20AC;&#x2122;, gave you an introduction into the land assembly process, and outlined Metrotown as a redevelopment opportunity. This article addresses the Metrotown area specifically. Firstly, the area that will see the most concentrated change in density will be east of Willingdon, staying north of Imperial, while remaining south of Beresford, and finally ending at Royal Oak Avenue. If you own properties in this area, you can expect to to varying degrees,9:52 a shiftAMin the zoning. The City has ADsee, card:q7 12/9/11 Page 1
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Owning a property that gets rezoned to high-rise could be like receiving a winning lottery ticket.
indicated it will be increasing the amount of mid-rise and high-rise opportunities in this area. Owning a property that gets rezoned to high-rise could be like receiving a winning lottery ticket. The value of the land under your building will skyrocket, likely resulting in a number significantly higher than as an apartment building. For example, in April a high-rise site transacted by NAI Commercial included three apartment buildings that sold for a combined total of $12,700,000. If you averaged this out on a price-per-door basis, the result equates to $343,243. In comparison, an apartment building across the street recently sold for approximately $200,000 per door. In order to get the maximum amount as a development play, the City generally requires an acre of land. As in this case, it took the cooperation of multiple property owners to come together as a package that supplies enough land to make the development opportunity viable. This resulted in a very rewarding experience to all the parties involved. Being rezoned for a mid-rise development can also result in quite a large increase in value. In this scenario, determining whether your building is worth packaging together as a development site will depend on how large your parcel of land is, compared with the number of units currently generating income. One way to approach this equation is simply take your dirt, multiply the base density given by the City, then