The return of diminishing returns

From the August issue: To make money on their new buildings, whether luxury condos or offices, developers have typically followed a simple rule of thumb: The profit margin should equal around 20 percent of the project’s cost. In the current market, though, that’s becoming increasingly difficult, as labor and materials costs remain overheated. Another obstacle is if projects drag on for longer than expected, owing to structural problems, bad weather or community opposition. more By C. J. Hughes