Planning and density
Site area, buildable floor area, exclusions, unit or tenant mix, parking and approval risk.
Development feasibility Vancouver
Will my development project make money?
A project works only when the buildable program, total cost, financing, schedule, tax and achievable revenue produce an acceptable return with enough resilience for change.
Short answerBuild the development pro forma from physical and timing assumptions, not from a target profit. Test the base case, downside and residual land value before committing to the site or capital structure.
Eight assumptions decide the result
Land and closing
Purchase price, transfer tax, carrying costs, demolition, environmental and closing conditions.
Hard costs
Trade pricing, escalation, general conditions, contingency, off-site and servicing requirements.
Soft costs and tax
Consultants, permits, municipal charges, insurance, marketing, GST and other project-specific taxes.
Schedule and financing
Approval, construction, sales or lease-up timing, interest, fees, equity and lender draw mechanics.
Revenue and exit
Pricing, absorption, vacancy, incentives, cap rate, commissions, closing costs and timing.
Use residual land value before accepting the asking price
Residual land value works backwards from achievable revenue, subtracts all development costs and required return, and shows what the project can support for land. It is not the same as market asking price.
- Set the required return and contingency explicitly.
- Include financing and timing—not just static costs.
- Run density, cost, revenue and schedule sensitivities.
- Identify which assumptions are still unverified.
Illustrative pro forma bridge
| Gross development value | $30.0M |
| Hard and soft costs | ($20.5M) |
| Financing, tax and selling | ($3.2M) |
| Required developer return | ($4.0M) |
| Residual land and closing | $2.3M |
The downside case should be designed—not improvised
Test combinations such as lower density, slower approvals, cost escalation, delayed sales or leasing, higher rates and lower exit value. A project that survives one isolated sensitivity may still fail when correlated risks occur together.
Move from feasibility to funding
When the project clears the investment hurdle, prepare a lender-ready development financial package connecting sources and uses, equity, construction cash flow, draws and downside cases.
Illustrative educational information only. Planning, construction, tax, legal, valuation and lending assumptions should be confirmed with the appropriate qualified professionals.