Is Time Still Your Greatest Ally?

One of the oldest sayings in real estate is that time is your greatest ally.

For decades, that has proven true. Buy quality real estate, hold it long enough, and time quietly does much of the heavy lifting. And for shorter term projects focused on high yield IRR, we often start a project underwritten to zero asset growth assumptions...but after a year of design and 18 months of construction, the value of those homes have gone up - and so has the return for our developer client. 

But if you're trying to develop housing today, that advice can feel disconnected from reality.

Compared to just a few years ago, interest rates are significantly higher. Construction costs have risen dramatically over the past several years. Vacancy has softened in many markets, while rent growth has slowed. Put all of those together and it's easy to look at a new development pro forma and wonder whether anything still works.

Photo: John Tyson/Unsplash

I've had more conversations over the past year that begin with the same question:

"Can this project still pencil?"

It's a fair question.

Some projects simply don't work in today's market, and forcing them rarely ends well. But I've also noticed something interesting. While many people have stepped to the sidelines waiting for the "perfect" market to return, experienced developers are still finding ways to move projects forward.

The difference isn't that they're ignoring today's challenges.

It's that they're looking beyond today's market.

They understand something that can be easy to forget when every assumption in a spreadsheet is under pressure:

Real estate has always been optimal as a long-term strategy. 

That doesn't mean every project is a winner. It means being disciplined enough to walk away from deals that don't work while having the conviction to pursue the ones that still create lasting value. 

In the next blog, I'll share why I still believe real estate remains one of the most powerful wealth-building investments available - not because of any single factor, but because several independent forces begin working together over time.

The spreadsheets matter.

But they're only the beginning of the story.