Quote:
Originally Posted by Westbased
I think the return from developing is still very very significant.
According to the sale brochure its around 950,000 square feet. Construction cost at $600 (over estimating) is $570 million. Sale prices could be blended average around $900 is $855 million. Leaving a margin of $285 million. Minus taxes, fees, other soft development costs etc. still leaving a large profit.
However, if he can get a buyer around $100 million without any of the risk or time cost I think its a fair decision.
As Bleaze mentioned above, it really does now seem this was their plan all along, market a massive revitalization of a run down area and then flip it once approvals are in place.
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Good analysis. And like Shift said, the project scope may be beyond what Tien Sher is expecting and they rather cash out now and take their profits than develop a somewhat difficult area with uncertainty with unknown Return on Investment (ROI). As well, Tien Sher is known have "unknown" investors in their joint venture using a series of bare trusts and shell companies (publicly available), so those investors would have much to say about their risk profile and it looks like they want a cash out now.
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