From a real estate developer or investor’s perspective, construction budgets display a breakdown of construction costs and financing measures. Costs are generally composed of land acquisition costs, hard costs, soft costs, and the interest reserve. Sources of financing includes both debt and equity financing. A sample of a simple construction budget is provided below:
| PSF | Category | Total | Debt | Equity |
| $71.23 | Land | $54,850,000 | $13,350,000 | $41,500,000 |
| $100.00 | Hard costs | $77,000,000 | $77,000,000 | |
| $25.00 | Soft costs | $19,250,000 | $19,250,000 | |
| $21.00 | Interest reserve | $14,900,000 | $14,900,000 | |
| $237.14 | Total | $166,000,000 | $124,500,000 | $41,500,000 |
Hard costs include material and labor during construction such as foundation, framing, drywall, flooring, heating, ventilation, and air conditioning (HVAC), plumbing, and other site work. Soft costs of construction include services and fees such as permitting fees, land and environmental surveys, insurance, architect or engineering fees, lawyer fees, and bank fees. The interest reserve is the amount set aside to pay for interest on debt financing for the extent of the construction loan. Other contingency and retainage costs may also be set aside. Interest expenses during construction may arise from senior debt, mezzanine debt, or preferred equity.
Finding an Available Site
The real estate industry is famous for being a networking-intensive industry, word of mouth being a common source of distributing timely information. Real estate deals are most likely to be sourced through networking than from formal channels. Sources for available sites might include real estate professionals such as brokers, local bankers, attorneys, accountants, architects, engineers, and property management companies. The visual inspection of an area or letters to owners, as well as secondary resources such as newspapers, trade magazines, foreclosure reports, planning and zoning departments, or real estate property tax services may also provide available sites.
When an owner does not pay property taxes, water bills, and other charges, these unpaid charges become tax liens that may be sold in a tax lien sale, recorded by the Department of Finance Lien Sale Task Force. Recording of tax liens on a property often signal foreclosure and can be a source for site acquisitions. Other websites such as Property Shark (free on-site to Baruch students), State UCC Lien Filings (available through the LexisNexis database), New York Foreclosures and Tax Lien Sales Directory, and LoopNet (commercial real estate foreclosures), also provide foreclosed and bank-owned properties.
Developers may also choose to submit competitive bids in Request for Proposals from the New York City Housing Preservation Department. The city awards publicly owned land to private developers, evaluated based on a variety of factors, including affordability. For privately-owned sites, developers can apply for city low-interest rate loans, tax credits, and other incentives in exchange for affordable housing. HPD works with developers to utilize city, state, and federal subsidies to finance affordable units, including single, multi-family, senior, and supportive housing.
Resources for Acquisition Costs
High-quality research resources can be found on company websites of public and private companies. Some of the most commonly used and accessible sources include the research of the major brokerage and services firms such as CB Richard Ellis, Jones Lang LaSalle, and Cushman and Wakefield.
Brokerage firms are a great source of information for land acquisition costs. When researching comparable sites, locational factors to consider include similar growth, demand, distance from transit and important attractions, and quality of the surrounding developments. Parcel considerations include parking, green space, density, FAR and layout, setbacks, access, required site amenities, and past and current uses. Building characteristics include the slope of the land, the shape and efficiency of layout, visibility and access to consumers, traffic patterns, ingress and egress, curb and median cuts, and the availability of utilities to the building. Environmental factors include on-site contamination, wetlands or flood plains, waterways, air pollution, and storm water management. Political factors to consider include re-zoning efforts, environmental and conservation groups, neighborhood opposition, historic and archeological sites.
Besides the brokerage firm websites such as CB Richard Ellis, Jones Lang LaSalle, Grubb and Ellis, and Cushman and Wakefield, other free internet resources for acquisition costs include real estate listing websites such as Loopnet and Black’s Guide (commercial properties), Realtor.com and Multiple Listing Service (residential properties), and The Wall Street Journal Online – Real Estate and Property Report (commercial and residential properties), free for Baruch students. CoStar (may be available to students on a trial basis) and Property Shark (free for Baruch students to use on-site) are paid websites that provide robust databases of searchable properties by type, location, by market or geography, sold or for sale properties, and space criteria.
Resources for Hard Costs
Hard costs of construction include materials and labor. The Associated General Contractors of America and National Association of Home Builders websites provides free resources for tracking construction economic information. McGraw Hill Construction and Reed Construction Data are paid websites that provide construction data, including construction starts, plans, building product information, bid data, and cost indices. Vendor websites and quotes are also a good way of searching for products at MSRP price points.
