Developers’ ability to sell newly built projects at prices that exceed replacement costs -- the cost to build the project -- signals a strong market that should motivate more builders to sell properties prior to or shortly after stabilization. Combine this with peaking delivery volumes in a number of markets, and it's fair to assume the volume of newly built projects that change hands during the second half of 2015 will equal or exceed first half activity. In gateway cities, newly delivered deals have traded in excess of $400,000 per unit, while new product in primary cities has eclipsed the $200,000 per unit benchmark. Even secondary markets are seeing new projects trade for upwards of $150,000 to $200,000 per unit. Hines just sold a project in St. Petersburg, Florida, for $54 million, or more than $175,000 per unit, a sales price that eclipses replacement costs. In Durham, North Carolina, Armada Hoffler Properties recently disposed of a 203-unit project for a similar pr...
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