Farpoint Development’s Post

Big changes ahead for Lendlease! 🏗️ The Australia-based developer just announced it's withdrawing out of the UK and selling off its overseas construction business to focus on its home market. 🇦🇺 This restructuring aims to free up billions in capital, but it also means major shifts for Lendlease's projects in the UK, including several large residential developments. The big question is: what will happen to these UK projects? Will they be sold off to other developers, put on hold, or cancelled altogether? 🤔 It's a tough situation, but Lendlease says it won't walk away from existing commitments. Still, big changes are coming, and the impact on the UK construction industry could be significant. What do you think the fallout will be? How might this affect the UK housing market and construction sector? Let me know your thoughts below! #Lendlease #ConstructionNews #UKHousing #RealEstate https://lnkd.in/eN77zsXi

Charlotte's multifamily market has over 32,000 units under construction, with 15,000 to be delivered next year—but what does this mean for investors in 2024? Find out in our latest market report. https://bit.ly/46co9si #charlotte #multifamily #multifamilyinvesting #charlottemultifamily

Some great advice on multi unit development investing.

If you're an LP investor looking at investing in a multifamily development, follow these 4 steps to make sure it's a worthwhile investment: (Developments can be the best or worst investments) 1: Land Cost How much did the GP pay for the land? Are they reselling it to the fund for more? Land costs can make or break returns. Once you buy land, you can't lower the price. You can always find ways to lower construction costs! Shoot to be no more than 10-15% of the total cost in land. 2: Vertical Integrations If the GP is managing the project tooth to nail, this can be good or bad. If they are, understand EVERY fee they are paying themselves. There will be: - GP splits - Asset Management fees - Property management fee - Acquisition fees - Contractor fees - Development fees 3: Location A lot of new development projects are in upcoming areas. Make sure there are tenant amenities nearby! I opt to avoid developments with no nearby jobs, commercial or recreation activities. The only thing drawing tenants will be pricing. 4: GP track record Have the GPs developed a project like this before? Their past is an indicator of success. Dig into it! I ALWAYS look at these 4 items before considering an investment and choosing to raise capital for a development myself. ..... If you found this helpful, reshare this post to your network and follow me @anthonywalker for content daily.

We are lending! We've raised BILLIONS of new capital and looking to deploy for construction financing! #Construction #builders #constructionmanagement #groundupbuild #brokers #build #contractors #partnership #relationships

Small Bay Leads the Way! Yet another report hails the impressive rent growth of small bay warehouses in South Florida. Newer small bay warehouses (built in 2010 or after and under 50,000 SF) have seen average rents grow by 20% over the last year, outpacing their larger counterparts. Industrial leasing activity in South Florida is being dominated by properties in the 10,000 SF - 50,000 SF range, and given the bleak supply outlook for this size range, rents in this segment are expected to keep growing. With all the hullabaloo regarding small bay warehouses, the question must be asked: why aren't developers building more small bay warehouses? Since 2019, the square footage of larger warehouses in South Florida has increased by more than 35%, while small bay inventory has increased by less than 1%. I believe one of the largest impediments to small bay development is the inability to achieve economies of scale. With high construction costs and ever-increasing land values, the costs per square foot for small bay are significantly higher than traditional warehouse development. Even though rents are at a premium, these deals are difficult to underwrite in a challenging capital markets environment. Moreover, although the costs per square foot are high for small bay warehouses, the total project costs are relatively small, often too small for large institutional investors. Deploying capital in check sizes ranging from $5M - $10M would be a cumbersome way for institutional groups to hit their deployment goals. Additionally, while small bay spaces are attracting a large demand pool of tenants, small bay tenants typically have lower credit than the average larger tenant, which is another unfavorable attribute for institutional investors. Although there are several obstacles to small bay development, I believe that developers will find a way to crack the code as the demand for this product is too strong to ignore.

This is an interesting and important announcement for many reasons I think. LendLease pulling back and only doing projects that play to their strengths and on home turf. Moving fast and regrouping will help LendLease as the article says, and as an Aussie, I hope this goes well. They are a big contributor to the Australian economy and employee market. It also says to me, play to your strengths as a business, and fast fail as required. Stay focused, do not get distracted. Lastly, I do wonder what this means for their tech investments. These are not construction focused, insights and thoughts welcome. https://lnkd.in/ehH2AFsq

In 2024 there are 440,000 apartment units expecting to be delivered and 900,000 more in construction. Here’s what this means for apartment investors (and how you can reduce risk in your future investments): What this means for investors: 1 - Plan for higher vacancy rates This is especially important in big markets that have the most deliveries scheduled: Phoenix, Dallas & Atlanta to name a few. 2 - More opportunities Higher vacancy rates are hurting owners who did not plan for so many deliveries and got too aggressive with their initial purchase. In 2024 we’ve seen record numbers of loan adjustments and there will be opportunities to buy great assets at big discounts. How you can reduce risk in your future investments: 1 - Invest in markets that don’t have big booms We like the midwest markets a lot. Fewer projected deliveries but still steady income and job growth. 2 - Invest infill We’ve invested in booming markets, and one of the biggest pieces of due diligence we take is focusing on infill locations, meaning the immediate area doesn’t have room for new construction to come in and compete with our property. 3 - Plan for concessions Concessions are a part of doing business in boom markets. New construction has concessions, which puts pressure on all properties to have concessions. Due diligence on new construction versus population growth over the next few years will be one of the biggest keys to being a successful real estate investor.

How profitable is property development? I’m often asked the question, particularly by non-property people, how profitable is property development. When it comes to making money from property, one strategy stands head and shoulders above all others – property development. That said, there are risks and those need to be understood and mitigated as well as possible. I don’t consider renovating as property development. For me, it starts with a two-lot subdivision. The reason is we aren’t just adding value we are creating more ie. One lot becomes two lots. So how much could you potentially make from a one into two lot subdivision? The big variation is location which has a large effect on pricing. A two-lot subdivision at Potts Point would be worth more than a two-lot subdivision in Birdsville. Also, the industry-standard profit margin for small projects is lower than for larger projects. This margin is calculated as the profit as a percentage of the total costs. The margin on a four-townhouse project might become acceptable from 18% – 20% upwards but on a two-lot subdivision, it might become acceptable from 12% – 14% upwards. The reason is that the smaller project is quicker to develop with less financial risk. On the small project, it might be considerably faster to get a development approval and the only construction could be as little as connecting new services. Also, borrowings are less in dollar terms, and cheaper finance is available. With the larger project, the development approval typically takes longer, the construction takes longer, the financial risk is higher, and finance is more expensive. Here is a quick thumb rule for calculating the projected profit on a project showing a 20% margin on cost. If you know what the product (lot, townhouse, or apartment) would sell for multiply that selling price by 16.67%. For example, a townhouse that would sell for $800,000 should show a development profit of $133,000. When you consider that you can gear the borrowings 4 times (25% equity, 75% debt), that gives you an 80% return on funds invested. It’s not hard to see why property development reigns supreme in the wealth-creation property world. To chat further with us about Property Development, click here: https://lnkd.in/gqp8W75M

Are you thinking about dipping your toes into the world of property development? ️ This can be an exciting venture, but it's important to be well informed before you dive in. #propertyinvestment #propertyfinance #property #ukproperty #commercialproperty #propertydevelopment https://lnkd.in/gVrFCcD6