There are several things you should know before beginning your commercial real estate development. When planning your next project, keep in mind how you are going to find land for your development, the steps of your project, and even how to make your development sustainable. Read on to make sure you begin your project from a prepared starting point.
Finding Land to Buy
You will need to find lots and land to build on. Become familiar with the area, check maps for potential locations, look at online listings, and talk to local builders or real estate agents. You need to choose land at a location that is zoned specifically for commercial development. Do plenty of research about traffic access, nearby businesses and competition, and other developmental or infrastructural plans for the area before deciding to buy land in a specific location.
You will need to get building permits from the local government, and there are many regulatory issues you will need to plan for. If the requirements end up being too strict, the costs too high for your budget, or the process too long, lack of knowledge about permit and zoning issues could cause major problems for your development.
Obtain the necessary permits and permissions as early as possible. Depending on where you are, there may be restrictions pertaining to the height of buildings, kinds of flooring, colors, and more. Working with a construction management company could be helpful in making sure you are complying with all local requirements.
You will have to make sure the property fits zoning requirements and you are obeying the guidelines for its use. Make sure you ask the right things before you start. For example, if the area needs to be rezoned, what is the process for that? How long will it take for you to be approved? These are just a few of the necessary questions you should ask in order to get a feel for what your timeline and tasks will look like.
It is important to know about commercial development financing. Review your options for loans and financing. Budgeting is essential because you need your money spent to return a profit. You have the option of hiring a financial consultant to help you, but you can also figure out the finances yourself. Create a list of expenses in detail, including necessary expenses such as cement, equipment rentals, workers’ wages, etc. Make sure you keep an extra 10% of your budget in reserve in case an emergency expense arises. Be sure to have a clear idea of the state of the financial market and probability of making a profit following completion of the development.
Decide what kind of commercial interests you want to market the property to. Depending on your location, you may have many options as far as the purpose of the property. Each type of building, whether it becomes a movie theater, gym, office, hotel, retail building, residential building, or other specialty building, has specific needs and standards. You’ll need a building that fulfills the needs of employees, customers, and possibly others. Brainstorm carefully to make sure you have an image of how you envision the property being used, and thus what it will need to look like in its finished state. That will guide many of your future efforts and decisions in planning, design, and marketing.
Building sustainably isn’t just a trend; it can be an expectation these days. When planning your commercial real estate development, think about how you can incorporate green construction practices. You can do this by adding solar panels to your project, using durable and eco-friendly materials, eliminating some of your fossil fuel-based machinery, incorporating efficient technology, and adding cleanup procedures to your worksite. Trash hoppers make a worksite safer by helping clear waste.
What does the current market look like? What is the overall supply and demand in the area? Before starting your commercial development, ponder the current state of lending conditions and fluctuating costs for the development. You don’t want to produce something that goes unused, wasting your money and bringing the entire development to naught. Before beginning, consider what businesses and properties are in demand and what sort of property may not be relevant for the current market climate. Don’t develop a property with an office in mind if there is already an over-abundance of office spaces and office-based companies are going out of business. Make sure your development plan is feasible.
Representing Your Company
Schematic design is an important part of the commercial development process. You need to draw it all out before you start. How will your project visually represent your company? How do you want it to? Your company’s brand may not be one of the things right at the front of your mind when going into a new commercial real estate development, but it is always something important to consider before you begin. Think carefully about different colors, sizes, materials, shapes, textures, and patterns of your project before you begin, keeping in mind how this will connect to your company and your company’s image.
Selecting Your Team
An essential part of preparing for your development is choosing your team, including an architect and a contractor. Some developers also hire extra people to help with the hard work. You will need to think about how much time you personally want to spend working on the project. Hiring a construction team is something many developers decide to do, and this can end up being an efficient choice, but many skip this optional step due to high costs.
Needed Tools and Materials
Before finalizing your plan and getting started, you will need to know what equipment and materials you will need. No detailed plan is detailed enough or anywhere near action-ready without a list of materials. Do you need specific tools or machinery? Do you know where to find those necessary items? Do you know how much they will cost? You may need to return to your budget when your list is finished in order to finalize the total cost and make sure you have not accidentally omitted a necessary expense.
Before taking on your development project, it is important to know about the necessary financing, zoning, sustainability, and other expectations. Now that you understand more about what it will take to plan and carry out a commercial real estate development, you are ready to begin.
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