Developing Townhomes in San Diego

[Andy Thrailkill]

Hi BP, 

A close investor buddy of mine recently came across a 2 lot development opportunity in San Diego. the owners of the land approached him and wanted to partner with a developer to develop the lots into new townhouses, the owners are willing to carry the loan on the property but would like us to bring in the build cost and we all would get a % of the profits when completed. I have done some SFR development before but never townhomes, so was seeing if anyone has had experience in development of townhomes or condos to help give some guidance. Each lot is zoned R-4 and some developers just completed a project right across the street with the same concept as we our looking to develop. We are looking to build 4-6 1100-1300sf units on about a 10,000sf lot. I know it all depends on the city specs. Any advice on build cost and process would be greatly appreciated.

Thanks 

Regards, 

Andy T

[Colin L.]

I've worked on several projects similar to this in Coronado and one in San Diego.  The Coronado build price I think usually ran around $300+/SF and the San Diego project is not built yet but I think it will run around $200-225/SF.  

Some differences between SFH and MFH (4+ units):

-you will need a licensed architect

-you will need a licensed M/E/P engineer

-you will need a civil engineer for the usual grading/drainage, plus consolidating the 2 lots and/or the condo split for the townhomes

-there may be other consultants required for landscape architecture, environmental studies, etc. (I'm working on a 38 unit project w/ 7 consultants on the team)

-construction is similar to a MFH except you will need fire rated separation between units and also comply w/ accessibility codes 

-parking often becomes the limiting factor on smaller lots in regards to how many units you can build

-talk w/ the city planning department regarding the process to determine if its just a simple building permit or depending on the location you may need to go through a design review or some other type of entitlement process