The private sector’s ability to build more housing is significantly influenced by the regulatory environment. When there is less red tape, quicker timelines for permitting, reduced city fees, and less bureaucracy, real estate development flourishes. In Los Angeles, the Executive Directive 1 (ED1) is a prime example of how streamlined processes can catalyze affordable housing development even in challenging economic…
In the past, the construction finance landscape was characterized by lower construction costs, lower cap rates, lower interest rates, higher loan proceeds, and readily available capital. This environment was conducive to development, with growing rents and minimal vacancies. However, today’s reality paints a very different picture for developers, especially at the Ready-to-Issue (RTI) stage. This newsletter will explore the significant…
IntroductionReal estate development is a multifaceted process involving a wide array of expenses that need careful consideration and planning. Understanding the various costs involved is crucial for successful project underwriting and execution. This deep dive explores the four primary categories of costs in real estate development: land costs, hard costs, soft costs, and carry costs. 1. Land CostsDefinition: Land costs…
