HBU of Church with high land value as vacant

[George Hatch]

Redevelopment when individual SFR lots are $30k or less is one thing. The math changes a lot when you start getting north of $100k for a 7000sf lot.

 

[gregb]

Local church split off about 2 acres from a 12 acre site, receiving about $900,000. Developer built three residences, one recently closed for $1,900,000 (2650sf GLA) with the two others under contract north of $1,795,000.

 

[Mr Rex]

I have seen alot of internet pics of churches converted to SFR.. Super large main living area with "Cathedral ceilings" etc

 

[George Hatch]

That's an HBU horse of a different color. Probably a more complicated analysis.

 

[Terrel L. Shields]

Pay $15,000 to demolish the church

I doubt $15,000 would touch one-tenth of a large church. Some 5000 SF small church perhaps but most of them don't have more than an acre or two. The one above I posted is 2 large buildings, parking lot and it is on 8 acres but most of it is a large drainage ditch. The reason they sold was because they couldn't expand.

 

[Terrel L. Shields]

If it costs similar to demolish a modest size church as it costs to demolish a house, a spec developer won't care

In my market the cost would be prohibitive. The HBU would not go to a SFR, rather would more likely go to an institutional use with a remodel. Perhaps a young center, city office, etc. You cannot develop a small parcel when 14,000 SF lots sell for $30-40,000 each and houses sell for $200,000. The exception would be a large tract with a small improvement footprint. The cost of roll off dumpsters would run $900 each and it takes a lot of dumpsters loads to put a church in.

 

[DREA Dean]

I doubt $15,000 would touch one-tenth of a large church. Some 5000 SF small church perhaps but most of them don't have more than an acre or two. The one above I posted is 2 large buildings, parking lot and it is on 8 acres but most of it is a large drainage ditch. The reason they sold was because they couldn't expand.

The OP mentioned a 1960s church on 1/2 to 1.0 acres, so I assumed a small church. Like everything else in our business, it varies by location and other factors.

 

[Deleted member 126639]

You don't. You value the land to its highest and best use, it sounds like the H&B use of your's is residential development. The highest and best use of the subject as though vacant and the highest and best use of the subject as improved do not have to be the same.

If your religious facility is located on a site with limited demand for development of other legally permissible uses, you might indicate that use of the site as a religious facility is the use most demanded for the site. Nothing about religious facilities passes the financial feasibility test. Almost all religious facilities suffer from functional and external economic obsolescence as soon as they are built. A new religious facility is analogous to buying a new car, as soon as it goes off the lot (is constructed) it loses 20%+ of its "value."

This is true of all community facilities as we call them in New York. Not all real estate development is to make money! It's easier for post-war churches as lot of them are just not architecturally significant. In New York, we have endless battles of keeping churches no one goes to anymore. In my home neighborhood in Brooklyn (60,000 people) there are 7 Catholic Churches! All pre-war, marble, granite, whatever. You basically have to battle preservationists, and it only works if the density makes it worth the battle, or if it has a school or parking lot.

But these new churches all seem like simple knock downs. Though, I don't do those markets. Just a spectator.