Wednesday, September 15, 2021

A typical real estate project development process

Author: Sachin Gupta | Find me on Twitter

Once the land development process has been completed successfully, a developer will focus his/her energies on the project development process. Developing and delivering a real estate project successfully is challenging and it lasts for several years passing through various phases. Primarily any real estate project can be divided into 5 phases:


Phase I – Land acquisition
The details about land acquisition process can be found in our earlier post of land development process.


Phase II – Construction
Construction phase requires applying for license (permitting), and project development.

  • Permitting/Licensing:

The permitting process usually begins with an application which identifies the site, its location, and a preliminary design of the improvements to be constructed. This application is then used by public officials to verify compliance with its current zoning classification. If it complies, the permit is granted and the construction of the project may commence subject to building codes and inspections. If the permit is denied, the applicant will usually clarify or amend the application and will ask the city planning staff/director to review it again.

  • Preliminary checklist – Project development:

This checklist is usually the first step that a developer reviews when evaluating a site for possible development.

    1. Allowable uses per zoning classification.
    2. Minimum lot size per zoning classification.
    3. Maximum floor to area ratio (FAR).
    4. Building bulk/density limits.
    5. Setback/building line.
    6. Building height limits.
    7. Building footprint/envelope.
    8. Parking ratios.

  • Important terms/project development:
    1. Setback/building line – requirement to construct building a specified number of feet (setback) from the right-of-way line or other landmark.
    2. Right-of-way line – area designated for a public street or alley that is dedicated for traffic, public use, utilities, etc.
    3. Building related terms:
          • Footprint – it is the shape or outline of the primary building slab or foundation as it will be constructed on the site.
            • Envelope – the total outside perimeter of a structure, including footprints and any exterior patios, mall ways, landscaping, etc.
              • Facade – the exterior, usually the main entrance of a structure
                • Bulk – a three dimensional space within which height, width, footprint, and number of structures/elevations/shapes are viewed in total relative to the land area upon which it will sit to determine land use intensity.
                  • Building codes – refer to required materials and methods used to construct improvements within a jurisdiction.
                    • Permit- document executed by the director of planning authorizing the construction, restoration, alteration, repair, etc., of a structure and acknowledging that it conforms to requirements under the applicable zoning ordinance.
                1. Floor to area ratio (FAR) – it is usually calculated as gross building area divided by square footage of land area.
                2. Height restrictions – used to limit the vertical height of a structure to be constructed.
                3. Allowable use – user activities permitted in a zoning classification
                4. Impact fees – charged by public entities to cover added public sector expenses expected to be caused by the development such as traffic control, drainage, etc.
                5. Incentive zoning – used by city planners to accomplish community goals simultaneously with private sector development.
                6. Inclusion zoning – part of a zoning ordinance that requires that a specified type of development be included in order to obtain permit for that site.
                7. Minimum lot size – per zoning classification
                8. Parking ratio – required number of parking spaces per sq. ft of gross building space or per number of apartment units.
                9. Site plans – drawing done to scale depicting the placement relative to other requirements
                10. Traffic counts – number of vehicle trips per hour past a specific site.
                11. Encroachment – occurs when the construction of improvements extends over a property line on to an adjacent property.
                12. Property tax abatement – forgiveness of taxes for a specified number of years.
                13. Land to value ratio – calculated as rupee value of land to total project value (including land) anticipated upon completion of project.


              Phase III – Completion and occupancy

              There are certain risks in any real estate project development. Once the construction has been completed, there is an additional risk of selling and handing over the project to clients or bringing in tenants in case of rental property. Risk begins with land acquisition and increase steadily as construction commences until cash flows from the leasing phase materialize. It should be noted that factors determining the demand for type of space (such as office, retail, warehouse) being developed are critical to project risk. These factors may manifest themselves in current market indicators, such as vacancy rate levels, rent levels, or the extent of leasing commitments from the tenants.

              A very good understanding of the underlying economic base of an urban area or region is critical when assessing the viability of real estate development.  The point is that investors must examine the demand for space in terms of the characteristics of the demand by end users (tenants) in a given market. This demand in turn depends on the type of employment in the local market and the nature of the functions tenants will perform. Only by understanding the local economy and the nature of employment can developer anticipate demand accurately and produce and supply the quantity and quality of space in the proper combination to satisfy market demand.


