- Commercial real estate development encompasses the entirety of the process of creating and managing a physical location for businesses to use.
- Essential considerations include location & market analysis, financing & budgeting, safety & functionality, and design & construction.
- Researching and staying organized with permits, deadlines, and budgets is essential for successful completion.
- Understanding the key considerations in commercial real estate development can help ensure that projects are completed on time and satisfactorily.
Commercial real estate development is a complex process that requires careful planning and consideration. From the initial concept to the finished project, several key factors must be taken into account to maximize success. This blog will cover some crucial commercial real estate development considerations that businesses should be aware of.
Table of Contents
What is Commercial Development?
If you’re an entrepreneur or business looking to purchase, lease, or rent a commercial space, you’ve likely heard of “commercial real estate development.” But what does it mean?
Commercial real estate development encompasses the entirety of the process of creating and managing a physical location for businesses to use. This can include construction, leasing, financing, and more. Understanding this process can help you make informed decisions about your commercial needs.
The Development Process
The initial step in any commercial real estate development project is to identify the need for a new building or renovation of an existing one. Depending on the scope of the project, this could involve obtaining permits from local government agencies, setting up utilities and infrastructure plans, and researching zoning laws in order to ensure compliance with regulations.
Once these steps are complete, then comes the actual construction phase. This includes all aspects of designing and constructing a building, including choosing materials, hiring the best Cincinnati plumbing contractors and subcontractors, obtaining supplies such as lumber, rainscreen and drywall, etc., managing progress onsite and offsite (such as ordering supplies), performing inspections at various stages of construction, etc.
As mentioned, successful commercial development requires extensive research and planning. The following are some of the most important considerations for developers to keep in mind:
Location & Market Analysis
One of the most important aspects of commercial real estate development is determining the right location for your business. This will involve a thorough market analysis of potential sites, as well as an understanding of what type of business you’re trying to create.
This includes considering things like traffic patterns and access to public transportation, local land use regulations, demographics, competition, and more. It’s essential to do your research when selecting a location so you can ensure it will work best for your business needs.
Financing & Budgeting
Once you have identified a location, it’s time to start budgeting and looking into financing options for your project. Many businesses consider using traditional bank loans or other forms of conventional financing sources such as government grants or private investors.
However, there are also alternative sources, such as venture capital firms or crowdfunding platforms, that can provide additional funding options if needed. It’s essential to understand all the financing options available to ensure you have enough funds for your project and select the best choice for your specific needs.
Safety and Functionality
When it comes to commercial real estate, safety, and functionality are two important considerations for development. This is especially true for multi-story buildings, as the need for a safe property for all occupants and visitors becomes more apparent. Sometimes, this means meeting specific industry standards for construction materials and control systems, such as ASTM F-3010 for commercial elevator systems.
An experienced developer will typically know these standards, taking necessary measures to ensure a commercial space is designed in accordance with them – they can also be consulted for advice on completing the project successfully. Ultimately, safety and functionality must be prioritized in order to achieve a successful result in any given commercial real estate development project.
Design & Construction
The design and construction phase is where all those plans start coming together! This process involves deciding on architects and contractors who will bring the building plans to life according to local zoning laws and codes.
During this process, it’s important to stay organized with all contracts, permits, deadlines, and budgets while keeping communication lines open between all involved parties so everyone knows what their roles are throughout each phase of construction.
The Bottom Line
Commercial real estate development is a complex but rewarding process that requires careful consideration from concept through completion. Understanding the key considerations involved in the process can help ensure that your project is completed on time and satisfactorily. By weighing all these important factors, you can be sure your business’s commercial needs are met successfully.