By itself, the site is only a bit over 7,000ft2 which is comparatively modest in size for any redevelopment of scale. Though it could easily stand to be 3s residential, commercial or mixed use.
But it would be much more interesting if combined with the parcels to the north. (up to the laneway); that assembly would be ~14000ft2 and provide a wide variety of redevelopment options.
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The immediate area has no hirise precedents, so absent something novel here, I would assume this tops out at 6s in a redevelopment scenario.
If the City allowed straight conversion to residential here. The width would allow for 4 units fronting Carlaw, An argument could be made for 4 laneway homes as well, or you could stack, and go with 8 Carlaw facing units, but likely 4 front doors.