The New Juniper Posted May 17, 2006 Share Posted May 17, 2006 Does someone know something i don't? We purchased two rental buildings in urban environments in '05, and the rents were in the low $3 psf. And, we bought below replacement. STILL, the numbers barely work. They are more of a long term play. The highest rent of which i'm aware in Houston is Finger's Museum and it's not getting that much and this downtown building will cost a fortune? Don't get it. Link to comment Share on other sites More sharing options...
TheNiche Posted May 17, 2006 Share Posted May 17, 2006 Does someone know something i don't? We purchased two rental buildings in urban environments in '05, and the rents were in the low $3 psf. And, we bought below replacement. STILL, the numbers barely work. They are more of a long term play. The highest rent of which i'm aware in Houston is Finger's Museum and it's not getting that much and this downtown building will cost a fortune? Don't get it. Sometimes there's nothing to get. Link to comment Share on other sites More sharing options...
Trophy Property Posted May 17, 2006 Share Posted May 17, 2006 Does someone know something i don't? We purchased two rental buildings in urban environments in '05, and the rents were in the low $3 psf. And, we bought below replacement. STILL, the numbers barely work. They are more of a long term play. The highest rent of which i'm aware in Houston is Finger's Museum and it's not getting that much and this downtown building will cost a fortune? Don't get it.It makes more sense to develop these days. With Cap Rates being so low, it is difficult to make a decent return on your purchase. As you stated, your numbers are barely working. This is not just residential, it is a across all property types. In retail you can build a center for anywhere from $80-$150+ a foot. The typical value after completetion and lease up can be in the $175-$300 range. The investor who is buying the new center is buying at a 6-8 cap rate while the investor is making 25% plus on his investment. I am not sure the numbers on Residental, but I assume they are similar. Finger is able to make a better return on developing a building than purchasing. Just one man's opinion. Link to comment Share on other sites More sharing options...
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