Using article databases through the Baruch Library is a way of accessing real estate publications without purchasing the reports. Note: Harvard Business Review reports do not sell subscriptions through colleges and universities, so HBR case studies and reports are not accessible through the Baruch Library system; however, publications are priced relatively inexpensive at around $8.95 per publication. Each database has its own distinct features, special topics, publications, search capabilities, date ranges, and formats. Factiva offers construction publications with hard cost information through Engineering News Record, Professional Builder, and SinoCast Construction & Real Estate Beat.
Resources for Soft Costs
Soft costs of construction include fees and services. Douglas Elliman, a New York City brokerage firm provides a guide to New York City Closing Costs, detailing the closing costs by associated with purchasing a cooperative, condominium, or townhouse in the New York City region. Accurate quotes can be procured directly from the appraiser, lawyer, or real estate agent. New York City Department of Buildings provides a breakdown of information and fees by permit type. New York City Open Data also provides data sets compiled by New York City agencies by category, such as business and housing. In the days of the sharing economy, open forums on websites such as StreetEasy or Brownstoner, or Angie’s list (which requires a paid subscription) may also provide an initial search for real estate professionals or cost inquiries, though the quality of the data may be not be verified or reliable. New York City Department of Buildings provides a list of registered professionals on their ‘Know Your Construction Professional’ page.
New York City Resources
New York City has a complex construction process which involves various city agencies, resulting in soft costs in services and fees. Building construction in New York City requires knowledge of urban planning, permitting, zoning and re-zoning efforts, tax blocks and lots, and unique environmental, architectural, and engineering challenges. The City of New York has many online resources and tools that developers and investors can utilize with data specific to the New York City market.
Department of Buildings
The New York City Department of Buildings Building Information Search is an online query system with general information on properties in the city including recorded complaints, violations, actions, applications, and inspections. You can also search for information about skilled / licensed tradespeople and general contractors registered with the Department of Buildings.
The Department of Buildings Metrics & Reports page, publishes self-reported data in monthly and weekly statistical reports containing job filing information for new buildings, alterations, permit issuance, signs, complaints, and dispositions. Reports include: weekly construction applications, statistical reports on jobs, permits, and signs, complaint disposition reports, archived metrics and reports, construction-related accident reports, cellular antenna reports, and Mayor’s Management reports.
Department of Finance
The New York City Department of Finance provides information on properties, property taxes, property records (ACRIS), and property tax maps. The Property Division maintains the official tax maps of New York City and collects real property transfer and mortgage recording taxes. The City Register records and maintains all real estate documents including deeds, mortgages, leases. The Automated City Register Information System (ACRIS) allows you to search property records and view document images by property borough, block, and lot, or address for the boroughs of Manhattan, Queens, Bronx, and Brooklyn (1966 to present). Staten Island is an exception, where the Office of the Country Clerk keeps these records.
Online tools include Property Benefit Lookup and Digital Tax Map. The Property Benefit Lookup page or Property Portal, allows you to search for property tax benefits by address or borough, block, and lot. The Benefits for Property Construction webpage provides general information on exemptions and abatements, detailed at, and includes: 421a and 421b tax exemptions on new multiple dwellings and new construction or substantial rehabilitation of owner-occupied one-and two-family homes, the Commercial Expansion Program (CEP), Commercial Rent Tax (CRT) Special Reduction, Commercial Revitalization Program (CRP), Division of Alternative Management Program (DAMP), Green Roof Tax Abatement, Industrial and Commercial Abatement Program (ICAP), Industrial and Commercial Incentive Program (ICIP), J-51 tax exemption an abatement for residential rehabilitation or conversion to multiple dwellings, Payment in Lieu of Taxes (PILOT) agreements, Solar Electric Generating Systems tax abatement, and the Urban Development Action Area Program (UDAAP).
The Digital Tax Map, maintained by the Tax Map Office, shows lot lines, block and lot numbers, street names, lot dimensions and easements for the City of New York. With the Digital Tax Map, you can search current and past tax maps, as well as the history of tax map changes.
Department of City Planning
The Department of City Planning is the New York City zoning and land use agency charged with designing a physical and socioeconomic framework to foster the growth and development of the City. Blending the social and natural sciences, urban planning, and design concepts, The Department of City Planning aims to create frameworks for sustainable, economic development of communities by strategic planning of adequate and appropriate resources for its population to include housing, business, industry, transportation, distribution, recreation, culture, comfort, convenience, health, and welfare. The Department of City Planning has a wide array of resources and maps including plans and studies displaying maps of city projects, zoning maps with historical, current, and proposed zoning, a community portal showing the 59 community districts, a ‘NYC Population’ section containing historical and demographic, socioeconomic, and housing maps.
