NorCal Development project

[Dean B.]

BP wise ones...

I am in between a rock and a hard place right now. I know many of you are in California and know how (block my eyes from the gouging) high the costs are with construction in NorCal. We have a beautiful flat parcel in NorCal and are about 2 years into the process of developing the site. We own the land outright. We are surrounded by multifamily and SFH. We've gone the direction of modular to try and save time/money but the numbers just are not penciling out like we'd like them to. Would love some feedback from anyone with experience in this market and/or with this size of project from a start to finish job. Since many of you will ask the details, they are below. What we are trying to figure out is if we can get costs down if we do this on our own and piece out to local subs - We've only done rehabs so this is a bit new for us. If we did this on our own in smaller bites vs. financing through lender with strict guidelines...also if stick built is significant savings vs modular at these rates. We are in no rush but these numbers are a bit crazy...but so is this area in costs right now. Hard to imagine anyone penciling profit off of these numbers even with skyhigh rents.

Location: North of San Francisco 

Project: 145 units. Comprised of a few 3-story apartment complexes and a couple dozen attached SFH. <5acre parcel. City is DYING for us to build asap. 12-378SF studios (Total: 4550sf), 63 510sf 1/1s (TOTAL: 32100sf), 36 875sf 2/2s (Total: 32000sf), 12 senior 2/2 rooms (TOTAL: 5500sf), 22 sfh (3/1 1100sf) (TOTAL: 23000sf). RENTABLE AREA: ~96,000sf. Average rent rate currently: $2.30/sf. Potential of $218,000 gross rent at 100% capacity.

Costs: Quote are for Modules alone delivered to site $16-17M; GC end to end (site prep, finish work) work quotes $18-25M.  These numbers are pushing above $355/sf cost to build. This is not including any finish work on our CDs. Or at least another $500k that that I anticipate costs for.  

Any and all feedback (constructive or not) would be greatly appreciated.  Tear these numbers apart, tell us how horrible the deal is...just would love some feedback. We are not quite asking our local friends who do this type of work so literally any feedback would be golden.