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Developement feasibility question

Posted on 10/4/21 at 5:47 am
Posted by teambooyah
Member since Aug 2015
120 posts
Posted on 10/4/21 at 5:47 am
Why are so many still developing and redeveloping real estate with construction costs and real estate costs continuing to increase? I run pro formas pretty often and the numbers suck. What the hell am I missing?
Posted by SkinnyTestaverde
Fort Lauderdale
Member since Dec 2009
401 posts
Posted on 10/4/21 at 6:47 am to
People need somewhere to live?
Posted by jimbeam
University of LSU
Member since Oct 2011
75703 posts
Posted on 10/4/21 at 8:59 am to
Housing shortage
Posted by yellowhammer2098
New Orleans, LA
Member since Mar 2013
3850 posts
Posted on 10/4/21 at 10:54 am to
There is a lot of very cheap money from banks and investors with a large appetite for multifamily real estate currently. It is a stupid market. Most real estate deals I'm seeing go through right now in the SE don't make much sense. Purchasers/developers are baking in a LOT of rent increases and not enough of a risk cushion IMO with regard to reversion.
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