What do you get when you take a booming real estate market and add a high demand for worship space fuelled by the arrival of new immigrant communities? In Vancouver and Toronto, you get a red-hot market for church property, some real estate agents say.
“There’s not very much out there, and whatever comes for sale sells pretty quick,” says Leonardo Di Francesco, who, with his business partner Rav Rampuri, has been specializing in selling church real estate in the Vancouver area for more than 20 years. “These type of properties are rare, and now with real estate becoming even a hotter commodity, they’re even more rare.”
Di Francesco and Rampuri spoke with the Anglican Journal shortly after a meeting with a Lutheran bishop about the sale of a church in Burnaby, B.C., outside Vancouver. The partners are asking $8.8 million for the property, which includes 10,000 square feet (929 square metres) of floor space (two sanctuaries, plus a house) on an acre (0.4 hectare) of land.
Prices for church property tend to go up or down with prices of real estate property in general, Rampuri says, because of the potential of church property to be converted to other uses. A one-acre parcel of church land, for example, could be converted to roughly six residential properties worth $1.6 million each, for a total of about $9 million.
“We have to do a direct comparison on value of land, and what the use is later on—so, what is the potential of that property,” he says. “And you always have to look for the highest and best use to determine the value of the church land.”
The most expensive property Di Francesco and Rampuri have ever sold was a 40,000-square-foot (3,716-square-metre) Salvation Army building in Vancouver. The building, which included a hostel for unemployed men, went for $15 million some years ago to a Buddhist group, and has since been transformed into a monastery for Buddhist nuns. The building would be worth about $25 million today, Di Francesco says.
Church property that has a trifecta of commercial-sized kitchen, large sanctuary and ample parking represents a “gold mine” for any congregation that wants to sell it, Di Francesco says.
“If you’ve got all three components, for the big religious groups, honestly, price is not the issue…Because it’s so rare, the sky’s the limit. Within reason. Not 100 million, but 20, 30 million [dollars] is not unreasonable.”
Typically, says Di Francesco, their work involves them selling a church for a long-established congregation whose numbers have dwindled, to faster-growing congregations of various religions, often largely composed of new Canadians.
“A lot of new immigrants that are moving here are currently renting space right now,” he says. “Their congregations are small, but you know they’re growing. So as they grow, the demand for their own building changes, plus financially they become stronger.”
According to a 2015 Angus Reid survey, 35% of Canadians born outside the country are likely to attend religious services, compared to 21% of Canadian-born people.
“Some of these [long-established] congregations…had 300-400 people, 30, 40 years ago, and these 400 people are down to 75 because most of them have passed away,” Di Francesco says. The partners have sold church buildings to a wide range of religious communities—Chinese groups of various faiths, Pentecostals, Hindus, Muslims, and more.
But church property doesn’t come up for sale very often. Some of the fast-growing congregations are unable to find the space they need despite their willingness to pay handsomely, the partners say.
“We had two groups actually call us—they were looking for a church on the west side [for] up to 20 or 30 million [dollars], and they couldn’t find them,” Di Francesco says.
In its latest monthly report, the Real Estate Board of Greater Vancouver announced the average price of all residential properties in Metro Vancouver had reached $930,000 in July—32.6% higher than a year earlier. The average price for detached homes was $1,578,300, 38% higher than the previous July. According to the Canadian Real Estate Association, housing prices in Greater Vancouver have nearly doubled since early 2009.
Because of this high demand for worship space, Di Francesco and Rampuri say, about 90% of the churches they handle are sold to other religious organizations—unlike in other parts of the country, where churches are frequently converted into residential or other space.
Sometimes, one of two or more congregations sharing the property will want to sell their space. In this case, says Di Francesco, one of the challenges is to find another congregation of the same religion to move in.
“To make the transaction easier, you want to sell to the same religion,” he says, since different religions often have different needs in terms of altars and other physical elements.
Some churches express preferences in terms of how their properties will be used after they’re sold, and some don’t, he says.
Church property is also one of the specialties of John Morrison, a real estate agent practising in Canada’s other famously hot market, the Greater Toronto Area (GTA). Like Di Francesco and Rampuri, Morrison says he’s seen church prices move in rough lockstep with residential prices. This means that on average they’ve probably roughly doubled over the past seven or eight years, although they can vary enormously, he says, depending on factors such as location, parking and their proximity to highways.
Prices are not likely to be as high in less ethnically diverse parts of the city; but in areas where there are higher immigrant populations, Morrison says, “there are certain communities that are really aggressively looking for churches.”
In the GTA, churches once sold also often end up being converted to residences or some other institutional use (such as a private school); or being demolished to make way for some new development. There’s hardly a limit to how much can be fetched for a church in prime residential spots that can easily be converted to condominium space, he says. Many people, Morrison says, are willing to pay a premium to live in converted church space.
This spring, a three-storey condominium in Toronto’s posh Rosedale neighbourhood was listed at $3.95 million. The condo was one of five residential units that had been converted from a former Baptist church.
The hot market can make it difficult for religious groups looking for worship space, Morrison says, because it often means they have to compete with other groups for the same space. Also, he adds, financing can be more challenging because banks are sometimes more reluctant to lend to congregations than they would be to individuals or companies.