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Rising construction costs force Alexandria multifamily projects to scale
Developers said capital and material costs are driving plan changes, including downsizing some projects and slowing others as financing becomes harder to attract.
Bisnow reports that elevated construction expenses are reshaping housing development in Alexandria, Virginia, as multifamily projects in the city are being scaled back or redesigned to move forward amid higher costs of capital and construction materials.
At Bisnow’s Alexandria State of the Market on Thursday, developers including Whitaker Investment Corp. said some projects are being intentionally reduced because the economics no longer support a return expectation strong enough to attract capital.
Whitaker Investment Corp. President and CEO Ryan Whitaker pointed to its TideLock waterfront project, a 234-unit development that delivered recently with 169 rental units, 65 condominiums and 7,000 square feet of commercial space, and said the construction cost came in “massively more expensive” than when it was envisioned in 2019.
Bisnow also notes that another project, HRP’s plan to convert a 19-acre former coal plant into 2.5 million square feet of residential and commercial development, required a city tax increment financing package approved by Alexandria City Council in June, with Alexandria Economic Development Partnership President and CEO Stephanie Landrum saying public financing was not originally contemplated when the plan began.