Client Case Study: Land Assembly – Optimizing a Real Estate Investment

Today we’re focusing on how our consulting division helped a client transform a good project with a land assembly into a great one. This is a real estate case study where strategic alterations led to a more successful development while also steering clear of zoning variances.

Identifying Obstacles

The project on hand started as a single-infill apartment development situated close to a shopping center and a light rail station. Quite often, the issue with single-family Home Lots is their narrow dimensions compared to the ideal widths desirable for a mid-rise apartment building. Consequently, achieving a functional building within the theoretical zoning allowances can be a challenge.

The Solutions

Our pre-construction liaison with the city’s planning department uncovered several non-compliant elements in our design with respect to zoning regulations. We were below the zoning’s minimum lot size by a few square feet which presented us with two potential solutions.

Firstly, we could apply for a zoning variance through the Committee of Adjustments. This would involve a delay of about two to three months to secure a minor zoning variation. Alternatively, we could attempt to acquire one of the neighbouring properties to expand our lands. This would negate the need for a variance.

Increasing Project Size

Our negotiations with the neighbouring property owners initially consisted of higher asking prices than the local area’s property values. However, the development potential justified the investment. By successfully securing one of these locations, we transitioned our plans from a 30-apartment, six-story project to a 60-apartment development similarly with no zoning variance.

Affordable, Functional Design

While accommodating modern living expectations and affordability, the design of our new project also had to be resourceful. In an environment where the starting point for rent is around $1,800 per month, provision of affordable, well-designed apartments was key to our project’s success. These apartments, although smaller, offer a quality living space designed for those who can forego the amenity of a car owing to the excellent location of the development.

Boosting Density

With clever design and optimal utilization of the available space, we could increase the apartment count from 60 to 66. This addition of 10% more density took our project from good to great. Moreover, the strategic reduction in apartment size brought costs down without compromising on livability, and maximized owner returns on rent per square foot.

To deliver high returns for investors even in an era of higher interest rates; a combination of careful consideration of variables, clever design, strategic location, detailed planning, and consulting expertise is all a part of the winning formula.

Stay connected and discover more about my work in real estate and by visiting and following me on various platforms:

Real Estate Espresso Podcast:

Y Street Capital: