Three Ways This Isn’t 2004
Construction cranes. Everywhere. That frenzy is why we're pleased to offer a look into the future at Bisnow’s New Construction & Development Summit on Tuesday. But first, a look at how construction has already changed. (Ten years ago, Facebook was new, Friends was on, and development was faster.)
Last week, we talked about how buildings look different; this week Duke Realty SVP David Hudson broke down how the development process itself has transformed.
1) Everything Takes Longer
David says it was once typical to build an industrial project in six or seven months, and you could get one done in five (if you had dinner plans in May that you couldn't break). No way you’d manage that today—eight months is average. David attributes that more regulations and longer time to get permits. (And Lord help you if you need government approval for something like wetlands mitigation.)
Financing is making development a big money game. Most construction today is from REITs and large institutions that have deep pockets and can build with less debt. (Or no debt—Duke is one of a handful of developers that are building in Houston entirely on their balance sheets.) Meanwhile, private guys may have a hard time getting a loan.
3) You Have to Be Perfect
Gone are the days when you could one-up your competition by having better information. These days, everyone can pull stats on absolutely everything. David says that means developers have to differentiate themselves by being spot on about rent, TI, etc., and have to absolutely nail pro forma. Don't miss what it takes to compete in today's market by registering for our event, July 8, Bisnow’s New Construction & Development Summit.