What is Commercial Real Estate Development?
Commercial real estate development (CRE), is the process of creating a new building for sale or for rent from empty land. Commercial investment properties that are leased to third parties are often built from the ground up and are referred to as being in the “commercial real estate development” category. Office complexes, shopping malls, factories, and other structures with a business focus are examples of commercial real estate. Condominium developments and multifamily apartment buildings are also included in commercial real estate.
Making ideas into property is the goal of commercial real estate development. It is a procedure that offers a product in response to a specific consumer need. But the process of developing it is complicated.
A large number of specialists are involved in the development of the commercial real estate, including general contractors, subcontractors, architects, landscape architects, civil engineers, site planners, attorneys, environmental consultants, surveyors, title companies, and lenders.
Commercial Real Estate Development Process
The process of developing commercial real estate can be divided roughly into three stages:
Site Selection, Assessment & Deal Making
Extensive study and analysis are required during the initial phase of commercial real estate development to check whether or not the plan is good enough to be executed. A successful retail location must meet consumer needs, tenant needs, lending circumstances, and regulatory standards. It must also meet market demand.
The most crucial tasks for a real estate developer are site appraisal and selection. Nearly always, this choice is the most crucial one. How one approaches the location selection and assessment process will determine the success of the project. Instead of trying to get a discount and ending up with land that can’t be used to earn money, it is preferable to pay the price and purchase the best property in the best area available.
Property Entitlement & Development
It’s time to start thinking about the development details when site plans have been made, due diligence has been completed, and the purchase contract has been signed. The following stage focuses on the required signatures and approvals needed for the recently proposed commercial real estate developments to be approved by municipalities.
The type of commercial real estate development, known as merchant development, involves flipping properties. A developer that focuses on developing properties for quick resale is known as a merchant builder.
The process of developing commercial real estate affects nearby communities and businesses in addition to active participants. Keeping a project’s neighbors informed of the proposed development plans, including advantages, rezoning, community effect, etc., is the aim of community outreach during commercial development. The final objective is to inform the community and, with their help, hopefully, improve attitude in favor of the project’s approval.
Building Operations & Construction
A commercial real estate developer’s role in the construction phase is to manage and coordinate the stage rather than build the structure.
The overall construction coordination often includes working with general contractors and subcontractors to complete: Handling RFIs from contractors and architects & weekly construction calls and reports.
As structure is added to the property during the building construction phase, the imagined property starts to take shape. The base of a commercial real estate development is made up of frames, walls, roofs, and all other significant building materials. The following are some primary tasks: HVAC, roofing, framing, and site utilities.
The Vella Group
Vella Group is a leading commercial real estate developer and investor based in Los Angeles, Miami and New York City. Vella Group has unmatched global experience that has given it market-driven knowledge and skills that allows it to take on even the most complex commercial real estate development projects.
Vella Group, LLC works from inception to completion and follows an approach that increases the predictability and effectiveness of commercial real estate development projects.