By Randyl Drummer
February 29, 2012
Portman believes it has the skills and resources in place to be equally successful in adaptive reuse as it has been in new development.
“Reuse and repositioning is easier for us today relative to ground-up development, mainly because it can be cheaper,” Pinkham said. “Development financing is currently very difficult, and adaptive reuse is not quite as hard to finance. We would step in after the bones, the basic asset, is already in place, eliminating some of the construction and market risk.”
Pinkham said, assuming one can acquire a half-finished hotel or condominium asset at the fairly common 50% below replacement cost from a developer that has run out of equity, the buyer can complete the development or redevelopment for 75% of replacement costs, which Pinkham calls “good economic sense.”