The October issue of Institutional Real Estate Americas will take a look at development risk and where we are in the cycle. Those risks can include anything from construction cost overruns to difficulties leasing or selling the completed building. One of those risks: Fire.
Last month, The Intersection, a 105-unit apartment building under construction at 3800 San Pablo Ave. in Emeryville, Calif., caught fire in the middle of the night and burned down to its concrete parking garage, leaving nothing but twisted scaffolding behind. Months of labor and materials went up in smoke, putting the development behind schedule. According to the San Francisco Business Times, the $40 million construction project by Holliday Development is being set back six to nine months, shifting its opening from the beginning of 2017 to end of the year.
While catching fire is a bit on-the-nose, metaphorically, the San Francisco Bay Area residential market has been blazing hot, and apartment developers have been working hard to take advantage of the strong rental market. The Intersection is one of several projects under construction or planned in the Emeryville neighborhood bordering Oakland.
The views, statements and opinions expressed in this article are those of the author and are not necessarily those of Institutional Real Estate, Inc.
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Loretta Clodfelter is senior editor of Institutional Real Estate Americas.
