The Managing Director from Tishman Speyer told us that San Francisco was the most difficult city to develop in. Even harder than New York. I've been wondering what metropolitan cities around the country are generally easier to develop in?
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in terms of permitting/zoning? ease of acquisition? potential return?
Houston and Dallas. In my experience, Chicago has been the most reasonable out of the mega-cities (NY, LA, etc.) - could just be that our particular project got heavy political support that time around though.
Las Vegas, Phoenix, Houston, Dallas, anything that has lots of flat land with nothing growing on it.
More important than the amount of land is the amount of zoning regulation or other bureaucratic barriers. Though I guess that is somewhat tied into the amount of available land.
Just from what I've heard, Houston and Dallas are pretty much the wild west. No regulation or zoning and plenty of open space. Over the holidays someone described the entitlement process in San Francisco and that sounded brutal.
This will sound harsh but East Coast cities will generally be harder, both politically and culturally. Obviously liberal policies mean more regulation, but also places like Boston, NYC, or Philadelphia have a lot more history and therefore buildings worth protecting than newer cities like Houston or Phoenix or wherever
Dallas has stricter regulation/zoning/planning than Houston. Houston is the most laissez-faire city I have dealt with by far.
I once saw someone from Hines speak, and they mentioned they would always prefer to develop in the places that are harder to develop. He said their experience and size made it possible to get projects done, while in easy to develop cities, they would be competing with a bunch of guys working out their trucks developing projects.
This is also the strategy of Rick Caruso. He focuses in SoCal and loves high barrier to entry markets. It's worked out quite well for him so far
Seems obvious. Well capitalized and experienced with lots of staff and lawyers. Target the toughest markets. High barriers to entry equals high margins.
But those cities also have high housing prices. I wander why? Way more speculative though. If you time nyc right in a booming market where your one of the few people getting supply to market you will make a killing. It’s like the gasoline market. Tough to build a refinery. Limited excess supply. When things boom and your on the right side you kill it. Want to hit singles with less risks then the other markets are better.
Hines also does a lot of build to hold with 10+ year holds. It's not as big of loss if you build into a bad market, because they will make it up later.
Texas cities. Atlanta has been pretty good. Florida has been friendly towards new development as well. I think Cali is the worst for getting projects approved.
Depends which part of Florida we are talking. Wetlands/ Marsh areas can make dev. a nightmare. But our group is developing gas stations, not anything sexy in Fort Lauderdale or Miami.
I dealt with some pretty cluster-F situations down in South Florida in a previous life. I've found that the power brokers down there can be a bit...unprofessional.
All of the above, plus Phoenix.
biggest nightmare markets in my experience include Arlington (VA), Bethesda (MD), SF, Los Angeles, California in general where CEQA review is required.
Why didn't you include DC with Arlington and Bethesda? Genuinely curious
I worked on two development deals in DC and they were significantly easier than both other jurisdictions. Less in-your-shorts about design review (unless you are subject to Commission of Fine Arts which is a nightmare), less stringent on conditions of development, more accessible/faster on reviews and permit processing...just more straightforward and professional overall.
People joke about Arlington as being The People's Republic of Arlington, working in Bethesda was equally painful.
El Paso & Albuquerque lol
Hong Kong.
Houston and Dallas by a long shot. If you have the money in Houston, you can probably build it, even more so in this market and with oil below $50.
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