Out with the fancy, in with the practical. You know how all those very tall residential towers with lap pools and lacquer cabinets and bat caves are not selling? And developers are losing way too much money on them?
A new crop of developer has sprouted up. The new way to build is to focus on these key items: rental housing, less expensive midrise construction, and new ways to finance. The reality:
"For now, the highrise condo tower is a broken business model in the city. Even with the price of land down more than 50 percent, it still costs at least $750 a square foot to build a steel-frame tower.
A tower with 1,000-square-foot two bedrooms would have to average $750,000 a unit to break even. To achieve the 20 percent return most investors seek would require average prices to hit $900,000 — a difficult sell in this market. And that’s assuming developers could get financing, which they can’t." Does this surprise anyone?