              Phase IV – Management

              Once the property is occupied by clients/tenants, there is need for professionally managed facility management team. This team can look into the property management tasks such as maintenance, HVAC, parking management, security, civil works, housekeeping, landscaping, etc. These tasks are equally important and ascertain the long life of property and thus ensure positive rental income as well as capital appreciation. 


              Phase V – Sale
              The developer may choose to sell the property from construction phase onward as happens in residential development in India. Or he/she may choose to hold the property in case of commercial developments provided rental income from the commercial properties is significant enough to justify retention.




              Have any Questions?

              80 comments:

              1. Developing a real estate project is no easy task. you need to work hard to complete the project ifrst and then to sell the units. it requires huge investment as well patience too. you must be ready to see the worst conditons and also come over it.

                ReplyDelete
              2. If you are a buyer, we could help cost and put your DLF Garden City Plots Lucknow or residential property on the market for a fast sale. Learn more about Helios developers property by searching search engine.

                ReplyDelete
              3. To develop a real estate project is top task. Form starting to end its like a headache for both the owner and the developer. So a proper plan and execution of the plan is necessary to finish the project. Nice post thanks to share.
                Duplex house near by Bhubaneswar

                ReplyDelete
              4. Yeah its not easy to develop any real estate project with furnished structure and facilities. Generally builders and developers has to wait to see their project developed and they have to keep patience a lot during this period. Property development is a big task for any developer like Vigneshwara Developers, Vatika, Unitech, Supertech.

                ReplyDelete
              5. David Sessford
                Enormous one blog! I have got very clear picture of the topic you shared here that’s truly amazing!

                ReplyDelete
              6. wow,, this article contains the key points about the development process of real estate business.. Best plots to buy in South Bangalore MGB IRR EnclavePlots to buy in Electronic City

                ReplyDelete
              7. UTC Project -Code 60 providing 1 and 2 BHK Studio Apartments, 2 and 3 BHK Studio Apartments in Noida Extension, Best Studio Apartment in Delhi NCR, Best Luxury Studio Apartment Noida

                ReplyDelete
              8. Nice post, thanks for sharing. Property is one of the most expensive resources for someone. We have extensive range of IT park in central India for all size organizations. wardhaitpark is one of the biggest IT office In India.

                ReplyDelete
              9. I have got amazing things after visiting this blog. It's quite awesome.
                Residential Property in Jaipur

                ReplyDelete
              10. Wonderful blog.. Thanks for sharing informative blog..
                2 BHK Apartments for Sale in Whitefield

                ReplyDelete
              11. It is quite interesting blog. Thanks for the post. Giridhari Kamala Narayan is a unique collection of luxury residences in the most exclusive location of Secunderabad. properties for sale hyderabad

                ReplyDelete
              12. hi thanks for sharing your post it is so impressive

                ReplyDelete
              13. Well and informative content given about Besides Mangalya Hall, Off Hindu Friends Society Road, Jogeshwari East Mumbai. Thanks for given this information here about this blog.
                2bhk Flats in Dwarka More

                ReplyDelete
              14. Flats available for sale within your budget.

                ReplyDelete
              15. 2 and 3 bhk flats available for sale within your budget salarpuriasattva.info/celesta/

                ReplyDelete
              16. 2 and 3 bhk flats available for sale within your budget.. http://salarpuriasattva.info/salarpuria-altana-2/

                ReplyDelete
              17. 2 and 3 bhk flats available for sale within your budget.. http://salarpuriasattva.info/salarpuria-altana-2/

                ReplyDelete
              18. Thanks for sharing property list! it is good news for property Buyer. You can see more here at Affordable Flats in Jaipur

                ReplyDelete
              19. Great article has shared by you. There are many real estate companies in jaipur, Rajasthan. "Suvaas" is one of the best among them. You can know more in details visit at http://www.suvaas.com/

                ReplyDelete
              20. I came across through your blog. I found the valuable information about the real estate. Thanks for sharing.
                3 BHK Flats in T Nagar

                ReplyDelete
              21. Very Good List. Really helpful one. Must say it’s a unique list. I have never found these blogs before. Thanks. Your blog is very fantastic with impressive images and post also.
                https://www.bharattaxi.com

                ReplyDelete
              22. Thank you so much for sharing this information with audience. You run a great blog. If you need any information regarding real estate visit website. I am also writing and sharing information regarding Dubai Real Estate in Dubai, United Arab Emirates, If you need any information regarding real estate visit website.

