Re: Reston Station SkyScraper Siting Empty, Developer Losing Money
Posted by:
how it is done
()
Date: February 17, 2019 10:41AM
patiencepatience Wrote:
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> Reston Traffic Gridlock Wrote:
> --------------------------------------------------
> -----
> > Damn the Reston developer who built that
> building
> > near the metro must be losing tons of money.
> It's
> > been empty ever since it built. I wonder how
> much
> > it costs to have a new 12 building sitting
> empty
> > for months.
>
> It's amazing how long developers will let
> buildings sit vacant. There were a bunch of
> speculative building near the R28/Westfields Blvd
> intersection and in the Westfield's business park
> that were unoccupied for probably 5 or 6 years
> after completion. In fact, some of them might
> still be partially vacant 12 years after
> construction.
Some don't understand smart business. Build today at today's prices. Set the lease prices high so that no one will lease the property.
This gives the developer the ability to amortize the properties over a calculated period as a loss, and allow the market lease price point catch-up to the desired high profit level.
So basically you buy the land, erect the structure, write off the expenses of development as a loss until the property can be leased.
When the value of the land goes up so the investors can borrow money against the property to develop new properties.
and so goes another cycle.