All Forum Posts by: Joao Santiago

Good morning,

we are planning a 30 resi units development in Washington State. I need reliable info of what can be an average mid-class apartment construction cost - using modular/ prefab techniques (all parts)... We are considering 2 / 3 storeys 6plexs, 12plexs

Thank you,

JSantiago

Dear Duarte, sorry for my late reply,

You seam to be Portuguese, therefore I am sure that you have followed the political and economic condition of the country in the last 8yrs.  You are now assisting to a values rise, nevertheless the reference asking prices didn't get to a before crisis value... From the yrs of 2011-2014 we watched a value drop in all real estate following the money available in the society. From 2015, the deals got to a up to 9% cap rate remuneration, what is huge compared with the reference rate (Debt Obligation) + risk rate... talking mostly of foreign income, either in rent or selling. In this moment in Lisbon, talking of a cap rate over 7% in LTR is absolutely real estate speculation, (but the future may reserve us a back to before crisis value and therefore the bought property can be sold by a higher value. As well, the rents will necessarily increase...) . I hope my comment helped you to put things in perspective!

BR,

JSantiago

Dear Duarte,  I am an architect and real estate consultant based in Lisbon. To answer your question, investing in Lisbon in the rentals market, you can get from 6.5% to 12% cap rate.  6.5% would evidently be the yearly cap rate of a flat in the traditional renting market (long-term), from that starting point, you can find several other alternative uses for resi market, such as short-term!, senior living (independent and assisted, very much missed in downtown lisbon), hostels, etc...

there are cities in the Lisbon metro area booming, where you still can find very cheap assets and the cape rate in alternative uses rises to 15%, where I think it will be in the coming 5 years...

Talking of ROI in rentals, has to be subject to an exploration fix period, the knowledge of the loan rate, etc... It may not be the reference term of comparison!

Please don't hesitate to get in touch with me,

BR,

JSantiago