Department of Housing Preservation
Established in 1978, the New York City Department of Housing Preservation and Development (HPD) is the largest municipal housing preservation and development agency in the nation. The agency’s mission is to promote the construction and preservation of affordable, high quality housing for low- and moderate-income families in thriving and diverse neighborhoods in every borough by enforcing housing quality standards, financing affordable housing development and preservation, and ensuring sound management of the City’s affordable housing stock.
NYC Open Data
NYC Open Data is a new initiative to increase accessibility, transparency, and accountability of New York City government. Its catalog of open databases provides a wealth of public data sources by a variety of New York City agencies and other City organizations. Data is presented by category, city agency, or city organization and anyone can use the open data sets to conduct research and analysis or create applications. Descriptions of the data, collection method, and metadata are provided for easier use.
OASIS
The OASIS (Open Accessible Space Information System) website provides a free and rich resource of interactive community maps for New York City, containing overlays of property information, zoning and land use, transportation networks, park, playground, and open spaces, population characteristics, environmental characteristics, water, wetlands, and food systems.
Baruch Library resources
The Baruch College Library provides access to many databases, free to students. Baruch’s librarians have created Research Guides as a reference for general business topics such as ratio and industry analyses, venture capital, and mergers and acquisitions.
Companies and competitors
Several databases cover topics on companies and competitors. Mergent Online / Mergent Horizon offers public company profiles with links to business relationships including customers, suppliers, partners, and competitors. S&P NetAdvantage offers provides current and past stock prices, annual reports and SEC filings for publicly-traded companies, industry surveys, analyst reports, and US and international market information data. PrivCo is a source for business and financial data on major, non-publicly traded corporations, including family-owned, private equity-owned, venture-backed, and international unlisted companies.
Industry and markets
Industry and market databases include IBISWorld, S&P NetAdvantage, Passport GMID (Euromonitor), and BMI Research. IBISWorld provides industry analysis for over 700 U.S. industries and hundreds of global industry reports. Passport GMID (Euromonitor) provides data and analysis on consumers and markets covering hundreds of industries in over 200 countries, all U.S. states, and 1,150 global cities. BMI Research provides industry profiles, country risk analysis, financial market reports, and company profiles with SWOT analysis, covering 22 industry sectors in 70 global markets.
Technology and commerce
Technology and e-commerce sectors are covered in eMarketer and Gartner. eMarketer aggregates marketing research related to online marketing and e-commerce, and Gartner provides analysis of IT markets for hardware, software, IT services, semiconductors, and communications, as well as reporting on IT issues in 10 industries including education, banking, retail, healthcare, and manufacturing.
News and periodicals
For access to news and periodicals, Business Source Complete and ABI/Inform provide full text access to scholarly publications, business journals, magazine, newspapers, and trade publications. Factiva provides access to global news, business, financial information from newspapers, magazines, newswires, and trade journals, including information on companies, industries, and financial profiles.
Trading Floor Resources
Baruch’s Trading Floor is home to Bloomberg Professional, which provides up-to-date information, historical data, analytics, news, and financial asset data, including equities, FX, money, fixed income, commodities, and energy. The FactSet database provides current and historical global financial analytics for over 70,000 public and private companies worldwide, and monitors global markets with real-time data on over 5,000 equity, fixed income, and commodity indices. Most of Baruch’s library databases can be accessed remotely using your Baruch Library login credentials; Trading Floor resources must be accessed on-site.
Equity and debt resources
Websites such as Bloomberg.com, Deal Pipeline, Real Capital Analytics, and Thomson One Banker provide information on equity and debt markets such as interest rates, availability of capital, and deal flow, though some resources do not offer free access, such as Real Capital Analytics. Bloomberg Terminals are available to students via Baruch’s Trading Floor. The credit rating agencies, Moody’s, Standard & Poor’s, and Fitch provide credit ratings for financial institutions, insurance, structured finance, and managed funds. Statistics and analytics for the commercial mortgage-back securities market can be found CMBS.com, Realpoint, and Trepp. IFR Briefings is a good resource for debt and equity research in international capital markets. Real estate professional organizations such as CCIM (Certified Commercial Investment Member) Institute, Mortgage Bankers Association, National Council of Real Estate Investment Fiduciaries, Pension Real Estate Association, Urban Land Institute may also provide reports such including capital markets analyses such as ULI’s Emerging Trends in Real Estate and PREA Quarterly magazine. Brokerage and advisory firms research reports, often accessible for free, also often contain research including capital markets data and reports. Articles and journals accessible through Baruch’s database regarding topics on capital markets and real estate finance include the Journal of Real Estate Finance and Economics, Real Estate Finance, Real Estate Finance and Investment, Private Equity Real Estate, and National Mortgage News.