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Do developers buy entire apartment complex for redevelopment?

Discussion in 'General Property Chat' started by teg499, 5th Mar, 2016.

  1. teg499

    teg499 Well-Known Member

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    Sydney
    I have a 2br unit in a 1970's apartment building (12 unit building)opposite Liverpool Westfield. Adjacent is a commercial office building, and recently a developer bought the block at the rear of the building, knocked down the old house and built a new apartment complex. Is it feasible for a developer to buy an entire old building (12 units), knock it down and build a new residential apartment complex? I know developers regularly buy land consisting of an old house or even a small apartment block (ie 4 units)...however have do you know any cases where developers buy out larger bldgs (12 units) , knock down bldg and redevelop? I would think the profits wouldn't be very attractive as they would Need to spend a lot of $ to buybout the exiting owners ....my bldg would be perfect for a redevelopment, just not sure how likely this is till happen? Any thoughts? Thanks.
     
  2. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    If they can get it for the right price then yes they do. Often they will offer everyone the same amount but sometimes there is a sweetener for the person who holds out last.
    Generally all the sales are subject to all the other sales happening so if one person says no then it's a no go
     
    teg499 likes this.
  3. Chrispy

    Chrispy Well-Known Member Premium Member

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    I had a unit in a group of 6, sitting on an acre of land. We got quotes from developers to purchase the whole lot. The offers were around $50k per unit less than we could get by selling individually.
     
  4. Scott No Mates

    Scott No Mates Well-Known Member

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    @Chrispy - $300k buys a developer alot. So there must have been some life in it.

    Should have done a stratum subdivision and sold the balance of the land.
     
  5. teg499

    teg499 Well-Known Member

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    Wouldn't they need to offer the owners much higher than the median to get the owners to sell up? If they offer just market value , it doesn't seem like much of an incentive to sell. I would assume if median value for 2br units in the suburb is $400K, then then they should offer to buy the units for say $450K - $500K..is this how it works, or am I dreaming?
     
  6. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    Generally yes that is the easiest way to get everyone to sell. However they will only offer over market price IF the feasibility stacks up to do so.
     
    Leo2413 likes this.
  7. poeter

    poeter Active Member

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    NSW
    I think this may not be the case when the new law comes in effect.
    NSW strata law changes: 75% rule

    Holding out until developers provide enticing offer will no longer be effective. In fact, it could be dangerous as the last 25% owners will miss out and have their property sold at independent valuation which may be likely to be lower than the developer's original offer...
     
    Westminster likes this.