Increase in Multifamily Development Costs
As the cost of lumber, steel, other materials and labor increases, a strain is being put on the multifamily apartment developers. For a group that raises capital like ours, this makes our job a little harder since the margins tend to decline in this type of environment. At this part of the cycle our job is to determine the strength of the borrower and work towards making sure they have the best team put together. Weaker developers will have a harder time getting financing. You’ll have to show a proven ability to develop similar projects at or below cost to get the lending and investing community excited about your deal.
-Adam Horowitz, Principal, Lever Capital Partners