DENVER | Main Development Thread #6

[bcp]

Originally Posted by Sam Hill

This sort of a statement keeps getting repeated, and honestly, I don’t get it.

I think the average rent could be half what it is now, and if there was demand for new units, someone would build new units. If not – if even a modest dip in rents would halt new development in Denver - then how the hell is anything getting built in Texas? For chrissakes, that little Forbes video you showed us hails Des Moines, IA as some kind of mecca of urban development. How the hell does anything get built in Des Moines? The only substantial difference in terms of development costs between Denver and Des Moines, or anywhere else in the U.S., is land values, and the cost of land would have to be proportionately small compared to the cost of labor, equipment and materials. Right?

The reason they’re charging two grand for a one bedroom in some of these new developments is because they think they can get away with it (which they probably can) – not because that’s what they have to charge in order to make it worthwhile. Otherwise, nothing gets built in Des Moines, or Omaha, or Texas. Right?

That’s just the way my gut feels about it. I see notoriously cheap cities like Panama City building literally hundreds of shiny new skyscrapers and I have to wonder just how much cheaper land and labor is in a country like Panama. Is steel or concrete cheaper in Panama somehow? Are the banks there willing to take much greater risks?

Mind you, I’m not debating anyone here. I guess I’m intentionally displaying my ignorance. If someone with more knowledge on this topic could set me straight, that would be awesome, because I really don’t get it. Why does the rent have to be extremely high in order for us to get a nice brick building? How does anything get built in Louisville, KY order Des Moine, IA?

Disclaimer: I've had four glasses of scotch, even though it's a weekday. The cost of living may have gone up in Panama City since I last read about retirees from the U.S. and Canada flocking there in droves because one could supposedly buy a fancy penthouse on top of a shiny new skyscraper for $100K. I use the word "shiny" too much whilst mentioning skyscrapers. No Oxford commas were used in this post.

If we had awards, that would be the best, scotch-influenced post of the year. That said, we should have awards!