Developing a Commercial Property – Procedures for Success: #CommercialPropertyDevelopment #RealEstateDevelopment #PropertyInvestment #PropertyDevelopmentProcess #PropertyDesign #PropertyConstruction #PropertyManagement #PropertyMarketing #PermittingProcess #FeasibilityStudy #ProjectFinancing #ProjectManagement #TenantAcquisition #BusinessDevelopment #CommercialRealEstate #ConstructionManagement #ArchitectureDesign #InvestmentOpportunities #ZoningRegulations #MarketAnalysis #ROI #ConstructionTimeline #TenantRetention
If you are in the commercial property business, there are a number of steps that should be followed to ensure the success of your project. We’ll walk through each one below:
Identify the Purpose and Scope of the Project
Once you have identified the purpose and scope of your commercial real estate project, you can begin to define its goals. The following is a list of questions that will help you identify what you would like to achieve by completing this project:
What is the desired outcome?
Who are the stakeholders involved?
What are their roles in this process?
How will they benefit from its completion (or not)?
Conduct a Feasibility Study
A feasibility study is a process of evaluating a project to determine if it makes sense for you to move forward. The components of a feasibility study include:
- Market analysis
- Financial analysis, including projected costs and revenues
- Legal considerations (for example, zoning restrictions)
Securing financing is one of the most important steps in the commercial property development process. You’ll have to consider several factors when determining how much money you need, and who will be able to provide it.
- What do they want from me? It’s important to know what your lender wants from you before approaching them with your request for financing. The two main things lenders look for are collateral (good assets) and creditworthiness (a history of paying bills). If you don’t have either of these things, then securing financing could be difficult or even impossible–particularly if the lender doesn’t trust your ability to repay their loan if something goes wrong with your business plan or project execution!
- Who should I approach? Depending on how much money is needed for this particular project, there may be several potential sources available within reach: friends/family members; banks; private equity firms; venture capitalists…the list goes on! Make sure not only who but also where they’re located geographically since that could make a big difference as well depending upon where exactly this property lies geographically speaking (i..e., near Silicon Valley vs near New York City).
Obtain Permits and Approvals
In order for a commercial property to be developed, you must obtain the necessary permits and approvals. Here is a list of some of the most common permits:
- Building permits
- Zoning and subdivision approvals
- Building and occupancy permits (if applicable)
- Utility service connections (gas, water, electric)
- Environmental permits (if applicable)
- Fire protection permits
Design and Construction
- Design and construction of the property
- The importance of design and construction for commercial property
- The role of the architect, engineer and contractor
- How to choose an architect, engineer and contractor
- How to manage the design and construction process
Lease or Sell the Property
The next step is to make a decision about what to do with the property. You can lease or sell it, or even hold onto it in case you need it later on. If you decide to lease out your commercial space, there are many factors that go into determining how much rent should be charged for each unit. Some things to consider include:
- Location of the building (i.e., proximity to other businesses)
- Size of each unit (bigger units cost more)
- Condition of each unit’s interior and exterior walls/floors/windows
There are many steps to developing a commercial property, and each step is crucial. If you’re interested in learning more about how we can help you with your next project, contact us today!
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