Top Highlights

• Close-out, involving marketing, selling, leasing, and managing the project after completion, also consumes a relatively small 5 to 8 percent of project costs.
• Construction costs are the largest component of project costs, followed by land, architecture and engineering, legal, financial, environmental, management, marketing, and communications.
• One of the most important skills that a developer brings to this process is the ability to obtain and manage appropriate equity and debt financing to fund these activities in a timely and cost-effective manner.
• When combined with residential real estate, however, the value of U.S. real estate exceeds that of U.S. stocks and is approximately equal to that of the U.S. bond market.
• The Tax Reform Act of 1986 substantially reduced tax rates for all taxpayers and eliminated accelerated depreciation for real estate, thus making real estate less of a tax shelter and more of an income-producing asset.