Church Re-Use
Church conversion to house
The property was originally a New Apostolic Church facility from its construction in 1970 to its sale in 2014. The facility was going to be repurposed to a day care operation (permittable in R1 zoning in Ann Arbor). That was the intent of my client, Once Upon a Childhood.
The church is 1,650 square feet on one floor (over a crawl space). It has a sanctuary that can seat up to 75 with a small fellowship hall area (23 ft by 16 ft), office (8 ft by 9 ft), men’s/women’s bathroom and storage room (10 ft by 12 ft). The parking lot holds 19 cars. The property has 180 ft of frontage along Miller Avenue and is 126 ft deep. R1 zoning requires lot minimums of 60 ft of frontage on the road by 120 ft of depth.
However, Once Upon a Childhood changed their corporate direction in 2015 and implemented a marketing program. The initial sale price for the property was $325,000. The driving force for this sale price was the ability to carve the property into three buildable lots.
Ann Arbor church real estate market is dynamic and driven by the number of churches out numbering the number of church buildings (i.e. demand exceeds supply). Churches in Ann Arbor can sell for $80 to $115 per square foot, which is one of the strongest markets in the state of Michigan.
In 2015 the church property sold for $150,000 to Once Upon a Childhood. This represents a per square foot sale price of $90 per square foot. The property sold for two hundred and forty thousand dollars in October of 2017. This represents a sale price of $145 per square foot.
Why did the church sell for a premium?
The sale price premium is the result of the very strong residential market in Ann Arbor. The buyer has plans to convert the 1,650 square foot church into a four bedroom home and build another home on the east end of the property. Vacant lots with access to utilities are selling for $75,000 to $125,000 in Ann Arbor. Homes within a half mile of the location are selling for $175 to $307 per square foot.
Thus the driving force for the redevelopment was the value of the underlying land parcel. Is your church more valuable as a redevelopment? Many congregations are in places where this is a viable question. There are some simple questions that you can ask
Are they building new homes in my community?
Are they building new strip malls in my community?
Is my property located on a busy corner (i.e. commercial redevelopment)
