Top 20 metros with the most new CRE construction in dollars(First Half of 2016)

[TheseGoTo11]

Originally Posted by Ant131531

If anything, I'm more surprised that Dallas isn't higher considering it has 40k apartments U/C in the metro along with a massive amount of office construction considering it's gargantuan job growth numbers.

Because this is measured in $, DFW's numbers look low due to cheap land costs.

[Ant131531]

Originally Posted by TheseGoTo11

Because this is measured in $, DFW's numbers look low due to cheap land costs.

Yeah it's too bad we can't normalize these numbers. Cities like Atlanta and Dallas probably have more construction than the numbers on here suggest. That being said, I'm not sure if land values are part of the construction costs of a project, but in certain cities, wages are higher which are in fact part of construction costs so NYC, SF, DC, Seattle, LA where wages are high are naturally going to push construction costs higher.

[TheseGoTo11]

Originally Posted by Ant131531

I'm not sure if land values are part of the construction costs of a project

Land is 30-40% of the cost of building an office building in NY or SF, but less than 10% in Plano, Texas or Alpharetta, Georgia. The cost per acre in these places can run 10-20x higher than metro Atlanta or DFW. This is why you have to build up to make a profit. DFW is #2 nationally right now for apartment construction, but doesn't have a single building > 500 ft going up. No way to build that much in NY, SF, or even Boston or Seattle, and not go higher.

[mhays25]

When I was a subscriber, localized differences in construction costs weren't involved. It seemed like they just decided what a 100,000 sf office building "should" cost, in a cornfield it seemed, and that was the cost they used. My own company's projects were often off by a 3:1 ratio.

Land costs aren't included in this sort of tally, at least not intentionally.

Relying on news articles and self-reporting are big reasons they're BS. The first category of variable is that some are legit construction contract values, and others include design fees, land, future tenant buildouts, the eventual loan payments in year-paid dollars, and who knows what else, often without saying so. The second category is that private-sector owners usually don't have to say anything about cost, and they release any number they want to. Some want their projects to sound big and expensive. Others want to sound like they're doing a lot for a little. On a project basis that's fine, as it's the owner's business, but someone like Dodge tries to compile things and the list goes to hell.