                ReplyDelete
              23. This is such an informative blog, your opinion, observations and ideas are amazing and to the point. I would love to read more content like this, and I want to give one advice to you are looking for a best builders in mp then Sagar Green Hills is the ideal township for you.

                ReplyDelete
              24. This Blog is really very helpful, I really Appreciate the blog content it really very useful for everyone Crescent Homes is best Home Builders in Waterloo and Home Builders in kitchener

                ReplyDelete
              25. Op Chains Sector 36, Bahadurgarh. Royal Green Homes holds the promise of thousand dreams coming true with more than 25 Amenities.
                Op Chains Royal Green Homes Bahadurgarh
                Op Chains Group

                OP Chains Group
                First floor, opposite Maruti Plaza,
                Sanjay Place, Agra- 282002
                E-mail: info@opchains.com
                call: +91-9555-900-300

                ReplyDelete
              26. Nice article.. i read your whole article which has too much information, i was looking for. thanks for sharing.

                3 BHK flats in andheri west
                4 BHK flats in andheri west

                ReplyDelete
              27. Dwello is the new place to buy Homes. Buy your new home with confidence with Dwello. Dwello - The Right Address is Waiting
                Northern Lights
                Address One

                ReplyDelete
              28. Hii Sachin Gupta, Thanks for Information. The Information is Really helpful for my business.
                NA PLOTS NEAR PUNE
                NA PLOTS IN HINJEWADI
                PLOTS IN PUNE
                PLOTS FOR SALE IN PUNE






                ReplyDelete
              29. Here I would like to introduce most trusted Builders Now providing Apartments in Bangalore.
                G: Corp Residences koramangala

                Best perporty in Bangalore

                ReplyDelete
              30. Nice Blog Post… If someone wants to take a flat or apartment in your budget of 1bhk, 2bhk and 3bhk, then Kolte Patil Pune location is giving you a good real estate property.

                ReplyDelete
              31. Thanks for your information. Here I suggest most trusted Builders like Faith property developers. Now providing Apartments in Bangalore and all

                ReplyDelete
              32. If you want to buy the city of your dreams then Mahavir Spring Price it will be the best house for you.

                ReplyDelete
              33. Nice article. You have described your thoughts nicely in your article.Thanks for sharing such a informative article.Property development is a big task for any developer.Generally builders and developers has to wait to see their project developed and they have to keep patience a lot during this period.For more details, click here Apartments & Villas for Rent in Dubai

                ReplyDelete
              34. This comment has been removed by the author.

                ReplyDelete
              35. Its a very informative Post, Thank you for sharing and keep Posting. If you want to buy Retail/Office space visit:- Bhutani grandthum

                ReplyDelete
              36. Amazing post, I have an Experience or sharing my ideas for real estate, If Someone Buy 2/3Bhk Apartment in Godrej Properties visit:- Buy 2/3Bhk ApartmentsGodrej Woods

                ReplyDelete
              37. Nice Article! When you need cheap land for sale , we can help you find the right property that you can buy in California and Arizona. Check out available lands with us today!

                ReplyDelete
              38. Very Use full informative information and we provide the best SEO Services Delhi services in India

                ReplyDelete
              39. Hey There. I found your blog using msn. This is a very well written article. I will make sure to bookmark it and come back to read more of your useful information. Thanks for the post. I’ll definitely comeback.drone aerial videography nashville

                ReplyDelete
              40. I think this is a really good article. You make this information interesting and engaging. You give readers a lot to think about and I appreciate that kind of writing. Please visit Our site:- Buy 2/3Bhk Apartments Godrej

                Woods

                ReplyDelete
              41. Nice Article, Thank you for sharing it. Express Astra launched a Beautiful 2/3Bhk Apartments in Noida Extension. If you have any queries related to Express astra, Visit Our site:- Express Astra

                ReplyDelete
              42. If you are looking for the cheap land in California then let us help you to choose the suitable property for your needs. Get started with us today!

