Real Estate Development – 5 Keys to Profit and Success

Finance, real estate, business — you have the know-how, and now you are moving into a larger-scale real estate development project. When do you get the architect involved?

It’s sooner than you might have been led to believe.

The site you choose will make or break your project and your profit. Too few developers get the architect involved before they close on the site. Yet the site may, and probably does, come with a number of hidden obstacles that a good architect will be adept at spotting from the start.

Thoughtfully addressing each issue makes it a key that unlocks the results you want.

#1 Is the site zoned for what you want to use it for?

“Zoned for commercial development” is not enough.

Sometimes, when I research a property with this label attached to it, it turns out the property is still officially zoned for a previous use, which could be anything from agriculture to multifamily housing.

Applying for the zoning you want can take weeks, cost money, and, in the end, may not even be approved. The correct zoning must also be in place and on file with the local jurisdiction before they will even consider reviewing the rest of your plans for the project.

#2 What will the neighbors think?

Even if your plan is technically the right use in terms of zoning, how does your project fit with the interests of the neighbors?

Goodwill gestures for the neighbors can go a long way. This applies both to heavily residential areas and commercial neighborhoods.

For example, I’ve seen neighbors try to shut down a multifamily project going into a mixed-use neighborhood during the permitting process — after the drawings were already done.

Eventually, all parties reached a compromise, but it wasn’t until the owner agreed to make substantial changes to the building. Those changes ended up costing him a lot of time and money.

Don’t let this happen to you.

In my experience, early and transparent communication, with the intention of bringing additional value to the neighborhood, can make a big difference.

#3 Are all the utility infrastructures there and properly sized for your specific project?

You, your draftsperson, or your engineer may have looked at a survey and perhaps even developed initial drawings placing the building on the site. But how much attention have you really given to the infrastructure?

What about other requirements relating the site to the building, such as the minimum number of parking spaces, accessibility standards, and the placement and sizing of entrances and exits for fire truck access?

How close is the nearest fire hydrant?

If there isn’t one, you may be responsible for providing another source of water on-site for that purpose, such as underground tanks.

Locating utilities on the site isn’t enough. Your architect knows how to connect all the dots between the building and the site and can help you understand what you’re dealing with before you go too far in the wrong direction, losing time and money during permitting and construction.

#4 What can you get rid of, and what do you have to keep?

When it comes to existing conditions, there are always some things you can change, certain things you can’t, and others you decide to live with because the cost to change them would take too big a bite out of your profit margin.

It’s a juggling act.

One of my clients had purchased a site and had it rezoned for townhome development. His program called for a certain number of units to make the numbers work.

Unfortunately, in order to place that many homes on the site while complying with the city’s ordinance requiring the entrance to the development to be on one street and the exit on another, an existing light pole was in the way.

The city said, “You can move it, but you will have to pay.”

It was going to cost $30,000 to move the light pole 18 inches to the right.

The client said that was out of the question, and the project went on hold for quite a while as he considered his options: selling the land or building something else. Neither solution gave him the return he had planned on from the original project.

This is just one of hundreds of situations that can add cost, time, and stress to a project. However, many of them can be anticipated ahead of time with the right professionals on your team.

In design and construction, there are no one-size-fits-all solutions. The right solutions for you depend on the unique objectives and priorities of your project.

#5 Do you have a process to find the obstacles and manage your risk?

Our team is experienced in working with real estate developers.

Our process identifies obstacles and reduces your risk during design and construction, helping you achieve your goals and maximize your profit.

If you are just starting to think about your project and are still looking at properties, we offer assessments such as “Should I Buy This Site?” and the “Side-by-Side Site Analysis” to help you make a more informed decision.

If you already have a site for your project, we start with a “Strategic Site Analysis,” which is step one of our ROI Roadmap™ process.

The architect doesn’t just draw pictures.

Our role in a project includes a lot more. A big part of our job is connecting the dots I mentioned earlier and looking out for our client’s best interests throughout design and construction.

Without proper communication and the right process in place, that doesn’t happen. All the client ends up with is a collection of pretty pictures that can’t be built without investing substantial amounts of additional time and money.

We have seen too many projects fail because everyone was not on the same page.

The earlier you assemble the right team to discuss your goals and needs, and the better that team communicates, the more satisfied you will ultimately be with your project and the greater its potential for success.

Protect Your Investment Before You Purchase the Site

The most expensive development problems are often the ones that could have been identified earlier. LKB Architecture helps property owners and developers uncover potential obstacles, evaluate opportunities, and create a clear path forward before committing significant time and money.

Explore our property development planning services to learn how early architectural guidance can reduce risk and strengthen your project’s potential.