Development cost NYC (Brooklyn)

[Cristiano Bell]

Hi everyone,

My company has only done internal renovations so far. We are thinking about expanding into development. We have been offered some plots in Brooklyn and we are unsure what would be the cost to develop them.

The one we are most interested in has a house on it. We would need to demolish it, and there is approval for 7 stories, 12 apartments. The total area would be 9000 sqft. What would be the cost to demolish and build? 

We are also interested in the Harlem area, I assume the cost per sqft would be similar?

Thank you,

Cristiano (www.integerinvestments.com)

[Barry Ruby]

@Cristiano Bell the cost of construction is always site and project specific. The best way to get a preliminary figure is to run a residual analysis. This is conducted by running an income driven pro forma.

This is done by establishing the total value of the planned project and deducting ALL COSTS BUT CONSTRUCTION COSTS including a target development profit. The remaining balance represents the total figure the deal can support for the planned development.

Let me know if you have any questions and I can walk you through the process.