Francis Underwood
If someone were to ask you to name some of the biggest world markets, what would be your answer? You might say consumer electronics or cars, but there’s another you aren’t considering: commercial property development. And hold onto your seats, because this market is worth over $300 trillion across the globe.
Building a property for commercial real estate is no mean feat. Every real estate developer runs the risk of going broke due to project costs and clashes with the community and zoning laws. So what does the process look like for commercial buildings?
Keep reading as we discuss commercial property development from beginning to end.
Commercial Property Development Begins With Choosing the Site
It all begins with choosing the location for commercial properties. The layman might be surprised by just how much research and analysis goes into choosing a location. Factors include the following:
- Average weather at the location
- Access to utilities
- Environmental risks, such as floods
- Zoning restrictions
- Location in relation to the city center and/or suburbs
- Traffic flow around the area
- Nearby tenants and their business purposes
It can take months or years just to select a suitable location. Developers will conduct feasibility studies and site investigation reports. This process can cost thousands of dollars as professionals check whether it is ready for development.
Purchase and Hiring Contractors
Once you have ensured the land is good and you have obeyed the law, it’s time to sign your purchase contract. After that point, the development begins in earnest. You begin a real estate executive search, assemble your team, and get to work.
Next up is hiring out the job to a contractor. Many contractors may bid to do the job for you, giving you a nice spread to choose from. It’s here that you play the balancing game between cost and build quality.
You also maintain communication with the community. It’s essential that they understand what is going to happen, and how that affects them.
Finalization of Blueprints and Construction
This article is too short for us to cover the many finer aspects of the process. But suffice it to say that there is a lot of red tape in the form of building permits and closing your escrow before the building begins.
You’re not out of the woods once construction starts, though. There are ample opportunities for things to go wrong, such as accidents or costs exceeding the budget. Property owners must keep in close contact with the construction managers to make sure everything goes according to spec.
Once the external construction concludes, work begins on the interior. After that concludes, you need to perform inspections to ensure everything works according to the law. It’s at this point that you can finally begin to rent to tenants and make money from the property.
Start Your Commercial Property Development Project Today
Needless to say, commercial property development is quite an undertaking. It is a long slog of permits, zoning laws, and keeping everything within budget. Building a property requires you to be patient, but the rewards, in the end, are well worth it.
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