AUGUST 14, 2007
THE RETURN OF DIMINISHING RETURNS
- The Real Deal
Featuring Abraham Hidary
To make money on their new buildings, whether luxury condos or offices, developers
have typically followed a simple rule of thumb: The profit margin should equal around
20 percent of the project's cost.
In the current market, though, that's becoming increasingly difficult, as labor and
materials costs remain overheated. Another obstacle is if projects drag on for longer
than expected, owing to structural problems, bad weather or community opposition.
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