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Hear Hot Property with Ozzie Jurock every Saturday morning between 8:30-10 am on CKNW AM980
Tip of the Week:
10/6/07
Here is what is happening INDUSTRIALLY!
The National Association of Industrial and Office Properties did a case study of a real industrial land sale and development from 2005.
Profiled was a 45,000-square foot building in Greater Vancouver built on a 2.3-acre site.
In June 2005, the total project cost was $4.2 million, including land at $575,000 per acre and shell building costs at $55 per square foot.
The development cost charges were $3 per square foot. Debt servicing on a 20-year amortization loan worked out to $21,700 per month.
The projected real annual return including annual principal repayment on the investment came in at 16%.
In 2007, the same project would see land costs of $950,000 per acre; the shell building construction costs would be $75 per square foot; the debt costs would be over $32,000 per month; and the development cost charges have more than doubled to $7 per square foot. The total cost of the project today would be in excess of $6 million, and the estimated real annual return would be 6% including annual principal repayment.
Industrial land values have gone up like crazy...Sooo much cash available in the $2 - $10 million range that the lowest returns seem acceptable.
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