I am interested in commercial real estate investments, I dont know which route to take in terms of buying existing stip malls or whether to buy a peice of land and then construct your own. I do not have any experience in this area, I would have to depend on Professional services.
Recently I was interested in a peice of land in growing area of fredericksburg,VA. I met the civil engineer (recommended by the broker) to discuss the overall cost of the Project. I was quite surprised at the construction costs he specified. He said the whole construction costs would be 150 dollars for square foot, this is exclusing land cost. With the rents going for about 15 dollars for sq ft it was not viable investment.
Is 150 dollars per sq ft reasonable price?? Can someone please help me in regards to getting the construction estimates and resources.
Thanks in advance
To choose between buying an existing building or developing one the best thing you can do is get your calculator and crunch the numbers to see which is more profitable. However with little to no experience developing will be much trickier.
As far as $150 per sq ft for construction in your area being reasonable or not, the only way to find out is to get numerous estimates. With rents being only $15 per sq ft it seems like a very slim profit margin to me.
Hope this helps.
Thanks for your input, what would be the best source for me to find out about the construction costs in my area (DC/MD/VA). Do you know of any good web site having the contact information.
Marshall and Swift have excellent resources on construction costs. Their website is www.marshallswift.com. However they are on the expensive side. I would recommend simply calling contractors in your area from a phone book to get a ball park. Sorry I can’t be more specific.
you have been great help, thankyou.