Multifamily Case Study
$2.1M in Validated Savings Opportunities Identified on 254-Unit Houston Development, via ProfitFinder
OVERVIEW
A multifamily developer engaged Strella Companies through our ProfitFinder™ Savings Plan program to evaluate construction costs for a 254-unit market-rate apartment development in Houston, Texas.
Following a comprehensive review of plans, specifications, and procurement strategy, Strella identified: $2,119,520 in validated savings opportunities (5.24% of total project costs)
THE SITUATION
This project was not underperforming.
The developer operated with a high level of sophistication:
- Transparent and well-structured budget
- Competitive pricing across major trades
- Vertically integrated execution (developer, GC, and capital aligned)
Costs were already tightly managed and below typical benchmarks in several major categories.
The objective was not to fix inefficiencies—
it was to determine whether the project was fully optimized.
STRELLA'S APPROACH
Through ProfitFinder, Strella conducted a bottom-up cost analysis including:
- Full plan and specification review
- Factory-direct material pricing validation
- Subcontractor benchmarking across national and regional markets
- Trade-level quote procurement
- Value engineering evaluation
- Supply chain and logistics optimization
SAVINGS IDENTIFIED
Strella identified:
$2,119,520 in validated savings opportunities
Across:
- Competitive supplier and subcontractor pricing
- Procurement strategy improvements
- Scope and specification optimization
Key Areas of Opportunity
- Factory-direct sourcing of cabinets, countertops, and flooring
- Expanded subcontractor bidding and competition
- Unbundling labor and material scopes
- Negotiation leverage using validated pricing benchmarks
- Strategic use of owner-furnished materials
- Aggregated savings across smaller cost categories
IMPACT
| METRIC | RESULT |
|---|---|
| Project Budget | $40.47M |
| Savings Identified | $2.12M |
| Cost Reduction | 5.24% |
| ProfitFinder Fee | $50K |
| ROI | 42X |
YIELD ON COST IMPACT
Construction cost reductions of this magnitude directly improve project returns when NOI remains constant.
Illustrative Example:
- $40.5M project cost
- 5.24% cost reduction
- NOI held constant
→ 30 - 40 basis point improvement in Yield on Cost
This level of improvement can:
- Strengthen deal feasibility
- Improve investor returns
- Increase lender confidence
- Move projects from “marginal” to “viable”
KEY INSIGHT
Even with a highly capable, vertically integrated developer, and a budget that was already tighter than most, Strella's ProfitFinder Savings Plan identified over 5% in additional savings opportunities.
Well-run projects are efficient. But they are not always fully optimized.
Its normal that internal teams and local GCs typically operate within:
- Established vendor networks
- Existing procurement structures
- Limited external pricing visibility
Strella introduces:
- Independent pricing intelligence
- National supplier access
- Cross-market benchmarking
This is where additional savings and return enhancement are unlocked.
OUTCOME
The developer received a fully actionable Savings Plan with multiple execution paths:
- Immediate implementation via Strella’s supply chain
- Independent execution using validated pricing benchmarks
- Optional engagement for advisory-driven savings capture
Want to increase your yield?
Put the risk-free PROFITFINDER program to work on your next project - or cycle of projects.
Rising costs don’t have to define your project’s returns. Our expert
team is ready to review your current budgets to uncover hidden
savings – because remember, “Where there’s mystery, there’s
money!”
Contact Strella today and put PROFITFINDER to work.
