The Toronto nonprofit WE Charity was able to sell seven of its downtown Toronto buildings for a collective $36 million (CAD), which was much more than the real-estate market anticipated — but some of the properties were also sold for a loss.
According to its annual report, WE was able to land $2.1 million, or 7 percent, more than the construction value of some of the buildings it sold. Many of the properties were deemed worth more than $300,000, per square foot.
And in some cases, we got money, but we got more money in capitalized interest than what the buildings were ultimately sold for. The market price for office properties was $220 per square foot. And now we got it for $200 per square foot — some of those were as low as $175 per square foot. But some of them were more like $195 per square foot, so we benefited by being a little conservative. But it does mean, if you sell it for the market price, the capitalized interest has got to be less than what you’re actually paying for it. And in some cases, it’s under what we were paid for it. So that makes it kind of hard. The good news is that we’re still going to have a hell of a lot of money left over. We’re going to build something big, or we’re going to buy something big, because we see it as a great investment. But I’m not sure how much capitalized interest is the most efficient way to do it.
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