Deugen Development __________________________________________________________________________________
mundane . When you finally get to attend the completion ceremony , it ’ s such an incredible feeling to see what was once a dilapidated old structure , transformed into a beautiful new building . That ’ s why I do this .”
Hit the ground running
As talk turns to the future , Eric shares some concerns that he has for the wider industry . “ I think 2023 is going to be a slow one for everybody , and I ’ m just hoping that by the time we hit election year that rates will have normalized , and owners will be tired of sitting on their hands , unless this is the new norm . I imagine there are plenty of people across the industry wishing for more activity in 2024 , and praying that they ’ ll make it to 2025 . Costs are close to double what they were three or four years ago , which coupled with interest rates doubling , is going to have smaller organizations backed into corners .
“ Even from our side of the development aspect , as we ’ re looking at future projects , it ’ s getting difficult to get any kind of deal to pencil out . Sellers are still stuck on the old numbers ,
but unfortunately for them , the new numbers are very different , and a lot of them aren ’ t ready to bridge that gap . There are a select few , however , who are starting to realize that they ’ re not going to get those numbers anymore , and are succumbing to selling at a minor discount . All these smaller guys who once upon a time couldn ’ t keep up with incoming work and whose phones were ringing off the hook , are now having to rely on the banks for financing , which is just nonexistent . The prices will definitely come down soon , but it will just be a rough time for folks until they do .
“ Personally , when looking to the future of Deugen Development ,” he concludes , “ I want to see our work balance shift to 90 percent our own projects , while making up the other ten with other developers ’ contracts . So , in the meantime , my primary focus is to get as much work teed up as possible , so we ’ re ready to hit the ground running once this has all blown over .” ■
www . deugen . com
74