Whether you’ve just been hired to consult with land owners or you are wanting to purchase a parcel of land for any kind of commercial development use, don’t go it alone. Doing so can easily lead to some very expensive learning experiences and will make the progression of the project much more difficult.
Developing, or re-developing, a parcel of land for commercial real estate (CRE) uses takes a variety of skills and expertise. There are critical decisions to be made and numerous processes to navigate at every point of the journey. Prior to even going to the governing municipality for approvals, a property owner needs to develop a team of experienced professionals to provide guidance with these processes and help ensure the best decisions are made along the way.
- Commercial Real Estate Attorney – preferably someone who specializes in commercial transactions (and possibly an Environmental Attorney based on the parcel conditions)
- A Construction Manager to assist in the selection process of architect(s) and engineer(s) in addition to overseeing the project on an “open-book” basis vs. signing over control of your project to a General Contractor who is in charge of hiring and managing sub-contractors directly.
- An Architect who is both familiar with the type of project that you’re planning to undertake as well as possessing past experience with the zoning and building requirements of the municipality the property is located in.
- A Structural Engineer to work in conjunction with the Architect and Construction Manager
- A Civil Engineer may also be needed depending on the project, to conduct traffic studies, design bridges, retaining walls, and parking lots
- A Commercial Lender – could be a lender you may already have a relationship with but be sure that the lender has the loaning capability and comfort level to handle your size project. Some developers use a mortgage broker who is hired to “shop” for the best rate and lending criteria that suites your needs.
- A Commercial Real Estate Broker with wide array of expertise. Your broker should have a comprehensive understanding of CRE and the market surrounding your parcel. Your broker can assist you with understanding:
- Tax Credits
- The creation of a proforma cash flow projection for both the property owner and lender
- Forecasting absorption time to fill the building or project with tenants (integral to understanding and evaluating how long you may need to carry the project until it is cash positive on its own)
- Market trends and expertise on demographics – who is the ideal tenant, and for retail, where do the target buyers live?)
- Other factors that comprise the real estate decision making process as relevant to your project goals and needs – being mindful of neighbors, proposed traffic pattern changes, etc.)
Once you have a good team in place, you should also be aware of management concerns. A primary component to a project’s success is the ability for all parties on the team to be able to collaborate with each other. As with any large group of collaborators, it is vital to facilitate a positive and productive pathway to get things done. Assign a point person (usually the attorney, to delegate tasks, keep folks on schedule and oversee progress)
Without good management and leadership, you will end up wasting valuable time and money when decisions are needed. Another thing to monitor is focus. The ability for all participants to check their ego at the door and “stay in their lane” makes for a cohesive and smoother running team as well.
For the CRE component of the development team, reach out to the talented market experts at NAI Platform and let us assist you in realizing your commercial real estate goals.
Jay Verro, CCIM
14 Corporate Woods Blvd.
Albany, NY 12211
Direct: 518-465-1400 ext:214