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Considerations for Improving or Selling Property
Many congregations are faced with questions similar to the following:
- Our old building is not being used as it once was;
- Our old building is not as full as it used to be;
- Our old building is not in the good shape it once was;
- Our old building is no longer affordable;
- Our old building does not meet our needs today;
- What can we do?
Most congregations have a valuable asset, the real estate. The solution to the perceived problems could be taking advantage of the "highest and best use" principle wherever possible. Highest and Best use is simply the maximum value a property will attain by virtue of its location, site area, improvements on the site (buildings), the zoning, the potential zoning, and potential uses. Determining the highest and best use is one of the necessary exercises in deciding whether to sell or renovate an existing property and what other possible alternatives exist for housing your congregation or mission.
This is too large a topic to be able to spell out every step of the process here; if this is an issue for you, you will need some expert input in many different areas. You can acquire that expertise through a single source development consultant or developer, or you can assemble a team of experts to address each facet. But in every case, your starting point, and the most important exercise you will undertake, is determining what your needs are, realistically. You can't evaluate whether your property or buildings are up to the task if you don't identify your needs clearly first. Having done that, the steps are relatively simple and the responses you received from whoever is providing input will have the right context in which to be evaluated.
Having determined your needs, you will be better able to evaluate the responses to a plethora of questions, including:
- Can you afford your property as it is today, regardless of your needs?
- Is your property preventing you from meeting your needs;
- Do you have to adjust your needs if you keep the property as it is today?
- Do you retain the property and renovate?
- Do you retain the property and rebuild?
- Do to stay on site but sever and sell a portion of the property to generate funds for improvements?
- Do you need to relocate regardless of the property features?
- Will you sell "as is"?
- Will you re-zone to highest and best use before selling to maximize the financial opportunity?
If your decision is to stay put and renovate, again having highly detailed and documented needs will help you acquire the right design partner who then has the proper tools to deliver a design which meets your needs right off the bat and that can be built at optimal cost.
If your decision is to move, you then have a number of options which can again be determined by your stated needs, as well as the energy and enterprise of your organization. Some considerations might be:
- Sever off or lease a piece of the property to others to generate capital (only on a larger property);
- Sell air rights to a neighbouring developer to generate capital;
- Sell your property at a higher value and acquire suitable property at a lower value and allocate the difference in prices towards the capital cost of a new building;
- Consider leasing a commercial unit with options to expand if a growing group;
- Consider leasing a commercial unit with an option to purchase, for growing and stable groups;
- Consider shared space with other community groups to share both capital and operating costs and to maximize space available for use at optimal cost.
Other factors for consideration:
- Selling outright is the fastest generator of capital, but will not generate the highest price;
- Re-zoning will generate a higher value but will take longer to realise;
- Partnering with a developer will put you somewhere in between the two.
If acquiring a new property, either through purchase or development, there are many considerations, and there are right ways and wrong ways to go about the task. At TUCC, we may well be able to help you, at very reasonable cost, in any aspect of your decision making, from providing you with some simple tools and techniques to ask the right questions, elicit and evaluate the answers, and move in the right direction, to partnering with you throughout the project, and various alternatives in between.
For a discussion of these possibilities and our reasonable rates, please contact the Director of Property Management at (905) 771-5124.
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