How to Use Real Estate Cap Rates to Predict a Successful Workforce Housing Project
Let's be honest, predicting the relative success (or lack thereof) of any real estate development project is no simple task. There are a myriad of elements to consider no matter which side of the real estate development landscape you work within. But there are also key indicators that savvy developers tend to keep in their field of view.
In this video, Scott Choppin, CEO and Founder of Urban Pacific, evaluates cap rates and how they can be used to predict the success of a workforce housing project.
From this video:
Scott: Now, having said that, the art of underwriting cap rates and multi-family is highly important in a regular deal. Right. If you are underwriting to cap rates, let's say you have a major institutional apartment deal, you're going to develop it and you need to look out into the future and say, what's my cap rate going to be? How do I stress test that one. You want to have some margin over your exit cap rate at the time that you underwrite it.
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