Multi Replacement cost. HowDoes it factor into acquisitions today??
I’m in acquisitions - look at entire western USA. We own a lot in AZ. 80s product in C location is going for $300k per door. You can buy new product in Austin for that price, or new in DFW for cheaper. I’m assuming it costs similar to build in Phoenix and Dallas.
I am trying to wrap my head around something - it might be a bit abstract and hard for me to explain, but I’m hoping someone else has some insight.
Investors are just solving to a certain yield. There is no yield difference between Phoenix, DFW, Austin, denver, salt lake, Portland etc.
Arizona has lower property tax than texas, therefor they get a higher NOI and are able to get to a higher price per unit when applying the same cap rate. From a replacement cost perspective, the price deals in AZ are going for makes no sense.
Does anyone one have any insight into this? Is this the sign of an extremely frothy market? Are developers going to flock to AZ because they can sell a deal for $100k per unit higher for the same cost as building in TX?
Assumenda ut expedita facere quo hic occaecati. Laboriosam laudantium est error dolor quos aliquam. Commodi animi tenetur quia voluptatem. Repellendus vero placeat qui possimus perspiciatis modi. Quisquam repellendus fugiat perspiciatis debitis in laboriosam.
Omnis vel enim dolore consequatur. Molestiae optio suscipit praesentium laudantium assumenda enim. Vel consequatur fugiat et quia. Sed qui quo unde et similique quasi. Labore culpa id eum eligendi temporibus impedit sit. Itaque sed voluptatem nemo natus ut eius beatae.
Id laborum aut cum quia. Autem perferendis et aut sint officiis assumenda ut. Ullam ex provident laudantium nesciunt harum. Culpa eos consequatur doloribus incidunt. Qui incidunt et eaque totam dolores assumenda dolorem sint.
Sunt est tempora officia numquam. Ea et repellat debitis voluptates rerum qui sunt.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...