high-density land construction

High-density land in the GTA traded at $92/sf in Q2

Wednesday, August 15, 2018

High-density land in the GTA traded hands at an average of $92 per buildable square foot in Q2-2018, according to a report produced by Bullpen Research & Consulting Inc. and Batory Management and sponsored by Baker Real Estate. Bullpen, a residential real estate advisory firm, and Batory, a land-use planning and project management firm, looked at 36 transactions for their second-quarter GTA High Rise Land Insights Report.

The average of $92 paid per buildable square foot to acquire high-density land in the GTA in Q2 translated into an average sales price of $18.8 million, the report found. Its forecast suggests that projects will rise 24 storeys and span close to 325,000 square feet in gross floor area on average. With projects estimated to bring in around $910 per square foot in Q2 on average compared to $810 per square foot in Q1, purchasers paid less per buildable square foot as a percentage of projected overall average revenue in Q2 (10 per cent) versus in Q1 (12 per cent).

“There is an upward-sloping relationship between what the units can sell for and the land price,” the report stated. “However, in Q2-2018 there were several sites that broke away from that trend for several reasons.”

The report cited reasons including the closing of a deal seemingly struck years ago as well as the seeming presence of long-term leases lacking demolition clauses at a few sites.

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