Commercial Real Estate Development

To be successful in commercial real estate development, you will need skills and experience. These skills include knowing how to develop and build a real estate team, anticipating risks, controlling construction costs, and staying within budget. You also need to be able to solve problems under pressure.

Building a commercial structure from scratch

commercial real estate development structure

The construction process can be expensive, with a down payment, appraisal costs, loan origination, closing costs, architectural design fees, building inspection fees, and other fees. It would be best to consider the site’s utilities and fire protection. Also, make sure there are roads nearby to accommodate the building’s expected traffic.

The first step in constructing a new commercial structure is to prepare the site. This includes preparing the soil and laying the footings for the foundation walls. Proper site preparation will prevent future problems with the safety and structural integrity of the structure. It is also vital that the builder does not cut corners during this phase of the construction process.

SEE ALSO: What does contingent mean in real estate?

Obtaining construction financing

commercial real estate development financing

Lenders will require a certain amount of detailed information to determine if the project is feasible. This can include detailed building plans, general contractor bids, and cost projections. They may also ask for copies of all relevant approvals and pre-leasing information. In addition, they may order detailed financial evaluations and site-environmental testing, which will be at the borrower’s expense.

When applying for construction financing, applicants should have good credit and a good debt-to-income ratio. Most lenders will require a credit score of 650 or higher. A down payment of twenty to thirty percent is also recommended. Shopping around for lenders willing to finance this type of loan is essential. The lender will look at the borrower’s financials, business credit score, and other factors before approving the loan application.

The lender’s requirements will vary depending on the type of development. For example, a developer may be looking to finance a single-family residence, a multifamily property, or raw land. Each stage of construction requires a specific amount of capital, so it is crucial to work with an experienced lender.

Are you interested in financing
for your next commercial real estate property?

Managing a property after tenant move-in

commercial real estate development property management

After the initial lease signing and tenant move-in, the real work begins: managing a property and its residents. Developing a positive attitude and remaining calm is essential to ensure a smooth transition. It is also important to have an efficient system for screening tenants. This should include automated background checks, security deposits, and related paperwork. However, it is also vital to keep a human touch.

There are several tasks that a property manager should undertake after the tenant move-in. It is vital to have a checklist, especially if the property is a project. It helps to know what needs to be done and when. If the property manager cannot always be present, it will be challenging to keep track of things.

Check out our sister company Calcore Mortgage!

Community outreach during commercial real estate development

commercial real estate development community outreach

Community outreach is a critical element of the commercial real estate development process. The goal of this outreach is to let neighbors and businesses know about the development plans and what impact they will have. The method also involves a zoning review to ensure the development is aligned with local standards. This provides quality development, the best land use, and adequate transportation provision.

Community outreach can be accomplished in a variety of ways. For example, developers may consider distributing information about the development to neighboring businesses and residents via door-to-door canvassing or hosting small meetings. Ideally, the outreach efforts should occur within a two-block radius of the development site. While large-scale community meetings may seem overwhelming, it can also be helpful to invite supporters who are known to support the project.

While real estate investors are primarily interested in making money, many also look for ways to improve the local community. 

To get in touch with us
Call: (855) 855-0080