Develop Commercial Real Estate
Developing commercial real estate is a challenging business endeavor that requires not only a significant financial investment, but also a sound understanding of commercial tenants' requirements, as well as zoning laws and project management. In addition, because developing commercial real estate involves negotiations with local authorities, representatives of local residents and business owners, as well as with the contractors who perform the architectural designs, construction work, and landscaping, good interpersonal and diplomacy skills are a major requirement. For entrepreneurs who possess the resources and skills, developing commercial real estate can offer an extremely rewarding business opportunity and pave the way to a long and lucrative career. Read the following steps to find out how to develop commercial real estate.
Steps
- Decide what type of commercial real estate you want to develop.
- The kind of businesses you lease or sell the property to will all have their own set of demands for the property, and you must be able to cater to that market by providing the right location, trustworthy contractors, and efficient property management.
- The most common types of commercial real estate you can develop are office buildings or office parks, industrial and warehouse real estate, and retail centers. Within each category there are a number of standard developments that may or may not be right for the type of commercial property you want to develop.
- Lay down a good plan.
- You need to do some careful planning before you jump into any type of property dealing. Even though plans can go wrong at times, proper planning from the start will help you to ascertain success. Do some research about the area you have plans on buying a property. Ask the locals in the area about its accessibility and certain problems that you need to be aware of.
- Secure the financing to develop commercial real estate. This can be in the form of a business loan, investments by investment companies or private investors, or a combination of both.
- Choose a location that is zoned for commercial development and find out how it is zoned.
- You can find out how a lot is zoned by checking with your city's zoning and planning division.
- Make sure the location allows for easy access for the traffic that will be attracted by the new development.
- Find out what other development and infrastructural plans exist for the area. For example, if a new highway is planned, it will allow for more traffic, which could be beneficial for the commercial property, but if existing commercial real estate is going to be demolished to create a park or residential buildings, this could adversely affect the attraction of your commercial development.
- Have the land surveyed by a reputable surveyor who can tell you all of the geographic particulars of the location that affect construction, such as ground quality or existing structures below the topsoil.
- Purchase the land if the zoning allows commercial development and the location allows for the type of construction you have in mind. Also secure any permits you need to develop commercial real estate. Depending on the location, this can include construction permits, parking permits, and waste removal permits.
- Enlist the services of an architect to design the commercial real estate you want to build. Make sure to explain clearly what your needs are in terms of budget, time, and building requirements.
- Approve the building plans if they meet all of your demands.
- Hire contractors to perform the construction and landscaping. Request weekly and monthly reports from both the contractors and the architect overseeing the project so you're aware of the progress.
- Arrange for building inspections. These are usually performed by a city agency that dispatches inspectors to investigate whether commercial real estate is in compliance with legal requirements.
- Hire a commercial Realtor to attract tenants for your commercial real estate.
- Hire a property management team to oversee the day-to-day operations of your commercial real estate, such as maintenance, repairs, and billing.
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