Is it more affordable to develop in Triad NC right now?

Question

Have been giving some thought to developing multi family. Can anyone with recent experience in NC share their expertise?

In a market with few quality “value add” opportunities(sub $10M) and lower yields, I’m wondering how the returns on developing a complex(under 100 units) stack up to simply waiting for the market to produce a value add.

Met a multi family developer the other day and they seem to have multiple projects underway or in lease up.

Thanks in advance!

Greg Dickerson · Answer

It all depends on the price and availability of the land and current construction costs which aren't too bad in that area right now. A lot of the deals under construction now started a year or two ago. The best thing to do is talk to some GC's in the area doing the type of buildings you want to build to get an idea of costs and then work it backwards. Costs are going to range $125-$165 a foot for mid grade construction all in not including land. You can't go much cheaper but can certainly spend a lot more.

New construction is a great model right now as it usually rents first and for more and its fairly easy to find land for smaller buildings like that and you can get the done fairly quick. Larger projects are taking a bit longer in  lot areas right now.

Patrick Nickerson · Answer

@Greg Dickerson

Appreciate your insight and POV on things like market trends and pricing per sqft! Really valuable!