Mult-Family Prefabricated Micro Development in Toronto

[Jeff C.]

Hi All,

This is my first time posting. Please excuse the long post. 

I am an architect in Toronto, with over 10 years experience in the design and construction of high-rise residential buildings. I am working towards transitioning from architect to developer. I am trying to get my first development in motion. 

A friend of mine is looking to sell a 14,000 sf site in downtown Toronto. I have reviewed the zoning by-laws and have determined that the site can hold a 4 storey commercial/residential building. Of course, there is potential to rezone the site for more density. 

Over the last couple of years, I have been developing various plans and construction details for prefabricated micro units. Market research has showed me that micro units sell very well here. I have talked to a few prefab builders in the area and they have given me estimates that could save upwards to 20% on overall costs. Most of the cost saving appear to be related to time saved and thus reduced interest payments. I have seen some great examples of prefab micro units in New York and San Fran and would like to put together a similar type of development. 

I have taken the plans that I have developed, and applied them to my friends property. The goal would be to build a wood-framed, prefabricated structure with mostly micro units. 

Here are the stats that I have come up with:

4 Storeys,

61 residential units (mostly micro units under 350sf, with small percentage of 2bd and 3bd as well),

17 at grade parking spaces

Here are the rough project costs. Keep in mind that this is the first pro-forma that I've created and is probably quite a bit off the mark:

TOTAL HARD COSTS 

Ground Floor – 13,736 ft2 x $210/ft2 = $2,884,560

Second to Fourth Floors – 30,849 ft2 x $135/ft2 = $4,164,615

Sub Total - $7,049,175.00

10% Contingency - $704,917.00

Total Hard Costs - $7,754,092.00

ESTIMATED TOTAL PROJECT COST FOR STICK-BUILT OPTION

Land cost - $5,000,000 

Soft costs - $ 775,409.00 - ($17.39 per square foot)

Hard costs - $7,754,092.00 ($173.95 per square foot)

TOTAL PROJECT COST FOR STICK-BUILT (INCLUDING LAND) - $ 13,529,501.000

MODULAR SAVES APPROXIMATELY 20% ON OVERALL COST.

TOTAL PROJECT COST FOR MODULAR (INCLUDING LAND) - $ 11,829,501.000

PROJECT VALUE

Total saleable area = 29,000sf

Total value of units + retail space = 29,000sf x $550 per square foot = $15,950,000

Total potential profit = $15,950,000 - $11,829,501 = $4,120,499.00

I would like to know if I am way off the mark, or close with my estimates. The price per square footage for construction were taken from our local price index for wood framed construction. The 20% cost savings would obviously vary. 

I would also like some advice on how to move forward in attracting investors/partners to make this development work. The numbers seem good to me, but I simply don't have the experience to know for sure. 

Any advice would be greatly appreciated.

Thanks all!