Five condo residences aren't going to fetch a ton of money.
How can a builder develop [[build) a 5-unit residence and make money?
My gut reaction is that it is a money loser.
http://www.crainsdetroit.com/article..._medium=social
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Five condo residences aren't going to fetch a ton of money.
How can a builder develop [[build) a 5-unit residence and make money?
My gut reaction is that it is a money loser.
http://www.crainsdetroit.com/article..._medium=social
Well, from the article the building has about 7000 square feet of units. They are charging $2.26 million for the units. That's about $325 a square foot. Building costs are around $150 a square foot now. They would have to be terrible at cost control if they couldn't make a profit on this project.
Why do you say that? Look at City Modern who have just about sold out at > $300/sqft. Additionally, the lofts on John R and the Crosswinds Condos sell between $250 and $300/sqft. Yes, these may be pricey but my feeling is that they will soon be viewed as a bargain considering the location.
I don't understand the demolishing of a building and then replicating it on the spot. I'm not an expert by any means, but why wasn't this building able to be salvaged, or at least the facade?
I say save every building, but this one is charred up pretty good -- hence the demo.
Guess I don't know how much the land, demolition and building cost amount to.
If someone gave them the land [[i.e., building and land) for $1 I'd say sure they'll do very well.
But what if they had to pay say 500K for the structure and land. Still make a profit on a 5-unit building?
I always assume in building that the price of land is the big problem. If the area is 'up and coming' then the price of land has been bid up, usually to unrealistic levels.
Could be a lot of reasons,if it was built as a hotel the structural aspects may be different then what their goal is,which appears to be more of a open floor plan aspect.Quote:
Originally Posted by Zads07
The cost factor in renovating is considerably higher,if they were offsetting the cost with credits there would have been a long waiting process,the foundation may have had issues.
Renovating a historic building requires input from the historic board which is another time factor.
The time factor and costs of demolition before the rebuild,which can be double.
Installing all the new services is easier when factored into the original drawings verses making them fit but yet be inconspicuous,they mentioned fitting for rock fiber which locks them in,so maybe a bit of a kick back there to help on expenses.
At the very least they are replicating what was there facade wise,which is a compromise,I do wonder why they did not bump it up a couple more stories,but that may have been the agreement to keep it the same proportions as what was being replaced.
I am a big fan of preservation but sadly not only the past Detroit but other cities never really grasped the whole mothball requirement and many take the advantage of demolition by neglect to the point where it becomes necessary to demolish,kinda like the University Club guy.
I don't see how they can fail to make money on this in the current climate around downtown. Land costs and building costs in the city remain relatively low, but prices for finished, modern units [[which are still in short supply) are going up. If the developers can get anywhere near the asking prices for the units quoted in that article, then they would turn a pretty tidy instant profit.