- Choose a location that is accessible and close to amenities for greater demand.
- Create accurate financial projections and involve the right team of professionals, such as architects, engineers, and construction companies.
- Take into account market conditions when considering the project timeline
- Ensure all required permits are secured before proceeding with the project
- Careful planning and preparation are essential to ensure the success of the commercial real estate project.
Commercial real estate projects are complex, and planning requires careful consideration of numerous factors. Not only do you need to find a suitable location and acquire the property, but you also need to create accurate projections and ensure that the project meets all legal requirements. Here are some essential aspects of planning a commercial real estate project to help ensure your success.
Location
One of the most crucial factors determining your project’s success is its location. Selecting the right place means greater demand, higher property prices, and better returns on your investment. But with so many options available, it can be overwhelming to select the perfect location. Here are a few tips:
Accessibility
Accessibility is another crucial factor to consider when choosing a location. Your property should be accessible through different modes of transportation. This way, your potential buyers or tenants will easily access your property, whether by car, public transport, or by foot. A location close to major highways, train stations, and airports would be ideal.
Proximity to Amenities
A location close to essential amenities will always be in demand, meaning higher rental or resale values. Ensure your property is close to supermarkets, hospitals, parks, gyms, and restaurants. These amenities will make your property more attractive to potential buyers or tenants.
Financial Projections
Creating realistic and accurate financial projections is fundamental to planning a commercial real estate project. The financial plan will outline the project’s expected costs, such as acquiring the property, development costs, and other expenses, such as insurance and property taxes. Review all projected income streams and current market trends and then use this information to create realistic financial projections.
Project Team
The team of professionals engaged throughout the process will form a fundamental element of the commercial real estate project’s success. This team can comprise of the following:
Construction Company
One of the most important members of your project team is a construction company. They will be responsible for the physical construction of your building and ensure that everything complies with local and state building codes.
It’s important to choose a commercial construction company as they specialize in larger projects. They should also have experience building the type of structure you are planning, such as a shopping center or apartment complex.
Engineers
Engineers are responsible for ensuring that your building is structurally sound and can withstand environmental factors such as weather and earthquakes. They will also design your facility’s HVAC and electrical systems to ensure they are energy efficient and meet local codes. Engineers should be involved in the project from the beginning to ensure everything runs smoothly and on schedule.
Architects
Architects are responsible for designing the building and ensuring it meets all local and state building codes. They will also provide the facility is aesthetically pleasing and fits within the budget. When choosing an architect, it’s essential to find one who understands commercial real estate and can work with your construction company to ensure the building can be built within the parameters of the design.
Legal Considerations
Before proceeding with the project, it’s essential to ensure all legal requirements are in order. That includes securing all necessary permits from the government, conducting an environmental assessment of the land, and zoning laws in the area. You may also want to consider partnering with a legal expert to ensure that all legal considerations are considered.
Time Frame
Finally, it’s worth considering the impact that real estate markets can have on the time frame for your commercial real estate project. Market conditions such as interest rates and demand can significantly affect your project’s timeline. If feasible, engage with a professional team who can advise on the potential downturns and assist with navigating any seasonal-specific issues that could affect the project’s deadline.
The Bottom Line
Planning a commercial property requires significant attention to detail and expertise. Ensuring that you have the right team advising you throughout the process, choosing the right location that achieves the right tenant mix, and considering extensive market research are crucial.
By spending time preparing and carefully reviewing all aspects of the project, you can increase the chances of making the commercial real estate project successful. Always be aware that achieving a profitable and sustainable commercial real estate project relies on extensive market research, a focused and passionate team, and careful planning and preparation.