                ReplyDelete
              43. Assetwala is a Real-Estate-portal created, tested and maintained by a dedicated team of software professionals. The service is designed to cater for latest fast growing needs of customers and dealers/promoters. NRI Property Management Services in Bangalore

                ReplyDelete
              44. This post is very wonderful, I have gained very good knowledge by reading and I am very thankful to you. If you have any queries related to Express Astra. Visit Our Site:- Express Astra

                ReplyDelete
              45. Thanks for another informative website. Where else could I get that type of info written in such a perfect way? I've a project that I'm just now working on, and I've been on the look out for such info.drone building inspections nashville

                ReplyDelete
              46. Okay, so you have done your neighborhood homework and you have narrowed it down. Now how do you go about finding homes which are available in your target neighborhood without getting pressured by salespeople? There are several methods which you can use without leaving the comfort of your living room. Best Real Estate Agent

                ReplyDelete
              47. Are you searching for private limited company registration in Dhaka, Bangladesh? Legal Adda is a leader in online pvt ltd company registration in Bangladesh.
                Company Registration in Bangladesh
                Smart Outsourcing Solutions is the best company and providing Static, Dynamic, E-commerce,Online Shopping and News Portal website development, Domain Registration, Cheap Web Hosting, Cloud Hosting, WordPress Hosting, Reseller Hosting,
                Virtual Private Server (VPS) and Dedicated Hosting,Internet Marketing/Digital Marketing like SEO,
                outsourcing institute

                ReplyDelete

              48. I really impressed after read this because of some quality work and informative thoughts. I just wanna say thanks for the writer and wish you all the best. Find the best home buyers new jersey.

                ReplyDelete
              49. This comment has been removed by the author.

                ReplyDelete
              50. I genuinely did like this post. As it is completely useful for the new investor and the buyer to understand the procedure. Well if someone want to buy flat in kondhwa then please do find on the website mentioned

                ReplyDelete
              51. Accurate and informative. Thanks for sharing the content. It is really helpful and easy to understand.

                Enhance your property renting business with advanced features and smart technology in an on-demand solution for tenant management. Keep the track of tenant, property, and landlord digitally.

                Property Management Solution

                ReplyDelete
              52. After reading this, I was blown away by the high quality of work and thought-provoking ideas. I just wanted to express my gratitude to the author and wish him or her the best of luck. Find the best Miami Real Estate Market

                ReplyDelete
              53. Nicely described phases of real estate development project process in 5 steps.

                ReplyDelete
              54. Are you looking for a trustworthy real estate firm? Then take a look at our website. Immobilienverwaltung Lüneburg can assist you in locating your demanding management system. With the help of a professional advisor, you may get the best acquisition, accounting, dunning and litigation, utility bills, and other services.

                ReplyDelete
              55. Great Content
                It's blog is extremely helpful and educational. A pakistan Largest Company Universal Property Network Thy Have Deals Best Services in pakista..
                Check-out It ..
                multichain
                debwan
                hackathon
                guides.co
                pinshape



                ReplyDelete

              56. I am happy to find much useful information in the post, writing sequence is awesome, I always look for quality content, thanks for sharing

                Student Accommodation in Innsbruck

                ReplyDelete
              57. Hi,Lots of useful information. Thanks for sharing.

                ReplyDelete
              58. Great article!
                Are you a Landowner struggling to develop your property?🤷‍♂️
                Without investment start earning from your land!📈
                Wondering how 🤔 Check our page to know more
                https://jkbhousing.com/joint-ventures/

                ReplyDelete
              59. From classic architecture to contemporary designs, find the Medina, WA, Homes for sale that suits your style. Experience the best of this sought-after community.

                ReplyDelete
              60. This is a very well written article. Thank you for sharing it.
                Gothic Homes

                ReplyDelete
              61. Thank you for sharing this phase-wise development process. It is very crucial for the successful completion of the project.
                Open Plots for Sale in Padakal

                ReplyDelete
              62. Excellent blog post! I found it incredibly informative and beneficial. Can't wait for more content from you. Also, if you ever find yourself Hotel in Kailash Colony near the Kailash Colony metro station, be sure to check out our hotels for a comfortable and convenient stay!

                ReplyDelete