Completing the purchase of commercial property investments can take place at various stages. You can purchase undeveloped land, a project ready to begin the construction phase, or property with existing structures. We will identify those stages today as Planning, Development, and Maintenance. If you’re considering a career as a real estate developer, it’s important to consider every stage of commercial real estate land development.
Regardless of when your investment begins, commercial real estate is a long-term investment with many steps. It’s important to partner with a real estate broker who is knowledgeable in commercial developments. Whether this is your first investment property or your fiftieth, a local agency will have accurate information about community needs, interests, and preferences. Taking these details into consideration will help you to make the most informed investment possible.
The planning or pre-development stage of commercial real estate development is all about due diligence. This stage includes finding the right land to purchase, determining a fair price, and planning the future development of the land.
If you know you want to build a shopping mall vs. an office building, this will limit your search, but if you are open to considering all options for local commercial real estate investments, you will want to research more thoroughly. There are many details to consider in the planning stage.
The Planning Stage Includes:
Finding a real estate professional to work with
Reviewing market analysis and feasibility studies
Acquiring the land or securing option rights to purchase land
Requesting surveys and environmental assessments
Planning: site plans, development plans, building plan designs, and potential infrastructure improvements
Acquiring building permits
The development (or construction) phase focuses on everything before people will enter their newly leased offices or storefronts.
The Development Phase Includes:
Building Construction
On-site inspections
Marketing available property or rental spaces
Hiring a property manager
Pre-leasing spaces
Listing the property for sale and actively looking for an investor
The development phase will have a projected timeline for completion, but prepare for delays and cost overruns, which are common. Most construction projects have surprises along the way. Some commercial property investors prefer to move on from a project once the land and building development is complete. In this case, you will want your real estate agent to focus marketing efforts on finding an investor for the completed property.
While this is considered the final stage of commercial property real estate development, it is also a beginning phase. The maintenance phase of your project may include selling the property or leasing spaces.
Some activities during the final stage include:
Ongoing marketing and leasing
Finding a property buyer
Filling commercial property spaces
Stabilizing management and monthly income from the property
One of the most important decisions you will make in your commercial real estate development process is the selection of your real estate agent. You need an agent who is knowledgeable about the local area where you are purchasing land. An experienced agent will walk you through every step of the commercial real estate process.
At Ullian Realty, we leverage over 50 years of combined market experience on Florida’s Space Coast in commercial real estate brokerage and development. We are committed to helping you find the right property for all your commercial real estate ventures. Please contact us today to find out more about the Ullian Process and how we will help you with your next commercial real estate development investment.
This article was originally published on June 7, 2018 but has been updated for accuracy and freshness.
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