Over the past decade, redevelopment has become an increasingly prevalent topic of conversation in the commercial real estate industry. 

In Toronto, many commercial property owners automatically assume that their property is eligible for redevelopment and are eager to benefit from the rising demand. However, this is not always the case. Depending on the asset itself, market conditions, and the applicable legal, physical, and financial possibilities, the highest and best use may be another path entirely. 

If you are looking to sell your commercial property in Toronto, here are some high-level considerations regarding the prospect of redevelopment. 

Looking to uncover the full value of your commercial real estate property in today’s market? We can help. Click here to book a strategic property evaluation. 

The Appeal of Redevelopment

In a consistently expanding urban hub like Toronto, commercial real estate with redevelopment potential is in high demand. Investors, entrepreneurs, corporations, and even government organizations are constantly looking for prime real estate for their next venture. 

For example, if you own a mixed-use building on a busy retail strip, you’ll likely garner interest from a wide range of buyers. Some will be looking for a turn-key income property and others a place to run their business. However, you will also have attention from large-scale investors who are seeking sites with high redevelopment potential. 

Rather than the building itself, these large-scale investors are after the land below the property. After purchasing it, they may tear down, remodel, or build upon the property to maximize its investment potential. For landlords, attracting these redevelopers can often mean a more profitable sale. 

Compared to small-scale investors or other independent buyers, redevelopers typically have more capital at their disposal, making their interest particularly ideal for sellers.   

Resetting Expectations

While the demand for commercial property with development potential remains strong, some property owners may be unaware of restrictions that could impact their prospective sale.  Commercial real estate is a complex arena. In Toronto, not all properties will be eligible for redevelopment.

Unlike the residential market, where homes can be renovated or reconstructed with a relatively small amount of red tape, changes to commercial properties involve a myriad of regulations, variables, and legalities that can change by neighbourhood, street, or the property itself. 

In order to prevent unrealistic expectations, it is important to understand the applicable uses of your property before you list. 

Unfamiliar with the distinct processes of commercial real estate? Explore these blog posts for an understanding of what goes into a lucrative property sale. 

Red Tape

In any sale, understanding the highest and best use for your commercial property begins with an in-depth professional analysis. In the case of redevelopment, effectively empowering your market position comes down to determining what is legally permissible for you or for future investors. This requires a savvy understanding of local bylaws, regulations, and the city official plan. 

One of the primary dictators of redevelopment potential is zoning. Across Toronto, zoning bylaws control and decree how land can be used. These regulations stipulate a variety of factors including where structures can be located, building heights, the intended use of a building or property, density, parking requirements, environmental protections, and much more. 

Further complicating this process, site-specific amendments can redefine restrictions or privileges applied to various zoning bylaws. While rare, community advocacy can also influence local land use and cause setbacks in redevelopment. 

Looking to build your knowledge of commercial estate in Toronto? Explore these market insights from our site. 

Best Practice: Working With Commercial Experts

If you’re looking to list your commercial property, you will want to work with a specialized expert who can help you navigate the market and secure the best possible return. At InTrust Commercial Real Estate, our team has years of experience spent underwriting real estate across a range of industries. 

Unlike your residential Realtor, we’re exceptionally well-versed in the nuances of commercial properties. With countless transactions under our belt, we’re able to provide a selling experience that is strategic, analytical, and educational – culminating in the lucrative sale of your asset.  

If you’re an active investor, our team will help you determine the smartest options for growing your portfolio or upgrading your assets after the sale. 

Looking to sell or redevelop your Toronto property? InTrust Commercial Real Estate can help. Click here to send me an email or call me at 416.930.3890.

Questions About Commercial Real Estate?

See the services we offer to learn how we can help you achieve more with your asset.

Learn More