Property development is a multi-thronged process that can at times be risky, lengthy, and overly complicated. Taking a real estate project from its initial planning stage to its construction phase and finally to its completion can take months, if not years. And with a real estate development project, you can rest assured that there will be plenty of obstacles popping up as it progresses, which is why having an experienced team handle your project is essential.
By our definition, a development project provides us with a unique chance to provide something that does not currently exist in that market. When properly executed, this development aspect is bound to translate into a great success story, which is something that cannot be said about an existing asset.
Real Estate Development Phases
The development of a real estate project is often a complex process which can be broken down into four main phases:
- Project initiation
- Project conception
- Project management
- Project marketing
The success of any project is dependent on our ability to ensure that all risks are kept under control, as the effect it has on the project expenses declines with every passing stage. It is the main reason why property developers ensure they have collected as much information as they can about the project during its early stages to determine whether it is practicable or not.
This is where all the necessary conditions for each project are established. It is important to note that there are three fundamental approaches to each and every asset development process, which include:
Location Seeks Capital and Ideas
An organization, for instance, looks for a development idea and a financier for a property that they already own. Normally, this is the case when an organization’s core business area is in no way associated with real estate. If you are a designer or architect, you have probably come across a situation where a financier has requested you to come up with an idea for a certain site.
Ideas Seek Location and Capital
In such a situation, an idea has already been formulated, and all that remains is to find a great location, and someone to finance the idea.
Capital Seeks Location and Ideas
This is a situation where a financier is looking to invest in assets and property development for one reason or another, i.e., institutional investors and pension funds
From the above description, it is clear that the start of any project typically starts with a single factor—capital, location, or idea. All missing parts must be obtained in the initial stage. Once this has been accomplished, a rough project description with measures and usage (footage or usable square meters) should be fashioned.
This will then pave the way for the completion of the preliminary contractor calculations.
The project conception phase starts as soon as the financing, location, and idea aspects have been roughly decided. It is a phase that will see the project undergo a number of systematic analyses.
In this stage, the primary goal will be to prove that the vision is actually feasible and profitable. A real estate Feasibility Study will need to be conducted to determine its profitability. The analysis is meant to help us look at the negative and positive outcomes of each real estate project before money and time can be put into it. We normally look at the project in terms of legal, sociological, economic, planning, technical, and a host of other factors. Some of the analyses that are summarized under the Feasibility Study term include:
- Cost analysis
- Market analysis
- Risk analysis
- Location analysis
- Competition analysis
- Usage concept
The extensive research and investigation carried out in the feasibility study helps us decide whether the project is worth investing into, or is one that is bound to have a negative financial impact, and hence should be overlooked.
In this particular phase, the developer is tasked with representing the clients’ role. The project design is concretized, and where deemed necessary, the contractor may delegate some of the client tasks to subcontractors.
The purpose of this phase is to make sure that the overall control, planning, and coordination of this project goes on without a hitch from start to finish. Construction management teams as developers tend to have an important knowledge-based advantage in this particular phase that is based on their work experience and education.
This is a phase that can start at any point during the construction process. Normally, we recommend that it starts early on and should continue as the construction work goes on. Past studies have shown that an early sale or lease tends to reduce the risks associated with the project under construction.
Involving a marketing specialist from the very start means that the specialist will get a better chance to understand the project. They will, therefore, be able to provide meaningful suggestions that are based on their experience and knowledge of the South Florida real estate market.
Note that there are instances where all these phases are likely to start overlapping. Leasing and sales can at times begin during the project conception phase. Additionally, the design phase may at times overlap with the project management phase. Once the project has been completed, a new phase known as the facility management phase begins. This is a phase that deals with optimizing the value of the property.
Why Choose Us for Your Real Estate Development Needs?
At RWB Construction Management & R. Williams Development, Inc., we understand that each project is unique, and requires a different approach than the others. Therefore, we ensure that we customize each construction project to meet your unique needs. Our construction team will listen to your needs, and take the time to learn everything there is to learn about your project. Moreover, we will go out of our way to make sure every aspect of the project is met on time, and as you envisioned, even if it means having to work around the clock to make it happen.