I own a piece of land in Central Jersey with some partners, and we've got approvals to build 750 apartments. We're looking at building units with an average square footage of 1250sft - that's what our market needs. We've spoken with a local builder who's done similar projects, but their price seems way off. They're estimating $260k per unit, and they're looking for a 10% development fee on top of that. Does anyone have any feedback on these numbers?
Additionally, can you please provide me with names of national builders who specialize in 3-story walkups or 4-story elevator buildings?
Bumping for visibility
I own a shopping center in South Jersey where there's an adjacent 100-unit townhome development. I've talked with Forestar, who entitled the land before selling it off to a major builder. If you want some insights from my contact at Forestar, send me a message.
Anyone?
So like $200-$250/SF? I do development in a HCOL and i would be ecstatic with that pricing. Unfortunately my city is probably in the $300-$400/SF range, maybe even higher depending on tariffs and trade wars. Can I have your builder's contact? Flying him and his subs out to me and providing lodging might still be cheaper for me
Interesting. A few questions if I may:
Is that your all in cost, or just hard costs?
Are you using Union labor?
What is the development fee on top of that?
And what rents are you hitting?
1.) Just hard
2.) No
3.) By development fee do you mean the fee that the GC is paid? The $300-$400 is inclusive of the GC fee and is usually around 15%-20% of hard cost.
4.) Uh this really depends on the submarket. But for brand new luxury buildings with amenities like gym, lounge, etc...for 1,250 SF, I would assume these are 3BR? In a decent submarket of my city, ~$6000
$260k/unit for elevator served, conditioned corridor, 3/4 level woodframe construction or traditional garden walkup? If it's the latter it's expensive, maybe in the neighborhood if the former product type. The design and building materiality also play a huge role, not to mention we don't know the site condition or if this number includes site work. Not in NJ but play in this arena if you want to trade notes.
Would be happy to
If you’re building 750 units, the dev fee should be 3.5-4%. The GC is probably going to charge 2% plus their general conditions. At 260,000 per unit, if that’s real, assuming hard costs - that’s a $195M build. Fees should be low as a percent there.
That's what I thought, but if you look at @Fredfredburger comment, he says a GC fee is closer to 15-20%. So which one is it?
Prob market dependent and what is your % based on? Total cost or HC?
I'm at a much smaller scale than 750 units sub-30 units. However, i know for a fact hard cost in the range of $300-$400 is accurate in my market. It will be more for 750 units, prob pushing $500 with union labor
260/unit is fair pricing for stick and frame non prevailing wage in NJ. I have 800 units ballparked around 475-500/unit for prevailing wage concrete podium.
My guy you have to give us some more detail on what you're building. Is this podium? Wrap? Type III or V? Sitework included? What is the scope of amenities?
Walkup, site work is limited, limited amenities. About as barebones as you get.
Then yeah that sounds overpriced unless there's some other unusual factor at play. I would talk to some other groups. Just lookup other projects in the area, find out who the GC is, and call the pre-con guy. They'll be more than happy to give you a read if your plans are legit.
DM me - have direct insight for you.
There is a lot of information needed to really give you a read on the price, but here are some thoughts on pricing in the mid-Atlantic region, all assumes standard site work that doesn’t include a lot of topography/wetland/soil issues.
these do not include any union labor, and can swing by a lot based on quality of materials and sitework (especially sitework considering if you’re doing 750 units that are surface parked, you must have a very large site). 750 units at once though should give the GC some buying power with subs as it’s going to be a big deal.
3 story garden walk ups - I would peg it around $205-$215K per unit including the GC fee.
4 or 5 story elevator - $225-$235K per unit including GC fee
one comment, this pricing is based on a more standard average unit size, 1,250 SF that you noted is extremely high, so your costs would be higher per unit, but lower per sf. Now it’s not all apples to apples as a 1,250 SF two bedroom two bathroom unit will have a lot of the same costs as a smaller two bed two bath unit, the extra 200 SF is usually the cheaper part of the cost (you’re not adding more bathrooms/kitchens/etc) but instead just have slightly larger bedrooms and living spaces.
GC fee will range from 3-5%, I have never seen anything near 10%, and confused why they are calling it a development fee? Maybe because they are doing more than just building it and instead are acting as the developer (which would then increase the fee). For example we are the developer and GC as we self perform, so if you added up both of those fees it is in the 8-10% range in any given deal.
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