What is Commercial Real Estate Development?
Commercial real estate development involves purchasing a piece of land or an existing structure and creating a new facility. This could mean purchasing land and building an apartment complex or buying an old commercial warehouse and renovating it into a wedding venue.
As you might imagine, the development process has many moving pieces. Some investors shy away from development projects and stick primarily to buying already-built structures. However, when done correctly, development can yield significant profits for willing investors.
What to Consider Before Development
Before beginning a commercial real estate development project, there are a few essential items to consider.
Risk
While the risk of development tends to be higher than simply purchasing an existing structure, it can pay off in the long run. Before developing, be sure you fully understand and feel comfortable with any associated risks.
Financing
There are many types of commercial financing, including lines of credit, construction loans, and portfolio loans. Connecting with an experienced commercial lender will help you determine the right kind of financing for your project.
Building Site
Choosing a piece of land or structure can be one of the most challenging parts of the process. Your real estate agent will help guide you through contract negotiation, zoning regulations, and any necessary inspections.
Construction
As the developer, it’s your job to bid out and supervise construction. Managing subcontractors can be time-consuming, so it’s important to allot enough margin to navigate challenges that arise through the construction process.
Sale or Leasing
Finally, when all is said and done, you must be sure you have the right sales or leasing team to market your new development and find the right buyer or tenant.
Build Your Real Estate Team
Before beginning your first commercial real estate development project, you should spend time assembling the right team. Please contact Steve Longenecker at WeBrokerCORealEstate or 720-600-9513 with any questions or if you have any commercial real estate needs in Longmont, CO, and our neighboring communities.
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