CMHC & financing
Purpose-Built Rental Development
As-is, as-approved and as-improved valuation to support CMHC construction loan underwriting.
The assignment
gsi prepared a comprehensive appraisal of a proposed rental residential development to support construction loan underwriting through CMHC’s Apartment Construction Loan Program. The assignment required separate opinions of value on an as-is, as-approved and as-improved basis.
Key considerations
Each valuation premise addressed a different stage of the property’s development. The existing land position, the assumed planning approvals and the completed income-producing development required distinct analysis. It was necessary to distinguish the value of development permissions from the value of the finished property, while keeping the assumptions underlying each opinion clear. The anticipated rental performance of the proposed accommodation was a central consideration in the completed-development analysis.
Our approach
gsi reviewed the planning context, proposed development information and relevant land transactions. The completed-development analysis considered anticipated rental income, operating expenses and capitalization rates. The land and income analyses were brought together within the specified valuation premises, with attention to the property components included in the assignment and the assumptions supporting the proposed development.
Purpose of the advice
The report provided independent valuation evidence for construction loan underwriting. By presenting the different valuation premises separately, it allowed the property’s existing position, planning potential and anticipated completed value to be considered within the financing review.
Related expertise
Assignment details have been generalized to protect client and property confidentiality.