$1 million / acre land used to seem far-fetched. Somewhere along the line, high profile land in dense areas reached that milestone, followed not too long after by land simply on a main road.
Now we are even seeing land all over Greater Edmonton selling for over $1 million / acre. To illustrate, we did a search of all commercial land being marketed for sale and found 58 properties selling for at least $1 million / acre1.
In deep southwest Edmonton, in a neighbourhood called Creekwood Chapelle (a name you would be forgiven if you didn’t recognize), three parcels all recently sold for over $1 million / acre.
– On the northwest corner of 41 Ave SW2 and 141 Street, Loblaw Properties purchased a 13.79 acre parcel for $15,169,000 ($1,100,000 / acre).
– Directly to the north of that site, Beulah Alliance Church purchased a 4.87 acre parcel for $5,113,500 ($1,050,000 / acre).
– A few blocks to the west, a 3.51 acre parcel sold for $5,089,500 ($1,450,000 / acre), with the new owner having a permit to build 5 commercial buildings (general retail, office, vehicle service & recycling depot).
What’s interesting, is that Edmonton does not have the same physical barriers for growth as other markets. Vancouver, for example, has geographical constraints which limits the physical supply of land. Toronto is on Lake Ontario, so it can only grow in the opposite direction before development is pushed to Brampton, Mississauga or the other communities in close proximity. Edmonton, on the other hand, can conceivably grow in every direction. Granted there are cities, towns and hamlets3 that would vehemently object to annexation, but the City of Edmonton has shown a proclivity to expanding the empire. There will be political and civil resistance, but little to no geographical opposition.
Given the insatiable supply available, it’s somewhat peculiar that land prices are fetching such astonishing amounts. It is a free market after all, and buyers and sellers are trading at prices they both deem to be fair. “Market” prices, as it were. With the province coming out of the worst recession in decades, it’s certainly encouraging to see buyers having such an optimistic outlook for the future.
The Network, CoStar
1 There were dozens of other land sites being marketed with no fixed price, so it’s reasonable to assume there are more than 58 sites available for + $1 million / acre.
2 41 Ave SW is the current southern boundary of the City, but annexation is in process to take City boundaries all the way south to the airport.
3 Did you know Sherwood Park is officially classified as a Hamlet?
Views and opinions are our own and do not represent any company, association or organization and is not intended to be real estate or investment advice. Information contained herein has been obtained from sources deemed reliable but is not warranted to be so.
Chad GriffithsSIOR, CCIM
Chad is a partner with NAI Commercial Real Estate and focuses on the Greater Edmonton area. Chad entered the industry in 2004 and has completed over 400 commercial transactions with clients ranging from small, local companies to large institutional owners. Chad has been a top 15 producer Canada-wide since 2013.
Ryan BrownBCom, SIOR
Ryan is a partner with NAI Commercial Real Estate in Edmonton. He is currently ranked nationally as one of NAI's top advisors in Canada. Having executed in excess of $100 Million dollars worth of sales transactions and over 2 Million square feet of lease transactions, Ryan has developed a firm understanding of asset evaluation and an aptitude for building design, functionality, and practicality for long term use.
Darcie is a licensed Commercial Real Estate Agent in the Province of Alberta with a focus on the Edmonton market and its surrounding areas. Darcie accomplishes custom solutions for her clients through her personable nature and results driven attitude. Darcie can help if you are looking to invest in commercial real estate or are looking for representation for a sale or lease transactions.
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