🔑 Unlocking Complex Real Estate Developments

22 November 2024

Published by Justin George, Managing Partner at Kadus Group

At Kadus Group, we understand the pressures developers face: high construction costs, fluctuating interest rates, and evolving market demands. By tackling these challenges head-on, we help developers unlock the full potential of their projects.

Here are strategies we recommend for solving today’s most pressing issues in large-scale, multi-phase projects:

1. Rising Construction Costs and Financing Risks

🚧 Phased Development:

Large, multi-phase developments can be daunting. If you have a multi-phase project, start with a market-appropriate first phase (e.g., a 20–24 storey high-rise in Ottawa). This approach reduces upfront costs, mitigates financing risks, and shortens timelines while allowing for incremental absorption as market conditions stabilize.

2. Challenges for Large Podiums

🏙️ Diversified Podium Uses:

Podiums often carry significant upfront costs. To offset this, consider alternative uses such as private healthcare, coliving, coworking, event space, or recreational facilities. These uses create revenue streams and reduce reliance on solely residential income.

3. Parking Infrastructure

🚗 Optimized Parking Design:

Building full underground parking upfront can strain finances. Instead, phased parking construction aligned with each building requires less capital and offers greater long-term flexibility. Reduced parking requirements—reflecting transit-oriented trends—further lower costs and improve project economics.

4. Limited Access to Affordable Financing

💰 Creative Financing Solutions:

Interest rate volatility has made accessing capital more challenging. Developers should explore grants and incentives for affordable housing or transit-supportive developments to bridge funding gaps and reduce overall costs.

5. Market Demand for Affordability

📏 Flexible Unit Mix:

Demand for smaller, more affordable units has grown. A mix of studios and one-bedroom units maximizes revenue per square foot, aligns with market demand, and caters to demographic shifts favoring single-occupant households.

6. Tenant Expectations for Modern Amenities

🌱 Enhanced Amenities:

To attract tenants in competitive markets, incorporate amenities that provide real value and align with the target population’s interests and needs.

7. Cost Fluctuations

🔧 Supply Chain Disruptions:

Lock in material costs early, source locally, and build partnerships with suppliers to ensure cost certainty and mitigate risks from ongoing disruptions.

At Kadus Group, we specialize in crafting tailored, innovative solutions that address these challenges. We don’t just deliver ideas—we deliver strategies that turn obstacles into opportunities.

Let’s connect if your project could benefit from bold strategies and fresh insights.

💡 Kadus Group | Building A Better Tomorrow